Law

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Compensation for Personal Injury in English,

German and Italian Law
Cross-border claims for personal injuries are becoming more common.

Furthermore, European nationals increasingly join class actions in the
USA. These tendencies have created a need to know more about the law
of damages in Europe and America.
Despite the growing importance of this subject, there is a dearth of
material available to practitioners to assist them in advising their
clients as to the heads of damage recoverable in other countries. This
book aims to fill that gap by looking at the law in England, Germany
and Italy. It sets out the raw data in the wider context of tort law, then
provides a closer synthesis, largely concerned with methodological
issues, and draws some comparative conclusions.
b a s i l m a r k e s i n i s q c , f b a is Professor of Common and Civil Law

at University College London and Jamail Regents Chair in Law at the
University of Texas at Austin. He is the author or co-author of
twenty-five books and over a hundred articles published in major
European and US legal journals. He has received high decorations from
the Presidents of France, Germany, Greece and Italy for his work on
European law and European integration and is Corresponding Member
of the Academies of Athens, Belgium, France and the Netherlands.
m i c h a e l c o e s t e r has been an Ordinarius Professor of Law at the

University of Göttingen (1983–1994) and Munich since 1994. He was
Dean of the faculty in Göttingen and has served on the Senate of the
University of Munich. He has been Visiting Professor at the University of
Michigan, University College London, and University of Nanjing. He has
authored four books and over 130 articles published in journals of
several countries, and is the co-author of two leading German
commentaries on private and private international law.
g u i d o a l pa f b a is Professor of Civil Law at the University of Rome

‘La Sapienza’ and Professor of Anglo-American Law at the University of
Genoa. He has been Vice President of the Italian Bar Council since 2001
and President of the Italian Bar Council since 2004. Professor Alpa has
published books on civil law, financial markets contracts and
regulation, consumer protection, tort liability and comparative law.
ii
a u g u s t u s u l l s t e i n l l b . q . c . is a barrister practising in London.

He specialises in Personal Injuries and Product Liability cases arising
from accidents occurring in England, Europe and the USA. He has given
expert evidence in the USA on the English Law of damages in Personal
Injury cases.
With a Foreword by the Rt Hon. the Lord Steyn.

c a m b r i d g e s t u d i e s i n i n t e r n a t i o n a l a n d c o m pa r a t i v e l aw
Established in 1946, this series produces high quality scholarship in the fields
of public and private international law and comparative law. Although these
are distinct legal subdisciplines, developments since 1946 confirm their
interrelation.
Comparative law is increasingly used as a tool in the making of law at
national, regional, and international levels. Private international law is now
often affected by international conventions, and the issues faced by classical
conflicts rules are frequently dealt with by substantive harmonisation of law
under international auspices. Mixed international arbitrations, especially those
involving state economic activity, raise mixed questions of public and private
international law, while in many fields (such as the protection of human rights
and democratic standards, investment guarantees and international criminal
law) international and national systems interact. National constitutional
arrangements relating to “foreign affairs,’’and to the implementation of
international norms, are a focus of attention.
The Board welcomes works of a theoretical or interdisciplinary character,
and those focusing on the new approaches to international or comparative law
or conflicts of law. Studies of particular institutions or problems are equally
welcome, as are translations of the best work published in other languages.
General Editors James Crawford SC FBA

Whewell Professor of International Law, Faculty of Law, and
Director, Lauterpacht Research Centre for International Law,
University of Cambridge
John S. Bell FBA
Professor of Law, Faculty of Law, University of Cambridge
Editorial Board Professor Hilary Charlesworth University of Adelaide

Professor Lori Damrosch Columbia University Law School
Professor John Dugard Universiteit Leiden
Professor Mary-Ann Glendon Harvard Law School
Professor Christopher Greenwood London School of Economics
Professor David Johnston University of Edinburgh
Professor Hein Kötz Max-Planck-Institut, Hamburg
Professor Donald McRae University of Ottawa
Professor Onuma Yasuaki University of Tokyo
Professor Reinhard Zimmermann Universität Regensburg
Advisory Committee Professor D.W. Bowett QC

Judge Rosalyn Higgins QC
Professor J.A. Jolowicz QC
Professor Sir Elihu Lauterpacht CBE QC
Professor Kurt Lipstein
Judge Stephen Schwebel
(list continues at the end of the book)

Compensation for Personal Injury
in English, German and Italian Law
A Comparative Outline
Basil Markesinis, Michael Coester, Guido Alpa

and Augustus Ullstein
  
Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo
Cambridge University Press

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Published in the United States of America by Cambridge University Press, New York
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© Basil Markesinis, Michael Coester, Guido Alpa and Augustus Ullstein 2005
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relevant collective licensing agreements, no reproduction of any part may take place
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Contents
Foreword page xiii

Preface xv
Table of cases xviii
List of Abbreviations xxxiii
1. Introduction 1
Preliminary observations 1
The problem of terms, concepts and language 2
English law 2
German law 3
Italian law 5
The impact of history: juries, non-juries, academic
writers 8
English law 8
German law 10
Italian law 11
Levels of award: a first glance 16
English law 16
German law 17
Italian law 18
Basic principles of tort law, especially to the extent
that they affect compensation practice 20
English law 20
German law 22
Italian law 23
Size of judiciary, volume of litigation, delays and cost 26
English law 26
vii
viii contents
German law 27
Italian law 28
Who pays legal costs? Is legal aid available and, if so, to
whom and on what basis? Does legal aid act as a brake
on litigation? Are conditional fee agreements or
contingency fees permitted? 29
English law 29
German law 30
Italian law 32
Social security, other sources of revenue and tort law 33
English law 33
German law 35
Italian law 36
Method of payment 36
English law 36
German law 42
Italian law 44
2. General damages: non-pecuniary losses 45

English law 45
Introduction 45
Concept of general damages 46
The ‘assessment’ concept of general damages 50
Psychiatric injury 51
Loss of marriage prospects 58
Loss of congenial employment 58
German law 59
Introduction 59
Principles of fair compensation and satisfaction 62
Assessment of non-pecuniary damages resulting from
personal injury in general 65
Particular factors for the assessment of the
compensation 68
Italian law 82
Introduction 82
Principle of full compensation 83
Danno biologico 84
Statutory rules about danno biologico 86
Methods for the liquidation of danno biologico 87
Life and death 89
contents ix
Psychiatric injury 90
Danno morale (pain and suffering) 91
Quantification of danno morale 94
3. Special damages: past losses 97

English law 97
Introduction 97
Loss of earnings 98
Past medical care 98
Personal expenses 102
Travel costs 102
Aids and equipment 103
Accommodation 104
Other possible headings 105
German law 105
Loss of earnings 105
Past medical care 105
Travel costs 107
Aids and equipment 113
Accommodation 114
Italian law 115
4. Future pecuniary losses 116

English law 116
Introduction 116
Principle of full compensation 117
Method of calculation 119
Future loss of earnings 123
Medical treatment and therapies 126
Third parties taking care of the claimant’s
needs 128
Future loss: home care or an institution? 133
Accommodation 134
Future loss: aids and equipment 136
Loss of pension 137
The lost years 138
German law 138
Future pecuniary losses 138
Loss of earnings 142
Future medical care 154
x contents
Is the victim bound to use the money he has received for

adequate care, or can he do with it as he
likes? 158
Other potential heads of damage 160
Lost years 161
Italian law 162
Introduction 162
Method of calculation 163
Future loss of earnings (capacità lavorativa specifica,
specific working incapacity) 164
Loss of opportunities 168
Method for the calculation of compensation:
lump sum, life annuity 168
Medical treatment and therapies 169
5. Collateral sources of revenue: subrogation rights and

miscellaneous matters 171
English law 171
Social security payments 171
Pension losses 172
Monies provided by the employer 173
Benevolence of third parties 173
Insurance policies taken out by the injured
person 174
Duties of local authorities 174
Interest 175
Limitation periods 175
Persons under a disability 177
Miscellaneous matters 179
German law 181
Introductory observations 181
Pension losses 186
Services/payments from the employer, insurer,
family and friends 188
Insurance policies 189
Interest 190
Limitation periods 191
Persons under a disability 192
contents xi
Italian law 194

Introductory observations 194
Insurance policies 195
Interest 196
Limitation period 196
6. Conclusions 197
General observations 197
The wider background 200
More specific conclusions 207
‘European’ and ‘American’ law 207
Punitive damages 209
Variations in awards within national European systems 211
Easy access to justice as a prerequisite to obtaining
compensation 212
Problems of comparison with non-pecuniary damages 214
Specificity about the size of awards 217
Nature and wealth of the defendant as a determinant of
the size of the award 219
Proposals for reform? 220
Appendix: Comparative tables on the evaluation of physical

injury (IP) for micro-permanent injuries 225
Index 228
Foreword
In 1871, when reviewing Addison’s recently published The Law of Torts,

Oliver Wendell Holmes expressed the view that ‘Torts is not a proper
subject for a law book’ ((1871) 5 Am.LR 340). In 1881 Holmes gave the
lie to this idea in his famous book The Common Law which contained a
magisterial chapter on the theory of the law of torts. Today, tort law has
a strong claim to have generated more case law and more literature than
any other branch of the law.
In an age in which comparative law has come of age the development
of our tort law has benefited greatly from comparative methods. It has en-
abled us to test our law against feasible solutions adopted in foreign legal
systems. Due perhaps in large measure to the relative inaccessibility of
sources in foreign languages, the comparative exercise has unfortunately
in English legal practice largely concentrated on decisions in common law
jurisdictions, such as Australia, Canada, New Zealand and South Africa.
That our courts need not be so inhibited has been underlined, for exam-
ple, by three major works, i.e. Prof. Christian von Bar, The Common European
Law of Torts, vols. 1 and 2 (2000); Prof. Walter van Gerven (van Gerven, Lever
and Larouche), Cases, Materials and Text on National, Supranational and Inter-
national Tort Law (2000); Prof. Basil Markesinis and Prof. Hannes Unberath,
The German Law of Torts (4th edn, 2002). All three are, of course, essential
reading for practitioners. The decision of the House of Lords in Fairchild v.
Glenhaven Funeral Services [2003] 1 AC 32, which concerned the age old tort
problem of uncertainty about which employment caused a disease, has
demonstrated what can be done, if the complex foreign material is ‘pack-
aged’ in an attractive manner. The opinion of Lord Bingham of Cornhill
(at 58 to 63 and 66) relied strongly on the rich sources of modern civilian
practice and doctrine: see also the opinion of Lord Rodger of Earlsferry
xiii
xiv foreword
(at 117 to 118). Practitioners need to take account of the important lesson
of Fairchild that Continental jurisprudence really matters.
Now there is another great step forward with the publication of this
book. The subject of compensation for personal injury is of great practical
importance in all civil justice systems. The book compares the solutions
adopted in English, German and Italian law. The aim is essentially prac-
tical, namely to make available to judges, practitioners and academic
lawyers a detailed account of the decisions of foreign courts, packaged to
meet the needs of practitioners, in order to enable the comparative point
of view to play a dynamic role in the development of our law.
The book has been written by distinguished lawyers who share a pro-
found knowledge of tort law and comparative methodology. Not surpris-
ingly, they have produced a first class book which is a notable contribution
to tort law and comparative law studies. It contains much material which
those in practice cannot afford to ignore. I commend it unreservedly to
judges, practitioners and academic lawyers.
johan steyn
House of Lords, June 2004
Preface
Biblical texts warn us that no one can serve two gods. Lawyers, no doubt,
have occasionally done so; and comparative lawyers must, surely, have a
dispensation to do so regularly. For the raison d’être of the latter is to de-
scribe and compare different systems without fear or favour, largely for
the sake of the advantages and the insights that flow from any compara-
tive exercise. We have thus tried to present in a comparative juxtaposition
three major legal systems of the world and have addressed our text to two
readerships which are often described as being very different – practition-
ers (including judges) and academics. We have done this for two reasons.
Many have written about the respective tasks of these two kinds of
lawyers; and in England those who have done so have stressed how differ-
ent they are. There is, of course, some truth in these assertions; but in our
view these differences have also been exaggerated – at any rate whenever
one is trying to make the one group work closely with the other, as we
feel they must. For in such circumstances academics must try to present
their theories in any way that makes them palatable to practitioners; if
they do not, their dish (for which read ideas) will not be savoured.
To the extent that the book describes in modest detail what can be
claimed in the event of personal (not fatal) injuries in the three sys-
tems compared, it tries to serve the first constituency. Two of us – Basil
Markesinis and Augustus Ullstein – have encountered this need in our
professional careers; and one more – Guido Alpa – also practises as an
avvocato in Rome and Genoa and knows the needs of the profession.
If the first of our targeted groups needs ‘usable’ data, the second needs
thoughts and ideas that can promote further reflection. Here the effort had
to go into the ‘packaging’ of the information we assembled for this book
in a way that made it look more than just a list of similar and different
solutions. Here, two of us – Basil Markesinis and Michael Coester – took
xv
xvi preface
more time to achieve this overall result by going over the entire text several
times and minimising, whenever possible, the effects of a presentation
that was too slanted towards national habits and methods. A few words
need to be said about the difficulties the authors encountered in carrying
out this enterprise.
Since this book was written in English and primarily addresses an An-
glophone readership, inevitably it had to take as its starting point the
classification structure known to the common law. If, as we hope, the
reader thinks that, overall, the presentation of the English, German and
Italian law makes good reading, it means that we have succeeded in our
‘packaging’efforts of the other two legal systems. But this was by no means
an easy task, as the specialist reader of any of these systems can attest. For
the truth of the matter is that the structures, divisions, concepts and no-
tions used in this book, being of common law origin, did not always fit
in easily with what exists in Germany and Italy, which is often very dif-
ferent to the English. Even the writing style of lawyers who come from
different countries is different and here, again, we have tried to produce
a work which will sit well in the library of a common lawyer. But ‘dif-
ferent’ does not mean less valid, less interesting or less attractive. This,
too, is made clear in several parts of the narrative; and tribute is here
paid to the two non-common lawyers who co-authored this book and so
generously agreed to comply with the demands of English language and
practice.
‘Packaging’, thus had to take place for, otherwise, the Continental sys-
tems discussed in this book, which have served as models for many coun-
tries, would continue to be a mystery to anyone but their own nationals
and devotees. In our view, the increasingly transnational nature of per-
sonal injuries litigation cannot tolerate such parochialism. Thus, the con-
tribution to the art of ‘packaging’ forms the first part of the intellectual
contribution this book tries to make to the art of comparison; the synthe-
sising conclusions form the other. Broadly speaking, the whole enterprise
follows the approach advocated by one of us on many occasions, most re-
cently in his monograph entitled Comparative Law in the Courtroom and the
Classroom: The Story of the Last Thirty Five Years (Hart Publishing, 2003) (this
will soon appear in French, German and Italian translations, an indica-
tion perhaps of the interest this method is attracting in these countries)
and has tried to avoid the format of a questionnaire which jurists from
different systems dutifully fill in. Such works may be useful in one sense;
but from a scholarly angle they seem less appealing.
One last word is needed on ‘packaging’.
preface xvii
A number of contemporary comparatists have objected to such efforts

at ‘packaging’ foreign law. They say it does not work. They also argue that
it ‘betrays’ the essential features of the foreign system, which must be
seen in its wider environment. We see no betrayal whatsoever in an ef-
fort which tries to make national wisdom and experience internationally
known and appreciated. And we affected no cover-up of the essential fea-
tures of a particular system, as our readers will see when reading carefully
what one could loosely describe as the components of the book which
contain the information about national law. For from them one can glean
additional information about history, the sources of law, the identity of
the major protagonists, the abstract or concrete mould of mind of each
system compared in this book, the style of judgments, as well as find out
how they compensate different headings of damage. Dare we thus say it?
This book, like most books which contain personal experiences of many
years and not just information, should therefore be read on two levels:
the obvious and the concealed.
That despite our efforts, disagreements may still persist about the
method is as possible as it is likely that the information provided on each
particular issue will not always be found to be as extensive in all three
systems under comparison. This, for instance, becomes obvious in chap-
ter 3 as a result of the unwillingness of Italian law to devise different rules
for calculating past and future economic losses. Here, then, no amount of
‘packaging’ could (or should) conceal existing difference. The reader must
be left free to decide if the differences are ‘apparent’ rather than ‘real’, as
well as the more difficult question whether the approach of Italian law
could be improved. Once again, the accusation of ‘betraying’ a foreign
system by making it accessible to lawyers of another is, to us, ludicrous.
For us, however, making value judgments of this kind was a matter of
lesser import. For, this, essentially, is an essay in comparative methodology
which all of us, in our similar and different ways of ‘making a living out
of the law’, are trying to develop in order to practise our profession. If
the attempt to innovate has carried with it problems, we were willing
to confront them and even risk falling into error since we know that all
human action entails the risk of error. For, as the great Goethe (in Faust,
Part I (1790; Insel edn, 1965), p. 16) put it, Es irrt der Mensch, solang er strebt.
The alternative – inaction – was not an option.
Basil Markesinis QC, FBA (London and Texas); Guido Alpa, FBA (Rome and
Genoa); Michael Coester (Munich); Augustus Ullstein QC (Temple)
London, Genoa, Munich, 24 December 2003
Table of cases
Common law cases

A v. National Blood Authority [2002] Lloyd’s Law Reports Medical 487
page 181, 199
A.B. v. South West Water Services Ltd [1993] QB 507, CA 3
A.B. v. Tameside and Glossop Health Authority [1997] 8 Med. L.R. 91, CA 55
A.E.I. Rediffusion Music Ltd v. Phonographic Performance Ltd [1999] 1 WLR
1507, CA 29
Alcock v. Chief Constable of South Yorkshire Police [1992] 1 AC 310,
HL(E) 51–52, 54, 56
Andrews v. Reynolds Memorial Hospital, Inc., 499 S.E. 2d 846 (W.Va.
1997) 215
Andrews v. Secretary of State for Health [2000] 54 BMLR 111 [2000] Lloyd’s
Reports Medical 121 56
Annable v. South Derbyshire Health Authority [2001] QB 272, CA 49
Appleton v. Garrett [1996] 5 PIQR P1, QBD 45
Atkinson v. Seghal [2003] All ER (D) 341 (Mar), CA Civil Division, Judgment
of 21 March 2003 53
Auty v. National Coal Board [1985] 1 WLR 784, CA 118, 138
Barnet Group Hospital Management Committee v. Eagle Star Insurance Co. Ltd
[1960] 1 QB 107 99
Barrow v. Bankside Members Agency Ltd [1996] 1 WLR 257, CA 36
Behrens v. Bertram Mills Circus Ltd [1957] 2 QB 1 54
Bell v. The Great Northern Railway Company of Ireland (1890) 26 LR Ir.
428 53
Bell v. Todd [2002] Lloyd’s Rep. Med. 12, QBD 134, 174
Birkett v. Hayes [1982] 1 WLR 816, CA 10
xviii
table of cases xix
Blamire v. South Cumbria Health Authority [1993] PIQR Q 1 123, 126

Bourhill (Hay) v. Young [1943] AC 92, HL (Sc) 54
Bowling v. Pfizer, Inc. (Shiley Heart Valve Litigation) 143 F.R.D. 141 (S.D. Ohio
1992), 159 F.R.D. 492 (S.D.Ohio 1994), 502, 521 202, 205
Bradford-Smart v. West Sussex County Council [2002] 1 FCR 425; [2002] LGR
489, CA 55
Brightman v. Johnson, The Times, December 17th 1985 48
British Transport Commission v. Gourley [1956] AC 185, HL (E) 98, 123
Brittain v. Garner, The Times, February 18 1989 125
Brown v. Merton, Sutton and Wandsworth Area Health Authority (Teaching)
[1982] 1 All ER 650, CA 135
Browning v. War Office [1963] 1 QB 750, CA 173
Brunsden v. Humphrey (1884) 14 QBD 141, CA 36
Burns v. Edman [1970] 2 QB 541 123
Byers v. London Borough of Brent, QBD, Judgment of 24 April 1998
(Unreported) 59
Callery v. Gray (Nos. 1 and 2) [2002] UKHL 28; [2002] 1 WLR 2000 30
Cassell v. Riverside Health Authority [1992] PIQR Q168, CA 126
Chatelain v. Kelley, 322 Ark. 517, 910 S.W.2d 215 (1995) 215
Clarke v. Rotax Aircraft Equipment Ltd [1975] 1 WLR 1570, CA 10
Coenen v. Payne [1974] 1 WLR 984, CA 39
Connolly v. Tasker [2001] QB 272, CA 49
Cook v. J.L. Kier and Co. [1970] 1 WLR 774, CA 47
Cookson v. Knowles [1979] AC 556, HL(E) 122
Cooper v. Firth Brown Ltd [1963] 1 WLR 418 98, 123
Cunningham v. Harrison [1973] QB 942, CA 98, 100, 104, 129, 133, 172
Daly v. General Steam Navigation Co. Ltd [1981] 1 WLR 120, CA 99

Despina R., The [1979] AC 685, HL(E) 36
Dews v. National Coal Board [1988] AC 1, HL(E) 98, 137
Dimick v. Schiedt, 293 U.S. 484 (1935) 209
Dobbie v. Medway Health Authority [1994] 1 WLR 1234, CA 176
Donelly v. Joyce [1974] QB 454, CA 97, 100, 102, 129–30
Dooley v. Cammell Laird & Co. Ltd [1951] 1 Lloyd’s Rep. 271 56
Dow Corning Corporation, In re, 255 B.R. 445 (Bankr. E.D. Mich.
2000) 199, 201, 202, 205, 206, 210
Dulieu v. White & Sons [1901] 2 KB 669 53
Duller v. South East Lincs Engineers [1981] C.L.Y. 585 123
Dunn v. Rose Way, Inc., 333 N.W.2d 830 (Iowa 1983) 215
xx table of cases
Dunnett v. Railtrack plc (in railway administration) [2002] EWCA Civ 303;
[2002] 1 WLR 2434, CA 206
Evans v. Pontyprida Roofing Ltd [2001] EWCR Civ 1657 100
Fashade v. North Middlesex Hospital NHS Trust November 10th 2000, Wright
J. [2001] C.L.Y. 1712 42
Firle Investments Ltd v. Datapoint International Ltd [2001] EWCA Civ
1106 29
Fish v. Wilcox and Gwent Health Authority [1994] 5 Med. L.R. 230 101
Fitzgerald v. Ford [1996] PIQR Q72 100, 116
Fletcher v. Autocar and Transporters Ltd [1968] 2 QB 322, CA 47
Fournier v. Canadian National Railway Company [1972] AC 167, PC 36
Fuhri v. Jones [1979] CA (Unreported) 50
Galt v. British Railways Board (1983) 133 NLJ 870 56

George v. Pinnock [1973] 1 WLR 118, CA 10
George v. Stagecoach [2003] EWCH 2042 126
Giardina v. Bennett, 111 N.J. 412; 545 A.2d 139 (1988) 215
Gower v. London Borough of Bromley [1999] ELR 356, CA 55
Greatorex v. Greatorex [2000] 1 WLR 1970 81
Grimshaw v. Ford Motor Company, 119 Cal. App.3d 757, 174 Cal.Rptr. 348
(1981) 209
H. v. Ministry of Defence [1991] 2 QB 103, CA 9

H. West & Son Ltd v. Shephard [1964] AC 326, HL (E) 47, 48
Hale v. London Underground Ltd [1993] PIQR Q30 59
Halloran v. Delaney [2002] EWCA Civ 1258; [2003] 1 WLR 28 30
Hardwick v. Hudson [1999] 1 WLR 1770, CA 101, 130
Harris v. Brights Asphalt Contractors Ltd [1953] 1 QB 617 127
Harris v. Empress Motors Ltd [1984] 1 WLR 212, CA 138
Harris v. Harris [1973] 1 Lloyd’s Rep. 445, CA 10
Haumersen v. Ford Motor Company, 257 N.W.2d 7 (Iowa1977) 215
Heil v. Rankin [2001] QB 272, CA 16, 49, 50
Helfend v. Southern California Rapid Transit District, 2 Cal.3d 1, 465 P.2d 61
(1970) 213
Hewson v. Downs [1970] 1 QB 73 (Sheffield Assizes) 172
Hicks v. Chief Constable of South Yorkshire Police [1992] 2 All ER 65, HL(E)
47
Hinz v. Berry [1970] 2 QB 40, CA 51
table of cases xxi
Hodgson v. Trapp [1989] AC 807, HL(E) 102, 173

Hoffman v. Sofaer [1982] 1 WLR 1350 36, 47
Hogg v. Doyle, CA, Judgment of 6 March 1991 (Unreported) 101
Housecroft v. Burnett [1986] 1 All ER 332, CA 48, 101, 125, 131
Hunt v. Severs [1993] QB 815, CA; [1994] 2 AC 350, HL(E) 100, 129,
130–1, 157
Hunter v. Butler [1996] RTR 396, CA 123
Hussain v. New Taplow Paper Mills Ltd [1988] AC 514, HL(E) 173
Ichard v. Frangoulis [1977] 1 WLR 556 47
Jaensch v. Coffey (1984) 155 CLR 549 53

Jefford v. Gee [1970] 2 QB 130 9, 10
Jones v. Jones [1985] QB 704, CA 105
Justus v. Atchison, 19 Cal. 3d 564, 565 P.2d 122 (1977) 215
Kars v. Kars (1996) 141 ALR 37 100

Kent v. Griffiths (No.2) [2001] QB 272, CA 49
King v. Phillips [1953] 1 QB 429, CA 54
Kralj v. McGrath [1986] 1 All ER 54 3, 45
Krishnan v. Sepulveda, 916 S.W.2d 478 (Tex.1995) 215
Kroeker v. Jansen (1995) 123 DLR (4th) 652 100
Kuddus v. Chief Constable of Leicestershire Constabulary [2001] UKHL 29; [2001]
2 WLR 1789 45
Lanford v. Hebran [2001] EWCA Civ 361; [2001] PIQR Q160 59

Leon Seng Tan v. Bunnage July 23rd 1986 (Unreported) 102
Letang v. Cooper [1965] 1 QB 232, CA 45
Lim Poh-Choo v. Camden and Islington Area Health Authority [1979] QB 196,
CA; [1980] AC 174, HL(E) 10, 37–8, 47, 48, 118, 127
London Ambulance Service NHS Trust v. Swan, CA, Judgment of 12 March
1999 (Unreported) 138
Longden v. British Coal Corporation [1998] AC 653, HL(E) 172
Masterman-Lister v. Jewell [2003] 1 WLR 1511, CA 177

McCamley v. Cammell Laird Shipbuilders Ltd [1990] 1 WLR 963, CA 132
McFarlane v. EE Caledonia Ltd [1994] 2 All ER 1, CA 56
Meah v. McCreamer (No.1) [1985] 1 All ER 367 53
Metcalfe v. London Passenger Transport Board [1938] 2 All ER 352 36
Miliangos v. George Frank (Textiles) Ltd [1976] AC 443, HL(E) 36
xxii table of cases
Milton v. Cary Medical Center, 358 A.2d 252 (Me. 1988) 215
Mitchell v. Mulholland (No.2) [1972] 1 QB 65, CA 118
Moeliker v. A. Reyrolle & Co. Ltd [1977] 1 WLR 132, CA 126
Moen v. Hanson, 85 Wn.2d 597, 537 P.2d 266 (Wash. 1975) 215
Moore v. Shah, 458 N.Y.S. 2d 33 (1982) 133
Moriarty v. McCarthy [1978] 1 WLR 155 58, 104, 133
Nash v. Eli Lilly & Co. [1993] 1 WLR 782, CA 176, 177
Nobles v. Schofield, CA, Judgment of 14 May 1998 53
North Glamorgan NHS Trust v. Walters (2002) EWCA Civ 1792; [2002] All ER
(D) 87 (Dec); [2003] Lloyd’s Rep. Med. 49 53
Ornelas v. Fry, 727 P.2d 819 (Ariz. App., 1986) 133

Osman v. United Kingdom [1999] 1 FLR 193 201
Page v. Sheerness Steel Co. Plc [1996] PIQR Q26. 122, 138
see also Wells v. Wells
Page v. Smith [1996] 1 AC 155, HL(E) 53, 54
Phelps v. Hillingdon London Borough Council [2001] 2 AC 619, HL(E) 55
Pickett v. British Rail Engineering Ltd [1980] AC 136, HL(E) 10, 161
Prather v. Lockwood, 19 Ill.App.3d 146; 310 N.E. 2d 815 (1974) 215
Pratt (Keith) v. Collie Smith Mr David Froskett Q.C. (Unreported) 59
Pritchard v. J.H. Cobden Ltd [1987] 2 WLR 627, CA 105
Ramsay v. Rivers [2002] QB 272, CA 49

Rees v. Mabco (102) Ltd (in liquidation) [2001] QB 272, CA 49
Rialas v. Mitchel (1984) 128 SJ 704, CA 98
Roach v. Yates [1938] 1 KB 256, CA 128
Roberts v. Johnstone [1989] QB 878, CA 135
Robertson v. Forth Road Bridge Joint Board [1995] IRLR 251, Ct of
Session 56
Robinson v. Harman (1848) 1 Exch. 850; 154 ER 363 117
Roe v. Wade, 410 U.S. 113, 93 S. Ct 705 (1973) 215
Ryan v. Liverpool Health Authority [2002] Lloyd’s Rep.Med. 23 134, 174
Sayers v. SmithKline Beecham plc [2002] EWHC 1280 202, 210

Schofield v. Saunders & Taylor Ltd [2001] 1 QB 272, CA 49
Schott Kem Ltd v. Bentley [1991] 1 QB 61, CA 39
Shaw v. Wirral Health Authority [1993] 4 Med. LR 275 99
Sirianni v. Anna, 285 N.Y.S. 2d 709 (1967) 133
table of cases xxiii
Smith v. Manchester Corporation [1974] 17 KIR 1, CA 126

Smoker v. London Fire & Civil Defence Authority (1991) 2 AC 502, HL(E) 173
Spittle v. Bunney [1988] 1 WLR 847, CA 175
State of Missouri ex rel. Hardin v. Sanders, 538 S.W.2d 336 (1976) 215
Stubbings v. United Kingdom (1997) 23 EHRR 213 176
Stubbings v. Webb [1993] AC 498, HL(E) 176
Summerfield v. Superior Court, 144 Ariz. 467, 698 P.2d 712 (1985) 215
Tanner v. Hartog, 696 So. 2d 705 (Fla. 1997) 215

Taylor v. O’Connor [1971] AC 115, HL(E) 118
Thomas v. Brighton Health Authority, see Wells v. Wells
Thompson v. Commissioner of Police of the Metropolis, Hsu v. Commissioner of
Police of the Metropolis [1998] QB 498, CA 9, 45
Thurston v. Todd (1966) 84 WN Pt 1 (NSW) 231 118
Urbanski v. Patel [1978] 84 DLR (3d) 650 133
Victorian Railways Commissioners v. Coultas (1888) 3 App. Cas. 222, PC 53

Volk v. Baldazo, 103 Idaho 570, 651 P. 2d 11 (1982) 215
W. v. Meah (1986) 1 All ER 935 45

Wadey v. Surrey County Council [2000] 1 WLR 820, HL(E&Sc) 175
Wagon Mound, The (No. 1), [1961] AC 388, PC 54
Ward v. James [1966] 1 QB 273, CA 9
Warren v. Northern General Hospital NHS Trust [2001] QB 272, CA 49
Warriner v. Warriner [2002] EWCA Civ 81; [2003] 3 All ER 447 121
Wells v. Wells [1997] 1 WLR 652, CA; [1999] 1 AC 345, HL(E) 38, 118,
119, 120, 122, 135, 138
White v. Chief Constable of South Yorkshire Police [1999] 2 AC 455,
HL(E) 53, 56, 57–58
Willett v. North Bedfordshire Health Authority (1992) 143 NLJ 745,
QBD 136
Williams v. BOC Gases Ltd [2000] ICR 1181, CA 174
Willson v. Ministry of Defence [1991] 1 All ER 638 40–41, 42
Wilsons & Clyde Coal Company Ltd v. English (1938) AC 57, HL(Sc) 57
Winkworth v. Hubbard [1960] 1 Lloyd’s Rep. 150 98
Wise v. Kaye [1962] 1 QB 638, CA 46, 48
Witty v. American General Capital Distributors, Inc., 727 S.W.2d 503 (Tex.
1987) 215
Wood v. British Coal Corporation [1981] 2 AC 502, HL(E) 173
xxiv table of cases
Woodrup v. Nicol [1993] PIQR Q104 98, 126, 127

Wright v. British Railways Board [1983] 2 AC 773, HL(E) 10, 175
X (Minors) v. Bedfordshire County Council [1995] 2 AC 633, HL(E) 55,

