Ashcroft v Curtin [1971] 1 WLR 1731; [1971] 3 All ER 1208, CA

Keywords

Assessment/quantum of damages - personal injury - loss of profits/reduction in company profitability - standard of proof - certainty of assessment - difficulty of assessment - sufficiency of evidence of damage - best estimate rule applied - nil award/nominal damages rejected

Summary of issues and findings

Difficulty of assessment - reduction in company profitability following injury to sole proprietor - Company keeping only rudimentary records and ‘unreliable’ accounts - evidence of reduction in profits - evidence of expert/accountant to say that 10% increase in profits would have been expected in similar firm - trial judge assessment 7 years @ £1500 (£10500) - Held: (i) Claimant had suffered some loss: "... there is a high probability that injuries such as he sustained would .... have a damaging effect on the business...." - (ii) difficulty of assessment/unreliable accounts data did not mean no recovery/nominal damages: "[A nil award] is a conclusion to which I have been frankly loth to arrive, for it does not seem to me to meet the justice of the case. It means that, in the words of Holroyd Pearce LJ in Daniels v Jones ([1961] 3 All ER 24 at 28, [1961] 1 WLR 1103 at 1109), ‘arithmetic has failed to provide the answer which commonsense demands’" - (iii) impossibility of (certain/accurate) assessment not a bar to recovery/best estimate rule applied (nb Chaplin v Hicks not referred to): "… while the probability is that some loss of profitability resulted from the plaintiff’s accident, it is quite impossible to quantify it. But I personally regard it as improbable that the loss would be anything like in the region of £10,500….. Doing the best I can, and fully realising that I too am rendering myself liable to be attacked for simply ‘plucking a figure from the air’, I think the proper compensation under this head is £2,500." - (iv) reduced profitability head not approved (CA assessment based on a distinct head of claim, ie claimant’s diminished capacity to find work elsewhere and the risk that he may have to do so).

Comment
  1. This case illustrates the difficulty which a judge might find in deciding how much weight (if any) to give to quantum evidence which appears to be unreliable (see quantum). The trial judge considered that the evidence was sufficiently reliable and used it as a basis for the assessment. The CA, on the other hand, appears to have given very little if any weight to the evidence, perhaps in effect saying 'my guess is as good as yours.’

  2. Where (quantum) evidence is rejected on the ground of unreliability and where no better evidence is obtainable, the court must make its own assessment on the basis of the evidence of harmful consequences or primary facts alone. The principle applied in this case was therefore the best estimate rule. That factual and evidential basis is evident from the statement that: "Regrettably vague though the evidence is, my conclusion is that it points not only to a decrease in profitability since 1965, but also to that decrease being due to the accident."

  3. The same ratio/principle was applied by the Court of Appeal in Alger, Brownless & Court Copyservices Limited v Jitesh Thakrar Trading as Thakrar and Co (a firm) [1999] EWCA Civ 574 although the CA in that case appeared to consider that the use by the judge in Alger of his expert knowledge was a material factor.

  4. There is no distinction between a ‘nil award’ (which was rejected in favour of the best estimate rule) and nominal damages in this context. 

Extracts from All ER Judgement (Edmund Davies LJ)
NB: Page numbers refer to preceding text

"In a one-man company of this kind, with an actively working managing director of undoubted efficiency, there is a high probability that injuries such as he sustained would not only interfere drastically with the quality of his life but would also have a damaging effect on the business which he had created and still controlled. Before the accident he not only worked at the bench himself, but he could see to it that his staff of six men did a good day’s work. In the same way, when he visited sub-contractors he could see how they were executing their commissions. Never again can he do any of these things. He is slower at estimating, and it is at least no more than one would expect that, because of his impaired efficiency, he should be less efficient at pricing his contracts. Regrettably vague though the evidence is, my conclusion is that it points not only to a decrease in profitability since 1965, but also to that decrease being due to the accident.