201
Z v. United Kingdom [2000] 2 LGLR 212 201
German cases
Decisions of the Federal Constitutional Court
BVerfG 23 June 1999, NJW 1999, 3186 31
BVerfG 8 March 2000, NJW 2000, 2187 4, 18
BVerfG 25 July 2003, NJW 2003, 2598 205
Decisions of the Federal Supreme Court

BGH 3 December 1951, BGHZ 4, 133 148
BGH 4 April 1952, BGHZ 5, 314 43
BGH 19 June 1952, BGHZ 7, 30 152
BGH 13 May 1953, BGHZ 10, 6 143
BGH 6 July 1955, BGHZ 18, 149 4, 62, 63, 65, 79, 80, 190
BGH 19 November 1955, BGHZ 19, 94 190
BGH 22 June 1956, BGHZ 21, 112 188
BGH 12 July 1957, VersR 1957, 574 140
BGH 29 October 1957, NJW 1958, 627 154, 160
BGH 14 February 1958, BGHZ 26, 349 61
BGH 13 March 1959, NJW 1959, 1031 68
BGH 20 December 1960, BGHZ 34, 110 139, 140, 141, 146
BGH 19 September 1961, NJW 1961, 2059 211
BGH 16 November 1961, NJW 1962, 243 75
BGH 20 March 1962, NJW 1962, 1054 147
BGH 3 July 1962, VersR 1962, 1100 144
BGH 25 September 1962, BGHZ 38, 55 150, 151
BGH 2 April 1963, VersR 1963, 682 147
BGH 9 April 1964, BGHZ 41, 292 188
BGH 10 November 1964, NJW 1965, 102 107, 161
BGH 5 January 1965, NJW 1965, 1376 190
BGH 8 January 1965, VersR 1965, 439 106
table of cases xxv
BGH 2 December 1966, VersR 1967, 256 81

BGH 7 January 1969, VersR 1969, 350 190
BGH 13 January 1970, MDR 1970, 315 140, 154
BGH 5 May 1970, BGHZ 54, 45 148
BGH 22 September 1970, VersR 1970, 1053 184
BGH 15 December 1970, VersR 1971, 442 154, 159
BGH 11 May 1971, BGHZ 56, 163 82
BGH 13 July 1971, NJW 1971, 2069 190
BGH 23 March 1973, LM RVO § 1542 Nr 78 184
BGH 18 June 1973, BGHZ 61, 101 80
BGH 25 September 1973, NJW 1974, 41 150, 161
BGH 25 September 1973, VesrR 1974, 142 144, 150
BGH 13 November 1973, NJW 1974, 134 153
BGH 3 July 1974, MDR 1975, 490 69
BGH 17 December 1974, NJW 1975, 1467 75
BGH 7 May 1975, BGHZ 64, 260 188
BGH 11 November 1975, NJW 1976, 326 187
BGH 16 December 1975, NJW 1976, 1147 73, 161
BGH 23 March 1976, BGHZ 66, 239 158
BGH 8 June 1976, VersR 1976, 967 66, 67
BGH 8 February 1977, NJW 1977, 1283 153, 154
BGH 18 October 1977, BGHZ 69, 347 186
BGH 8 November 1977, VersR 1978, 149 114, 154, 155
BGH 19 December 1978, NJW 1979, 760 190
BGH 21 December 1978, NJW 1979, 598 111, 113
BGH 23 January 1979, NJW 1979, 2142 146
BGH 10 April 1979, VersR 1979, 640 184
BGH 26 April 1979, BGHZ 74, 231 191
BGH 8 May 1979, NJW 1979, 1654 72
BGH 22 January 1980, NJW 1980, 1787 140, 144
BGH 8 January 1981, NJW 1981, 818 43, 141, 142
BGH 19 May 1981, NJW 1982, 757 107, 113, 114, 154
BGH 23 March 1982 VI ZR 85/81 (not published) 148
BGH 4 May 1982, NJW 1982, 1864 158
BGH 22 June 1982, NJW 1982, 2123 73
xxvi table of cases
BGH 30 March 1983, NJW 1984, 1552 43

BGH 12 April 1983, VersR 1983, 663 186
BGH 5 July 1983 VI ZR 269/82 (not published) 147
BGH 31 January 1984, NJW 1984, 1405 82
BGH 19 June 1984, NJW 1984, 2520 151
BGH 23 October 1984, NJW 1985, 791 160
BGH 4 December 1984, NJW 1985, 735 161
BGH 5 February 1985 BGHZ 93, 351 82
BGH 21 May 1985, NJW 1985, 2757 112
BGH 15 October 1985, VersR 1986, 264 156
BGH 14 January 1986, NJW 1986, 1538 106, 159
BGH 25 February 1986, VersR 1987, 1140 70
BGH 30 June 1987, BGHZ 101, 207 186
BGH 29 March 1988, NJW 1988, 1783 156
BGH 6 October 1988, VersR 1989, 1150 68, 154
BGH 18 October 1988, NJW-RR 1989, 670 106
BGH 22 November 1988, NJW 1989, 766 112, 155, 157
BGH 4 April 1989, NJW 1989, 2317 82
BGH 9 May 1989, WM 1989, 1481 81
BGH 23 May 1989, BGHZ 107, 325 188
BGH 26 May 1989, NVwZ 1990, 406 75
BGH 10 October 1989, NJW-RR 1990, 34 151, 156
BGH 24 October 1989, NJW 1990, 1037 113
BGH 24 April 1990, NJW-RR 1990, 962 156
BGH 12 July 1990, NJW 1990, 3020 43
BGH 15 November 1990, VersR 1991, 678 153, 154
BGH 28 November 1990, NJW-RR 1991, 514 43
BGH 13 February 1991, NJW 1991, 2340 108
BGH 19 February 1991, NJW 1991, 2340 106, 108, 110, 111, 112
BGH 9 April 1991, NJW 1991, 2347 72, 78
BGH 30 April 1991, NJW 1991, 1948 162
BGH 14 January 1992, MDR 1992, 349 65
BGH 14 January 1992, NJW 1992, 1043 67
BGH 11 February 1992, NJW-RR 1992, 791 160
table of cases xxvii
BGH 18 March 1992, NJW-RR 1992, 1091 43

BGH 31 March 1992, NJW-RR 1992, 852 149
BGH 28 April 1992, NJW-RR 1992, 1050 147
BGH 20 May 1992, VersR 1992, 975 71
BGH 22 September 1992, VersR 1993, 55 145
BGH 13 October 1992, BGHZ 120, 1 72, 78
BGH 15 October 1992, NJW 1993, 648 191
BGH 16 February 1993, NJW 1993, 1531 73, 79
BGH 6 July 1993, NJW 1993, 2673 149
BGH 13 October 1993, NJW 1993, 781 5
BGH 25 October 1994, NJW 1995, 1238 44
BGH 15 November 1994, NJW 1995, 389 140
BGH 15 November 1994, NJW 1995, 861 4
BGH 29 November 1994, BGHZ 128, 117 63, 79
BGH 1 December 1994, VersR 1995, 1316 68, 74
BGH 17 January 1995, NJW 1995, 1023 139, 143, 145
BGH 21 January 1995, DAR 1991, 302 70
BGH 24 January 1995, VersR 1995, 469 145, 146, 147
BGH 7 February 1995, NJW 1995, 1438 79
BGH 26 April 1995, NJW-RR 1996, 986 69
BGH 9 May 1995, BGHZ 129, 366 186
BGH 27 June 1995, NJW-RR 1995, 1272 139
BGH 24 November 1995, NJW 1996, 921 155
BGH 5 December 1995, NJW 1996, 984 62
BGH 12 December 1995, NJW 1996, 726 182, 186
BGH 14 December 1995, NJW 1990, 1062 43
BGH 16 January 1996, NJW 1996, 1591 63, 64
BGH 30 April 1996, BGHZ 132, 341 75
BGH 25 June 1996, NJW 1996, 2508 155
BGH 5 November 1996, NJW 1997, 455 75
BGH 10 December 1996, NJW 1997, 941 148, 149
BGH 4 March 1997, NJW 1997, 1853 155
BGH 4 March 1997, NJW 1997, 2175 184
BGH 1 March 1998, BGHZ 103, 338 81
xxviii table of cases
BGH 3 March 1998, NJW 1998, 1634 149

BGH 12 May 1998, VersR 1998, 1034 78
BGH 7 July 1998, NJW 1998, 3276 187
BGH 10 November 1998, NJW 1999, 421 155, 156, 181
BGH 25 February 1999, NJW 1999, 2041 191
BGH 20 April 1999, VersR 2000, 233 143, 145, 146, 147
BGH 8 June 1999, NJW 1999, 2819 106, 155, 157
BGH 21 January 2000, NJW 2000, 1256 43
BGH 25 January 2000, NZV 2000, 252 186, 187
BGH 6 February 2000, NJW 2001, 1640 148
BGH 17 February 2000, NJW 2000, 1498 191
BGH 7 November 2000, NJW 2001, 1274 188
BGH 16 January 2001, NJW 2001, 1431 43
BGH 6 March 2001, NJW 2001, 1721 191
Decisions of the Courts of Appeal and Lower Courts

OLG Freiburg 30 June 1953, JZ 1953, 704 82
OLG München 14 May 1959, VersR 1959, 957 190
OLG Celle 22 January 1962, VersR 1962, 623 114
OLG Celle 9 November 1967, NW 1968, 1677 81
LG Tübingen 29 November 1967, NJW 1968, 1187 82
BayObLG 11 July 1968, BayObLGZ 1968, 184 140
OLG Düsseldorf 30 December 1968, VersR 1969, 671 160
LG Frankfurt 28 March 1969, NJW 1969, 2286 82
OLG Nürnberg 7 November 1969, VersR 1971, 260 114
OLG München 16 December 1969, VersR 1970, 643 161
KG 26 February 1973, NJW 1974, 607 161
OLG Düsseldorf 18 June 1973, NJW 1973, 2112 111
OLG Köln 9 January 1978, VersR 1979, 166 111
OLG Zweibrücken 24 February 1978, VersR 1978, 1029 152
OLG Hamburg 19 January 1979, MDR 1970, 670 152
OLG Frankfurt 2 November 1979, VersR 1981, 239 111
OLG München 29 October 1980, VersR 1981, 560 111
LG Hechingen 9 January 1981, VersR 1982, 253 81
OLG Köln 29 January 1981, 7 U 85/80 148
OLG Koblenz 23 March 1981, VersR 1981, 887 111
OLG Celle 12 November 1981, VersR 1983, 40 151
KG 15 February 1982, VersR 1982, 978 159, 161
table of cases xxix
OLG Köln 11 March 1982, ZfS 1984, 132 151

OLG Nürnberg 31 January 1984, NJW 1998, 2292 82
OLG Düsseldorf 28 May 1984, VersR 1985, 644 106
OLG München 30 November 1984, VersR 1985, 868 70, 218
LG Münster 15 May 1985, ZfS 1988, 69 111
LG Amberg 29 April 1986, NJW-RR 1986, 1357 70
OLG Saarbrücken 16 May 1986, NJW-RR 1987, 984 68
OLG Hamburg 19 August 1986, VersR 1988, 720 68
OLG Hamburg 7 August 1987, VersR 1988, 858 106
OLG Köln 17 September 1987, VersR 1988, 61 114
OLG Saarbrücken 23 October 1987, NZW 1989, 25 109
LG Saarbrücken 18 December 1987, NJW 1988, 2958 109, 111
LG Augsburg 11 March 1988, ZfS 1988, 239 111
OLG Köln 13 April 1988, NJW 1988, 2957 107
OLG Köln 19 May 1988, VersR 1988, 1185 140, 148
OLG München 8 July 1988, VersR 1989, 1056 80
OLG Stuttgart 21 July 1988, NJW-RR 1989, 477 82
OLG München 20 September 1988, VersR 1989, 1203 68
OLG Stuttgart 6 October 1988, VersR 1989, 1150 75
OLG Karlsruhe 25 November 1988, VersR 1989, 1101 148
OLG Köln 4 October 1989, VersR 1989, 1309 107
OLG Düsseldorf 12 October 1989, VersR 1990, 852 75
OLG Frankfurt 21 March 1990, NJW-RR 1990, 990 17
OLG Hamburg 20 April 1990, NJW 1990, 2322 162
OLG München 24 July 1990, DAR 1991, 301 77
OLG Schleswig 9 January 1991, NJW-RR 1992, 95 80
OLG Frankfurt 21 January 1991, VersR 1992, 621 71
OLG Oldenburg 21 January 1991, DAR 1991, 302 68
OLG Nürnberg 21 June 1991, DAR 1994, 158 18
OLG Köln 14 November 1991, NJW-RR 1992, 221 63
OLG Düsseldorf 10 February 1992, NJW-RR 1993, 156 17, 68, 69
OLG Karlruhe 6 March 1992, DAR 1993, 391 151, 161
OLG Köln 20 May 1992, VersR, 975 68
OLG Oldenburg 28 July 1992, VersR 1993, 1491 161
OLG Köln 16 October 1992, NJW-RR 1993, 350 71
OLG Oldenburg 10 November 1992, NJW-RR 1993, 798 149
OLG Celle 26 November 1992, VersR 1993, 976 63
OLG Köln 17 February 1993, NJW-RR 1993, 919 76
OLG Schleswig 24 February 1993, VersR 1993, 310 73
OLG Hamm 7 June 1993, NJW-RR 1994, 94 63
xxx table of cases
OLG Hamm 17 August 1993, NJW-RR 1994, 415 157

OLG Frankfurt 22 September 1993, DAR 1994, 21 81
OLG Koblenz 7 October 1993, NJW-RR 1994, 1049 161
OLG Frankfurt 11 November 1993, DAR 1994, 119 68, 71, 79
OLG Düsseldorf 19 November 1993, NJW-RR 1994, 352 107
OLG Nürnberg 7 December 1993, DAR 1994, 157 68
OLG Hamm 17 March 1994, DAR 1994, 496 161
OLG Oldenburg 19 April 1994, VersR 1994, 1071 161
OLG Frankfurt 26 October 1994, VersR 1996, 864 76
OLG Düsseldorf 1 December 1994, VersR 1995, 1316 68, 81
OLG Hamm 15 December 1994, VersR 1996, 243 71
OLG Hamm 8 March 1995, VersR 1996, 892 74
LG Bonn 12 April 1995, VersR 1996, 381 160
OLG München 30 May 1995, NJW-RR 1995, 1239 157, 158
OLG Hamm 2 June 1995, VersR 1996, 1515 111
OLG Brandenburg 24 October 1995, OLGR 1996, 76 149
OLG Frankfurt 21 February 1996, VersR 1996, 1509 17, 69
AG Radolfzell 25 April 1996, NJW 1996, 2874 18
OLG Hamburg 25 July 1996, NJW 1996, 2870 4, 18
OLG Stuttgart 30 January 1997, VersR 1998, 366 154
OLG Nürnberg 25 April 1997, VersR 1998, 731 79, 81
OLG Münster 12 June 1997, NJW 1998, 1801 110, 111
OLG Karlsruhe 11 July 1997, VersR 1998, 1256 106, 110
OLG Saarbrücken 27 November 1997, OLGR 1998, 381 148
OLG Hamm 17 December 1997, VersR 1998, 1392 80
OLG Bremen 21 April 1998, NJW-RR 1999, 1115 154, 155, 157,
161
OLG Frankfurt 7 January 1999, NJW 1999, 2447 81
OLG Köln 19 May 1999, VersR 2000, 1021 159
OLG Bremen 31 August 1999, FamRZ 2001, 1300 108, 109, 110,
111
Decisions of the Supreme Court of the German Reich

RG 5 April 1906, JW 1906, 359 148
RG 27 September 1906, JW 1906, 718 148
RG 24 April 1911, RGZ 76, 174 77
RG 15 February 1927, RGZ 116, 151 3
RG 23 May 1935, RGZ 148, 68 154, 159
RG 11 June 1936, RGZ 151, 298 159, 160
italian cases xxxi
Italian cases
Constitutional Court
Judgment, 20 December 1996, n. 399 in Cons. Stato 1996, II, 2090 85
Judgment, 11 July 2003, n. 233 7
Court of Cassation
Palermo (4 June 1898) in Foro sic., 1898, 486 93
Turin (22 November 1913), in Giurisprudenza torinese, 1914, 33 92
1967, n. 774 (28 April 1967) in Res.civ.prev., 1967, 572 95
1971, n. 174 (26 January 1971) in Foro it. 1971, I, 342 15
1979, n. 3996 (11 July 1979) in Resp.civ.prev. 1980, 436 95
1980, n. 537 (7 October 1980) in Foro it., I, 1051 95
1980, n. 5484 (13 October 1980) in Resp.civ.prev., 1981, 403 95
1982, n. 4815 (4 April 1982) in Giur.it.Mass. 1982 94
1982, n. 6234 (18 November 1982) 165
1983, n. 2396 (6 April 1983) in Resp.civ.prev. 1983, 760 95
1985, n. 4947 (11 October 1985) in Arch.giur.circ. 1986, 100 95
1990, n. 399 (Labour section, 10 March 1990) in Crit.Pen. 1995, 50 85
1992, n. 7194 (11 June 1992) in Foro it. 1992, I, 2079 196
1993, n. 5832 (24 May 1993) 166
1993, n. 11271 (15 November 1993) 166
1993, n. 13013 (30 December 1993) 168
1994, n. 6228 (1 July 1994) in Riv.giur.Enel, 1996, 467 195
1995, n. 755 (23 January 1995) 168
1995, n. 12299 (28 November 1995) in Foro it. 1996, I, 3120 90
1997, n. 9742 (7 October 1997) 195
1997, n. 9959 (13 October 1997) 166
1997, n. 10923 (6 November 1997) 167
1997, n. 11439 (18 November 1997) 168
1998, n. 1285 (6 February 1998) 5
1998, n. 12195 (1 December 1998) in Dir.famiglia, 2000, 68
1999, n. 491 (20 January 1999) 89, 90
1999, n. 500 (22 July 1999) 15
1999, n. 1135 (10 February 1999) 196
2000, n. 2037 (Labour section, 23 February 2000) in Giust.civ. 2000, I,
1655 88, 170
2000, n. 9228 (12 July 2000) 168
xxxii table of cases
2000, n. 15580 (11 December 2000) in Resp.civ.prev. 2001, 609 167

2001, n. 4783 (2 April 2001) 89
2001, n. 6023 (24 April 2001) 86
2001, n. 13409 (29 October 2001) in Giust.civ.mass. 2001, 1814 164
2001, n. 15034 (27 November 2001) 86
Courts of Appeal and Lower Courts

Turin, 1880 (4 June 1880) in Giurisprudenza torinese, 1880, 447
Turin, 1885 (3 November 1885) n Giur.tor. 1886, 104 93
Bologna, 1889 (4 February 1889) in Riv.giur.bol. 1889, 38 92
Bologna, 1889 (11 October 1889) in Riv.giur.bol. 1889, 309 92
Trani, 1898 (13 June 1898) in Riv.giur.Trani 1898, 747 92
Catania, 1900 (12 April 1900) in Giur.cat. 1900, 48 93
Bologna, 1902 (14 February 1902) in Monitore dei Tribunali 1902,
750 92, 93
Florence, 1905 (13 September 1905) in Monitore dei Tribunali 1906,
215 92
Parma, 1910 (14 June 1910) in Giur.tor. 1910, 1054 93
Milan, 1920 (11 May 1920) in Riv.dir.comm, 1921, II, 448 93
Rome, 1921 (23 July 1921) in Riv.dir.comm 1922, II, 178 93
Florence, 1967 (6 January 1967), 1969 Arch.resp.civ 130 84
Pisa, 1985 (16 January 1985) 166
Genoa, 1988 (13 January 1988) 96
Trieste, 1988 (14 January 1988) 170
Milan, 1988 (18 February 1988) in Resp.civ.prev. 1988, 454 85
Milan, 1993 (2 September 1993) in Nuova giur.civ.comm. 1993, I,
680 91
Milan, 1993 (19 October 1993) in As. 1994, II, 2, 126 166
Venice, 1994 (8 June 1994) in Arch.giur.circ. e sin.stradali 1995,
637 167
Milan, 1998 (21 April 1998) in Dir.lav. 1998, 957 85
Rome, 1998 (12 December 1998) 170
Milan, 1999 (1 April 1999) 86
Milan, 1999 (26 June 1999) in Lav.nella giur. 1999, 1075 85
Rome, 2002 (20 June 2002) in Foro it. 2002, I, 2882 94
Abbreviations
AC Law Reports, Appeal Cases (Decisions of the

House of Lords and the Privy Council from
1891)
AcP Archiv für die civilistische Praxis
AfP Archiv für Privatrecht
AJ Comp. L American Journal of Comparative Law
All ER All England Law Reports
ALR Australian Law Reports
AOK Allgemeine Ortskrankenkasse (National
Health Insurance Scheme)
App. Cas. Law Reports, Appeal Cases (1875–90)
Arch. resp. civ. Archivio della responsabilità civile
AuR Arbeit und Recht
BayObLG Bayerisches Oberstes Landesgericht
BB Der Betriebsberater
BGB Bürgerliches Gesetzbuch (German Civil Code)
BGBl. Bundesgesetzblatt (Government Gazette)
BGH Bundesgerichtshof (Germany’s Federal
(Supreme) Court)
BGH GS Decisions of the Grosser Senat (Plenum of the
Court)
BGHZ Entscheidungen des Bundesgerichtshofs in
Zivilsachen (Decisions of the German
Supreme Court in Civil Matters)
BRAO Bundesrechtsanwaltsordnung (Code of
Conduct for German Attorneys)
BVerfG Bundesverfassungsgericht
xxxiii
xxxiv abbreviations
BVerfGE Entscheidungen des

Bundesverfassungsgerichts (Decisions of the
Federal Constitutional Court)
BVerfGG Bundesverfassungsgerichtsgesetz (Statute of
the Constitutional Court of Germany)
CA Decisions of the English Court of Appeal
Cass. Cour de cassation
CC Code Civil (French Civil Code)
Ch. Law Reports, Chancery Division (from 1891)
CLJ Cambridge Law Journal
CLR Commonwealth Law Reports
Cod. civ roc. Codice di procedura civile (Code of Civil
Procedure)
Consiglio di Stato Council of State (Supreme Administrative
Court)
Corte di Cass. Corte di Cassazione (Supreme Court for Civil
and Criminal Matters)
Corte Cost. Corte costituzionale (Constitutional Court)
Crit. pen. Critica penale
Danno e resp. Danno e responsabilità
DB Der Betrieb (Law Review)
DStR Deutsches Steuerrecht
EGBGB Einführungsgesetz zum BGB (Introductory
Law to the BGB)
ELR European Law Reports
EuGRZ Europäische Grundrechtezeitung
EWCA Civ England and Wales Court of Appeal, Civil
Division (online Reports of Judgments of the
Court of Appeal)
Ex. D Law Reports, Exchequer Division (1875–80)
FamRZ Zeitschrift für das gesamte Familienrecht
FCR Family Cases Reports
FLR Family Law Reports
F. Supp. Federal Supplement (American Law Reports)
F. 2d Federal Reporter, 2nd series (American Law
Reports)
Foro it. Foro italiano
GG Grundgesetz (Constitution of Germany)
Giust. civ. Giustizia civile
Giust. civ. massimario Massimario della giustizia civile
abbreviations xxxv
ICLQ International and Comparative Law Quarterly

INAIL Istituto Nazionale per L’Assicurazione contro
gli Infortuni Sul Lavoro
IRLR Irish Law Reports
JA Juristische Arbeitsblätter
J Leg. Stud. Journal of Legal Studies
JSB Judicial Studies Board
JSPTL Journal of the Society of Public Teachers of
Law
JuS Juristische Schulung
JW Juristische Wochenschrift (from 1872 to 1939)
JZ Juristenzeitung
KB Law Reports, King’s Bench (1901–52)
KG Kammergericht (Court of Appeal of Berlin)
Lav. nella giur. Il lavoro nella giurisprudenza
LG Landegericht (Court of First Instance of
General Jurisidiction)
Lloyd’s Rep. Lloyd’s Law Reports
LQR Law Quarterly Review
LR Ch. App. Law Reports, Chancery Appeal Cases (1865–75)
LRCP Law Reports, Common Pleas Cases (1865–75)
LR Ex. Law Reports, Exchequer Cases (1965–75)
LRHL Law Reports, English and Irish Appeals
(1866–75)
LRQB Law Reports, Queen’s Bench (1865–75)
LT Law Times Reports (1859–1947)
MDR Monatsschrift für Deutsches Recht
Med. LR Medical Law Reports
Med. R Medizin und Recht
MLR Modern Law Review
NJ Neue Justiz
NJW Neue Juristische Wochenschrift
NLJ New Law Journal
Nuova giur. civ. comm. La nuova giurisprudenza civile commentata
ObLG Oberstes Landesgericht
OGH Oberster Gerichtshof (Austrian Supreme
Court)
OLG Oberlandesgericht (German Court of Appeal)
OR Swiss Code of Obligations
P Law Reports, Probate Division (1891–)
xxxvi abbreviations
PIQR Personal Injury Quantum Reports

ProdHG Produkthaftungsgesetz (Products Liability Act)
QB Law Reports, Queen’s Bench (1891–1900;
1952–)
QBD Law Reports, Queen’s Bench Division (1875–90)
Resp. civ. prev. Responsabilità civile e previdenza
RG Reichsgericht
RGBl. Reichsgesetzblatt (Government Gazette)
RGSt Amtliche Sammlung der Entscheidungen des
Reichsgerichts in Strafsachen
RGZ Entscheidungen des Reichsgerichts in
Zivilsachen (Decisions of the German Imperial
Court in Civil Matters)
Riv. dir. comm. Rivista del diritto commerciale e delle
obbligazioni
S Ct Supreme Court
SLJ Solictors’ Law Journal
StGB Strafgesetzbuch (German Criminal Code)
StVG Strassenverkehrsgesetz (Road Traffic Act)
Tul. L Rev. Tulane Law Review
UKHL United Kingdom House of Lords Reports
(online Reports of House of Lords’ Decisions)
VersR Versicherungsrecht
VVG Versicherungsvertragsgesetz (Insurance
Contracts Act)
WLR Weekly Law Reports
WM Wertpapier-Mitteilungen
ZPO Zivilprozessordnung (Code of Civil Procedure)
ZRP Zeitschrift für Rechtspolitik
1 Introduction
Preliminary observations
Cross-border claims for personal injuries are becoming more and more
common, particularly within the European Union. Furthermore, we know
from our personal experience that European nationals and/or residents
increasingly join, or seek to join, class actions in the United States of
America. This tendency leads to a need to know more about the law in
Europe including, of course, English law. Thus, though this book is not
about American law, it makes allusions to it where this is likely to be use-
ful to both American lawyers using it and Continental European lawyers
aware of the fact that they must constantly guard against the danger of
thinking that they understand the law in the USA because they usually
know something about English law.
Despite the growing importance of this subject, we believe that there is
a dearth of material available to practitioners in any of these jurisdictions
to assist them both in advising their clients as to the heads of damage
recoverable in other countries and/or the level of damages which they
might expect to be awarded. It is the objective of this book to fill that gap
in sufficient (but not excessive) detail and we attempt this in chapters 2
to 5. If the transnational trend we alluded to above continues, we intend
to flesh out our account further in a future edition.
In this work we have deliberately limited the scope to compensation
for personal injury. Fatal accident damages is a very large subject in itself
and would, we feel, either overburden a book of the size which we intend
or compel contributors to reduce what they say on particular topics to
a level which is unlikely to be really useful. Again, however, references
to this branch of the law of damages do occasionally appear in our text,
especially where this seemed to be required by the narrative.
1
2 introduction
To make this material more intelligible, and also satisfy our purely aca-
demic interest in developing suitable ways to present foreign law to na-
tional readers, we have included a fairly long introduction. In it, we have
attempted to set our material in the wider context of tort law. We thus
address eight, wider, issues in the hope that it will assimilate the foreign
learning into the narrative of the text and explain to ‘foreign’ observers
its background. This is especially necessary whenever we encounter ‘pecu-
liarities’ found in one system alone. These wider issues we approach from
the point of view of English, German and Italian law though we stress
from the outset that here, and elsewhere in the book, not all subdivisions
and headings are entirely appropriate (or of equal importance) to the three systems
under comparison. A closer synthesis, largely concerned with methodolog-
ical issues, will be attempted in chapter 6 in the form of comparative
conclusions. There we shall, again, pick up on some of the themes found
(mainly) in this (but also other chapters) and refer in greater detail to the
structural differences which make it impossible to cover in each system,
in an equal and precise manner, the various subtopics discussed in this
book. This is a point of considerable importance and one which national
lawyers must come to terms with early in this study of ‘foreign’ law.
The problem of terms, concepts and language

English law
With regard to damages the common law uses a multitude of terms: gen-
eral and special, nominal and substantial, contemptuous and aggravated,
compensatory and punitive, liquidated and unliquidated, pecuniary and
non-pecuniary, past and future. These terms are not always understood
in the same way even by common lawyers themselves; and, as we shall
see, do not always have exact equivalents in other systems. This second
consequence not only makes the comparative exposition of different laws
difficult; it can also make the comparison of awards misleading since
often one may not be comparing ‘apples with apples’ but ‘apples with or-
anges’. The common law terms are often side-products of pleading rules
and the use of juries in civil law trials (now almost extinct in the English
but not the American common law) may have nothing to do with policy
decisions taken at the level of substantive law. Two sets of such terms will
make our point; and the picture will be further clarified in the account
that will follow in chapters 2 to 4.
the problem of terms, concept s and l anguage 3
‘Special damage’ is thus what the plaintiff must prove as part of his
cause of action in torts which are not torts actionable per se.1 This will
include quantifiable lost earnings up to the trial, damaged property (e.g.,
the plaintiff ’s damaged clothing) and other out-of-pocket expenses. As
indicated, this distinction between special damages (as defined above)
and general damages, which are the damages which are ‘presumed to
flow’ from the wrong complained of (and include future lost earnings)
is important for pleading purposes, but also has consequences for the
purposes of calculating interest.
‘Aggravated’and ‘exemplary’damages form another heading which may
cause some concern to civilians. What they have in common is that they
represent a way of enhancing the award of the successful plaintiff. They
also seem to frequent largely (but not entirely) the same areas of tortious
liability such as defamation and false imprisonment. But the similari-
ties end there. For the aggravated award augments the plaintiff ’s compen-
satory2 amount by taking into account the aggravated injury caused to the
plaintiff ’s ‘feelings of dignity and pride’. On the other hand, exemplary
damages require one to look at the tortious incident from the optic of the
defendant who is deemed to be particularly opprobrious, thus deserving
a form of (civil) punishment. Notwithstanding this attempt to maintain a
clear conceptual differentiation between these two notions, the fact that
they overlap may, in some specific areas of tort law, make the differences
between common law and civil law less pronounced than it appears to be
if compared at a purely dogmatic level.
German law
German law does not draw the line between past and future losses, or be-
tween special and general damages, but rather between damages which
1 Contemporary Continental European lawyers – and we shall henceforth refer to them as

‘civilians’ (and their law as civil law) to contrast them with the common lawyers and the
common law – will regard a tort that does not include damage among its essential
ingredients (tort actionable per se) as a paradox. Nonetheless, it is one which is easily
explained once one realises that in the case of these torts (such as trespass to the person,
land or libel) the prime aim of the law is to vindicate legal interests and not just
compensate harm caused by the defendant. This is an acknowledged function of tort law
in Continental legal systems, too (for Germany, e.g., see RG 15 February 1927, RGZ 116,
151, 153; BGH 25 November 1986, BGHZ 99, 133, 136). Needless to add, however, if
damage has been caused, damages will follow.
2 Not surprisingly, therefore, some judges have argued that the increased pain and
suffering of the plaintiff should be reflected in his general damages: see Kralj v. McGrath
[1986] 1 All ER 54, approved in A.B. v. South West Water Services Ltd [1993] QB 507.
4 introduction
can be compensated (and ‘repaired’) once and for all by a single sum of
money (restitutio in integrum, § 249 II, 251 BGB), and continuing losses or
costs of living which will accompany the victim’s life for the (foreseeable)
future (§§ 842, 843 BGB). If damages of the first category (e.g., the acqui-
sition of a wheel-chair) are not yet compensated at the time of the court
decision, they are ‘future damages’, based on § 249 II BGB. And if con-
tinuing needs of the victim (e.g., care) have been met already before the
decision is rendered, they are ‘past losses’, but recoverable under § 843 I
BGB ( just like the care necessary in the future). It becomes obvious, how-
ever, that – as a matter of fact – the bulk of future damages belongs to the
realm of §§ 842, 843 BGB.
Non-pecuniary losses are commonly referred to as ‘Schmerzensgeld’, a not
very precise and unofficial short-hand term for what the statute calls ‘non-
pecuniary damage’ (§ 253 BGB). The danger of translating ‘Schmerzensgeld’
as pain and suffering must thus be avoided since the German term encom-
passes additionally such well-known common law headings of damage as
‘loss of amenity’, ‘disfigurement’, ‘loss of expectation of life’ etc. But the
notion has also, from early times, been taken to include the ‘satisfaction’
of the victim for what has been done to him;3 and the ‘deterrent func-
tion’ of ‘Schmerzensgeld’ has also been stressed by the BGH in mass media
cases involving the invasion of the privacy of celebrities.4 In such cases,
therefore, the notion comes close to the concept of ‘punitive damages’.
The concept of a ‘damage per se’ (danno biologico) is rarely discussed in
Germany, but is, in fact, not totally unknown. According to the Code, a
‘damage’ is to be assessed by the comparison of the situation quo ante and
the situation after the injury. Where pecuniary damage is involved, the
monetary award that will be made to the plaintiff becomes a simple matter
of calculation, the point of reference being either the costs of repair (resti-
tutio in integrum, § 249 BGB) or – where repair is not possible or sufficient –
the economic loss of the victim (§ 251 BGB). The problem of non-pecuniary
damage is, in general, solved by pursuing the ideas of ‘fair compensa-
tion’ and ‘satisfaction’ (atonement), which provide some guidelines for
the pecuniary compensation of non-pecuniary losses (see p. 62). But these
concepts fail to produce satisfactory results where, because of a fundamen-
tal destruction of the victim’s body and personality, fair compensation is
3 BGH 6 July 1955, BGHZ 18, 149, translated in Basil Markesinis and Hannes Unberath, The
German Law of Torts: A Comparative Treatise (4th edn, Oxford 2002), p. 981 (henceforth
referred to as GLT followed by the appropriate page number).
4 BGH 15 November 1994, NJW 1995, 861; OLG Hamm 25 July 1996, NJW 1996, 2870; see
also BVerfG 8 March 2000, NJW 2000, 2187; GLT, pp. 472–7; cf. p. 22 and p. 64.
not possible and the victim cannot feel any satisfaction. In cases such as
these, the BGH has, not without some tergiversations, come to acknowl-
edge that there must be another, specific type of ‘damage’ which is inde-
pendent of pecuniary losses or the personal perception of the victim.5 The
severe physical impairment as such is the legitimating and decisive factor
for the assessment of damages which is not treated as a conventional and
paltry amount but, on the contrary, is treated as a substantial heading of
damages.6 It is, however, still unclear whether this will remain a narrowly
construed exception in German law or the first example of an emerging
new concept of a ‘damage per se’.7
Tort law (Deliktsrecht; Recht der unerlaubten Handlungen) refers only to the
relevant provisions of the BGB (§§ 823–853) which are based on the fault
principle (notwithstanding some statutory modifications and exceptions).
Apart from the BGB, however, there exist many specialised statutes which
also provide for compensation for harm caused irrespective of fault e.g.,
in cases involving public traffic, nuclear energy, product liability etc. A
general term, more appropriate for these types of harm, is ‘Haftungsrecht’.8
Italian law
Italian law does not draw a clear line between past and future losses9
or between special and general damages. The parallel thus seems to be
more with German than English law. Rather, its main distinction is be-
tween damages which result from non-performance of obligations (danno
contrattuale) and damages which result from a tort (danno extracontrat-
tuale) – a distinction which, of course, is not unknown in both English and
German law.
The measure of damages arising from breach of contract includes the
loss sustained by the creditor (danno emergente) and lost profits (lucro
cessante), insofar as they are a direct and immediate consequence of the
5 ‘Eine eigenständige Fallgruppe, bei der die Zerstörung der Persönlichkeit durch den
Fortfall oder das Vorenthalten der Empfindungsfähigkeit geradezu im Mittelpunkt
steht’, BGH 13 October 1993, BGHZ 120, 1 = NJW 1993, 781, 783 = GLT, pp. 997–9.
6 In the aforementioned case the amount thus awarded was DM50,000 in the form of a
lump sum and a further DM500 per month for the duration of the victim/plaintiff’s life.
7 Christian von Bar, Gemeineuropäisches Deliktsrecht II, no. 16–22 argues in favour of the
latter alternative.
8 Adherence to this terminology is breaking down in practice.
9 We use the term here in the English sense. In Italian law (unlike French law for example)
future loss, in the sense of loss of a chance, is not compensated as such. The problems
raised by these cases are dealt with as problems of causation. See, e.g., Corte di
Cassazione 6 February 1998, no. 1286, Foro it., 1998, I, 1917.
6 introduction
performance or delay (danno immediato e diretto) (article 1223 Civil Code,

cod. civ.). If the non-performance or delay is not caused by the fraud or mal-
ice of the debtor, compensation is limited to damages that could have been
foreseen at the time the obligation arose (danno prevedibile, article 1225).
If damages cannot be proved in an exact manner, they are equitably liq-
uidated by the judge (liquidazione equitativa del danno, article 1226). At this
level, then, the differences with English and German law are not signifi-
cant. As this, and the next chapters, will show, however, the differences
in the tort area are greater.
In tort cases special rules apply. The basic distinction between patrimo-
nial and non-patrimonial damages, found in the other two legal systems,
is also known to Italian law. The way, however, these are treated in prac-
tice has varied over the years. This will become increasingly obvious as the
presentation of our materials unfolds.
Damage arising from loss of earnings is patrimonial loss and is equi-
tably estimated by the judge according to the circumstances of the case
(article 2056 cod. civ.). When a personal injury is of a permanent nature,
the liquidation of the injury can, if the judge so decides, be in the form
of a life annuity which takes into account the conditions of the parties
and the nature of the injury (article 2057). But the injured party can de-
mand specific redress when this is wholly or partially possible (article 2058
sect. 1) and is not excessively burdensome on the defendant (article 2058
sect. 2).10 Unforeseen damages are also liquidated (danno imprevedibile) in
the same way. We discuss these rules in greater detail in chapter 4.
Non-patrimonial (i.e., non-pecuniary) damage (danno morale) can also
be awarded but only in cases provided by the law (article 2059 cod. civ.).
The italicised words were, for a long time, interpreted narrowly to refer
only to criminal law. So, if there was no violation of the criminal law,
moral damages were not awarded. This approach did not meet with uni-
versal approval; but it survived more or less intact until recent times.
Most recently, however, the highest courts of Italy, taking their cue from
some judgments of lower courts, decided to liberalise the law. Thus, in
the context of fatal accident action, they held that the claimants, ‘relatives’
of the deceased, could claim moral damages for their pain and suffering
even in the absence of a crime. The first court to sanction this departure
from older orthodoxy was the Supreme Court in a judgment delivered on
10 In specific types of cases (not relevant to the subject matter of this book), special laws
may decree that the compensation may take the form of specific redress or restoration.
This, e.g., is the case where art. 18 of the Law on Environmental Damage is applicable
(Law no. 349 of 8 July 1986).
31 May 2003;11 and, a few weeks later, it was followed by the Constitutional
Court in its own decision of 11 July 2003. The evaluation of the damages,
expressly described as non-patrimonial but moral, would henceforth be
undertaken on the basis of all the relevant circumstances including the
closeness of the family relationship, the cohabitation with the primary
victim, the size of the affected family, way of life, the age of the primary
victim and the age of the relatives.
In the domain of personal injury (danno alla persona) some further com-
ments are necessary to take into account an important innovation that
took place in the 1970s.
In Italian law, health is looked at in a comprehensive manner so as to
include injury to the body as well as the psychological consequences (danno
psicofisico) which flow from such injury. This is seen as a subjective right
(diritto soggettivo) protected by the Constitution (articles 2 and 32 Cost.).
Due to a very long, complicated and controversial debate, which mainly
took place in the 1970s between academic lawyers and judges, a new
concept of damage to the person was created by case law. This is known
under the untranslatable heading of danno alla salute or danno biologico –
a notion which refers to any interference with the psycho-physical health
of the claimant which is presumed to be actionable if affected adversely.
This, then, is a third heading of damages which is awarded besides danno
patrimoniale and danno morale.
Danno biologico, as described above (and discussed in greater detail in
chapter 2), was originally awarded only to victims of traffic accidents.
Subsequently, however, it was extended to victims of accidents at work
and then, finally, it was awarded to other types of situations (e.g., damages
caused by defective products, tobacco inhalation, etc.).
Apart from the general rules provided by the Civil Code, many spe-
cial statutory rules govern specific circumstances or relationships. Indica-
tively one could mention the following: compulsory insurance for civil
liability arising from the use of vehicles;12 work-related accidents and oc-
cupational diseases;13 rail, sea and air transport;14 circulation of defective
11 Decision no. 8828 has, thus far, only been published on the Internet, 11 July 2003,
no. 233. See: www.cortecosttuzionale.it
12 Law no. 990 of 24 December 1969, art. 18 ff.; Law no. 39 of 26 February 1977, art. 4; Law
no. 57 of 5 March 2001; Law no. 273 of 12 December 2002.
13 Law no. 144 of 17 May 1999; Legislative Decree no. 38 of 23 February 2000; Legislative
Decree no. 202 of 19 April 2001.
14 Warsaw Convention of 12 October 1929, implemented by Law no. 841 of 19 May 1932;
Bern Convention of 21 February 1961 implemented by Law no. 806 of 2 March 1963.
8 introduction
products15 and social security16 law. There are nowadays also special rules
which govern damage from vaccination and terrorist attacks for which
no compensation is provided but only a simple indemnity. One feature
of (some of ) these statutes is that they may provide ‘caps’ to damages
awarded under them. But no such capping of damages awarded under the
Civil Code is possible.
The impact of history: juries, non-juries, academic writers

English law
The eminent Cambridge legal historian William Maitland encapsulated
the theme of this subsection perfectly when he wrote that ‘the forms of
actions we have buried, but they rule us from their grave’.17 The medieval
writ system thus left the common law still bearing the marks of the nom-
inate torts. The shaping of the early common law by practitioners rather
than academics (as is the case with Continental European law) has also
meant that English law has avoided wide formulations and generalisa-
tions such as those to be found in the modern civil codes. Finally, the
adoption of the jury trial in the later Middle Ages also shaped English pro-
cedure and evidence and left an important mark on the law of damages.
It is with this last point that we are concerned here; and it is not an in-
significant one either. For anything that pertained to damages was within
the province of the jury and this meant two things. First, if the judges
wished to exercise some kind of control over the case before it left their
hands and went to the jury, they had to develop notions and devices that
could help them achieve this aim. In the law of occupiers’ liability, the
distinction between different types of entrants, owed different types of
duty, was just such an invention which came about in the late nineteenth
century. More important was the subsequent ‘invention’ of the notion of
duty of care which helps demarcate the range of relationships and inter-
ests protected by the law and which helped stop cases reaching juries (or
full trial) for the better part of the twentieth century.
The second consequence of jury trial was the absence, for a very long
time, of any legal rules and principles concerning the law of damages.
This led to uncertainty, unpredictability and the lack of a corpus of law
defining the principles of the law of damages. Growing realisation of the
15 Presidential Decree no. 224 of 24 May 1988, art. 11.

16 Law no. 222 of 12 June 1984.
17 A.H. Chaytor and W.J. Whittaker (eds.), The Forms of Action at Common Law (CUP, 1963), p. 2.
t h e i m pa c t o f h i s t o r y 9
need for consistency and comparability in awards thus led the Court of
Appeal in Ward v. James18 to rule that juries should no longer be used for
the assessment of damages save in very exceptional cases.19 Lord Denning
MR, delivering the judgment of the full Court of Appeal, justified this as
follows:
recent cases show the desirability of three things. First accessibility: In cases of
grave injury, where the body is wrecked or the brain destroyed, it is very difficult
to assess a fair compensation in money, so difficult that the award must basically
be a conventional figure, derived from experience or from awards in comparable
cases. Secondly, uniformity: There should be some measure of uniformity in awards
so that similar decisions are given in similar cases; otherwise there will be great
dissatisfaction in the community, and much criticism of the administration of
justice. Thirdly, predictability: Parties should be able to predict with some measure
of accuracy the sum which is likely to be awarded in a particular case, for by this
means cases can be settled peaceably and not brought to court, a thing very much
to the public good. None of these three is achieved when the damages are left at
large to the jury.
It will be noticed that while the first two reasons given for the change
are related to what could be called the ‘fairness’ of the awards, the last is a
purely ‘administrative’ argument, though no less important for that. For
it is this consistency which makes it possible to proceed to settlement out
of court and thus expedites the administration of justice.
A second change of some importance to the law of damages came with
Jefford v. Gee,20 where it was held that judges must assess separately dam-
ages payable: (a) for accrued pecuniary loss; (b) for non-pecuniary damages;
and (c) for damages for loss of future earnings. This threefold division
was largely dictated by the passing of the Administration of Justice Act
1969, which made it obligatory for courts to award interest in any case
18 [1966] 1 QB 273 at 299–300.

19 There is, according to s. 69(1) of the Supreme Court Act 1981, a prima facie right to a
jury trial in cases of fraud, malicious prosecution, false imprisonment and, of course,
defamation. But s. 69(3) has been seen as strengthening further this presumption
against jury trial since it gives a judge the right to deny a jury trial if the case will
require a ‘prolonged examination of documents or accounts or any scientific . . .
investigation which cannot be made with a jury’; see H v. Ministry of Defence [1991] 2
QB 103. Recent decisions of the Court of Appeal to intervene in jury awards have struck
a further blow to the unfettered powers which juries enjoyed in the past. See, in
particular, Lord Woolf ’s judgment in Thompson v. Commissioner of Police of the Metropolis
and Hsu v. Commissioner of Police of the Metropolis [1998] QB 498, where clear and thorough
guidelines where given on the matter of jury instruction.
20 [1970] 2 QB 130.
10 introduction
in which judgment21 was given for more than £200, all or part of which
consisted of damages in respect of personal injury or the death of a person.
Jefford v. Gee was, therefore, the case that elaborated the principles of the
award of interest, and it did so by dividing the heads of damages as above.
After some hesitation, these principles were confirmed in Pickett v. British
Rail Engineering Ltd22 and the position is as follows: (a) special damages
(i.e., pre-trial losses) carry interest at half the usual short-term rate; (b) for
non-pecuniary damages the interest on damages is at a more modest rate –
currently 2 per cent;23 finally (c) future pecuniary losses carry no interest
since they have not materialised at the time of the trial.
The final change was firmly established in George v. Pinnock,24 where it
was accepted that the parties themselves had a right to know how the
judge arrived at his final figure. The older practice, therefore, of allowing
an appeal only where the total figure was erroneous, was deemed to be
incorrect. Nowadays, therefore, the most common ground for overturning
an award is if there is an error in one of its component parts; and this,
typically, consists of the trial judge having failed to consider whether
there is an overlap between different headings of damages with the result
that the plaintiff has been enriched.25
German law
In terms of structure, the draftsmen of the BGB tried to steer a middle
course between the casuistic approach of the Roman law (and English
common law) on the one hand, and the vague general clauses of the French
Civil Code (articles 1382, 1383). Thus, three basic tort provisions of the BGB
(§§ 823 I, 823 II, 826) mirrored the status quo of the late nineteenth century,
though they remained open to new developments in the future.
21 This power of the court to award interest on a judgment meant that if the defendant
paid his debt any time between the commencement of the proceedings and the giving
of judgment he escaped having to pay interest at all. Now, however, as a result of s. 15 of
and Sch. 1 to the Administration of Justice Act 1982 the courts are given power to award
interest on any debt outstanding when the writ is issued.
22 [1980] AC 136.
23 Birkett v. Hayes [1982] 1 WLR 816; Wright v. British Railways Board [1983] 2 AC 773.
24 [1973] 1 WLR 118.
25 Thus, see, Harris v. Harris [1973] 1 Lloyd’s Rep. 445, CA (future loss of earnings and loss of
marriage prospects); Clarke v. Rotax Aircraft Equipment Ltd [1975] 1 WLR 1570 (loss of
earning capacity and loss of future earnings). It is doubtful, but probably not finally
settled, whether there can be an overlap between pecuniary and non-pecuniary losses.
See Lord Scarman’s obiter dictum in Lim Poh Choo v. Camden and Islington Area Health
Authority [1980] AC 174 at 192.
Ideologically, tort law represents a more complex amalgam. Thus, while

the tort law, which emerged around the turn of the eighteenth and nine-
teenth centuries, was strongly influenced by the ideas of the age of en-
lightenment and by liberal principles, the tort law of the German BGB
was rather a ‘latecomer’ and as such already, albeit reluctantly, suscep-
tible to the idea of social justice, the central problem of the twentieth
century.
German tort law, as contained in the BGB, is based on the liberal fault
principle, but also incorporates some concessions to the anti-fault school
by introducing a number of cases where fault is presumed e.g., injuries
caused by employees (§ 831 BGB), or children (§ 832 BGB) or even excep-
tions such as no-fault liability for damages caused by pets (§ 833 S. 1 BGB).
Needless to say, however, the social and economic convulsions of the twen-
tieth century led to further inroads into the hitherto dominant idea of
(economic) freedom. The principle of ‘casum sentit dominus’ was more and
more pushed back by the social component of justice, which called for pro-
tection of the individual and for more extensive compensation wherever
a loss had fallen upon a person. This tendency was backed by the Consti-
tution of 1949 which declared the ‘Sozialstaat’ as one of the fundamental
characteristics of the then newly established Federal Republic. Thus, while
German tort law is still basically rooted in the BGB, its legal and economic
significance has changed substantially by, e.g., the widespread existence
of private insurances, taken out by the potential victims or tortfeasors
(including legal litigation insurances, see p. 31); by a comprehensive net
of social security (see p. 35) or other mechanisms of immediate social
help for injured persons (combined with the right of recourse against the
tortfeasor); and by the emergence of the substantial body of statutory regu-
lation outside of the BGB which – for specific areas – tends to push the fault
principle further back and in many instances establishes strict liability.
The administration of tort law in Germany has always been in the hands
of professional judges. There is no jury in civil cases. This has consequences
for the amount of damages awarded to victims (see p. 17).
Italian law
Shadows of the past
Like the other two systems studied in this book, Italian law bears the marks
(or scars) of the country’s past. Three observations in particular need to
be made at this stage; others will emerge as the exposition of the detailed
rules unfolds.
12 introduction
First is the impact of Roman law. At the beginning this was, of course,
understandable. In the country where Roman law was born, its claim on
the present was obvious. The continued ‘relevance’ of the subject still
remains a discussed and disputed issue, some lawyers championing its
study merely for its historical interest while others argue that despite (or,
perhaps, because of ) its Ovidian metamorphoses, the ancient learning still
has practical significance. Happily, we do not have to enter into this debate
for the purposes of this book. For, at least as far as the law of damages is
concerned, the link with the Roman past has long been attenuated almost
to vanishing point.
The grip Roman law retained over the subject during the middle and
latter part of the nineteenth century later gave way to German ideas
which acquired new prominence with the enactment of the BGB. Soon,
however, they, too, began to be overtaken by indigenous speculation,
largely prompted by dissatisfaction with award practices which often dis-
tinguished levels of compensation on the basis of outmoded societal views.
The work of Gioja26 brought to the subject an approach that made great
use of statistics and was thus too novel for his times. When notice finally
26 Melchiorre Gioja’s main work was Dell’ingiuria dei danni del soddisfacimento e relative basi di
stima avanti i Tribunali civili (1821). In it he stressed that the assessment of damage to the
person must have regard for the two ‘substances’ which constitute the person, i.e., his
body and his mind. He thus argued that the sufferings of the mind also affect the body.
The emphasis of compensation law must be on satisfaction for both affected elements;
and it must be achieved not so much by focusing on the income of the injurer but on
the situation of the victim. Gioja’s ideas led him to criticise Justinianic law and
re-evaluate medieval law which paid more attention to injured feelings resulting from
physical injuries. But Gioja also had another aim. He was concerned to remove the
danger of abuse of assessment of damages by having recourse to the science of statistics.
The chosen criteria taken into account were thus the age of the victim, his life
expectancy and, above all, his working conditions. For, whoever injures a working person
prevents him or her from utilising his or her powers. The shoemaker, who makes shoes
and who has been injured in the hand, must be awarded damages related to the income
he would have produced if he had remained unhurt; the surgeon, rendered unfit for his
profession, must be awarded damages related to the earnings he would have made from
his activity. These premises enable us to elaborate an actual taxonomy of injuries. Gioja
thus compiled very sophisticated tables reflecting his criteria. But, in addition to these
damages, Gioja also considered it necessary to take into account some very intangible
assets such as the deformation of beauty, something which he thought could have
particular impact on a woman’s (plaintiff ’s) life. For all persons who have an income
greater than daily wages he thought one should also have regard to the negative effect
of the injury on their social life. Additionally, the individual limbs of the body were
classified and assessed on the basis of a particular ‘price’, which took into account their
use in one’s physical, working and social life. To all this, Gioja added the injury to one’s
feelings, which is not limited to pain, but includes the consideration of the victim in
the society of his peers, including also his commercial standing.
came, it took a very Italian form; and this is the second feature of Italian
law which needs to be stressed.
The close interrelationship of academic writings and judicial work is
not a feature of Italian law alone. This symbiosis is a feature of the civilian
tradition and contrasts deeply with the common law – especially English
common law – practice of the first half of the twentieth century. But in
Italy, and because of the country’s rules of civil procedure,27 the judicial
acknowledgement of this academic inspiration and its subsequent em-
broidery by the courts is not obvious from the texts of their judgments.
Thus, as will be noted in the next chapter, the judicial tergiversations –
in particular over the way one should compensate non-pecuniary losses –
closely follow these academic debates. The fact that this theorising will
receive little attention in this book is dictated by the aims set out in its
Preface. Yet it is clear that the really interested reader must, at some stage
in his research, be able and willing to study this material if he is to un-
derstand better the judicial pronouncements on this subject. This adds a
further layer of difficulty in the presentation of Italian law which almost
makes it impenetrable to the outside observer – certainly the practitioner.
For present purposes, the last peculiarity of the Italian legal system
which needs to be stressed, particularly for the English reader, is the sys-
tem’s geographical fragmentation and complexity. By this we mean to
stress regional variations, both in the size of awards and, at times, the
proclaimed way of calculating them. The extent to which these judicial
variations can be linked to ‘local’ loyalties (e.g., legal theory developed
by the local law school) adds further ‘spice’ to this complex mixture. But
‘allegiances’ (and the reciprocal obligations they generate) are a notable
feature of Italian life as a whole. Here, we mention this feature only in
order to stress that it is also found in the life of the law.
Italy’s political fragmentation in the Middle Ages and, later, in the Re-
naissance and post-Renaissance years (lasting until its political unification
during the middle of the nineteenth century) is, of course, well-known.
Once again, one is bound to enquire if this picture is really that different
from the picture one encounters in post-1871 Germany (or, even, the
27 Article 118.3 of the Rules Concerning the Application of the Code of Civil Procedure
(enacted along with the Civil Code in 1942) expressly states that: ‘in ogni caso deve
essere omessa ogni citazione di autori giuridici’ [‘in any case all citation of legal authors
must be omitted’]. The reasons are not that different to those once utilised in England to
prohibit citing to English courts the works of living authors. But the citation of foreign
judgments is not caught by the prohibition and is beginning to take hold though,
admittedly, in a ‘supporting’ manner.
14 introduction
present United Kingdom). And yet, one is tempted to say that in Italy’scase
the difference may be quantitatively and qualitatively very pronounced
indeed. For one is not only talking of substantive differences in per capita
income – much higher in the North than in the South – but also differ-
ences of mentality, social structures and notions about family unity and
mutual obligations – all of which have a bearing even on a mundane and
technical subject such as the law of damages. To put it differently, the
regional variations in awards can be pronounced, something which has
led practitioners often to indulge in a sophisticated game of (internal)
forum shopping.28 If practising lawyers (and their clients) can gain (and
have gained) from such ingenuity, academics end up paying a substantial
price, at any rate whenever they are called upon to give to foreign lawyers
a simple presentation of Italian law.
Codal structures
In terms of structure the draftsmen of the Codice civile of 1942 had to make
a considered choice between the Code of 1865 (of the then recently uni-
fied Italy), which was inspired by the French model (Code Napoléon) and the
newer German Code (BGB) of 1900. (A third choice, never fully explored
by the Italians, was of trying to adjust the French model to the German
one and produce a synthesis of their own.) In the end, the decision was
taken to build tort law around a general rule, a sort of ‘general clause’
(article 2043 cod. civ.) which states that any malicious, intentional or neg-
ligent act which causes an injury to another ‘contrary to law’29 obliges the
tortfeasor to make amends.
As in the case of the French and German models, the fault principle
governs the model. Nonetheless, presumptions of fault were introduced
concerning the liability of parents, guardians, teachers, masters and em-
ployers, dangerous activities, things and animals in custody, collapsing
buildings and the circulation of vehicles.
As to what was protected, the codal provision was vague and generous;
and in practice it experienced a gradual expansion. Thus, during the first
28 Cases concerning torts are, at the plaintiff ’s choice, heard by the judge of the place
where the tort was committed (art. 20 Civil Procedure Code, cod. proc. civ.) or the place
of the defendant’s residual abode (the home for natural persons: art. 18 cod. proc. civ.,
or the place of the headquarters, for legal persons: art. 19 cod. proc. civ.). In car accident
cases, plaintiffs usually decide between the two depending upon which court is likely to
award higher damages in accordance with the tables concerning personal injuries
applicable to their location.
29 This requirement, a legacy of the Roman iniuria, brings Italian law closer to German
than to the French.
decades of the Code’s life, the notion of danno ingiusto (in the key provision
of the Code: article 2043) was understood to refer only to interferences
with absolute subjective rights such as property, bodily health and per-
sonality (surnames, pseudonym, image and, later in the 1960s, privacy).
Since the 1970s, however, and thanks to a revolutionary decision of the
Supreme Court,30 even interference with contractual relations has been
included within the protective scope of this provision, in marked contrast
to the common law and German law which may afford such protection
only when additional elements are satisfied. Since 1999, following a sem-
inal decision of the Supreme Court,31 damages arising from an illegal act
of the administration have also been included within the protective ambit
of this provision thus leading to a damage award. The general rules of the
Civil Code have given rise to an enormous volume of decisions by Italian
courts so that one can truthfully claim that contemporary Italian tort law
is almost in its entirety case law.
Since the 1960s, the interpretation of the codified rules has been done
against the background of the Republican Constitution. This gave birth
to an entirely new framework of values (solidarity, equality and fairness)
which, in turn, provided new and intriguing foundations for private law
as part of the process which has elsewhere32 been described by one of us
as the ‘constitutionalisation of private law’. This new framework offers
the legal basis for some new policies for tort law concerning, for instance,
the rational distribution of wealth, the protection of the individual, the
balancing of conflicting interests, etc. Economic analyses of the law of
torts and references to the wider constitutional order have thus become
the main motors towards the introduction of strict liability in many in-
stances. Employers’ liability (article 2049 cod. civ.) and products liability33
are notable examples.
Legal machinery
In Italy as, indeed, in Germany, tort law has always been in the hands of
professional judges and juries are not recognised.
Since 1995 small claims judges (so-called ‘giudici di pace’, who are lay
judges and not employees of the state) are competent up to €2,500, and
30 Corte di Cassazione 26 January 1971, decision no. 174, Foro it., 1971, I, 342.
31 Corte di Cassazione 22 July 1999, decision no. 500, Foro it., 1999, I, 2487.
32 Shimizu Trust, ‘Comparative Law: A Subject in Search of an Audience’ (1990) 53 MLR.
33 Decree of the President of Republic no. 224 of 24 May 1988, enacting EEC Directive
85/374, art. 1.
16 introduction
in car accidents cases up to €15,000.34 All other tort cases are submitted
to courts dealing with civil matters, namely, the Court of First Instance
(Tribunale), the Court of Appeal (Corte d’Appello) and the Corte Suprema
di Cassazione – the Italian Supreme Court.
According to the figures of the Department of Justice (Ministero della
Giustizia) there are, in Italy, 848 locations of giudici di pace, 164 locations
of Tribunali, 26 Corti d’Appello and one Corte di Cassazione in Rome.
The total number of cases heard by these courts is very high. According to
the last Report of the Department of Justice covering the period 1 July 2001
to 30 June 2002, giudici di pace heard 726,845 civil cases. The Tribunali
heard 1,072,719 cases and the Corti d’Appello 7,899 cases. During this
same period the Corte di Cassazione had to deal with circa 15,000 appeals.
The average length of civil proceedings (from initiating the relevant
proceedings to decision) during this same period has been: 325 days for
the giudici di pace; 963 days for the Tribunali; 727 days for the Corti di
Appello; and almost two years for the Cassazione. So, theoretically, the
amount of time needed from the issuing of the writ to the final decision
of the Supreme Court could be something in the region of 2,320 days
or over seven years – a record which has not escaped the censure of the
European Court of Human Rights in Strasbourg.
Levels of award: a first glance