My greatest difficulty is in quantifying the loss. Counsel for the defendant submits that the task cannot be performed and that the failure should result in a ‘nil’ award on this aspect of the case. Having rejected the accounts as ‘largely unreliable’, the learned judge is said to have ‘plucked out of the air’ the figure of £1,500 as representing the company’s annual profitability loss. Counsel says that it cannot be justified and that the consequent award of £10,500 cannot stand. No figure, so it is urged, can replace it.

That is a conclusion to which I have been frankly loth to arrive, for it does not seem to me to meet the justice of the case. It means that, in the words of Holroyd Pearce LJ in Daniels v Jones ([1961] 3 All ER 24 at 28, [1961] 1 WLR 1103 at 1109), ‘arithmetic has failed to provide the answer which commonsense demands’.

Furthermore, it is a conclusion which counsel for the plaintiff submits is not inescapable. He points out that the plaintiff’s uncontradicted evidence is that he would have to pay, on 1969 rates, between £2,500 and £3,000 per annum to anyone of his skill and experience to do similar work. He stresses that the learned judge’s multiplicand of £1,500 would represent only £2,200 gross, 1213and that by taking as low a multiplier as 7 he made, if anything, an excessive allowance for all possible contingencies. But I am very doubtful about the validity of this approach, for if another man had been engaged to do the plaintiff’s pre-accident work it does not follow that the profits would have gone down by the amount of his salary. On the contrary, I see the force of the observation of counsel for the defendant that, as no other man was in fact engaged, it is irrelevant to consider what would have happened if he had been, for, so far from producing a drop in profitability, his engagement might equally well have led to a realisation of that 10 per cent increase which Mr Boulter assumed would have enured but for the accident.

In Bonham-Carter v Hyde Park Hotel Ltd ((1948) 64 TLR 177 at 178) Lord Goddard CJ, who found it possible to arrive at a conclusion despite the extremely unsatisfactory evidence as to damages, said:

‘Plaintiffs must understand that, if they bring actions for damages, it is for them to prove their damage; it is not enough to write down particulars and, so to speak, throw them at the head of the court, saying: "This is what I have lost, I ask you to give me these damages". They have to prove it.’

So approaching the matter, the unsatisfactory conclusion to which I have felt myself driven is that, while the probability is that some loss of profitability resulted from the plaintiff’s accident, it is quite impossible to quantify it. But I personally regard it as improbable that the loss would be anything like in the region of £10,500.

But, the case for loss of profitability having been so effectively battered, at a very late stage of the trial leave was granted to amend the statement of claim by adding a further and alternative allegation that ‘by reason of his injuries the plaintiff has been permanently prevented from working as an engineer’. As to this, the learned judge said merely that ‘there may be something to be said for that approach.’ That there was serious impairment in this respect is beyond doubt. Counsel for the defendant concedes that, had this belated head of claim called for assessment in say 1966 the chances of the plaintiff, for one reason or another, being obliged to go out into the competitive labour market to seek a job would have deserved careful consideration and could well have resulted in a not insubstantial award. But, now that 1971 has been reached and the plaintiff’s work with the company has continued, albeit on a more limited scale, counsel for the defendant submits that the risk is either non-existent or so minimal as not to justify any award. I respectfully disagree. On the contrary, at the time of the trial the plaintiff still had several years of working life before him and some of those years still remain, for this was a man of whom the judge said:

‘My reading of his character is that he never would have retired until he had a nervous breakdown, or his wife had pressed him forcibly to do so.’

His capacity to engage himself outside the company, finding the sort of work for which he has been trained since he was a boy of 14, has been virtually extinguished. I agree that the risk of his being placed in such a predicament is not great. But it does exist, and I think it justifies some award being made in respect of it. Doing the best I can, and fully realising that I too am rendering myself liable to be attacked for simply ‘plucking a figure from the air’, I think the proper compensation under this head is £2,500.

It follows that I would allow the appeal by substituting that sum for the £10,500 awarded by the learned judge, and so reduce the total award in the plainitff’s favour from £15,611 to £7,611. (1214):"

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