English law
The level of awards is set, in practice, by guidelines issued from time
to time by the Court of Appeal.35 Judges, and the Court of Appeal, set
what they regard as the appropriate bracket for each category of case. The
highest possible award for quadriplegia or very severe brain damage is
£205,000. Hence that figure sets the benchmark for all other awards in
the various brackets below it.
Guidelines for the assessment of general damages have also been is-
sued by the Judicial Studies Board, such guidelines being updated approx-
imately every two years. Although cases may differ on their individual
facts, judges will not go outside conventional brackets. In 1999, a Re-
port of the Law Commission had recommended that general damages be
increased by a factor between 1.5 and 2. The Court of Appeal in Heil v.
Rankin declined to follow that recommendation and increased awards of
£150,000 by 33 per cent, those of £110,000 by 25 per cent, those of £80,000
34 Art. 7 cod. proc. civ. 35 For example, what was said in Heil v. Rankin [2001] QB 272.
l e v e l s o f awa r d : a f i r s t g l a n c e 17
by 20 per cent and those of £40,000 by 10 per cent. The decision demon-
strates the caution which has always been adopted by English judges in
setting levels of general damages. In consequence, awards are very much
lower than those in the United States of America where a jury, not a judge,
sets the damages.
In common with Germany, awards in defamation cases (where the dam-
ages are set by the jury) have traditionally been much higher. Although
juries do not give reasons for their decisions and no one is permitted to
enquire into what happened in the privacy of the jury room, there is a
widely held belief that the jury’s intention is to punish the defendant.
It has led the Court of Appeal again to issue guidelines for appropriate
awards in defamation cases.
German law
The level of awards is influenced by the fact that there is no jury in civil
proceedings in Germany. The amount of compensation is assessed by the
judge who – with regard to mentality and personal income – could be
compared with higher ranking civil servants. Thus, middle class values and
economic perceptions determine the assessment of damages.36 Attempts
at the arbitrary redistribution of wealth, as one finds (or is said to find) in
American jury awards, are totally unknown in German law and, indeed,
the law of tort of Continental Europe.
Traditionally, German judges showed themselves very cautious in
awarding damages, though the current tendency points to somewhat
more generous awards. In the case of extremely severe injuries, the courts
have awarded under the heading of ‘Schmerzensgeld’ (non-pecuniary dam-
ages) up to €250,000 along with periodical payments of €1,000 per month
or more.37 Such amounts, though smaller (or much smaller) than awards
36 As to the social background and mentality of German judges see Heldrich and
Schmidtchen, Gerechtigkeit als Beruf (1982); Raiser, Rechtssoziologie (1987), p. 151.
37 In one case, a three-year-old boy was hurt in the face by an exploding bottle of lemonade
and became blind. The Court of Appeal of Frankfurt (OLG Frankfurt 21 February 1996,
VersR 1996, 1509, 1510) awarded DM500,000 (c. €250,000) plus a monthly pension of
DM500 (c. €250). In a decision delivered in 1993, the Court of Appeal of Düsseldorf (OLG
Düsseldorf 10 February 1992, NJW-RR 1993, 156, 158) had to deal with the case of a
thirty-three-year-old man who was hurt so badly in a car accident that he suffered
tetraplegia; the court granted him DM450,000 (c. €225,000) and a monthly pension of
DM750 (c. €375), which added up to c. DM600,000 (c. €300,000) when the annuity was
capitalised. In a case of paraplegia, the Court of Appeal of Frankfurt (OLG Frankfurt 21
March 1990, NJW-RR 1990, 990) awarded DM200,000 (c. €100,000) plus a monthly
pension of DM400 (c. €200). For cranio-cerebral injury resulting in an increased fluid
18 introduction
for pain and suffering made in the USA can, in fact, be larger than the
above figures may suggest once one has taken into account the additional
monthly amounts, especially where the victim has a long life ahead of
him or her.
An interesting feature of the German compensation practice is the sub-
stantial gap between the level of awards for physical injuries on the one
hand and compensation for infringements of personal rights on the other
(for a drastic contrast compare OLG Hamburg NJW 1996, 2870 (awarding
DM180,000 or €95,000 for a fictitious interview with Caroline of Monaco)
and AG Radolfzell NJW 1996, 2874 (awarding DM5,000 or €2,600 for the
rape of a woman)). This practice has been attacked with reference to the
principle of equality (article 3 I Grundgesetz) but, thus far, the attack has
not led to an upward adjustment of awards for non-pecuniary types of
harm.38
The comparison of awards is facilitated by extensive private compila-
tions of court awards in Germany.39
Italian law
In Italian law the assessment of the amount of compensation is done by the
judge, usually on the basis of the findings of the technical report produced
during the trial by a medical expert appointed by the court (subject to the
right of the expert witnesses of the parties to contradict his findings). The
liquidated amount is assessed according to ‘equity evaluations’.40 We can
distinguish different kinds of methods.
‘Danno patrimoniale’ is calculated by taking account of expenses and the
loss of earnings.
‘Danno morale’ – pain and suffering in the meaning explained above – is
left to the ‘wise’41 discretion of the judge. In practice it does not reach half
the amount awarded for ‘danno biologico’. Currently, there is some pressure
pressure in the head and partial tetraspasticity, the Court of Appeal of Nürnberg (OLG
Nürnberg 21 June 1991, DAR 1994, 158) granted an indemnification of DM260,000
(c. €130,000). For more examples see Deutsch and Ahrens, Deliktsrecht (4th edn, 2002),
pp. 230–1, as well as chapters 2 and 3.
38 BVerfG 8 March 2000, NJW 2000, 2187; see p. 64.
39 ‘Schmerzensgeldtabellen’; see, e.g., Beck’s Schmerzensgeldtabelle (4th edn, 2001); Hacks, Ring
and Böhm, Schmerzensgeldbeträge (17th edn, 1995); see GLT, pp. 919–20.
40 The idea of ‘equitable evaluation of damages’ appears very frequently in Italian legal
literature and it really means judicial discretion. The flexibility (and vagueness) of the
notion must be noted; but it cannot be avoided.
41 Another of those Italian expressions frequently encountered in this part of the law. The
reader must note, however, how practice seems to have developed guidelines within
which this ‘wise’ judgment is exercised.
l e v e l s o f awa r d : a f i r s t g l a n c e 19
to apply tables which will give the same result for all cases, according to
the circumstances.
The most difficult problem is related to the calculation of ‘danno bio-
logico’. Every (local) court has in its possession tables drafted with the help
of statistics. In the Appendix, the reader can see the regional variations of
awards for ‘danno biologico’ in cases of permanent invalidity. The extent of
(permanent) invalidity can, of course, vary; and it is measured by a points
system fixed by the medical profession: 1 being the lowest; 100 being total
i.e., permanent disability.
The amounts given per point of invalidity vary according to standard
parameters (e.g., the age, sex, health, etc. of the victim). In the past, and to
some degree even at present, these amounts are (to some extent) affected
by fortuitous causes such as the judge’sleanings, regional differences, and
the like.
From a comparative point of view, what may be most interesting to
stress are the regional differentiations that have resulted from this prac-
tice. Thus, a five-year-old child, for each ‘point’ of permanent disability,
may obtain €550 from the Tribunal in Milan, €550 from the Tribunal in
Rome, and €1,200 from the Tribunal in Genoa; a thirty-five-year-old adult,
respectively €650, €400 and €900; an elderly person aged sixty-five, re-
spectively €500, €250 and €450.
For ten ‘points’ of disability, a five-year-old child, again in the same Tri-
bunals, may obtain respectively €15,000, €15,000, and €30,000; a thirty-
five-year-old adult, respectively, €12,000, €10,000 and €23,000; an elderly
person aged sixty-five, respectively €10,000, €6,500 and €11,000.
For 100 ‘points’ of disability i.e., for total disability, the minor may ob-
tain respectively €500,000, €650,000 and €300,000; the adult respectively
€450,000, €420,000 and €230,000; the elderly person aged sixty-five re-
spectively €370,000, €270,000 and €110,000.
As the text above shows, the value attributed to each point has var-
ied from one regional court to another. Such variations have not been to
everyone’sliking – hence article 5 of Law no. 57 of 5 March 2001 fixed a uni-
form price for ‘each point’ of permanent disability. This was set at €600.
This figure can be adjusted in order to take into account the rate of infla-
tion and the cost of living and, indeed, the Ministry of Industry (Ministero
delle Attività Produttive) raised this by decree on 22 July 2003 to €650.
Uniform tables thus now exist for permanent disability up to 9 points. For
higher forms of permanent disability, the value of each point remains to
be fixed in a uniform i.e., nationwide manner. Until this is done, regional
variations remain the rule.
20 introduction
Basic principles of tort law, especially to the extent that

they affect compensation practice
English law
From the point of view of a civilian lawyer, the notion of the common
law of tort which will attract the most interest and cause the most con-
cern is that of duty of care. As already stated, common lawyers use this
notion to demarcate the range of relationships and interests which are
protected by the law, whereas other systems have left this decision to the
legislator who, once he has taken it, shapes court decisions of subsequent
courts. The German and English attitude towards compensation for pure
economic loss through tort rules is a good illustration. For both systems
have, broadly speaking, taken the same stand (unlike, for instance, French,
Italian, Dutch law) and have expressed this ‘dislike’; the first by exclud-
ing pure economic loss (reiner Vermögenschaden) from the list of protected
interests of § 823 I BGB and the second through the utilisation of the no-
tion of duty of care. The policy arguments for such decisions can be found
in either the preparatory works of the Code or, in the case of the common
law, in its court decisions.
There exist, however, other areas of the law where the award of damages
seems dubious but where the systems have handled the issue differently.
Compensation for psychiatric injury (in the USA invariably referred to as
emotional distress) is such an example. For the common lawyers, alter-
nating between exclusionary and more liberal rules, the ambivalence is
largely caused by the fear of unending litigation, vexatious or frivolous
claims and exaggerated awards. Though these are not insubstantial wor-
ries, it can be argued that they seem larger in the common law systems,
especially the USA, where trial by jury is still allowed (or has still left its
mark). For judges are unlikely – or so the argument typically runs – to be
swayed by emotional considerations and enlarge awards in an irrational
manner, nor be bamboozled by the exaggerated presentation of medical
evidence as it occurs in an adversarial system of justice. These concerns,
as well as the need to keep litigation within reasonable bounds, saving
public and private money, have made an Anglo-American court reluctant
to make an award to such claimants. In Germany (and France and Italy) on
the other hand, these fears seem to have been checked by the structural
differences found in the trial systems of these countries with the result
that not only do we find such headings of damage widely compensated but
also find them compensated by relatively small amounts. Still, as we shall
see, the essential difference between psychiatric harm which amounts to
b a s i c p r i n c i p l e s o f t o r t l aw 21
a recognisable medical illness and pure pain or grief is known to all three
systems under comparison.
The same fears, but in a different area of civil liability, can also be found
in English (and American) law. This is the troublesome area of state and
local authority liability over a wide range of issues including potential
liability for the police, prosecution services, school authorities and other
social services bodies whose activities are primarily governed by a written
regulatory regime. The no-duty option has, it is submitted, again prevailed
widely in the common law systems; and this has largely been so because
common law judges have seen themselves as protectors of the fiscus. The
more liberal regimes found in Germany and France may, in part again,
be explicable by the fact that awards made in these systems for violation
of the rules of civil liability are relatively modest. Though these types of
claims are not within the purview of this book the idea herewith sketched
is one which the reader must constantly bear in mind. For the central
theme behind it is that in the common law, what often happens at the
liability stage of the enquiry is, in reality, determined by issues pertaining
to damages and procedure.
The last general point worth raising at this stage is the common law’s
willingness to use the notions of damage and causation to limit liability
and hence the possibility of awards. The bulk of these instances do not,
once again, concern issues of personal injury and thus do not fall to be
discussed in this book. Yet they do provide interesting insights into the
methodological need to look at foreign systems and the solutions they
provide to given factual situations from the angle of history, procedure
and wider societal policy concerns.
For we can see how judges could lay down rules about what kind of
damage was suitable, and the rules they laid down in fact differed accord-
ing to the type of behaviour in question. Just as the most objectionable
forms of behaviour (according to the early way of thinking, at any rate)
were made actionable per se, we find that the less objectionable the be-
haviour, the stricter is the definition of the requisite damage. And for
the least objectionable forms of damaging behaviour, such as the right
to start legal proceedings and the right to speak, this strictness was ex-
tended from the definition of that damage to the prescription of the causal
link between the behaviour and the damage. Thus, in an action for abuse
of legal procedure the plaintiff fails unless he shows that because of the
defendant’s conduct he has suffered damage in the form of risk of im-
prisonment, risk to property, actual financial damage or inevitable loss of
reputation. Other types of ‘injury’, like anxiety or a tarnished reputation,
22 introduction
will not suffice. Similarly, in all cases of slander (save the four exceptional
categories which are actionable per se), the plaintiff has to show that he suf-
fered special damage in the sense of damage which is capable of pecuniary
estimation. Indeed, the cases suggest that a tight causal link will also be
required, for it will not suffice to establish that the normal consequence
of the words complained of was to make others think worse of the plain-
tiff. It will also have to be shown that the words complained of directly led
others to deny the plaintiff some economic benefit. Finally, in negligence
the plaintiff must prove damage. Where the harm is physical injury to
person or property, the courts’ main preoccupation has been with issues
of duty and remoteness; and where the plaintiff ’s hurt has occurred invis-
ibly in the form of shock or pure financial loss, they have encountered the
greatest difficulties. Yet, a few cases apart, the courts have refused to deal
with these problems under the rubric of ‘damage’ and have tried to use
the concepts of duty and remoteness with which they are familiar. This
brings us back to our opening remarks about the tendency of common
law judges to use remoteness or duty terminology where they are really
expressing doubts as to the compensability of a particular type of damage.
German law
When we move to German law we note that the problems discussed under
this subheading become problems of ‘structure’ or arrangement of the
kind which one has to consider in systems operating under written civil
codes but do not arise in the common law systems. Thus, the principles
of compensation for injuries are not peculiar to tort law but are laid
down in the general provisions of the second book of the BGB, the ‘law
of obligations’ (§§ 249–255 BGB). They thus apply to contractual as well as
tortious liability. Indeed, only few provisions of tort law (§§ 842–845 BGB)
spell out or modify these principles. A very practical consequence of this
first point is that the researcher must be prepared to find the relevant
material not merely in tort books but also in treatises of the entire law of
obligations.
The starting principle is ‘Naturalrestitution’– the wrongdoer has to repair
the damaged good (§ 249 I BGB) or to pay the money necessary for its
restoration (§ 249 II BGB).42 This principle goes along with the principle
of ‘Totalreparation’ – the damage has to be fully compensated.43 It is no
exception to this principle that the wrongdoer may only partially be liable
42 As to the freedom of disposition of the victim see chapter 2.

43 For the ‘loss of chances’ see p. 68.
for the damage because of contributory negligence of the victim or his

failure to mitigate the damage (§ 254 I, II BGB).
Only where ‘Naturalrestitution’ is not possible or not sufficient, has the
damage to be compensated in money (§ 251 I BGB). The wrongdoer can
choose this method of compensation also in cases where a restitutio would
be possible, but disproportionally expensive (§ 251 II 1 BGB).44
Even if the tortfeasor may be required to pay money under § 249 II and
251 BGB, the point of reference for the calculation is different: under the
principle of ‘Naturalrestitution’ (§ 249 II BGB), it is the costs of the ‘repair’;
under § 251 BGB, it is the market value of the damaged good.
As a matter of principle, non-pecuniary damages do not have to be com-
pensated, unless a statutory provision explicitly orders such compensation
(§ 253 I BGB; see p. 4 and p. 60).
Only the person who is directly injured by the tortfeasor is entitled to
damages under German law. Persons indirectly affected (ricochet victims)
are generally not included in the protective scope of tort law.45 German
tort law, however, has established two exceptions to this general principle:
§§ 844, 845 BGB, concerning ‘relatives’ who have lost statutory claims
for alimony or services against the victim46 . Another exception has been
created by the courts, concerning shock injuries of persons who watch or
learn of an accident in which a close relative is killed or severely injured.47
A further, but veiled, exception may be found in the rules which deal with
the compensation of the victim for costs which his relatives have incurred
in order to care for him or visit him in hospital.48
Italian law
As mentioned above, the basic rules governing compensation for personal
injury are set out in the Italian Civil Code art. 2056. In its basic structure
this system leans more towards the French and more ‘generous’ approach
to tort law than towards either the English or the German. By this we
mean basically that Italian law has not experienced the difficulties the
other two systems have with pure economic loss, being content to leave its
solution to the notion of causation. On the other controversial issue of tort
44 This rule does not apply, however, with regard to injured animals: § 251 II 2 BGB.
45 This rule may not be confused with the (irrelevant) distinction between direct and
indirect damages. If the tortfeasor is liable for the injury of the victim, this includes
direct damages (Erstschaden) as well as consequential damages (Folgeschäden) – as long as
the latter can, according to the theories of causation, be attributed to the tortious act.
46 For more details see GLT, pp. 925–30. 47 See p. 81 and GLT, pp. 115–44.
48 See chapter 3.
24 introduction
law – compensation of psychiatric injury – the approach is generous in

practice even though this system, too, accepts in principle the (often vague)
distinction between recognisable, psychiatric injury (which is compen-
sated) and mere pain, grief and suffering, which are not. It is notable
that in this area of the law we even find allusions to the floodgates argu-
ment which, one must admit, is not one overtly utilised by European legal
systems.
Though in its structure, Italian tort law differs from both English and
German tort law, its attitude towards the basic principles of law which
affect the rules of compensation are similar to those found in the other
two systems under comparison. Thus it, too, attributes to compensation
the prime (if not exclusive) function in the reparation process, accepts the
principle of full compensation (and rejects the idea of capping damages
except in certain situations regulated by statute), distinguishes between
pecuniary and non-pecuniary damages and, despite the fact that it recog-
nises the possibility of paying damages in the form of annuities, on the
whole opts for a lump sum method of settling the tortfeasor’s debt. But
it also has features of its own which will be stressed in the appropriate
places in this book. Here suffice it to mention one only.
To understand better the current law of compensation in Italy one must
also refer – even if very succinctly – to yet another aspect of the system. At
one level this has more to do with wider economic and political considera-
tions than with law in the strict sense. But since these wider considerations
affect the size of awards, they have to be mentioned here, even at the risk
of producing a crass account of a complex problem.
From an economic and social point of view, it is widely accepted that
compensation for personal injuries does not only have a ‘micro-economic’
dimension i.e., that it affects the relationship between the wrongdoer and
the injured party. On the contrary, the compensation of personal injuries
has a bearing, often a considerable one, on other aspects of societal life:
the system for the organisation of labour, social security, the system of
prevention of accidents, and others. For present purposes, one more con-
sequence must be noted: the compensation amounts that will become
payable to successful claimants also have a bearing on the private insur-
ance system. For that system, the forecast of the total amount due for
compensation in relation to the number of expected road accidents is
one of the components of the calculations required for the determina-
tion of reserves to be earmarked by insurance companies. But the conse-
quences of accidents go further and deeper than what has been suggested
thus far.
Given that car ownership is very extended in Italy and given also the fact
that insurance for motor vehicles is compulsory, the cost of car insurance
is one, effectively, carried by most Italian families. For this reason, mo-
tor car insurance has, nowadays, also become an item that interests the
government since it has to be taken into account in determining the statis-
tical index of the rate of inflation. The widespread claim for damages from
the use of vehicles is taken as the benchmark against which all claims for
personal injuries must compare, except for those cases where there are
reasons to intervene with specific rules, such as for accidents in the work-
place, catastrophic events, and so forth. Hence the widespread conviction
that the rules pertaining to personal injuries should not be separated from
the evaluation – of a macroeconomic nature – of their effects on the entire
economic system and on that in which the insurance companies operate.
It is against this background that one must see the interventions made
at the beginning of the twentieth century by the insurance companies to
standardise, according to assessment tables, the amounts to be paid out
to the victim in the event of permanent damage. The same is true for the
agreements reached at the end of the twentieth century on the premiums
to be charged to their insured parties. The Italian government assumed a
big say in this.
In the 1990s the tide changed. Various EEC Directives49 forced the Ital-
ian government to give up its right to fix premiums and leave their de-
termination to market forces. Most observers had assumed and, indeed,
predicted that this would lead to a decrease of premiums as a result of mar-
ket pressures forcing insurance companies to become more competitive.
Yet the premiums went up, not down, because the insurance companies
argued that ‘danno biologico’ and other kinds of rising costs could only be
met by a rise in car insurance premiums. This, however, was the façade;
the reality was different. For an enquiry by the Anti-Trust Authority sub-
sequently determined that seventeen insurance companies had reached
a secret agreement enabling them to increase premiums. For this, the
‘guilty’ insurance companies were fined €350,000,000;50 and an appeal to
the Consiglio di Stato was unsuccessful.51 It is, therefore, understandable
49 Directive 92/96/EEC (life) and Directive 92/49/EEC (non-life) respectively enacted with
Legislative Decree no. 174 of 17 March 1995 and Legislative Decree no. 175 of 17 March
1995.
50 Autorità di Garanzia della Concorrenza e del Mercato, delibera del 28 July 2000,
no. 8546 in Boll. N. 30/2000.
51 Consiglio di Stato, decision of 23 April 2002, no. 2199, see www.giustizia-
amministrativa.it
26 introduction
why governments over the last few years have put forward rules concern-
ing the criteria for the assessment of personal injuries, not so much with
the aim of standardising compensation in the event of identical or similar
injuries, but rather in an effort to contain the amount of the same, and
therefore inflation.
Size of judiciary, volume of litigation, delays and cost

English law
In 1999, civil procedure in England underwent a wholesale and radical
reform as a result of the Report of the Woolf Committee. The avowed
purpose of the reform was to make the resolution of all forms of civil
dispute quicker, easier and cheaper.
In consequence, all claims for personal injuries must be started in the
county court unless, at the time when the proceedings are issued, the
claimant’ssolicitor files a certificate that the value of the claim is in excess
of £50,000.
Claims with a value of up to £5,000 are allocated to the small claims
track. At the hearing, the strict rules of evidence do not apply and the
court need not take evidence on oath. Such claims are generally heard by
a district judge.
The court may not order a party to pay the other party’s costs in small
claims cases except for a fixed sum which has to be paid by the claimant
on commencement of a claim. The only other exception to that rule is
that if one party has behaved unreasonably in the conduct of his claim he
may be ordered to pay the costs of the other party.
Claims with a value of between £5,000 and £15,000 (and having no
special difficulty) would be allocated to the fast track. The intention of
the Civil Procedure Rules is that such cases should be completed within
thirty weeks of the claim being instituted. Hearing times are not normally
longer than a day; and the court may not award more than £500 by way
of costs where the claim is worth more than £3,000 but not more than
£10,000, or £750 where the value of the claim is in excess of £10,000.
The more complicated cases would be allocated to the multi-track. They
may be tried either in the county court or the High Court. In practice it is
only the very large or very complicated cases which will be heard in the
High Court.
The length of time between injury and the date of trial in multi-track
cases varies enormously. However, the court has powers of case manage-
ment which it exercises to attempt to ensure that the case is not unduly
s i z e o f j u d i c i a r y, v o l u m e o f l i t i g a t i o n 27
delayed. Even in a complicated head injury case (where, for example, the
claimant needs a lengthy period of rehabilitation) the court tends to set
periodic case management conferences in order that it may be informed
as to the progress of the claimant and ensure that the matter is brought
to trial as expeditiously as is practicable.
In these types of cases the intention of the Woolf Committee to drive
down the costs has not, thus far, succeeded. In a long, difficult and com-
plicated case the costs could easily exceed £100,000 on each side.
In multi-track cases the costs are not fixed. Each party is entitled to
spend as much as they think they need. However, once the case has been
decided the losing party, which normally pays the costs of the winner,
is entitled to have the winner’s cost assessed by a specialist cost judge.
He will determine what is reasonable. Normally the winner will recover
about 80 per cent of the costs actually incurred from the other side.
German law
There are many more courts and judges in Germany than in England.
More precisely, there are 708 Amtsgerichte, 116 Landgerichte, 25 Ober-
landesgerichte and one Federal Supreme Court in civil matters (BGH).52
Approximately 22,000 judges are employed by the single states of Germany
or by the Federal Republic (with 110 judges at the BGH). The output of pub-
lished decisions in civil matters, especially in tort law, is very high. The
more important decisions of the BGH and the Oberlandesgerichte are pub-
lished officially by the courts themselves (BGHZ, OLGZ), but any of these
or other decisions may be published by interested law journals.
The duration of court proceedings varies considerably, the average du-
ration for the court of first instance being six months (Amtsgericht) or
11 months (Landgericht), respectively. Proceedings before the courts of
appeal take (on average) six to seven months (Landgerichte) or eight to ten
months (Oberlandesgerichte). The third instance again takes up to one
year (Oberlandesgericht or BGH). This means that parties to a lawsuit may
have to wait for the final judgment of the BGH (or OLG) for four years or
more.53
The costs of the proceedings depend on the value of the matter in dis-
pute. They include the costs of the court and the lawyers’ fees. If the value
52 As to the jurisdiction of these courts see GLT, pp. 4–7.

53 See Statistisches Bundesamt, Fachserie 10, Reihe 2: Rechtspflege: Gerichte und
Staatsanwaltschaften; Statistisches Bundesamt, Arbeitsunterlagen Zivilgerichte 2000;
for older figures see Schreiber, Jura 1991, 617–20.
28 introduction
of the matter is low, the costs may exceed the amount of money the par-
ties are fighting for. (Example 1: value €600; costs of first instance €400,
second instance €550, third instance €500 = costs of €1,450 altogether.
Example 2: value €35,000; costs of first instance €6,500, second instance
€8,500, third instance €8,000 = costs of €23,000 altogether.)54
Italian law
In Italy, the number of ‘ordinary’ (i.e., career, full-time) judges is approxi-
mately 8,000. To these must be added thousands of judges recruited on a
temporary basis from practising lawyers to deal with ‘severance’ proceed-
ings, which have formed a huge backlog, as well as thousands of giudici
di pace.
Every town, regardless of size, has its court, whilst the districts of the
Courts of Appeal correspond, by and large, to the regional capitals of
Italy. The number of judgments dealing with tort litigation reached by
the Corte di Cassazione every year represents, approximately, 10 per cent
of this court’s total number of decisions. Most are published in the law
reviews, and in data-banks. Judgments by the Constitutional Court (Corte
Costituzionale) on this subject are few, but highly relevant, as we have
seen (and will note again, later on) concerning both damage per se and
non-economic damage.
The duration of proceedings varies according to circumstances and the
workload of each court. Usually, a trial judgment takes between three
and four years to be delivered counting from the date when the writ was
issued. An appeal takes a further two to three years, and recourse before
the Corte di Cassazione will delay the final outcome by a further two
years. These time periods are slightly reduced if judgment is sought from
a giudici di pace.
The length of trials is one of the chronic problems of the administration
of justice in Italy, so quite often victims have gone to the European Court
of Human Rights in Strasbourg, and have obtained judgment against Italy
for violation of fundamental rights.55 Individuals who suffered a loss due
to a violation of the European Convention on Human Rights may have
their damage liquidated on an equitable basis according to Law no. 89 of
24 March 2001.
54 Compare the examples given by legal cost insurers, at www.anwalt.net/kosten and

http://www.autorecht24.de
55 The last decision of the Strasbourg court condemning the length of the Italian
proceedings was published on 27 March 2003: see www.dirittiuomo.it
w h o pa y s l e g a l c o s t s ? 29
The cost of trials is largely linked to the value of the lawsuit. The judge
awards by judgment the amount of costs, which include both court fees
and legal fees and expenses for the winning party. Court costs are not con-
sidered high – they vary from court to court, but do not exceed e.g., €3,000
to €5,000 for car accidents. Taxes for judicial acts and execution of judg-
ments are, however, high. As regards lawyers’ fees, these are set out by the
National Bar Council and are fixed by a decree of the Ministry of Justice.
They vary depending on the value of the case and the activity performed,
in or outside the court.
Who pays legal costs? Is legal aid available and, if so, to whom and
on what basis? Does legal aid act as a brake on litigation? Are
conditional fee agreements or contingency fees permitted?
English law
The general rule is that the losing party pays the costs of both sides. How-
ever, since the introduction of the Civil Procedure Rules in 1999 costs are
more issue-based than before.56 The overall winner may be deprived of his
costs for an issue he has lost. In practice that will only be done where the
issue on which he has lost played a major part in the case.
A defendant can protect himself by making a payment into court of the
amount which he believes that the claimant will actually recover at trial.
The claimant has the right to take the money so paid into court within
twenty-one days of being notified of the payment in. In that event the
defendant will pay all the claimant’scosts. If, however, the matter proceeds
to trial and the claimant recovers the same or less than the amount of the
payment, he will have to pay the defendant’s costs as well as his own from
the date of such payment in.
In the event that the trial is split and liability is tried first, the claimant
will be awarded his costs of that trial. If, when quantum is dealt with, he
fails to beat a payment in then he will have to bear the costs of the second
trial.
If the defendant is unable to protect himself by means of a payment into
court (as, e.g., where liability is tried separately) he can protect himself by
making an offer of settlement in a letter marked ‘without prejudice save
as to costs’. The letter cannot be referred to unless and until the question
56 A.E.I. Rediffusion Music Ltd v. Phonographic Performance Ltd [1999] 1 WLR 1507 and Firle
Investments Ltd v. Datapoint International Ltd [2001] EWCA Civ 1106.
30 introduction
of costs is adjudicated upon. Costs will then be awarded on the same

basis as a payment in. So, e.g., if contributory negligence is in issue at the
stage where liability is tried, the defendant may offer an apportionment
of liability between him and the claimant. If the claimant does not do
better at trial he will pay the defendant’s costs as well as his own since the
date of the offer.
Contingency fees, i.e., an arrangement whereby the lawyer is entitled to
a percentage of the damages recovered, are not permitted. Solicitors and
barristers are, however, allowed to enter into a conditional fee agreement.
That means that if the case is lost the lawyers receive no remuneration. If
they succeed they are entitled to their normal costs uplifted by a previously
agreed percentage. Any uplift can be recovered from the loser provided
that the costs judge is satisfied that the uplift is reasonable. The level of
uplift will depend upon the degree of risk undertaken by the lawyers so
that the lower the prospects of success in the case the higher the percent-
age uplift will be. Account is also taken of the length of time which the
lawyer is likely to have to wait for his fees. The more complicated the case,
the longer it is likely to take and, therefore, the greater the percentage
uplift.
Litigants can protect themselves against losing cases by obtaining in-
surance to cover the eventuality that they will have to pay the other side’s
costs. In practice insurers are unlikely to provide cover unless the lawyers
rate the prospects of success in the case at in excess of 50 per cent. The
premium paid to the insurers is recoverable from the losing party as part
of the winner’s costs. Again, however, the amount must be reasonable.57
Legal aid is no longer available for personal injury actions except in cases
which are of special interest. The question of whether a case falls into that
category is decided by a special committee set up by the Legal Services
Commission (the body which now administers legal aid). In practice it is
very difficult to persuade the committee that a case is of special interest.
In general the category is reserved for high cost cases such as multiparty
actions brought by those who, for instance, contend that they have been
injured by a pharmaceutical product.
German law
Costs and legal aid
The losing party has to pay all of the costs – this includes the costs of the
court and the fees of the lawyers of both sides (§ 91 ZPO). If the lawsuit is
57 Callery v. Gray (Nos. 1 and 2) [2002] UKHL 28; [2002] 1 WLR 2000; Halloran v. Delaney [2002]
EWCA Civ 1258; [2003] 1 WLR 28.
w h o pa y s l e g a l c o s t s ? 31
successful only in part, the costs have to be split proportionally (§ 92 ZPO).

These principles apply even if the case was won in two instances, but lost
before the BGH, or if the applicable law has been changed while the lawsuit
was pending. Each judgment of the court has to include the decision about
the costs of the proceedings (§ 308 II ZPO). This system gives an injured
person the chance to enforce his or her claim in court without having to
pay any costs; it includes, on the other hand, the risk not only of losing the
lawsuit but also of being liable for all of the costs, including the lawyers’
fees, of the other side.
Legal aid is available in two situations: outside of court proceedings
an indigent person may be entitled to obtain free legal advice from a
lawyer, whose fee will be paid by the state (Beratungshilfegesetz). Legal aid
in court proceedings is available according to §§ 114 to 127 a ZPO: the
party (plaintiff or defendant) must be unable to pay the legal costs, and
it must be likely that the applicant will be successful in the proceedings.
The application for legal aid will be considered and decided by the court
which will have to decide about the lawsuit. If legal aid is granted, the
applicant does not have to pay court fees or his own lawyer; if he loses
in the end, however, he will have to pay the costs (lawyers’ fees) of his
opponent according to § 91 ZPO (§ 123 ZPO).58
Legal expenses insurance

Since the financial risk of court proceedings is high, many insurance com-
panies in Germany offer insurance contracts which cover this special risk.
In a given case, the insurer will check that the intended lawsuit is not
frivolous, and will then take over the fees of the court and of its client’s
lawyer. Should the client win the case, the losing party has to pay all of
his costs (§ 91 ZPO) which have been laid out by the insurer (but not the
premium paid to the insurer by the client). Only if the client loses his case
does the insurer have to carry the burden of costs permanently (including
the costs of the other party to the lawsuit).
This branch of insurance has become very popular in Germany. It is
especially designed for private citizens and is not open for commercial
disputes. The insurance contract can be restricted to certain areas such as
traffic accidents, family proceedings, or the like. The insurance is available
for all kinds of compensation claims for personal injury.
The effects of legal expenses insurance are ambivalent. An injured per-
son is no longer prevented from pursuing a reasonable claim for fear of
litigation costs. On the other hand, the availability of insurance has led
58 Compare: BVerfG 23 June 1999, NJW 1999, 3186.

32 introduction
to a substantial increase in court proceedings: the financial risk is taken

from the insured, and since he has to pay the insurance premium anyway,
he might want to amortise these payments by initiating a lawsuit from
time to time.
Contingency fees; commercial financing of litigation

Conditional fee agreements and contingency fees are forbidden under
German law (§ 49 b II BRAO). The statute aims to protect the professional
integrity and independence of lawyers (who are bound by statute to con-
tribute to the administration of justice, § 2 BRAO). Very recently, how-
ever, commercial companies – sometimes branches of insurance compa-
nies – have appeared on the scene, offering to finance legal litigation and
taking the risk if a lawsuit is lost. As consideration the party agrees to
pay a contingency fee if his or her claim should be enforced successfully.
For claims of between €50,000 and €1,000,000 this fee amounts to 20 to
30 per cent of the money the plaintiff actually receives from the defendant;
the litigation costs which had been laid out by the financing company have
to be paid back before the contingency fee is calculated. The plaintiff re-
mains free to choose his legal representative, who will charge the normal
legal fees (the financing company, however, pays him an additional fee
as compensation for the communication with the company). The legal-
ity of such a financing system is disputed, but in general not seriously
questioned.59
The BGH has not yet ruled on the issue. Economic evaluation shows that
the financing companies, unlike the litigation costs insurers, have not yet
achieved much market acceptance; but there is a growing interest in this
method of reducing (and sharing) the risk of litigation costs – not only on
the part of the plaintiffs, but also of the lawyers. If, however, the lawyers
themselves establish such a company in order to finance the lawsuits of
their clients, such behaviour is very likely to violate the above-mentioned
§ 49 b II BRAO.
Italian law
In Italian law, the losing party must pay all costs, including court fees
and the legal fees and expenses of the prevailing party. If the claimant
has obtained only partial judgment in his favour, the award of costs may
59 For an exhaustive discussion and references see Maubach, Gewerbliche Prozessfinanzierung
gegen Erfolgsbeteiligung (2002); Dagobert Nitzsche, Ausgewählte rechtliche und praktische
Probleme der gewerblichen Prozesskostenfinanzierung unter besonderer Berücksichtigung des
Insolvenzrechts (München, 2002).
s o c i a l s e c u r i t y, s o u r c e s o f r e v e n u e a n d t o r t l aw 33
follow a different pattern, e.g., may end up being split equally between
the litigating parties.
Defence free of charge was an institution entrusted to the local bar
associations. They, in turn, would request their members, for reasons of
solidarity and professional dignity, to take on the defence free of charge.
Nowadays, however, such defence is no longer free of charge but is paid
for by the state.
The matter has recently been the subject of reform, Law no. 217 of 30 July
1999 having radically changed the previous regulations.60 To obtain legal
aid the applicant must have a personal income, if single, not exceeding
€9,000. For persons living as a family, the cut-off point is fixed by taking
into account the income earned collectively by all the family members.
Lawyers’ fees are paid by the state and, in the event that the defended
party prevails, court costs and legal fees are paid to the state by the losing
party.
Legal expenses insurance can, nowadays, be found even in Italy but it
is one branch of the insurance business which is not greatly developed;
only a few insurance companies cover this type of risk. The relationship
between the insured and the company is governed by the insurance policy.
In Italian law any agreement on making the payment of lawyers’ fees
conditional on the outcome of the case is forbidden by the Civil Code
(article 2233). Lawyers are not allowed, even through third party inter-
mediaries, to stipulate any agreement with their clients either excluding
the payment of fees or connecting payment to the successful outcome
of the trial. They are not even allowed to stipulate agreements concerning
the disputed assets in relation to which they have been appointed to act.
Violation of this prohibition is punished by treating the agreement as
being null and void and by compensation being awarded for damages.
Social security, other sources of revenue and tort law

English law
The Pearson Committee estimated61 that every year in the United Kingdom
some 3,000,000 people are injured and about 21,000 of them die of their
injuries. Of these, only about 1,700,000 receive some financial assistance,
but not all of them from the tort system. Indeed, only a very small minority,
60 Royal Decree no. 3282 of 30 December 1923.

61 Vol. i, para. 35 ff. There is no reason to believe that the overall picture has changed
radically in the intervening twenty years or so.
34 introduction
estimated at about 215,000, about 6 per cent of the grand total, received
any compensation in the form of tort damages. For the remainder, social
security, occupational sick pay or private insurance represent the main
if not sole sources of relief. But if tort victims represent only a small
percentage of accident victims, their share of the aggregate value of com-
pensation payments (estimated at £827 million at 1977 prices) amounted
to just over £200 million, so that just over 6 per cent of the accident vic-
tims received some 25 per cent of the total compensation paid out. This
category certainly includes a substantial percentage of the most serious
types of injury, but even allowing for this, it is not disputed that tort
victims fare rather better than the victims of other injuries. If these tort
victims are allowed to pile on to their tort awards other benefits received
from other systems of compensation (such as social security and private
insurance), the danger is not only that they may end up by being overcom-
pensated, but also that the overall compensation system may end up by
being unduly costly and wasteful as regards some victims and rather mean
to others. Unfortunately, there is no easy solution to this problem of dou-
ble compensation. Professor Atiyah, who has written extensively on this
subject, has summed up the problem as follows:
If there [were] any rational pattern to the various compensation systems as a whole,
it might have been possible to construct a ‘hierarchy’ of systems under which a
man should be compensated by system A, if that were possible, and if not, he
should then be relegated to systems B, C and D in turn. But this is not how things
have developed. In fact, each system by and large decides whether it is willing
to shoulder a burden, irrespective of other compensation available, or whether it
wishes to push the burden on to another system, or whether it is willing to share
the burden. But the whole process is one of almost unbelievable complexity.62
A victim of an accident may thus find himself receiving financial as-

sistance from a wide variety of sources. He may, for example, have been
prudent enough to take out first party insurance against precisely such
a possibility; or he may become entitled to an occupational pension paid
by his employer; or he may benefit from the charitable disposition of
his fellow human beings made either directly to him or, as is frequently
the case these days, as a result of setting up some kind of ‘disaster relief
fund’. Finally, he may be eligible to receive one or more of a number of so-
cial security benefits from the state. Legislation governs the relationship
62 Patrick Atiyah, Accidents, Compensation and the Law (Peter Cane (ed.) 4th edn,
Butterworths, 1987), p. 390.
s o c i a l s e c u r i t y, s o u r c e s o f r e v e n u e a n d t o r t l aw 35
between tort and social security.63 In other cases, it is up to the courts to

decide whether a particular payment should be deducted from damages,
starting from the general principle that the purpose of the tort rules is
to compensate the plaintiff and not, directly or indirectly, to allow him
to make a gain from the tort. In principle, the law can take one of three
options with regard to collateral benefits:64 cumulation, under which the
plaintiff is allowed to retain the benefit in question while being paid
damages which represent his full loss; reduction, under which the collat-
eral benefit is fully offset against the damages; and recoupment, whereby
the third party provider is given a right to recover the amount of the
benefit through an action against the tortfeasor or, in some cases, the
victim. At common law, the general approach is, in principle, to allow
cumulation, but subject to a highly complex case law which attempts
to distinguish (unconvincingly, in the eyes of many commentators) be-
tween those benefits which go to reduce the plaintiff’s loss, and others
which do not. The third option – recoupment – is seemingly barred at
common law, but does operate in respect of certain social security ben-
efits, under a statutory regime which is now provided for by the Social
Security (Recovery of Benefits) Act 1997. In order to analyse this body
of law it is therefore necessary to consider separately the common law
rules and those applying to the statutory regime and this is done in
chapter 5.
German law
A victim may be entitled to benefits from various branches of the social
security system, especially from sickness insurance, workmen’s compen-
sation insurance, unemployment insurance (if he has lost his job because
of the injury), or from care insurance (if he needs permanent care). Besides
the benefits from social security, the victim may have taken out private
accident insurance. As to the effect of such benefits on the compensation
claim, see p. 143.
If the victim is an employee but unable to work because of his injuries, he
is nevertheless entitled to full pay from his employer for the first six weeks
of sickness. His claim against the tortfeasor is insofar ex lege transferred
to the employer (§ 6 Entgeltfortzahlungsgesetz; see chapter 4).
63 Social Security (Recovery of Benefits) Act 1997, for which see below.
64 See Richard Lewis, ‘Deducting Collateral Benefits from Damages: Principle and Policy’
(1998) 18 Legal Studies 15 (Select Bibliography).
36 introduction
Italian law
In Italian law the victim of a tort may draw money from several social
security systems. These include national insurance for work-related acci-
dents, national health insurance, unemployment benefits, and so forth.
In the event of a road accident, the victim also benefits from the compul-
sory insurance for civil liability (if the wrongdoer is insured) and from
the indemnity granted by the Insurance Companies’ Guarantee Fund (in
the event that the wrongdoer is not identified or is unable to pay for the
damage caused). As regards the procedures for compensation, see below.
One peculiarity of the Italian Workers Compensation Act65 should, per-
haps be stressed from the outset. Compensation here follows strict rules
which determine its percentage by reference to the injured employee’s
wages. The Corte Costituzionale, however, has had difficulty in accepting
such reduced compensation with regard to the non-pecuniary part of the
award that refers to the danno biologico.66 An appeal to the Italian legislator
to address the problem having fallen on deaf ears, the Corte has returned
to the issue and has held that the evaluation of danno biologico should in
these cases, as well, follow the general rules (discussed in chapter 2).
Method of payment
English law
The first thing to note is that in tort actions damages must be awarded67
once only in respect of each cause of action and they take the form of a
lump sum.68 The English courts have no power to order the payment of
damages in periodic sums unless the parties agree.69 Accordingly, they
65 Law no. 1124 of 30 June 1965.

66 Corte Costituzionale 15 February 1991, no. 87, 1991 Resp. civ. E prev. 245.
67 Miliangos v. George Frank (Textiles) Ltd [1976] AC 443 abolished the old rule that damages
must be expressed in sterling. Thus, see The Despina R. [1979] AC 685. But the sterling rule
still applies to non-pecuniary damages such as damages for pain and suffering and loss
of amenity: Hoffman v. Sofaer [1982] 1 WLR 1350.
68 This rule against successive actions has to be qualified in at least two major respects.
First, it does not apply to continuing torts (e.g., continuing trespass) and secondly, it
does not apply whenever two different rights have been violated: Brunsden v. Humphrey
(1884) 14 QBD 141. For a more recent illustration see Barrow v. Bankside Members Agency Ltd
[1996] 1 WLR 257 and note that the doctrine of res iudicata may be relevant in such cases.
69 Fournier v. Canadian National Railway Company [1927] AC 167. At common law it was not
clear whether the courts would have the power even if the arrangement was agreed to
by the parties themselves (see Metcalfe v. London Passenger Transport Board [1938] 2 All ER
352 at 355); however, the Damages Act 1996, s. 2, now provides that ‘[a] court awarding
m e t h o d o f pa y m e n t 37
often have to include compensation for future damage that is likely to

accrue, in addition to compensation for damage that has already accrued.
This is easier to decide in theory than to apply in practice. The problems
become apparent in personal injury cases, where the judge has to try to
guess not only what would have happened to the victim if he had not
been injured, but also what is now likely to happen to him as a result of
the accident. This ‘guessing game’ is further aggravated by the fact that
it takes place against a number of imponderables, some of which are re-
lated to the victim (e.g., the nature of his injury, its likely complications
and pre-trial anxiety – known as ‘compensation neurosis’ – which can
postpone complete recovery and complicate the task of assessment of the
loss), while others are linked with wider economic factors (e.g., inflation,
rates of taxation etc.) but may affect particularly harshly a victim who,
because of the tort, may have reduced earning capacity. The great disad-
vantage of lump sum awards is not only that they make such estimates of
future developments little more than educated guesses, but also that they
are not open to subsequent correction. In Lim v. Camden and Islington Area
Health Authority, Lord Scarman was frank about this danger when he said70 :
Sooner or later . . . if the parties do not settle, a court (once liability is admitted or
proved) has to make an award of damages. The award, which covers past, present
and future injury and loss, must under our law be a lump sum assessed at the
conclusion of the legal process. The award is final; it is not susceptible to review as
the future unfolds, substituting fact for estimate. Knowledge of the future being
denied to mankind, so much of the award as is to be attributed to future loss
and suffering – in many cases the major part of the award – will almost surely be
wrong. There is really only one certainty: the future will prove the award to be either too
high or too low.
These remarks were prompted by Lord Denning MR’s attempt in the

Court of Appeal71 to change or, at least, adapt the existing practice and
to enable an award of damages in cases such as the one before the court
to be regarded as an interim award, allowing the court to make further
adjustments in the future. The idea, according to Lord Scarman, was:
an attractive, ingenious suggestion – but . . . unsound. For so radical a reform can

be made neither by judges nor by modification of rules of court. It raises issues of
social, economic and financial policy not amenable to judicial reform which will
damages in an action for personal injury may, with the consent of the parties, make an
order under which the damages are wholly or partly to take the form of periodical
payments’.
70 [1980] AC 174 at 182–3 (emphasis added). 71 [1979] QB 196 at 214 ff.
38 introduction
almost certainly prove to be controversial and can be resolved by the legislature

only after full consideration of factors which cannot be brought into clear focus,
or be weighed and assessed, in the course of the forensic process.72
The alternative to the lump sum method of payment of damages is the

annuity system which is adopted (in theory, though not rigidly in practice)
by a number of European systems such as, for instance, the French, the
German and the Italian. Its main advantage is its ability to adapt the award
downwards or upwards depending on whether the victim’s condition and
other circumstances become better or worse. In a number of instances –
e.g., in cases of fatal accidents where the chances of remarriage of the
surviving spouse have to be considered – this method of payment of the
damages award helps avoid awkward or embarrassing guessing exercises.
But annuities also have crucial weaknesses. For example, they require that
the cases be ‘kept open’ and insurance companies, who meet most of the
claims, understandably prefer to pay (if they have to pay) and ‘close their
books’. A mechanism must also be devised to allow for the adjustment of
the sums paid, and this can involve costs and delays. Victims also tend to
prefer to receive their compensation in one large amount even though the
unexpected receipt of large sums may lead them to spend their awards
in a very short time and then leave them without adequate financial re-
sources to maintain themselves (with the danger of social security having
to step in somewhere down the line). Last but by no means least, lawyers
are more likely to receive their remuneration without complaint and ex-
peditiously if the client/victim receives a large sum rather than modest,
periodic payments. For a variety of practical reasons, therefore, the lump
sum method of payment of the damages award may not be as bad as
some of its critics believe; and for practical reasons it seems unlikely to
be replaced completely.
In the future, therefore, the search for better solutions is likely to turn
towards mixed systems which, as far as possible, will attempt to com-
bine the advantages of the two extreme solutions, namely, the lump sum
versus the system of annuity payments. The emerging practice of ‘struc-
tured settlements’, described at p. 179 addresses these problems in the
case of damages for serious injuries; but three further ways of improving
the position of deserving plaintiffs must also be considered here. They
are (i) postponed or split trials; (ii) interim awards; and (iii) provisional
damages.
72 [1980] AC 174 at 183. See also Lord Steyn’s highly critical comments on the present
system of lump sum payments in Wells v. Wells [1999] 1 AC 345 at 384.
Postponed or split trials

It has already been noted why the lump sum method of payment of dam-
ages raises serious difficulties in the calculation of the right level of the
award, especially where the extent of the injury is not yet fully determined.
One way around this difficulty is to postpone the trial or settlement of the
claim until a clearer picture about the victim’s position has emerged. Un-
fortunately, such a solution presupposes that such a delay will make the
prognosis easier, which is not always the case. Moreover, this way of pro-
ceeding adds to the delays of the tort process, which has always been one
of the major weaknesses of the system. Finally, such delays may trigger off
in susceptible plaintiffs the so-called problem of ‘compensation neurosis’
and thus further delay their rehabilitation.
As a result of these limitations the different corrective device of ‘split
trials’was proposed by the Court of Appeal in 1974 in Coenen v. Payne.73 This,
as the name suggests, entails separating ‘liability’ which can be resolved
(or admitted) as soon as possible after the accident (when recollections
of witnesses are still (relatively) clear), from the ‘quantum’ of damages,
which in most serious cases could be postponed until a clear prognosis
could be attempted. Once again, however, there is no certainty that post-
ponement makes prognosis easier; and, under existing law (and subject to
what is said below), when the award is made it is final. In any event, this
method of proceeding can only have its full effect if it is combined with
the possibility of interim damages. Both these ideas, however, have met
with little enthusiasm in practice and are mentioned here for the sake
of completeness rather than as oft-used procedures in the compensation
process.
Interim damages
The idea of awarding interim damages is even older. It can be traced back
to the Winn Committee Report of 1968 and is nowadays regulated by Or-
der 29, Part II, rule 11 of the Rules of the Supreme Court. Such an order can
be made at the discretion of the court where ‘need’ can be shown by the
plaintiff.74 The money is meant to cover the plaintiff’s interim pecuniary
losses (such as loss of earnings, medical expenses, and the like) and can-
not include a percentage of his (possible) general damages. For a variety
of reasons this procedure, too, seems to be underused in practice. Some of
73 [1974] 1 WLR 984, now covered by the Civil Procedure Rules Part 3(2)(i).
74 Schott Kem Ltd v. Bentley [1991] 1 QB 61.
40 introduction
the reasons for this seem to be purely technical;75 and, nowadays, the
operation of the Social Security (Recovery of Benefits) Act 1997 may also
have an adverse effect in so far as there is the danger that the new
scheme might swallow up all interim payments, especially in those cases
involving smaller sums. So this device, too, has been of limited use to
plaintiffs.
Provisional damages
Provisional damages provide the third, comparatively recent, innovation
that aims to improve the position of the deserving victim of personal in-
jury. They were made possible by section 6 of the Administration of Justice
Act 1982 which empowers the courts ‘to make a provisional award in cases
where the medical prognosis is particularly uncertain and where there is
a chance,76 falling short of probability, that some serious disease or serious
deterioration in the plaintiff’s condition will accrue at a later date’.77
In the debates in the House of Lords, the Lord Chancellor, Lord Hailsham,
did not envisage that frequent use would be made of this provision;78 and
events have proved him right. The example he gave of a case suitable to
be brought under this heading, was of a young child whose skull was
fractured in an accident and who, at the trial, may appear to have made
full recovery. Yet in cases of cranial injuries there is always a chance of
subsequent epilepsy. Section 6 will now enable the court to award nothing
in respect of the feared event but to give damages later if the feared event
materialises. This procedure will avoid trying to evaluate the possibility of
the feared event materialising and then awarding a smaller sum for this
‘chance’ that may end by being too low or too high. Unlike the Pearson
proposals on this point, it is not obligatory for the court to adopt this
procedure on its own; it will be for the plaintiff to claim that a provisional
damages award be made; and the interests of the defendant will also have
to be given due weight. The case of Willson v. Ministry of Defence79 has, as
already stated, revealed how conservative the approach of the courts has
been.
The provisions of section 6 of the Administration of Justice Act 1982
were brought into force in July 1985.80 Under the new regime, as it was
75 They are discussed in the Law Commission Consultation Paper No. 125, pp. 71–2.
76 In Willson v. Ministry of Defence [1991] 1 All ER 638 the trial judge was of the view that
s. 32A of the Supreme Court Act 1981 was concerned with measurable not fanciful
chances, thus further limiting the opportunity of using this procedure.
77 It will be noticed that this section applies to contingencies due to medical reasons.
78 Hansard (HL) 1982, 28. 79 [1991] 1 All ER 638 at 641.
80 Rules of the Supreme Court, Order 37, rules 7–12, now Civil Procedure Rules Part 41.
judicially explained in Willson’s case, three requirements will have to be

fulfilled before use of this procedure can be sanctioned. First, there must
be a chance of the feared event materialising at some later date. The chance
may be slim but, as stated, it must be measurable. Secondly, there must be
a serious deterioration of the claimant’s physical (and, presumably, also
mental) condition and not just an ordinary deterioration or progression
of the injury or illness. This is a matter of fact and degree but the facts of
Willson’s case suggest that the courts are taking a conservative (arguably
overconservative) attitude towards this requirement. Finally, the judge
must be persuaded that the case before him justifies the exercise of his
discretion to give the claimant the right to return at a later date for more;
or, on the contrary, that it is one that is best resolved by a once-and-for-all
award of damages. In his decision, the judge will also, normally, specify
the period within which the application for further damages must be
made, though nowadays there seems to be a preference for not setting a
limit at all.81
The condition of the tort victim may not just get worse as a result of his
injuries; he may also die. If a provisional award has been made to him prior
to the death, how will this affect the legal position of his dependants? The
answer is now to be found in section 3 of the Damages Act 1996 which
does not preclude his dependants from bringing a lost dependency claim.
Wisely, however, the Act adds that any part of the provisional award that
was ‘intended to compensate him for pecuniary loss in a period that in
the event falls after his death shall be taken into account in assessing the
amount of any loss of support’ suffered by the dependants.
For most commentators the regime described above seems to be unduly
restrictive. Their arguments can be found in the specialised literature; and
they are also conveniently summarised and discussed critically in the Law
Commission Consultation Paper No. 125.82 Here it is enough to note two
of the most doubtful limitations and, also, add an observation of wider
import.
First, one must recall that the feared event must be specified by the
claimant’s lawyers in the original action in considerable detail. As we
have seen, the courts seem to take an overly narrow view on the question
of whether the subsequent event is a serious deterioration or an ordinary
deterioration or development of the injury or illness.
Secondly, the right to return to the court and have the award adjusted
arises only once and this may cause injustice in some cases. For exam-
ple, suppose that the claimant is injured in his legs and runs the risk of
81 See Bragg, ‘Provisional Damages’ (1992) 136 SJ 654, at 655. 82 At pp. 76–84.
42 introduction
subsequently developing arthritis. Since it is the disease that must be spec-

ified by the claimant’s application and not the parts of his body that are
susceptible to it, what will happen to the claimant who develops arthritis
in one of the injured legs? It would be unfair to suggest that he would
have to wait until the other leg was also affected by the disease; but it
would be equally unfair to limit his subsequent increase of damages to
include the arthritis in the one leg.
Finally, one may use this opportunity to pose a wider question concern-
ing the attitudes of the (conservatively inclined) English legislators. For,
having identified an area of the law that needs reform, why do they then
feel such an irresistible urge to circumscribe the reforming rules to such
an extent as to make them almost useless? The tendency is obvious in
other parts of the law of torts;83 and readers inclined towards speculating
about more general matters might wish to ponder over this question. In
the meantime, however, and as far as this particular topic is concerned,
all one can say is that the institution of provisional damages is, over ten
years after its introduction, still in its formative stages. One must, there-
fore, hope that the courts will be responsive to calls to liberalise their
present position on this issue before judicial accretions (such as Willson)84
make this task truly impossible.
Structured settlements
We shall discuss this mechanism briefly in chapter 5.
German law
As already mentioned before (see p. 3), German law distinguishes between
single losses and continuing losses. The first type of loss has to be compen-
sated by a single sum of money, while for the second type § 843 I BGB es-
tablishes the principle of periodical payments. These payments, however,
may be capitalised if there is a serious reason to do that (§ 843 III BGB).
83 For instance, the old s. 4 of the Defamation Act 1952 dealing with ‘unintentional
defamation’.
84 A case law search has disclosed only one recent case in which Willson was considered
and the judge in Fashade v. North Middlesex Hospital NHS Trust [2001] 4 QB 13 refused to
grant provisional damages for the claimant’s respiratory disability, on the ground that
the risk was not ‘clear and severable’ as opposed to ‘a continuing deterioration’. This
continues to suggest a highly restrictive approach on the part of the courts to
provisional damages claims, although some commentators justify this due to the need
to prevent the introduction of a ‘serious measure of uncertainty into the system’:
Winfield and Jolowicz on Tort (Horton Rogers (ed.), 16th edn, London, 2002), pp. 772–3.
In practical life, this statutory relation of rule and exception has been
turned into its opposite.85
For those cases in which the extent of the damages is uncertain, German
law of civil procedure offers two alternative ways of dealing with these
situations, depending on the degree of uncertainty encountered. On the
one hand, if it is not possible to foresee the future development of the
damage caused with adequate probability,86 German law (§ 256 ZPO) al-
lows that a declaratory judgment be passed which states the liability of
the wrongdoer for all damages incurred by the victim, without awarding
a certain sum or pension. Later on, once the damage has become certain,
either the parties will settle the victim’s claims between themselves, or
they can return to court in order to have the amount of damages judicially
determined. The court will then proceed on the basis of the first judgment.
On the other hand, if a pension (annuity) – this second possibility does not
exist for the case of a sum having been awarded87 – has been granted by
the judge, based on his assessment of how the damage will develop, and if
substantial new circumstances arise that make it necessary to change the
amount of the pension awarded, such a change can be effected through
new court proceedings (§ 323 ZPO). In this case, as well, the first judgment
in principle has a binding effect on the parties and the new judge. Only
circumstances that have arisen after the first decision has been passed jus-
tify a modification and may be taken into consideration when the amount
of the pension due is reassessed.88 For details see chapter 4, especially
pp. 138–42.
Inquiries with insurance companies have shown that an equivalent to
‘structured settlements’has not been developed in Germany. The two basic
methods of compensation (lump sum, annuities) may be modified in a
given case (annuities for five years, then lump sum for the rest of the life
of the victim, or the other way round; or non-pecuniary damages payable
85 GLT, p. 914; Esser/Weyers, Schuldrecht II/2 (8th edn, 2000) § 61 I 1; Küppersbusch

no. 649.
86 BGH 4 April 1952, BGHZ 5, 314, 315; mostly, this is either because it is likely that further
damages will occur in the future (BGH 14 December 1995, NJW 1996, 1062, 1063; BGH
16 January 2001, NJW 2001, 1431, 1432), or because the damage can not yet be assessed
(BGH 30 March 1983, NJW 1984, 1552, 1554; BGH 21 January 2000, NJW 2000, 1256, 1257).
87 BGH 8 January 1981, NJW 1981, 818, 819 ff.
88 BGH 21 February 2001, NJW-RR 2001, 937: this civil procedure provision is an application
of ‘clausula rebus sic stantibus’; new circumstances exist in the case of newly occurred
facts (BGH 18 March 1992, NJW-RR 1992, 1091, 1092), a change in legislation (BGH 28
November 1990, NJW-RR 1991, 514) or a different application of the law due to a decision
taken by the Federal Constitutional Court (BGH 12 July 1990, NJW 1990, 3020, 3022).
44 introduction
in the form of annuities instead of a lump sum), but there is no ‘third way’
like the structured settlement. This might be due to different tax laws
in Germany and the United Kingdom: under German tax law, it is not
the method of payment which is decisive but the object of compensation.
Damages for increased costs of living are not taxable but income tax has
to be paid for payments which compensate the victim for lost income.89
For more details see p. 59.
Italian law
As regards the procedures for the actual payment of the amount of dam-
ages, we have said previously that the judge establishes whether to award a
lump sum or a life annuity. In Italy, however (as, indeed, in France), the an-
nuity option is rarely exercised. Provisional damages can also be awarded
if requested by the claimant. The mechanism of structured settlements
has not yet been considered in Italian law.
89 BGH 25 October 1994, NJW 1995, 1238–40.

2 General damages: non-pecuniary losses
English law
Introduction
The guiding principle for the award of damages in respect of a tort is, in
English law, to compensate the victim of the wrongdoing. That is as true
in cases of personal injury as it is for any other tort. Punitive or exemplary
damages may not be awarded for personal injury no matter how severe the
injury may be nor how gross the negligence on the part of the wrongdoer.
The difference here between English and American law is significant and
accounts in large part for the different size of awards found in the two
countries.
If, however, injury has been caused by a deliberate act, aggravated dam-
ages may be awarded. If the personal injury has been caused by a tres-
pass to the person rather than by negligence, the court has discretion to
make such an award.1 Such cases are rare, and judges have discouraged
the pleading of claims as a deliberate tort in an attempt to increase the
damages.2
1 W v. Meah [1986] 1 All ER 935 where aggravated damages were awarded in a case of rape
and vicious sexual assault. The difference between aggravated and exemplary damages
has always been troublesome even though the prevailing view is that they are different.
The most recent (and thorough) discussion of the subject can be found in Thompson v.
Commissioner of Police of the Metropolis and Hsu v. Commissioner of Police of the Metropolis [1998]
QB 498 and Kuddus v. Chief Constable of Leicestershire Constabulary [2001] UKHL 29; [2001] 1
WLR 1789, yet even this reveals the closeness of the two notions. See also the Law
Commission’s Consultation Paper on Aggravated, Exemplary and Restitutionary Damages
(Law Com. No. 132, 1993), which recommended the abolition of aggravated damages as a
separate head of damages, and their absorption into a ‘strict compensatory model’ (para.
8.18); see also Law Commission Report No. 247 (1997).
2 Letang v. Cooper [1965] 1 QB 232 but see Kralj v. McGrath [1986] 1 All ER 54. See also Appleton
v. Garrett [1996] 5 PIQR P1.
45
46 g e n e r a l da m a g e s : n o n - p e c u n i a r y l o s s e s
There may also be a sound practical reason for framing claims in neg-
ligence. A claimant who pleads trespass in the form of assault or battery
gives the defendant employer the opportunity to contend that he is not
vicariously liable because the deliberate act was outside the scope of his
employee’s employment. It also gives the insurer standing behind the de-
fendant the opportunity to avoid the policy. It is, therefore, prudent for the
claimant to restrict his claim to one of negligence in order to be sure that
he will be paid his compensatory damages. Furthermore, the limitation
period is different. If an intentional tort is alleged, the limitation period
is six years but cannot be extended under section 33 of the Limitation Act
1980.
As we shall see in chapter 4, in the case of pecuniary losses the law aims
at full compensation (though whether it achieves this or not in all cases
is another matter). Such full compensation, however, is not objectively
possible in the case of non-pecuniary damage and the aim here is thus to
achieve fair compensation or satisfaction. However, in English law, these
words are not used as terms of art as they are in German law.
Concept of general damages

General damages represent the amount recoverable by the injured person
for pain and suffering, and loss of amenity. There is no separate award for
each of those headings. In English law, the compensation is one sum,
decided by the trial judge on the basis of all the evidence before him.
Pain and suffering

Pain and suffering covers the nature of the accident and its immediate
aftermath. The court will require evidence of precisely what happened.
Was the claimant aware of what was going to happen to him and became
afraid? For how long did he have to endure pain? A claimant is thus entitled
to recover for his pain and suffering – the two terms have never been
clearly distinguished by the courts – actual and prospective, resulting
from the tortfeasor’s conduct or from medical or surgical treatment made
necessary as a result of the tortious conduct. No award for this type of
damage is, however, made if the claimant is permanently unconscious
and thus not in any pain.3 Despite some earlier doubts it is now accepted
3 Wise v. Kaye [1962] 1 QB 638. This is so even if the result of lack of consciousness or pain is
due to drugs or anaesthetics: H. West & Son Ltd v. Shephard [1964] AC 326. The greater
availability of pain-killing drugs may well reduce further these awards and, perhaps, lead
the courts into making larger awards under the heading of loss of amenity.
e n g l i s h l aw 47
that the claimant’s economic and social position is irrelevant as far as

this heading of damages is concerned.4 Nor may damages for pain and
suffering be awarded in a case where death occurs instantaneously.5
Loss of amenity
The expression ‘loss of amenity’ is less easy to define. In H. West & Son Ltd v.
Shephard6 Lord Reid said:
There are two views about the true basis for this kind of compensation. One is that
the man is simply being compensated for the loss of his leg or the impairment of
his digestion. The other is that his real loss is not so much his physical injury as the
loss of those opportunities to lead a full and normal life which are now denied to
him by his physical condition – for the multitude of deprivations and even petty
annoyances which he must tolerate.
It is important in each case to consider precisely what has been lost. All
the personal circumstances of the injured individual must be taken into
account. That includes age, lifestyle, hopes and expectations, and disabil-
ities existing before the accident. Thus, a fit, athletic, active individual,
who in consequence of an injury is unable to participate in sport or an
outdoor lifestyle and who can no longer play with his young children in
the manner that he did before the accident, has lost more than a seventy-
year-old with a sedentary lifestyle who engages in gentler pursuits.
If the claimant’s injuries thus deprive the claimant of the capacity to
engage in sport or other pastimes, which he enjoyed before his injury, then
this must be compensated. Other losses compensated under this heading
include impairment of one of the five senses;7 loss or impairment of sexual
life;8 diminution of marriage prospects (an item which is additional to the
pecuniary loss that may result from such an event); destroyed holiday;9
inability to play with one’s children;10 and many others.
Until fairly recently, it was uncertain whether this heading of damage
was separate from or merely part of any award for pain and suffering. In
other words, what was unclear was whether the damages are awarded in
respect of the objective loss of amenities, or in respect of the subjective mental
4 Fletcher v. Autocar and Transporters Ltd [1968] 2 QB 322 at 340–1 (per Diplock LJ) and 364
(per Salmon LJ).
5 See Hicks v. Chief Constable of South Yorkshire Police [1992] 2 All ER 65.
6 [1964] AC 326 at 341. See also Lim Poh Choo v. Camden and Islington Area Health Authority
[1980] AC 174, per Lord Scarman at 183.
7 e.g. taste and smell: Cook v. J.L. Kier and Co. [1970] 1 WLR 774.
8 Ibid. 9 Ichard v. Frangoulis [1977] 1 WLR 556.
10 Hoffman v. Sofaer [1982] 1 WLR 1350.
suffering which comes with the appreciation of such loss. In Wise v. Kaye11
the claimant was rendered immediately unconscious and remained so at
the time of the trial three-and-a-half years later. Though she had suffered
an almost complete loss of her faculties, she had no knowledge whatever
of this loss. For Diplock LJ this was a good reason for awarding her a
comparatively small sum under this heading. However, the majority of
the Court of Appeal thought otherwise, and two years later in H. West &
Son Ltd v. Shephard12 the House of Lords agreed with this view. As Lord
Morris put it:
the fact of unconsciousness is . . . relevant in respect of and will eliminate those
heads or elements of damage which can exist only by being felt or thought or ex-
perienced. The fact of unconsciousness does not, however, eliminate the actuality
of the deprivation of the ordinary experiences and amenities of life which may be
the inevitable result of some physical injury.
This majority view was reaffirmed in Lim Poh Choo v. Camden and Islington
Area Health Authority,13 where Lord Scarman said that the cases draw a clear
distinction between damages for pain and suffering and damages for loss
of amenities. The former depend upon the claimant’s personal awareness
of pain, her capacity for suffering. But the latter are awarded for the
fact of deprivation – a substantial loss, whether the claimant is aware of
it or not. Nevertheless, his judgment leaves one with the impression that
an important reason for accepting this view was his desire not to disturb
what had become an established rule, since it has influenced both judicial
awards and extra-judicial settlements for many years.14
The levels of awards for pain and suffering and loss of amenities have
become an increasingly important issue over the past twenty years. In
1999, we noted that the highest awards for pain and suffering and loss of
amenities were around the £100,000 mark.15 Faced with similar (and, of-
ten, much larger) awards, various systems (e.g., Canada, Eire and a number
11 [1962] 1 QB 638.
12 [1964] AC 326. The vigorous dissents of Lords Reid and Devlin repay careful study.
13 [1980] AC 174.
14 [1980] AC 174 at 189. A second reason given was that this reform would be best effected
by means of comprehensive legislation. Other jurisdictions have not adopted this rule;
and the Pearson Committee recommended its abolition (Cmnd 7054–1, 1978), vol. I,
para. 398. The Law Commission recently recommended that no change should be made
to the position established since H. West & Son Ltd v. Shephard and confirmed in Lim
(Damages for Personal Injury: Non-Pecuniary Loss (Law Com. No. 257, 1999), esp. paras 2.19
and 2.24).
15 £95,000 was, e.g., awarded in Brightman v. Johnson (quoted by Kemp and Kemp, The
Quantum of Damages, vol. 2, para. 1–010) whereas in Housecroft v. Burnett [1986] 1
of jurisdictions in the USA) have opted for judicially or legislatively im-

posed maxima for non-pecuniary losses. The idea – known as ‘capping’ –
has much to commend it, especially in the case of unconscious claimants
(who still receive substantial awards for loss of amenities). On the other
hand, the Law Commission has, on more than one occasion, suggested that
current levels may be insufficient.16 Now, the Court of Appeal, in the case
of Heil v. Rankin,17 has ruled that certain increases should be made for more
serious injuries where awards are over the £10,000 mark. The increases
to be made are not uniform, but range from around a one-third increase
for awards at the highest levels (i.e., very serious injuries e.g., quadriple-
gia and severe brain damage) tapering down to no increase for awards of
£10,000 and below.18 The court examined the reasoning which the Law
Commission had used in making its 1999 proposals, expressing particular
appreciation for the role played by increased life expectancy in such as-
sessments, both in general and in terms of those suffering serious injury,
All ER 332, O’Connor LJ thought £75,000 was an appropriate guideline for the average
incident of tetraplegia.
16 See Personal Injury Compensation: How Much is Enough? (Law Com. No. 225, 1994) and
Damages for Personal Injury: Non-Pecuniary Loss (Law Com. No. 257, 1999) for detailed
discussion, including the results of extensive surveys and consultation responses. The
1999 Report proposed that awards up to £2,000 should see no increase, awards between
£2,000 and £3,000 should be increased by up to 150 per cent of present levels and
awards over £3,000 should see at least an increase of 150 per cent (and, indeed, possibly
200 per cent) of present levels.
17 [2001] QB 272. A five-judge Court of Appeal was convened to hear the appeal, indicating
the importance attached to the issue, and Lord Woolf MR delivered the court’s
judgment.
18 The judgment states that it ‘is our view that between those awards at the highest level,
which require an upwards adjustment of one-third, and those awards where no
adjustment is required, the extent of the adjustment should taper downwards, as
illustrated by our decisions on the individual appeals which are before us’. On closer
inspection, this taper does not appear to descend evenly: Warren v. Northern General
Hospital NHS Trust and Annable v. Southern Derbyshire Health Authority (conjoined appeals
with Heil v. Rankin) saw the Court of Appeal increase the award from £135,000 to
£175,000 (the new figure amounting to c. 130 per cent of the old), Ramsay v. Rivers saw an
increase of approximately 25 per cent (£110,270 to £138,000), Kent v. Griffiths (No. 2) an
increase of around 20 per cent (£80,000 to £95,000), Rees v. Mabco (102) Ltd around
10 per cent (£45,000 to £50,000), Schofield v. Saunders & Taylor Ltd 10 per cent (£40,000 to
£44,000) and in Connolly v. Tasker, the court reassessed damages on the conventional
basis but made no increase in the level available (the sum being only £4,000 after the
Court of Appeal’s amendment). In Heil v. Rankin itself, no order was made due to other
complications yet to be dealt with in the case, although the court stressed that it would
recommend no increase in the level of damages, since the sum fell below the £10,000
threshold laid down earlier in the judgment. Appended to the judgment is a diagram
showing the levels of increases made, which may aid the reader in placing these various
increases into context.
who may often live to a ‘normal’ average age in spite of their injuries.
However, doubts were also expressed about placing too much reliance on
evidence found in various surveys since the material collected might well
be susceptible to a number of interpretations and explanations, rather
than just dissatisfaction with the level of damages for pain and suffering
and loss of amenities.19 The very highest award available in England is
thus £205,000 for quadriplegia. No individual, however seriously injured,
can receive more under the heading of general damages.
The ‘assessment’ concept of general damages

The above figures should not be taken to represent anything more than
illustrations. In this subsection we wish to stress that the word ‘assessment’
of damage is used advisedly. There is no mathematical or scientific cal-
culation involved in arriving at the appropriate figure.20 As stated, there
exist tariffs which were recently reviewed by the Court of Appeal in Heil v.
Rankin.21
The guidelines set a bracket for general damages for all types of injury.
What they do not, and could not, do is to provide a bracket for every
conceivable combination of injuries. How, therefore, does the trial judge
approach his assessment? The answer is through a broad assessment of all
the evidence. A useful checklist might be:
(a) What were the circumstances of the accident?

(b) What was the degree of pain and suffering undergone by the claimant
in the accident itself ?
(c) What was the length and nature of the treatment undergone by the
claimant?
(d) What is the most serious injury suffered by the claimant?
(e) What other injuries did the claimant suffer?
(f) What are the residual disabilities of the claimant?
(g) To what extent, if at all, has the claimant been unable to lead a normal
life as a result of those disabilities up to the date of trial?
(h) What is the extent to which, if at all, the claimant will be unable to lead
a normal life as a result of those disabilities in the future?
The judge then has to make his assessment taking all these matters into
account. As has already been said, the exercise is neither an exact science
nor a mathematical calculation. The judge does not, for example, say that
an individual should have £5,000 for a broken leg and £3,000 for an injury
19 See [2001] QB 272 at 302–13. 20 Fuhri v. Jones, CA, No. 199, 30 March 1979.
21 [2001] QB 272.
to his arm, making £8,000 in all. He will consider all the factors on the
checklist and arrive at a final figure.
Despite appearing remote, judges, even in England, are human beings.
It would be idle to deny that, inevitably, some claimants make a good
impression upon them while others do not. Likewise, while some judges
are parsimonious, others are inclined to greater generosity. Practitioners
in the subject would subscribe to these views and would deny a too rigid
differentiation between the judges’ aloofness and the jury’s proclivity to-
wards deserving claimants. The Court of Appeal will not interfere with an
award of general damages unless it is plainly outside the bracket of what is
reasonable, having regard to the broad tariff in the Judicial Studies Board
(JSB) guidelines. As a result, it is rarely possible in England to give an exact
figure for what a particular claimant is likely to recover in any given case.
The best any practitioner can do is to provide a bracket.
Psychiatric injury
Special considerations apply to psychological injuries which, once known
as ‘nervous shock’,22 now tend to be bracketed under the heading of ‘psy-
chiatric injury’.
The starting point is to specify what is meant by psychiatric harm. Dam-
ages cannot be recovered for mere grief or emotional distress at an injury
or death, even of a loved one: ‘in English law no damages are awarded for
grief or sorrow caused by a person’sdeath’.23 However, there is in principle
a distinction between mere grief and a more serious, prolonged psychi-
atric condition which may be identified with the help of expert medical
testimony. Medical science now recognises a condition known as ‘post-
traumatic stress disorder’, which may occur in reaction to the violent or
unexpected death of a close relative or friend.24 In Alcock v. Chief Constable of
South Yorkshire Police, relatives and friends of spectators who were crushed
to death inside a football stadium as a result of police negligence brought
actions for damages based on psychiatric illness suffered in reaction to the
event. Some had witnessed the scene at the ground. Yet others had not
seen the event but had suffered reactions from, amongst other things,
fear that a close friend or relative had been killed or injured; being told
that such a person had indeed been killed; and identifying the body at
22 In American law they tend to be referred to as emotional distress.

23 Hinz v. Berry [1970] 2 QB 40 at 42 (per Lord Denning MR).
24 Older terms for similar conditions would include neurasthenia, shell shock and
nostalgia: see [1992] 1 AC 310 at 317.
the temporary mortuary set up near the ground. The nature of the condi-
tion from which the claimants were suffering was described in court as
follows:
It is classified as an anxiety disorder. It follows on a painful event, which is out-

side the normal human experience, the disorder involves preoccupation with the
event – that is intrusive memories – with avoidance of reminders of the expe-
rience. At the same time there are persistent symptoms of increased arousal –
these symptoms may be experienced in the form of sleep difficulty, irritability or
outbursts of anger, problems with memory or concentration, startle responses,
hyper vigilance and over-reaction to any reminder of the event . . . Many [of the
claimants] described an inability or difficulty in carrying out normal life activities
such as work, family responsibilities or any activity normally engaged in before
the disaster . . . All those in whom post-traumatic stress disorder was identified
appear to have undergone a personality change, the significant features of which
[included] being moody, irritable, forgetful and withdrawn within themselves,
[and] frequent unprovoked outbursts of anger and quarrelsome behaviour were
reported.25
The House of Lords restricted damages to those who had been within
sight or hearing of the event or its immediate aftermath. The House held
that the law should not compensate shock brought about by communica-
tion by a third party. It also dismissed the claims of those who had seen
the events on live television, holding that the television pictures did not
depict suffering of recognisable individuals since that was excluded by
the broadcasting code of ethics.
The next thing to note is that as a result of a complicated and not always
rational development of the law in the last ten years or so, English courts
have come to make compensation depend crucially upon whether the
claimant is a primary or secondary victim of the accident.
Primary victims
A ‘primary victim’ has been defined as one who suffers psychiatric injury
after being directly involved in an accident and is either himself physically
injured or put in fear of injury. A ‘secondary victim’ suffers psychiatric in-
jury as a consequence of witnessing or being informed about an accident,
which involves another. As far as primary victims are concerned, it is well
established that an accident victim who is physically injured through the
negligence of another may, in principle, recover damages for the psychi-
atric as well as the physical consequences of the accident, subject to the
25 [1992] 1 AC 310 at 317.

normal rules of causation and remoteness of damage.26 Equally, if the

claimant’s person is negligently endangered and he is placed in fear of
an injury, which does not actually occur, the early cases27 clearly indicate
that there will be liability. These decisions were reaffirmed by the House
of Lords in Page v. Smith28 which, though the subject of some trenchant
criticism,29 remains good law.
Secondary victims
The real difficulties begin when the claimant himself was neither phys-
ically injured nor threatened with injury. Such claimants were termed
‘secondary victims’ by Lord Lloyd. The victim may have suffered a psycho-
logical reaction after witnessing the scene of an accident where another is
killed or injured or through fear of injury to another, which does not then
materialise. Witnessing a scene may take the form of being present at the
event itself, seeing it relayed on television or hearing about it on the ra-
dio, or coming onto the scene in its immediate aftermath.30 Alternatively,
26 In the unusual case of Meah v. McCreamer (No. 1) [1985] 1 All ER 367, the claimant
recovered damages for the consequences of a car crash which included a personality
change and his subsequent imprisonment following conviction for offences of rape and
assault. See also the Australian case of Jaensch v. Coffey (1984) 155 CLR 549, discussed by
F.A. Trindade, ‘The Principles Governing the Recovery of Damages for Negligently
Caused Nervous Shock’ [1986] CLJ 476 at 477.
27 Bell v. Great Northern Railway Company of Ireland (1890) 26 LR Ir. 428, not following Victorian
Railways Commissioners v. Coultas (1888) 3 App. Cas. 222; Dulieu v. White & Sons [1901] 2 KB
669.
28 [1996] 1 AC 155. In Page, the defendant, driving carelessly, caused a collision between his
car and that being driven by the claimant. The latter, although receiving no physical
injury at the time or later, later suffered a reaction which led to the revival of the
condition ME (myalgic encephalomyelitis) which left him chronically ill and unable to
work. In his leading judgment, Lord Lloyd said that in the case of a primary victim such
as the claimant – i.e., one directly involved in an accident – it was not necessary to
consider whether psychiatric injury had been foreseeable. It was enough that injury of
some kind, either physical or psychiatric, was foreseeable. For an application of Page, see
Nobles v. Schofield, CA, judgment of 14 May 1998, discussed by Nicholas Mullany, ‘English
Psychiatric Injury Law – Chronically Depressing’ (1999) 115 LQR 30.
29 See the judgment of Lord Goff of Chieveley in White v. Chief Constable of South Yorkshire
Police [1999] 2 AC 455 at 473–7.
30 Atkinson v. Seghal [2003] All ER (D) 341 (Mar) (Court of Appeal Civil Division, judgment of
21 March 2003); North Glamorgan NHS Trust v. Walters [2003] Lloyd’s Rep. Med. 49. In both
cases the Court of Appeal extended the meaning of ‘immediate aftermath’. In the first
case the appellant’s daughter died in a road accident. The mother arrived at the police
cordon whilst she was looking for E and was told by a police officer that E had died.
About an hour and a half later, the mother visited the mortuary where she saw E’s face
and head which were disfigured. The Court of Appeal held that ‘immediate aftermath’
extended from the moment of the accident until the moment the appellant left the
the reaction may have been brought about by being informed of another’s
death or injury in particular circumstances. As the law presently stands,
however, the victim who has seen the events on television or heard about
them on the radio cannot be compensated.31 Psychiatric injury could oc-
cur without a ‘shock’ of any kind being sustained, for example through
the burden of caring for an injured relative. The nature of the relation-
ship between the claimant and the person suffering the injury in question
could range from that of a close family tie to the relations of friendship
or employment; the claimant could be a rescuer or a mere bystander. At a
further extreme, damage to property, such as a house, or to a much-loved
pet, could induce a reaction of this kind. In each of these cases the psy-
chological reaction suffered by the claimant may be entirely foreseeable.
However, for secondary victims, foreseeability of psychiatric damage be-
ing inflicted on the claimant is a necessary but not sufficient condition for
establishing a duty of care.32 If, for these purposes, the law regarded psy-
chiatric harm as equivalent to physical harm, there would be no difficulty
about a duty of care arising and liability would then depend on questions
of fault, causation and remoteness. Many cases might fail at these later
stages, particularly on questions of causation. But the common law does
not currently take this view.
The prevailing view instead is that the extent of the duty of care is
limited by a number of essentially arbitrary factors. In particular, the
claimant will have to show, in general, that: (a) he was not abnormally
susceptible to this type of harm; (b) that his illness or condition was caused
by a ‘shock’ of some kind; (c) that he either witnessed the event directly
mortuary. In North Glamorgan NHS Trust, the claimant was a mother of the baby son
who suffered severe brain damage as a result of the hospital’s negligence. Initially she
was sleeping in the same room and saw him coughing blood. She was initially told that
no brain damage had occurred. She followed the ambulance in which he was taken
from one hospital to another. The following day she was advised that the brain was so
badly damaged that he would have no quality of life. She agreed to terminate the life
support and her son died in her arms. The Court of Appeal held that the whole
thirty-six-hour period was one drawn out experience and that the claimant could
recover damages in respect of her injuries for all the events which occurred during
that period.
31 Alcock v. Chief Constable of South Yorkshire Police, n. 25 above.
32 In some early decisions the courts denied recovery to what would now be classified as
‘secondary victims’ who were not in the likely area of physical impact: see Behrens v.
Bertram Mills Circus Ltd [1957] 2 QB 1 and King v. Phillips [1953] 1 QB 429, where the judges
were divided on the reason for denying recovery. In Bourhill v. Young [1943] AC 92, Lords
Wright and Porter argued for the test of foreseeability of shock or psychiatric damage,
and this was accepted by the Privy Council in The Wagon Mound (No. 1) [1961] AC 388.
These dicta should not now be read as referring to primary victims following the
judgment of Lord Lloyd in Page v. Smith [1996] AC 155 (see in particular at 189).
or came upon its immediate aftermath; and (d) that his relationship with
the accident victim was sufficiently ‘proximate’ in the sense defined by
the judges. All these conditions have raised their own difficulties and the
reader who wishes more details must look for them in the specialised
textbooks on tort law.33 But the claims of two further types of victims
must be borne in mind to complete this summary picture of the law.
What these cases have in common is that here – unlike the cases thus
far considered – the claimant and defendant are known to each other in
advance. Indeed, one could argue that the defendant in these cases can
be regarded as having assumed a responsibility towards the claimant not
carelessly to expose him to the risk of psychiatric harm. In other words,
the existence of a pre-tort ‘special relationship’ of this kind may be the
basis for a finding of a duty of care when, otherwise, the conditions for
the existence of a duty would not be satisfied.
Thus, first, the responsibility owed by schools and educational author-
ities to children in their care or under their control seems fairly well
established. This principle of the responsibility of the individual teacher
to his students was accepted by the House of Lords in X (Minors) v. Bed-
fordshire County Council.34 In Phelps v. Hillingdon London Borough Council the
House of Lords refused to strike out an action based on the direct duty
owed by a public authority with responsibility for educational services.35
The potential for the application of this principle is apparent from a deci-
sion of the Court of Appeal, Bradford-Smart v. West Sussex County Council,36
in which an action was brought against the defendant for not taking steps
to prevent the bullying of the claimant by some of her schoolmates. The
bullying took place out of school, but it was argued that the defendant
should have taken steps to discipline the perpetrators. It was found, on
the facts, that the school had not acted negligently, but the existence of a
duty of care was recognised by the court.
The principle of assumption of responsibility may be taken further to
cover cases in which the defendant can be seen as being under a duty
of care to transmit distressing information to the claimant in a sensitive
and careful manner. In AB v. Tameside and Glossop Health Authority37 the
defendant sent out letters warning former patients that a health worker
33 For instance, Basil Markesinis and Simon Deakin, Tort Law (Simon Deakin, Angus
Johnston and Basil Markesinis (eds), 5th edn, OUP, 2003), ch. 2.
34 [1995] 2 AC 633 at 766 (per Lord Browne-Wilkinson). 35 [2001] 2 AC 619.
36 [2002] 1 FCR 425; [2002] LGR 489, CA, judgment of 23 January 2002; see also Gower v.
London Borough of Bromley [1999] ELR 356; Paula Giliker, ‘A ‘New’ Head of Damages:
Damages for Mental Distress in the English Law of Torts’ (2000) 20 Legal Studies 272.
37 [1997] 8 Med. LR 91.
from whom they had previously received obstetric treatment had tested
positive for HIV, leading to the risk that they would contract the disease.
The letters were sent by standard post and no arrangements were made
for counselling (although these were later put in place). Claims in respect
of psychiatric injury caused by the way in which the news of the possi-
ble risk to health was transmitted were rejected by the Court of Appeal,
but only after counsel for the defendants had conceded the existence of
a duty of care. As Nicholas Mullany has argued, this concession seems
justified: there was a pre-existing relationship and psychiatric harm was
foreseeable.38 The existence of a duty of care should not depend upon the
information being false. Nevertheless, it should be borne in mind that even
if a duty is established, there may be problems of causation: the claimant
will have to show that the shock would not have been suffered anyway.
Secondly, the courts have had considerable difficulty in classifying the
claims of employees who witness traumatic deaths or injuries of col-
leagues.
In Dooley v. Cammell Laird & Co., Ltd39 an employee was allowed to recover
for the fear that his workmates might have been injured when the crane
he was operating, through no fault of his own, dropped a load into the
hold of a ship. In Alcock,40 on the other hand, Hidden J considered that it
was the nature of the activity or the task undertaken by the employee,
and not the relationship he might have with the accident victim, that
determined liability. This seems to be the best approach: the liability of
the employer in most cases should depend on the duty of care which
he owes to employees not to expose them to undue risk of harm, either
physical or psychiatric. An employee will only be able to claim as a secondary
victim if he comes under one of the categories of protected close friends or
relatives outlined in Alcock.41 In White, confusion was caused by the failure
of the courts to distinguish clearly between the two very different types
of claim being made by the claimants, namely their claims as secondary
victims and their claims as employees. The claim of an employee arises
38 Nicholas Mullany, ‘Liability for Careless Communication of Traumatic Information’

(1998) 114 LQR 380. Mullany also suggests that even if there is no pre-existing
relationship, a duty of care can arise from the assumption of responsibility, which is
inherent in the transmission of bad news (see at 383). This would go further than the
proposition outlined in the text. See also Andrews v. Secretary of State for Health (Queen’s
Bench Division, judgment of 19 June 1998), discussed by Mullany, (1999) 115 LQR 30 at
36.
39 [1951] 1 Lloyd’s Rep. 271. See also Galt v. British Railways Board (1983) 133 NLJ 870.
40 [1992] 1 AC 310 at 346–7.
41 See MacFarlane v. EE Caledonia Ltd [1994] 2 All ER 1 and Robertson v. Forth Road Bridge Joint
Board [1995] IRLR 251.
from the relationship between him and his employer, under which the
employer is under a duty to take reasonable care for the safety of his
employee at work.42 This claim is not, therefore, parasitic on witnessing a
particular event, which causes harm to another. Indeed, for the purposes
of this claim (in contrast to an employee’s claim as a secondary victim) it
is in principle neither necessary nor sufficient that the employer’s negligence
(or that of an employee of the employer) should have led to the accident
in question. It is not necessary for the reason that case law suggests that
the employer may be responsible for avoiding causing psychiatric harm
to his employee in a number of situations. But nor is it sufficient, since
an employer may be entitled to expect employees to withstand a certain
level of exposure to stress. In particular, an employer is arguably entitled
to expect that employees who are trained in rescue services will be able to
withstand a greater degree of exposure to shock than ordinary members
of the public. Thus, in such situations, police and fire officers may expect
to have greater difficulty in showing that their employer has been in breach
of the personal duty of care which he owes them.
This last point is highly relevant to White v. Chief Constable of South
Yorkshire Police.43 It cannot be argued that the Chief Constable was in breach
of his duty as employer simply for exposing his officers to the harrowing
scenes which they witnessed. If the disaster had occurred through the fault
of a third party, it seems inconceivable that a reasonable employer would,
in the circumstances, have withdrawn his officers from the scene. Does
it make any difference that the employer, in White, was responsible for
the accident occurring in the first place? At this point, difficult issues of
causation arise. It is possible to argue that the claimants in White suffered
additional distress and abuse from the crowd and from relatives during and
after the events in the stadium because of the role of their fellow officers
in causing the deaths of the victims. More generally, the accumulation
of circumstances – the employer’s initial responsibility for the disaster
together with the highly stressful situation in which the claimants were
then placed – could be seen as placing the employer in breach of his duty
to have regard to their physical and psychiatric health and safety, as Lord
Goff argued in his dissent.
Unfortunately, the approach taken by the majority in White was to ques-
tion whether the employer owed his employees a duty of care at all, in the
situation which arose in that case. According to Lord Steyn, the liability of
42 Wilsons & Clyde Coal Co., Ltd v. English [1938] AC 57 and Alcock v. Chief Constable of South
Yorkshire Police, n. 25 above.
43 [1999] 2 AC 455.
the employer to his employees depended on general principles of tort law,

which limited the degree to which psychiatric damage was compensable;
there was nothing to be gained, then, from formulating the claim as one
of employer’s liability. If this approach is taken, then a major restriction
has been placed on the extent of the employer’s personal liability. Lord
Hoffmann, on the other hand, seemed to accept that earlier cases, which
had held that an employer could be liable for causing certain types of
psychiatric harm to an employee, had been correctly decided. However,
his Lordship seems to have considered that this line of authority was of no
relevance in a case where the psychiatric harm in question was sustained
through witnessing the death or injury of another, although why this ex-
ception should be carved out of the general law of employer’s liability is
not clear.
As the law currently stands, then, White has cast serious doubt over
the principle that an employer can be liable under certain circumstances
for psychiatric harm sustained by one of his employees. At the very least,
it seems that in cases of nervous shock, where the harm is sustained by
witnessing another’sdeath or injury, there is little or nothing to be gained
by framing the case as one of employer’s liability. Potentially, White is a
highly restrictive decision for the law of employer’s liability.
Loss of marriage prospects

Unsurprisingly, in the modern politically correct world, this is not for-
mally recognised as a separate and distinct head of damage.44 Various
brackets for the type of injury which may adversely affect the ability of an
individual to form a relationship with another person already encompass
that fact as part of his or her loss of amenity.
Physical injury to sexual or reproductive organs is, however, a recog-
nised, and separate, physical injury and features as such within the JSB
guidelines.
Scarring may attract a greater award if the injured individual is a young
female. That is not upon the basis of diminution of marriage prospects
but rather general loss of amenity and embarrassment.45
Loss of congenial employment

English law recognises, as a separate head of loss, that an individual may
well, in consequence of his injuries, lose employment which he found
44 Moriarty v. McCarthy [1978] 1 WLR 155.
45 This is recognised in the JSB guidelines in relation to facial disfigurement where the
introduction says, in terms, that the distinction between male and female and the
subjective approach are of particular significance.
g e r m a n l aw 59
fulfilling and satisfying. A separate sum, in addition to general damages

for pain and suffering, and loss of amenity, may be awarded for such loss.
It is not necessary that the employment which has been lost should
be glamorous or even particularly extraordinary. In Hale v. London Under-
ground Ltd,46 Otton J said:
There can be no doubt that there is a considerable feeling of fulfilment and sat-
isfaction to attend a fire, to extinguish it quickly and safely, and to rescue any
persons inside the building before they suffer fatal or other terrible injuries. I
consider this a real loss to Mr Hale and it is not mitigated by any enjoyment from
his present work.
The evidence required to establish this head of loss is, as appears from
that passage, fulfilment and satisfaction in the job and an obvious com-
mitment to it.
As with general damages, awards are not calculated on any mathemat-
ical or scientific basis. In Hale v. London Underground Ltd the award was
£5,000. That is probably the middle of the bracket for the average case al-
though it is capable of being considerably more in the case of a glamorous
occupation. In 2001, a claimant received £7,500 for loss of congenial em-
ployment as a kick-boxer and instructor!47 A similar sum was awarded to a
twenty-five-year-old woman who lost her career as a professional woman.
She was said to have been an exceptionally gifted double bass player, hav-
ing studied at the Royal Academy of Music under some of the foremost
double bass players in the world. Had she not succeeded as a soloist, she
would have obtained a post in a leading orchestra.48 The highest award
which we have been able to find, to date, is £8,750 for the loss of an exec-
utive position.49
As is apparent from the foregoing, the amounts under this head are not
large.
German law
Introduction
General principles
The German law of damages is based on the principle of putting the
claimant in the position he was in before the commission of the wrong
(Naturalrestitution). Thus, as a basic principle, damages aim at restoring the
46 [1993] PIQR Q30. 47 Langford v. Hebran [2001] EWCA Civ 361; [2001] PIQR Q160.
48 Byers v. London Borough of Brent, QBD, judgment of 24 April 1998 (unreported).
49 Pratt v. Smith, 2003 (unreported).
status quo ante. To this end, the situation of the claimant is considered
hypothetically as it would have been without the conduct or event that
entitles him to damages. The resulting difference is the object of the claim.
As for pecuniary headings, a claimant entitled to damages on the
grounds of violation of his person or property can, by choice, demand
payment of the amount of money necessary for the reparation instead of
‘restitution’ proper. Payment of money can also be demanded if, for cer-
tain legally defined reasons, the ‘restitution’ is either impossible or not
feasible.
It is, however, in the nature of non-pecuniary headings that ‘restitution’
in the sense understood by German law (i.e., return to the status quo ante)
cannot truly be achieved.
The loss suffered by the claimant may, however, be compensated by
means of a payment of an adequate sum of money which can grant a
certain amount of satisfaction. It is therefore seen in this light rather
than as a straightforward indemnification of the loss. The abstract idea of
an appropriate indemnification thus prevails over the notion of restitutio
in integrum.50
This has led the German legislator basically to exempt, in essence, non-
pecuniary headings from the system of damages and to allow compen-
sation in the above-mentioned sense only in particular and legally de-
fined cases. The basic regulation is found in § 253 BGB, which in its first
paragraph states the basic rule, namely, the non-compensability of non-
pecuniary headings of harm. Exceptions from this basic rule require ex-
plicit legislative authorisation.
By far the most important regulation of that kind is to be found in
the second paragraph of § 253 BGB (formerly § 847 BGB). It grants com-
pensation for non-pecuniary headings as a consequence of any claim on
the grounds of an injury of the body, freedom, health or sexual self-
determination of the claimant. Here, the technical relation of rule and
exception is virtually converted into its opposite.
The legal basis for the original claim, formerly51 playing a crucial role
as non-pecuniary losses were compensable only under tort law, is now
irrelevant. Any claim for damages involving a violation of any of the in-
terests enumerated in § 253 II BGB, automatically entitles the claimant
50 On this see Basil Markesinis and Hannes Unberath, The German Law of Torts: A Comparative
Treatise (4th edn, Oxford, 2002), p. 981 (henceforth referred to as GLT).
51 Before the ‘Zweites Gesetz zur Änderung Schadensersatzrechtlicher Vorschriften’ took
effect on 1 August 2002.
g e r m a n l aw 61
to non-pecuniary damages as far as they result from the violation of the

respective interest.
Other provisions, such as § 11 S. 2 StVG or § 8 S. 2 ProdHG simply extend
the rule of § 253 II BGB to the area of strict liability. The extent of such a
claim for compensation is, of course, subject to general and further reg-
ulations as, for example, the crucial principle of causality. Furthermore,
it is defined by the idea and intention of the rule of law upon which the
claim is based.
The only other statutory regulations granting compensation for non-
pecuniary headings are § 651 f II BGB which compensates for spoilt holi-
days, and § 611 a II, III BGB which compensates for sex discrimination in
employment matters.
Interference with honour and reputation52

A judge-made exception to the rule in § 253 I BGB in cases of the infringe-
ment of personality rights has recently been established in an incontro-
vertible way by the BGH in the ‘Caroline’ case.53
Even before the above-mentioned decision, and notwithstanding § 253
I BGB, the BGH granted compensation for immaterial damages result-
ing from interference with honour and reputation. Thus, in the Herren-
reiter case,54 the claimant, a well-known industrialist, was an amateur
equestrian. The manufacturer of a tonic designed to increase sexual per-
formance used, without the claimant’s consent, a picture of him taken
during a tournament for the purposes of advertising its product.
The claimant claimed DM15,000 (c. €7,500) as compensation for inter-
ference with his honour and reputation on the grounds that his advertis-
ing a product was incompatible with his social status and exposed him to
the opprobrium of his peers. The BGH confirmed the judgment of the trial
court granting DM10,000 (c. €5,000). The compensation was justified as
satisfaction for the immaterial damage done to the claimant’spersonality.
The court assumed from article 1, 2 of the Constitution that personality
itself was to be protected to a larger extent than originally intended by
the legislator of the BGB. For without the entitlement to damages, the
constitutional protection of human dignity (and personality) would be in-
effective. Thus, § 847 BGB (the former version of § 253 II BGB) was to be
applied by analogy. In a subsequent decision, the BGH preferred to base
52 Detailed and comparative to English law: Funkel, Schutz der Persönlichkeit durch Ersatz
immaterieller Schäden in Geld (München, 2001).
53 For details on the evolution of the substantive law, see GLT, pp. 472 ff., 685 ff. and 923.
54 BGH 14 February 1958, BGHZ 26, 349 ff.
the claim directly on § 823 I BGB in connection with article 1, 2 Grundge-

setz (instead of on § 847).55 Therefore, the violation of personality rights
was not expressly mentioned when the legislator moved the former § 847
to § 253 II BGB in 2002; the basis for such claims has not been altered.
Principles of fair compensation and satisfaction56

Basic principles
According to § 253 II BGB, the injured person is entitled to ‘fair compen-
sation by payment of money’. In its case law regarding the former § 847
BGB (now the statutory regulation preceding § 253 II BGB), the BGH has
over the years developed principles for the assessment of the damages. As
usual, therefore, in German law one has to consult the case law in order
to add flesh to the bones of the codal structure. The basic ideas can be
found in the judgment of the Great Senate of the Federal Court of 6 July
1955.57
In this judgment, the Great Senate analysed the idea of indemnification
as expressed in § 253 II BGB and found two basic principles, thus acknowl-
edging the dual function of this provision.58 In the first place, it is aimed
at granting the claimant fair compensation for the infringements caused
by the act complained of. To that extent, it compensates for the loss of
amenities and joy of life of the injured person as a result of the injury by
making other amenities possible.59
This idea of fair compensation by payment of money will, however, fail
in cases where the claimant is so well situated that he can afford every
form of amenity even without any payment from the tortfeasor. Since
neither § 253 II BGB nor the former § 847 BGB establishes exceptions for
such cases, the character of the provision could not fully be explained
by the concept of fair compensation. In search of further elements, the
Great Senate thus stated that the provision, on a second level, also aimed
at providing satisfaction for the infringement, an idea already known to
Swiss law.60
55 BGH 5 December 1995, NJW 1996, 984, 985 (‘verfassungsunmittelbarer Ersatz des
immateriellen Schadens’).
56 See also GLT, p. 916 ff.
57 BGH 6 July 1955, BGHZ 18, 149–68 (the Great Senate has the sole function to
decide issues disputed between the Senates of the Federal Court, § 132
Gerichtsverfassungsgesetz).
58 BGHGS 6 July 1955, BGHZ 18, 149, 154 ff.
59 See Hermann Lange/Gottfried Schiemann, Schadensersatz, § 7 V 2 with further citations.
60 Articles 47, 49, 60 OR; BGHGS 6 July 1955, BGHZ 18, 149, 155 ff.
g e r m a n l aw 63
This second element has generated substantial criticism from the legal
literature. To grant satisfaction regardless of the situation of the injured
person is considered a penalty under civil law and that, in principle at
least, is unknown to the German legal system. Furthermore, the German
Constitution requires procedural standards for the infliction of a criminal
penalty and also provides specific remedies against its wrongful imposi-
tion which German civil procedural law does not do. Some authors thus
find the element of satisfaction to be unconstitutional.61
The Federal Court, on the other hand, denied the punitive character of
the compensation.62 While punishment serves the interests of the pub-
lic, which would not be within the scope of civil law, satisfaction con-
cerns the injured person’s private interests. It is therefore entirely of a
private law nature. It is for this reason that the fact that the tortfeasor
has already been sentenced in a criminal trial has been held to have no
effect on the measure of the damages awarded in the subsequent civil
trial.63 To an outside observer, however, this result does not appear to be
equitable.
In another decision of the Federal Court,64 the defendant bank rob-
ber had put his arm around the claimant’s neck while at the same time
holding an authentic-looking (but, in reality, fake) gun to her head. He
threatened to shoot her if he were not given enough money. The claimant
experienced great fear and, as a result, suffered sleep disorder and night-
mares for a period of at least six months. Even at the time of the judg-
ment, she complained of increased irritability with the consequence that
her ability to work under pressure was lowered, something which had
even forced her to give up her previous employment. Upon the defen-
dant’s appeal against the judgment of the Landgericht, the OLG lowered
the amount granted as damages from DM8,000 (c. €4,000) to DM4,000
(c. €2,000) on the grounds that the element of satisfaction was of no
relevance to the level of damages since the defendant had already been
punished by a criminal court.
61 Hermann Lange/Gottfried Schiemann, Schadensersatz, § 7 V 2 with further citations.

Some of these objections have, of course, also been raised in the common law context by
those who find punitive damages to be – to put it mildly – an anomaly. But the different
‘constitutional’ settings of different common law systems give differing strength to
these objections.
62 BGH 6 July 1955, BGHZ 18, 149, 155; BGH 29 November 1994, BGHZ 128, 117, 122.
63 BGH 29 November 1994, BGHZ 128, 117, 122 ff. with further citations; BGH 16 January
1996, NJW 1996, 1591; OLG Celle 26 November 1992, VersR 1993, 976, 977; OLG Hamm
7 June 1993, NJW-RR 1994, 94; OLG Köln 14 November 1991, NJW-RR 1992, 221.
64 BGH 29 November 1994, BGHZ 128, 117 ff.
The claimant appealed against this judgment of the Court of Appeal

and the Federal Court restored the judgment of the trial court granting
the claimant an amount of DM8,000 (c. €4,000). It stated that the indem-
nification was not to be divided into two separate amounts, one of which
met the element of fair compensation while the other corresponded to
the element of satisfaction. Both were rather to be taken into account
as factors in the assessment of the non-pecuniary damage. Moreover, the
criminal conviction had no influence on the element of satisfaction, for
the latter was not aimed at the public interest in the prosecution of the
criminal but served solely the interests of the injured person.
In another case,65 the claimant claimed compensation for sexual abuse
by the defendant who had already been convicted by a criminal court. The
Court of Appeal again reduced the amount granted by the trial court from
DM60,000 (c. €30,000) to DM25,000 (c. €12,500) on the grounds that the
claimant had already obtained justice through the criminal conviction
of the delinquent. Once again, the Federal Court reversed the judgment
arguing that the element of satisfaction had its origins in the relation of
tortfeasor and injured person and, therefore, was substantially different
from the state’s right to prosecute.
Particularities in cases of interference

with honour and reputation
The above principles are valid for the compensation of pain and suffering
resulting from personal injury. As for interference with honour and rep-
utation, the German courts have established an extra legem exception to
the rule of non-compensation of non-pecuniary headings.66 In these cases,
the claim for damages is based on the idea of preventing the tortfeasor
(as well as possible successors) from repeating the interference. This dif-
ferent basis may lead to substantially diverging results in the assessment
of the damages i.e., most probably to higher amounts. The Constitutional
Court (Bundesverfassungsgericht) has considered this difference compat-
ible with the principle of equal treatment required by article 3 of the
Constitution.
Thus, in one case67 the appellants had suffered grave mental and phys-
ical injury from the death of their three children in a traffic accident.
They were awarded by the civil courts a compensation for pain and suf-
fering, with DM70,000 (c. €35,000) going to the mother, and DM40,000
65 BGH 16 January 1996, NJW 1996, 1591. 66 See p. 61.

67 BVerfG 8 March 2000, NJW 2000, 2187.
g e r m a n l aw 65
(c. €20,000) going to the father, which was only about one-third to one-
half of what they had claimed. They filed a complaint of unconstitution-
ality on the grounds that the principle of equal treatment (article 3 GG)
was violated. They argued that in cases of interference with honour and
reputation significantly higher amounts had been granted.
The Bundesverfassungsgericht did not accept the complaint. It denied
a violation of article 3 GG. The principle of equal treatment could not
limit the respective courts in their independence from each other and
especially not hinder a diverging interpretation of a legal provision. More-
over, the different treatment was justified by special reasons. While the
ruthless commercial exploitation of another person’s personality could
be prevented by high damages, such an effect was not possible in traffic
accidents (leading to personal injuries) because the damages were in these
cases generally paid by the tortfeasor’s insurance company.
Assessment of non-pecuniary damages resulting from personal

injury in general68
Discretion of the judge
The amount of compensation depends in the first place on the degree
and the extent of the impairment to the claimant’s life.69 Additionally, all
particular circumstances of a given case are to be taken into account.70
For instance it may be relevant to ask whether the injury has caused a
permanent or temporary disability to the claimant, of what kind and
extent, and if and to what extent the injury has affected his ability to take
part in social life.71
The assessment of the amount to be awarded is subject to the discretion
of the judge. German procedural law provides for this possibility in § 287
ZPO. Consequently, the claimant does not have to claim a specific amount
of money, but may leave this amount to the discretion of the judge. He
has to indicate, however, the minimum sum he is asking for.72
The Federal Court can only review the way the judge has exercised his
discretion. It thus verifies that the decision of the judge is not arbitrary
and that all relevant circumstances were taken into account by him when
68 See also GLT, p. 915 ff. 69 BGH 6 July 1955, BGHZ 18, 149, 157.
70 The BGH uses the expression of circumstances which ‘dem Fall ein besonderes Gepräge
geben’, roughly meaning ‘leave their particular stamp on the case’, see BGHGS 6 July
1955, BGHZ 18, 149, 157 ff.
71 Hein Kötz/Gerhard Wagner, Deliktsrecht, no. 522.
72 See BGH 14 January 1992, MDR 1992, 349.
reaching his decision. But, subject to the above, it cannot determine the
amount of compensation itself.
Thus, in one instance,73 the BGH reversed a judgment for misuse of dis-
cretion. The fifteen-year-old claimant had suffered severe injuries to her
head (skull fracture, concussion) as well as shock. As a permanent conse-
quence of these injuries, she lost her senses of smell and taste. Further
on, a significant damage of the brain functions occurred and produced a
permanent change of character, diminution of intelligence and instabil-
ity of the nervous system. Even the development of epilepsy in the future
could not be ruled out. A pre-existing hearing disability also deteriorated
further. The claimant’s earning capacity was reduced by 30 per cent.
The trial court and the Court of Appeal ordered the insurance company
of the defendant to pay DM30,000 (c. €15,000) for pain and suffering and
an additional pension of DM300 (c. €150) per month. The Federal Court re-
versed the decision to the extent that it exceeded the amount of DM20,000
(c. €10,000) for pain and suffering and remanded the case to the Court
of Appeal for retrial since the BGH was not, as stated above, allowed to
fix the amount itself. The Federal Court did not object to the splitting up
of damages into a lump sum for the actual harm and a pension for the
continuing impairments. It did, however, criticise the fact that the reduc-
tion of earning capacity and marriage prospects was taken into account
in the assessment of the lump sum (and not the pension), although the
reduced marriage prospects would not, given the claimant’s youthful age,
manifest themselves until many years later. As for the risk of epilepsy, this
should not have been taken into account at this stage of the proceedings
for the purposes of increasing the annuity because this could be adjusted
upwards if epilepsy did indeed occur by means of a simple petition to
modify the judgment.74 Additionally, in the opinion of the Federal Court,
the lump sum and annuity were disproportionate to one another. For the
amount awarded for the one and a half years of past and actual suffering
was five times the amount of the respective annuity for the same length of
time. Given the length of the in-patient treatment of only about six weeks
and the duration of the acute medical treatment of only three months,
as opposed to the gravity of the continuing effects, this did not reflect an
appropriate balance between the two components of the award.
Even trivial inconveniences in principle entitle to compensation for
pain and suffering. However, it is at the discretion of the judge to deny
damages if the injury does not exceed a degree typical to the risks of
73 BGH 8 June 1976, VersR 1976, 967 ff. 74 This is made possible by § 323 ZPO.
g e r m a n l aw 67
everyday life. If, for instance, persons living in the neighbourhood of a

factory have to bear foul odours for the duration of one evening, it is not a
misuse of the discretion of the judge if he refuses damages on the grounds
that the infringement is insignificant.75 In its reform of the law of dam-
ages, which became effective on 1 August 2002, the German government
intended to exclude trivial damages from non-pecuniary damages alto-
gether.76 In the end, however, the resolution of this problem was left to
the courts.77
Similar cases as guidelines for the assessment

Even if the German law-maker has deliberately not stated any tariffs for
compensation for pain and suffering, it is an acknowledged principle that
the amounts awarded should more or less be the same if the injuries of the
respective claimants are comparable. This practice is based on the princi-
ple of equal treatment and serves the purpose of legal consistency,78 not
to mention the fact that such consistency can only facilitate predictabil-
ity and the reaching of extra-judicial settlements. As a result of the above,
previous judgments are compiled in non-statutory tables to serve as guide-
lines.79 A further consequence of this is that the more the awarded amount
diverges from these standards, the more reasons the judge has to give for
his decision.80
The Federal Court developed this general assessment concept in its
judgment delivered on 8 June 1976.81 It considered the amount awarded
too high, because, after the capitalisation of the annuity, the total sum
amounted to DM100,000 (c. €50,000). Such a sum had, up to that date, only
been awarded for the most severe continuing effects of injuries, which had
not occurred in that case. For this comparison, it referred to the Schmerzens-
geld tables. Although the comparison was to be drawn only cautiously, it
had to be taken into account that the claimant was, for example, spared
disfigurement.
The reference to comparable cases is a well-established practice in all
cases where Schmerzensgeld has to be assessed. The sterilisation of women
75 BGH 14 January 1992, NJW 1992, 1043; the courts of first instance usually deny
compensation for petty injuries, see Küppersbusch, Ersatzansprüche bei Personenschäden,
no. 199.
76 BT-Drucks. 14/7752, 16, 25. 77 BT-Drucks. 14/7752, 31.
78 BGH 8 June 1976, VersR 1976, 967, 968.
79 See, e.g., Susanne Hacks, Ameli Ring and Peter Böhm, Schmerzensgeldbeträge (20th edn,
München, 2001), p. 20.
80 BGH 8 June 1976, VersR 1976, 967, 968. 81 BGH 8 June 1976, VersR 1976, 967 ff.
without their consent may serve as another example. In its judgment of

1989,82 the Court of Appeal of Düsseldorf awarded DM35,000 (c. €17,500).
In its decision of 1994,83 the same court awarded DM40,000 (c. €20,000)
in reference to the first judgment; it stated that in the first judgment the
damage had been alleviated by the fact that the claimant’s husband was
likely to be infertile. It also referred to a decision of the Court of Appeal
of Stuttgart84 in which DM60,000 (c. €30,000) were awarded to a claimant
who was seven years younger.
Particular factors for the assessment of the compensation

Factors on the side of the claimant
Age of the injured person
Youthful age is commonly regarded as a factor which justifies an increase
in the amount awarded.85 In practice, however, it is doubtful whether
this argument of itself weighs significantly on the minds of judges. For
the decisions themselves only rarely suggest comparison has been made
with a similar case involving a claimant of different age. The age of the
claimant, however, was of particular importance in the above-mentioned
case of the woman sterilised without her consent.86
In this context, claimants are considered ‘young’ up to about the age of
thirty-three.87 On the other hand, the courts tend to lower the awarded
amount if the youthful age enables the claimant to adapt to the altered
circumstances more easily.88
Loss of marriage prospects; break-up of partnership

It is left to the discretion of the judge to take into account the impairment
of the prospects of finding a partner.89 In the reasons given in particular
cases, this issue, however, plays only a minor role. Thus, it can be doubted
82 OLG Düsseldorf 12 October 1989, VersR 1990, 852.

83 OLG Düsseldorf 1 December 1994, VersR 1995, 1316.
84 OLG Stuttgart 6 October 1988, VersR 1989, 1150.
85 OLG Frankfurt 21 February 1996, VersR 1996, 1509, 1510 (blindness of a seven-year-old
boy); KG 16 April 1991, VersR 1992, 974 (one-sided blindness of a four-year-old girl).
86 OLG Düsseldorf 1 December 1994, VersR 1995, 1316; see pp. 67–8.
87 OLG Düsseldorf 10 February 1992, NJW-RR 1993, 156, 158 for a thirty-three-year-old; OLG
Köln 20 May 1992, VersR 1992, 975, 976 for a twenty-two-year-old.
88 OLG Saarbrücken 16 May 1986, NJW-RR 1987, 984.
89 BGH 13 March 1959, NJW 1959, 1031 (syllabus only); OLG Frankfurt 11 November 1993,
DAR 1994, 119; OLG Nürnberg 7 December 1993, DAR 1994, 157; OLG Oldenburg
21 January 1991, DAR 1991, 302, 303; OLG München 20 September 1988, VersR 1989,
1203; for a different view see (without explanation) OLG Hamburg 19 August 1986,
VersR 1988, 720.
g e r m a n l aw 69
that it is of real significance in judicial practice. In legal literature, on

the other hand, the criticism has been made that the loss of marriage
prospects has been considered – predominantly but not exclusively – only
in cases involving female victims.90 Thus, only recently have the reduced
prospects of men of finding a partner been taken into account as a factor
to increase their compensation.91
A rather sophisticated practice has been established concerning the
break-up of a marriage as a consequence of the injury.
Generally speaking, this risk is seen as part of the general risk of life. But
it may not always be so. Thus, a decision of the Court of Appeal of Köln92
concerned a woman injured in a bicycle accident who claimed an in-
creased indemnification for the fact that her marriage allegedly broke up
in consequence of a five weeks’stay at the hospital during which she could
not care for her four children. The court denied the claim on the grounds
that a direct connection between the break-up of her marriage and the
harm complained of could not be proved.
Courts tend to decide otherwise if the break-up of the marriage is the
result of concrete deficiencies of the victim caused by the accident, as,
for example, an inability to perform sexual intercourse. Thus, in one of its
decisions delivered in 1975, the Court of Appeal of Hamm93 found that the
thirty-year-old claimant was hurt on the pubic bone in a way that made
sexual intercourse very painful. As a result her marriage broke up, the
impaired possibility of intercourse resulting from the above-mentioned
injury being one of the reasons advanced by the husband. In the light
of these facts, the court accepted a causal connection between the injury
and the divorce and granted the claimant an indemnification of DM35,000
(c. €17,500) plus a monthly pension of DM180 (c. €90). The Federal Court
decided in a similar fashion a case where the claimant lost one of his
testicles.94 It is submitted, however, that the two factual situations do
not seem to be at all similar so that, in the end, the exact facts assume
particular significance.
In a case of particularly severe injuries from a car accident with substan-
tial continuing mental and physical effects (reduced ability to walk, disfig-
urement because of scars, general impairment of the fine adjustment of
90 Hein Kötz/Gerhard Wagner, Deliktsrecht, no. 525; Stuck JZ 1974, 417.

91 OLG Frankfurt 21 February 1996, VersR 1996, 1509, 1510 on a boy who was blinded by an
exploding bottle of mineral water at the age of seven; OLG Düsseldorf 10 February 1992,
NJW-RR 1993, 156, 158.
92 OLG Köln 26 April 1995, NJW-RR 1996, 986. 93 OLG Hamm 3 July 1974, MDR 1975, 490.
94 BGH 21 September 1982, NJW 1983, 340.
movements, memory disorder, fear of using any means of transport) the

break-up of a domestic partnership may, likewise, entail the same legal
consequences. But even lesser consequences – the injured person cannot
dress and take part in social life according to his or her habits95 – can
justify an increase of the award.
Impairment of professional possibilities; loss of earning capacity

German courts are increasingly willing to increase the damages in those
cases where the injured person has been forced to abandon or change
his job.
In one case, the claimant, a professional chef, suffered severe injuries
in a car accident, among others whiplash, a broken nose, scars and the
loss of his sense of smell. The Court of Appeal of Frankfurt96 granted a
compensation of DM20,000 (c. €10,000), and placed the emphasis on the
fact that as a result of the loss of his sense of smell the claimant could
perform his work as a chef only with great difficulty and therefore was
forced to abandon it. Additionally, however, the court took into account
the impairment of appearance as well as the youthful age of the claimant.
In another case,97 a beautician was granted DM9,000 (c. €4,500) for a
scar on her face resulting from a car accident in which she was held to have
been contributorily negligent to the extent of 50 per cent. It was argued
that as a beautician she depended greatly on an immaculate appearance.
In the mid-1990s, the Court of Appeal of Hamm98 awarded DM24,000
(c. €12,000) to a female certified accountant for the damage to her knee
that limited her ability to move, caused when an oncoming car crashed
into a petrol station. In fixing the amount, the court in the first place took
into account that the claimant had to change from the profitable field
service to less rewarding office work. Additionally, the general mental
burden, the loss of amenity and impairment through two operations and
three ancillary treatments were taken into consideration, as well as her
inability to engage in sporting activities.
These considerations are even more valid when the injured person be-
comes disabled.
The Court of Appeal of Oldenburg99 awarded DM100,000 (c. €50,000) as
non-pecuniary damages to a twenty-six-year-old woman who had suffered
95 LG Amberg 29 April 1986, NJW-RR 1986, 1357, 1359.

96 OLG Frankfurt 25 February 1986, VersR 1987, 1140, 1141.
97 OLG München 30 November 1984, VersR 1985, 868.
98 OLG Hamm 15 December 1994, VersR 1996, 243, 245.
99 OLG Oldenburg 21 January 1995, DAR 1991, 302, 303.
g e r m a n l aw 71
severe injuries to her head in a car crash. The injuries had led to a loss of
the sense of smell, hearing disorder, reduced brain performance, slowed
speech, hormonal malfunctions resulting in infertility, and the risk of
epilepsy. The court deemed it a relevant factor that through the loss of
the sense of smell the claimant could no longer be a professional chem-
ical laboratory worker. Furthermore, the court put emphasis on her re-
duced marriage prospects in consequence of the infertility and the speech
disorder.
The degree to which a profession is associated with particular prestige
or self-satisfaction has not, thus far, influenced the assessment of the
damages. In the literature, it is argued that a professional tennis player
or surgeon should be entitled to higher compensation than, for instance,
a factory worker.100 This distinction is justified by reference to the basic
functions of ‘Schmerzensgeld’(cf. p. 62). It is argued that for a well-off person,
more money is necessary to obtain a noticeable rise in amenity. These
factors, however, may well be concealed under different headings of the
award.
Impairment of the possibility to engage in leisure activities or hobbies

The amount of damages awarded to claimants is further increased if the
injured person can no longer pursue a hobby as a consequence of the
injury.101
Since an objective evaluation or even ranking of different hobbies or
leisure activities does not exist, judges refrain from establishing prefer-
ences in favour of certain occupations.102 Instead, the courts take into
consideration how important the activity has been for the claimant. The
objective degree of time, effort and success can only be an indicator of this
subjective importance, which alone is relevant.103 There remains, how-
ever, the questionable decision of the Court of Appeal of Köln which, in
the early 1990s,104 granted a twenty-two-year-old man who had not yet
engaged in running an increased indemnification on the grounds that
his injury prevented him from pursuing this sport in the future. The court
justified its decision by arguing that the permanent impairment of the
quality of life was of greater significance today than it was in former days.
100 Hein Kötz/Gerhard Wagner, Deliktsrecht, no. 525.

101 OLG Frankfurt 21 January 1991, VersR 1992, 621, 622; OLG Hamm 15 December 1994,
VersR 1996, 243, 245; OLG Köln 16 October 1992, NJW-RR 1993, 350, 351.
102 Critical however MünchKomm-BGB/Stein § 847 BGB no. 25.
103 OLG Frankfurt 11 November 1993, DAR 1994, 119, 120.
104 OLG Köln 20 May 1992, VersR 1992, 975.
Change of personality
If the injury affects the personality of the claimant, this may justify an
increase in the amount of compensation.105
In a case brought before the Federal Court in 1979,106 the fourteen-
year-old claimant suffered severe injuries in a traffic accident. These led
to a permanent walking impairment, scars and substantial damage to
the brain. According to the decision of the Court of Appeal,107 the brain
damage resulted in a significant change of personality, evidenced in the
first place by a diminished intelligence as well as emotional and sexual
disorders. Whereas the claimant had successfully completed his primary
school education and, by the time of the accident, had been attending a
commercial school for six months, his education came to a halt after the
accident. The claimant ran away from home and ended up keeping ‘bad’
company. This, eventually, led him to becoming a delinquent. He was con-
victed for his activities by a criminal court but, because of his diminished
criminal responsibility, he was sent to a secure mental hospital rather
than incarcerated in a prison. The Federal Court reaffirmed the judgment
against the wrongdoer to pay compensation of DM70,000 (c. €35,000). The
court relied heavily on the findings of the Court of Appeal according to
which the mental disorder and the delinquency were connected to the
accident which had resulted in his cranial injuries. The argument that
the claimant may have been predisposed to such activities was ignored
in view of the gravity of the accident and its consequences. Contributory
negligence was also disregarded.
Loss of senses
As for the element of satisfaction, problems can occur if the injuries are
of such a kind that the injured person loses the ability to feel satisfaction
at all. It has been argued that in these cases, the compensation should be
lowered as it cannot fulfil the function of granting satisfaction (see p. 62
and p. 3). This argument, however, has been rejected in later decisions.
In one case that reached the Federal Court,108 the defendant physician
had not carried out a caesarean operation during the birth of the claimant
although this was medically indicated. The claimant’s health was seri-
ously damaged. Besides considerable physical impairments (such as palsy,
partial diplegia, spasms etc.), substantial mental disorders ensued. The
105 BGH 8 May 1979, NJW 1979, 1654; see also BGH 9 April 1991, NJW 1991, 2347, 2348.
106 BGH 8 May 1979, NJW 1979, 1654.
107 OLG Karlsruhe 15 December 1977, VersR 1979, 164.
108 BGH 13 October 1992, BGHZ 120, 1 ff.
g e r m a n l aw 73
claimant did not possess the ability to speak but could only make moaning
or grunting sounds thus expressing a general sense of wellbeing or discon-
tent. Nor could she develop sophisticated feelings beyond joy, wellbeing
and aversion, the latter related to the physical perception of pain or taste.
Moreover, her possibilities of experiencing such feelings were restricted by
anti-epileptic medication. The Landgericht awarded the claimant as com-
pensation a lump sum of DM50,000 (c. €25,000) plus a monthly pension
of DM500 (c. €250).
The Court of Appeal reversed this judgment and lowered the indemni-
fication to a lump sum of DM30,000 (c. €15,000) and likewise reduced the
monthly pension to DM250 (c. €125). In its view, account should be taken
in this case of the fact that monetary compensation could not fulfil its
function to satisfy the victim. She was not able to realise the connection
between the injury and the payment of damages and could thus not feel
satisfaction. On the other hand, it was accepted that her life could, to some
extent, be eased by means of money to assist beyond the ordinary degree
of care. In particular, she could enjoy the additional human attention
money could provide.
The Federal Court reversed the judgment of the Court of Appeal insofar
as it had reduced the damages granted by the Landgericht, and remanded
the case back for the final determination of the award. It found that the
Court of Appeal had misconceived the meaning of Schmerzensgeld. That
the claimant, because of the negligence of the defendant, was deprived
of the chance to develop her personality was the crucial fact which de-
termined the seriousness of the injury. It therefore could not justify a
decrease of the indemnification. A different view would misinterpret the
right of personality as envisaged by articles 1 and 2 of the German Consti-
tution. A symbolic payment was not sufficient because, by means of the in-
demnification, the impairment of the personality and the loss of personal
quality as such were to be compensated as non-pecuniary headings.109
In a later case, the Federal Court confirmed this approach.110 The de-
fendant had left the claimant, at the time twenty-two months old, unat-
tended for several minutes. During this time, the claimant fell into a
pond. Though he narrowly avoided death by drowning, he suffered se-
vere damage to the nervous system that destroyed most of his sensitivity.
The Federal Court reversed the judgment of the Court of Appeal which
109 See Deutsch, NJW 1993, 784; OLG Schleswig 24 February 1993, VersR 1994, 310 ff.; for
the former jurisdiction see BGH 16 December 1975, NJW 1976, 1147; BGH 22 June 1982,
NJW 1982, 2123.
110 BGH 16 February 1993, NJW 1993, 1531.
had awarded only DM20,000 (c. €10,000) as a ‘symbolic expiation’ and

remanded the case for rehearing.
Unforeseeable future effects

In many cases, the effects of the injuries cannot be completely determined
at the time of the commencement of the action, nor even the trial. Some
effects may only be realised in the future, so that it may not be certain to
what extent, if at all, they will occur. Even so, unforeseeable future effects
may justify an increase in the amount of the damages by a subsequent
application to the court. Here, however, we are concerned with a different
aspect of the claim: the injured person’s fear and uncertainty.
In a case which reached the Court of Appeal of Hamm111 in 1995, the
claimant suffered from pneumothorax and had to undergo several oper-
ations as a result of medical malpractice on the part of the defendant. In
the course of one of these operations, the right lobe of her lung had to be
removed. The Landgericht and the Court of Appeal awarded DM150,000
(c. €75,000) as non-pecuniary damages. The award was influenced by the
fact that the claimant had, as a result of the malpractice, been placed in a
perpetual life-threatening situation. In determining the level of damages,
the court also felt it had to take into account the fact that, through the
loss of half her lung, the claimant’s heart would be overly stressed in the
long run. The damages had to be increased not only for the fear of coro-
nary failure but also to take into account the uncertainty engendered by
unforeseeable future effects.
In a similar way, the Court of Appeal of Köln112 decided for a claimant
who, as a result of medical malpractice, had to live with an oversized hip
joint prosthesis for three years before a smaller one could be installed and,
during this period, suffered substantial complications.
The evaluation of future effects is of great importance in cases of the
negligent sterilisation of a woman without her consent.
In a decision of the Court of Appeal of Düsseldorf of 1994,113 the claimant
argued that, following a caesarean operation, she had been sterilised with-
out her consent. The Court of Appeal ordered the surgeon in question to
pay DM40,000 (c. €20,000) as compensation for pain and suffering. Al-
though the claimant had herself considered sterilisation and already had
three children (so that in fact she was not totally deprived of the joy of
111 OLG Hamm 8 March 1995, VersR 1996, 892, 893.

112 OLG Köln 16 February 1995, VersR 1996, 712, 713.
113 OLG Düsseldorf 1 December 1994, VersR 1995, 1316, 1317.
g e r m a n l aw 75
motherhood) she was, at the time of the operation, still only twenty-seven
years old and had thus been significantly restricted by the surgeon’saction
in her future family planning. Moreover, there was a chance that future
matrimonial and family problems would arise because of the sterilisation.
Similar considerations can be found in other cases.114 In the same vein,
the Court of Appeal of Saarbrücken115 granted DM150,000 (c. €75,000) to
a ten-year-old boy who had lost his genitals as a result of medical malprac-
tice. The court based the assessment primarily on the consideration that
the future mental and physical effects were not yet foreseeable.
Relevance of pre-existing damage

Pre-existing damage or injury may justify an increase or a reduction of
the indemnification depending upon each individual case. A decrease is
required if the tortfeasor proves that an impairment does not result from
the injuries inflicted by him but from a preceding accident and therefore
is not caused by his negligence.116
If the damaging event simply aggravates an existing impairment, this
will also lead to a decrease in the amount of damages. Thus, in one case117
the claimant suffered severe injuries to the spine and head in a car acci-
dent and became disabled. The injuries healed without remaining medical
impairments. Yet the victim suffered pain because he lacked the men-
tal capacity to cope with the events. The cause was the claimant’s pre-
morbid personality as well as eight preceding traffic accidents. The Federal
Court confirmed the judgment of the Court of Appeal awarding DM50,000
(c. €25,000). But the claimant’s mental condition was taken into account
as a factor justifying a decrease in the amount of damages.
In some cases, however, the courts have increased the compensation on
the grounds of pre-existing damage. Thus, in one such case the claimant
requested compensation for pain and suffering from the city of Berlin
because he slipped on an icy pedestrian crossing. He claimed the city had
not met its obligation to clear snow from the crossing. The Kammergericht
of Berlin118 awarded DM20,000 (c. €10,000) as compensation for pain and
suffering. In the reasoning of the judgment, not only the seriousness of
the injuries and the duration of the treatment (of more than six months)
114 OLG Düsseldorf 12 October 1989, VersR 1990, 852; OLG Stuttgart 6 October 1988, VersR
1989, 1150.
115 OLG Saarbrücken 17 December 1974, NJW 1975, 1467.
116 This proof indeed failed in BGH 5 November 1996, NJW 1997, 455; see also BGH 16
November 1961, NJW 1962, 243.
117 BGH 30 April 1996, BGHZ 132, 341. 118 KG 26 May 1989, NVwZ 1990, 406, 407.
were taken into account, but also the fact that an existing impairment
of the claimant’s blood circulation in his left thigh and foot deteriorated
further. The court left open the question whether the partial amputation
of the claimant’sleft foot was a necessary consequence of the fall. The acute
deterioration of the claimant’s pre-existing affliction was sufficient.
In another case, the claimant showed neurotic reactions as a result of
being involved in a car accident. She suffered from hypochondriac self-
consciousness which the court considered pathological. The undisputed
cause for this was a latent disposition from which she suffered. The Court
of Appeal of Frankfurt119 decided that the law of damages could not treat
a psychologically or physically predisposed person in a worse way than
a sane person.120 Although the accident was in a sense only a random
occasion for the neurosis, this aspect had little or no weight in view of the
severity of the accident. The Court of Appeal thus awarded the claimant
DM50,000 (c. €25,000) in compensation.
Most decisions, however, which have taken into account an existing
predisposition are characterised by a careful weighing of all aspects of the
particular case. A definite qualification of predisposition as a factor which
increases or decreases the amount of damages is therefore not possible.
Some decisions underscore this point.
In one decision handed down in 1981, the Federal Court121 had to deal
with a claimant who had been bitten by the defendant’sGerman Shepherd
when he entered a tavern. Because of a pre-existing severe war wound, the
dog’s bite led to further severe injuries which made necessary two opera-
tions, three months of treatment, psychiatric therapy and caused disabil-
ity. The Federal Court confirmed the judgment awarding only DM35,000
(c. €17,500), instead of the claimed DM60,000 (c. €30,000), as compensa-
tion for pain and suffering. The court pointed out that the injury had only
aggravated a pre-existing damage. On the other hand, one had to take into
account that the claimant had already been seriously affected by his war
injuries.
In another case,122 a physician had badly performed an operation on
the nasal septum. As a result of this malpractice the claimant lost her
sense of smell. The OLG awarded DM7,000 (c. €3,500) as compensation for
pain and suffering. In reaching this figure, the court had to balance two
competing factors. On the one hand, the claimant’s sense of smell was
119 OLG Frankfurt 10 February 1994, VersR 1995, 796, 797.
120 Similarly, OLG Frankfurt 26 October 1994, VersR 1996, 864.
121 BGH 22 September 1981, NJW 1982, 168, 169.
122 OLG Köln 17 February 1993, NJW-RR 1993, 919, 920.
g e r m a n l aw 77
already deficient and this called for a decrease of damages. On the other
hand, it was to be taken into account that the loss of the sense of smell
was especially grave, since next to amenity, the claimant lost a warning
function which the sense of smell could perform e.g., in the event of fire.
In 1991, the Court of Appeal of Munich123 was confronted with a claim
by a twenty-one-year-old claimant who had been involved in a traffic ac-
cident. The court regarded as negligible the pre-existence of a mental
impairment, which had been severely aggravated by the accident. While
the claimant before the accident had an IQ of about 50 to 70, and had thus
been forced to attend a special school and had planned to become a carpen-
ter, he had, after the accident, an IQ of about 20 to 50. This rendered any
form of schooling or apprenticeship impossible. The court condemned
the tortfeasor to pay damages in the form of a lump sum of DM60,000
(c. €30,000), plus a monthly pension of DM400 (€200), which would total
about DM140,000 (c. €70,000) if the pension were to be capitalised.
Social background
In the calculation of damages, the claimant’s social background is princi-
pally irrelevant. An older decision of the Reichsgericht,124 claiming that
an impairment of the appearance was especially grave when the dam-
aged person belonged to the educated classes, can no longer be seen as
acceptable, especially given the provisions and spirit of the German Con-
stitution of 1949. Judges are thus not allowed to pursue values particular
to their own social background.125 As for the reproach of some authors
that the differences in the compensation for interference with honour
and reputation have, in fact, caused social injustice, see p. 64.
Early death of the injured person126

If an injury results in the early death of the claimant, this fact can be
taken into account as a decreasing factor in the assessment. The claim
passes on to the heirs of the victim though, at this stage, it no longer seeks
to provide compensation for pain and suffering but only to meet the need
for satisfaction.
The Federal Court has not, however, established strict criteria on how
soon death has to occur to justify an increase of the indemnification.
123 OLG München 24 July 1990, DAR 1991, 301 ff.

124 RG 24 April 1911, RGZ 76, 174, 176.
125 Hein Kötz/Gerhard Wagner, Deliktsrecht, no. 525; Christian v. Bar NJW 1980, 1724.
126 See also p. 4.
In one case,127 the heirs claimed indemnification in lieu of their par-

ents who died in a car accident caused by the negligence of the defendant.
The father was conscious for thirty-five minutes before he slipped into
a coma. During that time, he felt pain and was worried about his wife.
He died after ten days without regaining consciousness. The claimants’
mother lost consciousness immediately after the accident and died within
an hour. The Court of Appeal awarded an indemnification of DM28,000
(c. €14,000) for the father and DM3,000 (c. €1,500) for the mother. The
Federal Court turned down the claimants’ appeal. The indemnification
was to be lowered if the injured person died soon after the harmful event
and in consequence of the injury. As far as the father was concerned,
one would have to accept that he had been conscious for only thirty-
five minutes after the accident. Only within this period of time could a
non-pecuniary damage occur and compensation be ordered.128 As for the
mother, the Federal Court argued that, in view of her unconsciousness,
it was doubtful if immaterial damage had occurred at all. In contrast to
another similar case,129 she only had to remain unconscious for one hour,
so that an affliction was not ascertainable: § 847 (the former equivalent of
§ 253 II BGB) was not intended to provide indemnification for the short-
ening of life.
In fact, in this case the line had to be drawn between the killing of a
person (in which case no non-pecuniary headings of damages are owed
to this person) and the injury of a person which leads to his death. The
Federal Court tried to distinguish between a prolonged process of dying
(no Schmerzensgeld) and cases in which the injury preceding the death had
its own weight and could be viewed as impairment distinguishable from
the ensuing death. In such a case it would be appropriate to award non-
pecuniary damages.
Relevance of psychological consequences

Psychological effects are to be taken into account in the assessment of
damages in the same way as physical injuries. Thus, in one case before the
Federal Court130 the claimant’s physical injuries caused by a traffic acci-
dent had healed without lasting effects. The claimant, however, suffered
127 BGH 12 May 1998, VersR 1998, 1034 ff.

128 Other than in cases where the indemnification is granted for the lack of perception
(see p. 72; BGH 13 October 1992, BGHZ 120, 1 ff.), the claimant here had not fallen into
coma as a result of the injuries but had been put in this condition in the course of the
medical treatment.
129 BGH 13 October 1992, BGHZ 120, 1 ff. 130 BGH 9 April 1991, VersR 1991, 704.
g e r m a n l aw 79
psychological consequences that were not organic in origin, such as

change of character, loss of mental capacity, speech disorder, paralysis and
diminution of the sexual urge. The Federal Court confirmed the award of
damages on the grounds that they all formed recognisable physiological
and psychological harm.
Factors on the side of the tortfeasor

Degree of fault
On the side of the tortfeasor, the first relevant factor is the degree of
his fault. German courts take the view that an increase in the amount of
damages seems particularly indicated if the wrongdoer is also convicted in
a criminal procedure because of the act that had caused the injury. Thus,
in one case,131 the defendant was convicted for bank robbery. The Federal
Court justified an increase of the damages with the consideration that in
the case of intentional torts, a special relationship between tortfeasor and
victim had been created that had to be taken into account regarding the
element of satisfaction.
In one case (at least), the degree of fault was deemed to be an essential
element.132 Thus, the amount of damages was increased because the tort-
feasor had intentionally stuck a knife in the claimant’s back with the in-
tention of killing him. But negligence, too, can justify an increase in the
amount of damages. An example of this can be found in a decision of the
Federal Court of 1993133 in which the gross negligence of the defendant
justified an increase of the compensation.134
On the other hand, if it can be shown that the tortfeasor intended to do
the victim a favour but, nonetheless, injured him negligently, the level of
damages may be reduced.135
Fortune
In German law, the pecuniary situation of the tortfeasor may be taken
into account when fixing the level of the award. Thus, a wealthier tortfea-
sor may be liable to pay a higher indemnification.136 A tortfeasor without
means must neither be ruined by the award of damages nor, on the other
131 BGH 29 November 1994, BGHZ 128, 117, 120 ff.

132 BGH 7 February 1995, NJW 1995, 1438. 133 BGH 16 February 1993, NJW 1993, 1531.
134 Further cases: BGH 6 July 1955, BGHZ GS 18, 149, 157 ff.; OLG Nürnberg 25 April 1997,
VersR 1998, 731, 732; OLG Frankfurt 11 November 1993, DAR 1994, 119, 120.
135 BGH 6 July 1955, BGHZ 18, 149, 158 ff.
136 Even persons not responsible under tort law (children, insane persons) may be liable
for damages in those circumstances, § 829 BGB.
hand, can compensation be totally denied in such a case.137 But a defen-

dant is not considered to be without means when he has taken out an
insurance which covers the damage. The Federal Court has argued that
the claim against the insurance company is to be seen as a part of the
tortfeasor’s fortune (see p. 189).
Torts by relatives
In principle, the above-mentioned rules also apply to claims against rela-
tives. The fact that the parties are related to each other is, however, used
as an argument to decrease the damages.
In one case,138 the claimant was severely injured in a car accident while
on the highway. The accident was caused partly by her husband, who was
driving the couple’s car, and partly by the driver of a military vehicle. The
wife claimed compensation from the state, which, however, invoked the
privilege of § 839 I 2 BGB and argued that the wife had a claim for dam-
ages against her husband which had precedence over the claim against
the state. The BGH took the view that it was not against the nature of
marriage to allow a claim for damages by one spouse against the other to
proceed. The matrimonial bond was only to be taken into account when
fixing the size of the award. For the amount had to be of a size that the
respective spouse could afford without endangering the family’s finan-
cial basis. Damages that resulted in a shortfall of reasonable maintenance
would be inadequate.
Also, several Courts of Appeal approved a reduction of the indemnifi-
cation between relatives. So, the Court of Appeal of Hamm139 awarded a
son, who suffered quadriplegia from a car accident caused by his father,
an indemnification of DM250,000 (c. €125,000). It was taken into account
that his father had cared for the claimant since the accident and had thus
given him satisfaction. The element of satisfaction was therefore irrele-
vant in the assessment of the compensation. The same consideration can
be found in a decision of the Court of Appeal of Schleswig,140 where the
wrongdoer/husband was made to pay to his wife DM280,000 (c. €140,000)
for the quadriplegia he had caused her. The Court of Appeal of Munich,
however, rejected a reduction of the compensation in similar cases where
the claim was directed against an insurance company. The principles for
the assessment of the compensation between relatives were said not to be
applicable in these situations.141
137 BGH 6 July 1955, BGHZ 18, 149, 162 ff. 138 BGH 18 June 1973, BGHZ 61, 101.
139 OLG Hamm 17 December 1997, VersR 1998, 1392.
140 OLG Schleswig 9 January 1991, NJW-RR 1992, 95 ff.
141 OLG München 8 July 1988, VersR 1989, 1056.
g e r m a n l aw 81
Where a third party is responsible for the damage along with the rela-
tive, their liability is treated as a joint obligation. If the relative’s liability
is excluded as, for example, according to § 1359 or § 1664 BGB, the third
party alone is liable.142
Delay of payment of the damages

The damages for pain and suffering may be increased if the tortfeasor
deliberately delays the settlement of the matter, for instance by engaging
in frivolous litigation.143 One has to be careful, however, not to regard
any differing statement of facts as a frivolous protraction, even if it later
proves to be false.144 The tortfeasor is held responsible also for dilatory
tactics of his insurance company. Thus, in one case,145 the claimant was
sterilised without her consent. The court awarded an increased compen-
sation explicitly because the defendant physician had refused to accept
his wrongdoing until the very end of the trial.
In an especially drastic case, the Court of Appeal of Frankfurt146 doub-
led the claim for compensation for pain and suffering caused by medical
malpractice from DM10,000 (c. €5,000) to DM20,000 (c. €10,000) because
the physician refused to accept his liability although the malpractice was
undisputed. The court considered it particularly important that the de-
fendant refused to render any form of payment even after the Landgericht
had awarded DM10,000 (c. €5,000).
Compensation for the death of close relatives147

The injured person’s relatives cannot in principle claim compensation for
their mental suffering caused by the death of their relative; neither does
that fact have an increasing effect on the compensation of the victim.
Notwithstanding, the related third party may, through the physical
injury of the relative, experience psychological pain and suffering tothe
142 BGH 1 March 1998, BGHZ 103, 338 ff.; further quotations MünchKomm-BGB/Stein
§ 847 BGB no. 44. This is the kind of situation which the English High Court had to
address in Greatorex v. Greatorex [2000] 1 WLR 1970, discussed by B. Markesinis in
‘Foreign Law Inspiring National Law: Lessons from Greatorex v. Greatorex’ (2002)
61 CLJ 386.
143 BGH 9 May 1989, WM 1989, 1481, 1482 (obiter dictum); BGH 2 December 1966, VersR
1967, 256, 257; OLG Düsseldorf 1 December 1994, VersR 1995, 1316, 1317; OLG
Frankfurt 22 September 1993, DAR 1994, 21, 22; OLG Nürnberg 25 April 1997, VersR
1998, 731, 732; OLG Celle 9 November 1967, NJW 1968, 1677.
144 LG Hechingen 9 January 1981, VersR 1982, 253, critical Riecker VersR 1982, 254.
145 OLG Düsseldorf 1 December 1994, VersR 1995, 1316, 1317.
146 OLG Frankfurt 7 January 1999, NJW 1999, 2447.
147 For fuller details see GLT, pp. 115–44.
extent that an impairment of his health is caused. In this case, the relative
is himself entitled to a claim for damages (§ 823 I BGB) and thus also to
compensation for non-pecuniary damages.148
Because German civil law principally denies compensation for injuries
to third parties, the standards for such claims are very high.149 It is nec-
essary for the psychological impairment to have relevant medical effects
and require medical treatment. The impairment of health has to exceed a
degree which could normally be expected if a relative is injured.150 This is
only the case when traumatic disorders with psycho-pathological failures
of some duration occur.151 It is not sufficient if the victim’s wife’s alcohol
addiction worsens in consequence of the husband’s injury.152 Although
there is no rule that the legal interests or rights enumerated in § 823
I BGB have to be violated directly,153 it has to be considered in these cases
whether the causal nexus can still be regarded as adequate and whether
the indirect violation could have been foreseen.154
The mental stability of the claimant, however, is of no relevance.155
Furthermore, only close relatives, fiancés and partners of an amatory re-
lationship are entitled to this claim.156
Finally, the injury of the related person has to be especially grave and
beyond the general risks of life. This is only the case with death or se-
vere personal injuries. The more severe the injury, the less relevant is the
presence of the claimant at the place and time of the accident.157
Italian law
Introduction
In Italian tort law, as in its German and common law counterparts, the
guiding principle for the award of damages is the compensation of the
victim of the wrongdoing. But like the other two systems, with which it
is compared in this book, Italian law is fully conscious of the fact that
148 BGH 11 May 1971, BGHZ 56, 163; BGHZ 93, 351; OLG Freiburg 30 June 1953, JZ 1953, 704.
149 Erwin Deutsch, Unerlaubte Handlungen, no. 472.
150 Soergel and Zeuner § 823 BGB no. 27; BGH 5 February 1985, BGHZ 93, 351, 354 ff.; BGH
11 May 1971, BGHZ 56, 163.
151 BGH 4 April 1989, NJW 1989, 2317, 2318; OLG Nürnberg 31 January 1984, NJW 1998,
2292, 2294.
152 BGH 31 January 1984, NJW 1984, 1405. 153 GLT, p. 137. 154 GLT, pp. 126, 137.
155 BGH 11 May 1971, BHGZ 56, 163, 165.
156 OLG Stuttgart 21 July 1988, NJW-RR 1989, 477 ff.; LG Tübingen 29 November 1967, NJW
1968, 1187; LG Frankfurt 28 March 1969, NJW 1969, 2286. See GLT, p. 139.
157 BGH 5 February 1985, BGHZ 93, 351, 354 ff.
i t a l i a n l aw 83
it is easier to compensate damage to property (the amount there being

calculated by reference to the market value of the damaged thing) than it
is to put a monetary figure on personal injuries. For the same reason, it is
easier to compensate the innocent contractual party for interference with
his contractual relations than to calculate the harm to the body or fix the
right amount to take care of the danno morale (pain and suffering) in the
sense explained above in chapter 1 (and below). Personal injuries thus call
for special treatment. All systems under comparison agree with this; but
they differ in significant ways in matters of important detail. In particular,
what stands out in the eyes of a non-Italian lawyer is the degree of fluidity
that exists in Italian law. The absence of headings of damage, comparable
to those used by English lawyers, also makes comparisons difficult. The
reader must constantly bear this caveat in mind; and he must also be
prepared to explore the possibility of certain headings of damage being
taken care of obliquely by some of the more broad headings recognised
by Italian law (such as that of danno biologico).
As already indicated in chapter 1, Italian law accepts three broad head-
ings of damage. Danno patrimoniale, which comes close to the common
law notion of pecuniary loss, is the subject of the next chapters. It tends
to affect a person’s wealth, assets or income. Danno biologico and danno
morale are the main topics of the present one; and in Italian law they are
collectively referred to as danno non-patrimoniale. What the items covered
by this heading have in common is their inability to be assessed finan-
cially in an objective manner. Punitive or exemplary damages are never
awarded in Italian law, no matter how severe the injury may be nor how
reprehensible the mens rea of the wrongdoer (even though, as we shall
note below, compensation is not the only recognised aim of tort law and
‘punitive elements’ may be concealed in some types of award). To be sure,
under the influence of American law, some academics have proposed that
punitive damages should also become part of Italian law; but to date these
proposals have not gained wider acceptance.
Principle of full compensation

According to the German Differenztheorie the injured party has the right to
be put in the same situation in which he or she was before the accident,
without any extra profit. This is the starting point; but in personal injury
cases full compensation is achieved in an approximate manner by award-
ing damages related to health, pain and suffering and loss of earnings. The
compensation for impaired health and pain and suffering are not affected
by the earnings of the victim. Loss of earnings is taken into account only
in the liquidation of the danno patrimoniale (future loss).
Danno biologico is liquidated per se according to tables which differ from
court to court (see Appendix.)
Danno morale is liquidated by taking into account the circumstances of
the case, though the total sum tends, in practice, to reach about half the
amount (or less) awarded for danno biologico.158
Danno patrimoniale varies according to the category of the victim: employ-
ees are compensated according to the social security system, all the other
victims according to the evidence they can produce showing their loss.
In a tort action, the victim shoulders the burden of proof. The quantifica-
tion of the injury is calculated by the judge taking into account the views
of an expert witness (invariably a medical doctor) appointed by the court.
He, in turn, takes into account the estimates and opinions of the expert
witnesses appointed by the parties (claimant and defendant).
Danno biologico
In very general terms danno biologico means the interference with the
health of a person considered in and of itself as a legal interest worthy of
evaluation and, if affected, compensation. That the deprivation of health
or the loss of a limb should be compensated as such seems obvious enough
to us looking at Italian law from the perspective of late twentieth century
and twenty-first century law. But things were not always so in Italy since,
during the nineteenth century and the first half of the twentieth, the
compensation of any interference with the health of a person was linked
to the earning capacity and social status of the victim.159 This meant, for
instance, that poor people or old people could be considered as being
‘people without any value’160 and thus left without compensation, assum-
ing, of course, they had the means and the courage to chance litigation.
158 In a few court districts – for instance Genova – the courts have themselves prepared
tables which set out the amount of moral damages that could be awarded (depending
on a variety of factors indicated in the tables e.g., degree of relationship, duration of
pain and suffering etc.). In the majority of regions, however, the evaluation of the
amount is left to the discretion of the judge though, as stated, the total amount tends
to be approximately one-half of the amount awarded for danno biologico.
159 In Italian law, as well, prior to the introduction of the danno biologico, various attempts
were made to provide some compensation for these items of loss. But the way this was
brought about was oblique and the result, on the whole, unsatisfactory, given the fact
that the lower sections of society still ended up undercompensated for certain types of
harm.
160 See, e.g., Tribunale di Firenze, 6 January 1967, 1969 Arch. Resp. civ. 130.
The compensation thus given to the victim under this new heading of
damage (danno biologico) covers all the different kinds of damage which
English law would compensate under such headings as ‘loss of amenities
of life’, damage to the aesthetic appearance of the victim, damage to the
working capacity in general, etc.
This new way of looking at things was strengthened by the Constitu-
tional Court and the principles it developed during the early years of its
existence. Health was thus seen as an essential value constituting the ob-
ject of a fundamental right of the person. Such a right required full and
exhaustive protection both in the public sphere as well as in the realm
of private relationships. Its object is the general and common claim of
individuals to such conditions of life, environment and work that do not
jeopardise this fundamental right. Such protection implies a claim, in-
cluding preventive measures, if this right is affected but also the obliga-
tion not to prejudice or endanger other people’s health through one’s own
behaviour. In the event of conflict between the right to health, protected
by the Constitution, and other behaviour, free but not directly covered by
the Constitution, the first must necessarily prevail.161
According to the law currently in force,162 such an approach implies
that danno biologico is to be compensated within parameters which do not
take into account the income-producing capacity of the injured party. The
injury is, therefore, considered per se, as the fact causing damage to the
legally (and constitutionally) protected interest of health. So the expres-
sion danno biologico is, in essence, identified with the expression (consid-
ered more correct by most commentators) ‘damage to health’ (danno alla
salute). Health is included among the interests protected by the law and is
recognised by article 32 of the Constitution. It is an absolute right, and as
such it is fundamental, inalienable and indispensable.163
Case law still acknowledges a variety of indemnifiable headings of dam-
ages. Decisions have thus compensated interference with peaceful fam-
ily life,164 damage from demotion in one’s employment,165 damage from
‘harassment’,166 damage due to loss of kinship and of enjoyment of the
161 Judgment of 20 December 1996, no. 399, Cons. Stato, 1996, II, 2090; Foro it. 1997, I,
3123.
162 Contained in art. 13 of Legislative Decree no. 38 of 23 February 2000, repeated in art. 5,
para. 3 of Law no. 57 of 5 March 2001, and unchanged in the subsequent amendment
by Law no. 273 of 12 December 2002.
163 Civil Cass., labour section, 10 March 1990, no. 1954, Crit. Pen., 1995, 50.
164 Court of Milan, 18 February 1988, Resp. civ. prev. 1988, 454.
165 Court of Milan, 26 June 1999, Lav. nella giur., 1999, 1075.
166 Court of Milan, 21 April 1998, Dir. lav. 1998, 957.
relative, also sometimes referred to as hedonistic damage,167 and so on.

The creation of these heads of damages is due to a kind of moral evaluation
of the case. If the judge thinks that damages which are recovered by the
victim should be higher than those calculated according to the ordinary
methods, the way of solving the case is to create a new head of damages.
An accident causes disadvantages to the parents and relatives of the vic-
tim – their life is overturned – so the judge creates the head of ‘violation
of peaceful family life’. If the situation of the employee is difficult because
he or she is not satisfied with the work requested by the employer, or is
harassed by the employer, the judge creates the head of ‘demotion’ and of
‘harassment’, etc. It is by no means certain that this catalogue of headings
is closed. So now danno biologico is becoming and should be seen as the re-
ceptacle into which all different aspects of personal injury go, apart from
danno morale and danno patrimoniale.
Danno biologico covers two kinds of non-pecuniary harm: temporary disabil-
ity and permanent disability, depending on whether the injury has caused
alterations to the psycho-physical wellbeing of the victim that will disap-
pear after some time, or will remain for life.
On the basis of these assumptions, it becomes completely idle to discuss
the nature of danno biologico and decide whether it belongs to the ‘moral’
field or to the economic field. Any attempt to follow rigidly the common
law distinction between pecuniary and non-pecuniary losses would, like-
wise, be of little use. The attempt to present different legal systems in
exact logical juxtaposition can only go so far and no further. Danno bio-
logico may thus be considered a tertium genus, or a special aspect of ‘moral
damages’ and must be examined on its own terms. In other words, the
area of danno biologico also includes damages to social life, consisting of
the impossibility or difficulty for an individual who has suffered physical
impairment to reinstate himself or herself in social relationships and to
keep such relationships at a normal level.168 The damage to social life is
now considered as an aspect of danno biologico, and it can even consist of
the temporary suspension or reduction of normal life opportunities.169
Statutory rules about danno biologico

The considerable uncertainty prevailing in the law of compensation for
personal injury, combined with economic (mainly insurance) reasons al-
luded to above in chapter 1, forced the legislator to intervene repeatedly in
167 Court of Milan, 1 April 1999. 168 Cass. 24 April 2001, no. 6023.
169 Cass. 27 November 2001, no. 15034.
order to introduce legal regulations that could, once and for all, settle the
issues raised by the assessment of personal injuries. Though this attempt
has been patchy in approach and limited in its effect, it has opened up a
new stage in the history of personal injuries. One notable side effect was
also the fact that the discussion about compensation for personal injuries
was moved from the judges to the Italian Parliament.
At first instance, the provisions introduced concerned only minor in-
juries (9 per cent permanent incapacity or less). They further envisaged
tables which should be prepared in the future by the Department of Indus-
try with the co-operation of the Department of Health and the Department
of Justice.170 Moreover, article 5, paragraph 2 of Law no. 57 of 5 March 2001
did not deal with danno biologico in general, but only with injuries arising
from road accidents.171 Finally, article 5, paragraph 3 consecrated into
statutory law the rule established by the courts (and mentioned above)
that danno biologico ‘should be compensated without taking into account
the income-producing capacity of the injured party’.172
Soon after the passing of this statute and without prejudice to the
provisional regulation of the liquidation of danno biologico, the legislator
intervened again with the passing of Law no. 273 of 12 December 2002.
This introduced additional assessment criteria aiming to cap these levels
of award. Such intervention had two objectives. First, was the wish to act
as a curb against inflation. The second was to complete the parameters
given to judges by the first statute. More precisely, given the widespread
feeling that the first statute fixed the amounts in a rigid manner, the new
enactment chose to give judges the right to provide (limited) additional
amounts when the personal conditions seemed to justify them. The de-
sire to allow judicial discretion is praiseworthy. Yet, it also creates the risk
of regional or other inequalities and thus returns to the status quo ante
which the new statutes had aimed to terminate.
Methods for the liquidation of danno biologico

When the official tables envisaged by the above-mentioned statutes are
published for all degrees of permanent invalidity, the method of calculating
the levels of damages for danno biologico will be clear and uniform over
the whole of the country. Predicting a date when this process will be
170 Law no. 57 of 5 March 2001, art. 5, paras 1–6.

171 The principles of the law and the tables now in force (reproduced in the Appendix) are,
however, now applied to other types of accidents.
172 We omit here as not relevant to our main purpose the challenge that was made to the
Constitutional Court concerning the constitutionality of this new statute.
completed is hazardous; but the fact that it will happen in the foreseeable
future does not seem to be in doubt. Given this prediction, we feel it is
not necessary to describe in any detail the current and varied ways used
by the different regional courts to carry out this task. Here, then, suffice
it to mention the barest outline of the procedure.
In order to liquidate damage to health, the judge must use ‘ample equi-
table powers’. However, the discretional assessment inherent in the equi-
table method cannot turn into an arbitrary quantification. The Court of
Cassation has, therefore, specified that trial courts must adequately jus-
tify the logical reasoning through which they have come to fix the amount
of compensation, for the victim cannot be enriched at the expense of the
tortfeasor. The judge must therefore indicate in his judgment the ele-
ments he deemed useful in order to reach his decision concerning the
final assessment of compensation under this heading.173
According to the Court of Cassation the general limits to be observed by
the judge when using his equitable powers are essentially two: first, the
resort to an elastic criterion, allowing him to appreciate all the circum-
stances of the case; secondly, the justification of the use of such criteria
must have regard to logic, consistency and the completeness of the state-
ment of reasons. In practice, it is possible to resort to tables, mathematical
or statistical formulae, provided that they reflect these criteria. The judge
is therefore free to use formulae that are commonly accepted in practice,
or are even provided for in special laws concerning particular types of ac-
cidents. The tables are prepared by medical examiners, trade associations
and sometimes by the courts themselves.
As stated, it would be unnecessary to describe here the various methods
of evaluation devised by various regional courts such as Genoa, Pisa, Milan
and Rome, though one mentions this phenomenon in order to provide
yet another specific illustration of the regionalism of Italian law noted in
chapter 1. However, we feel it might be useful to draw the attention of the
reader to two guidelines.
The first is found in a decision of the Supreme Court which stated that:
According to the constant trend of this Court, on the matter of liquidation of
danno biologico, which is essentially an equitable one, the trial court may even
resort to predetermined and standardised criteria, provided it does so flexibly, thus
defining a general rule fitted for the particular case. The criterion that assumes
as a parameter the average ‘point’ of disability, calculated on the average of court
precedents, is a valid one: therefore the ruling that resorts to such method is not
173 Cass. Se. Lav., 23 February 2000, no. 2037, Giust. civ., 2000, I, 1655.
in itself censurable under the profile of legitimacy, provided that it is supported

by suitable grounds with regard to adjustment of the average value of the ‘point’
to the peculiarities of the case.
The second guideline can be found in article 4 of Law no. 39 of 26 Febru-

ary 1977, governing compulsory insurance for civil liability arising from
the circulation of motor vehicles. This article contains provisions that ap-
ply in the event of personal injury when the impact of temporary or perma-
nent disability on earned income, however qualified, is to be considered
for the purposes of compensation. The indicated criteria concern income
from employment and self-employed income. In all other cases ‘the in-
come to be considered for the purposes of compensation cannot in any
case be lower than three times the yearly amount of the non-contributory
pension’ (article 4, para. 3).
Life and death

The deprivation of life is not included in the heading of damage to health
and, therefore, in the award for danno biologico. True, the injury to health
results in a worsening (temporary or possibly permanent) of the quality
of life and of the conditions in which the victim is forced to live after
the accident, but health is a value different from life. Death is not the
maximum possible damage to the psycho-physical health of the victim,
but affects a different value, the loss of which terminates any right of the
deceased subject to compensation for the accident.174
The injury to the legally protected interest of life is punished under
criminal law and has legal consequences under civil law. For the surviving
relatives the civil law consequence is the award of non-economic damages
for the loss of the deceased.175 If, in addition, they suffered economic loss
as a result of being economically dependent on the deceased, they will be
compensated for this as well, but in their own right, not iure alieno or iure
successionis. What common lawyers refer to as Fatal Accidents Act actions
are not within the scope of this book so little more will be said about this
topic.
The different treatment – from the civil point of view – of the two cases
is not surprising. Such different treatment is justified by two reasons.
Damage compensation has no function of punishment in itself, but the
function of reinstating and repairing damages actually suffered. Damage
compensation cannot apply when the person who is the owner of the
174 Cass. 20 January 1999, no. 491, Giust. civ. Massimario, 1999, 115.
175 Cass. 2 April 2001, no. 4783, Danno e resp., 2001, 820.
right, and who should enjoy it by nature, has ceased to exist, as with death
the legally protected interest inherent in the individual is extinguished.
Furthermore, compensation for the right to health implies compensation
for all the negative effects to which the surviving person is exposed. If
death is immediate, or occurs within a negligible time lapse after the
accident, any physical and mental suffering cease at the same time.176 As
the Court of Cassation correctly pointed out:
[it cannot] . . . be considered absurd from the point of view of legal logic, that in
terms of the amount of compensation, ‘death’ can cost less to the wrongdoer than
a modest injury with permanent effects. If this occurs, it is simply the result of the
different entity of the harm caused in the one and the other case, and therefore of
the different legal positions of the individual affected by the tort . . . The diversity
of situations, therefore, derives from the diversity of the damage to the personal
or economic sphere that can be restored as ‘unjust damages’ caused by the tort
and not by possible anomalies revealing any irrationality in the discipline of the
damaging effects of the tort.177
Psychiatric injury
As in England and Germany, ‘psychiatric’ harm (in the English sense of a
recognisable illness) is compensable in Italian law under the heading of
danno biologico. The more difficult problems arise in marginal (extreme)
cases of pain or shock, usually referred to in Italian law as ‘psychological
damage’. The difficulties here are broadly similar to those encountered in
the common law; and some Italian authors even invoke the ‘floodgates’
argument.
This kind of damage may be ‘marginal’ but it can affect the victim and
his or her relatives.178 The prevailing view is that this being pure grief,
pain, etc., it is not included in danno biologico because it does not affect the
body. Because it also tends to be very difficult to ascertain, its effects are
usually not acknowledged. The possibility that some of this psychological
reaction may be real and closely linked to chemical reactions of the brain
does not appear to have received much attention by Italian courts which,
in their decisions, tend to resemble the more conservative positions taken
by the common law. But some courts have shown greater sensitivity to
claims of this kind.
176 Cass. 20 January 1999, no. 491, Giust. civ. Massimario, 1999, 115.
177 Cass. 28 November 1995, no. 12299, Foro it., 1996, I, 3120.
178 More generally see Emanuela Navarretta, Diritti inviolabili e risarcimento del danno
(Giappichelli, Torino, 1996).
The Court of Milan, for instance, in its judgment of 2 September 1993,179

held that this kind of award could be given to the parents who, due to
their daughter’s death, had incurred an injury to health consisting of an
alteration of their mental equilibrium. This result divided legal writers.
Some argued that psychological damage had equal dignity in respect of
the injury caused to physical integrity;180 others proposed to consider
this kind of damage as ‘ricochet damage’, according to the well-known
formula created by French case law.181 Yet others rejected the inclusion
of psychological damage in the sphere of non-economic damage or in any
case in the area of application of article 2059 of the Civil Code.182
In practice, sometimes these kinds of damages are awarded to relatives
of the victim in cases of extremely serious, but not fatal, injuries.183
In its judgment of 1994, referred to above, the Constitutional Court
admitted compensation for ‘pure’ psychological damage only if based on
the fault of the tortfeasor. Such compensation, however, is excluded in
cases of causal i.e., strict, liability.
Danno morale (pain and suffering)

Besides danno biologico, the victim and his or her relatives can be awarded
another kind of compensation called danno morale. Danno morale is an an-
cient formula, which refers to the pain and suffering connected with an
injury. It is something that concerns the moral sphere of the individual,
and is usually considered as being in existence even if in reality there is no
evidence that it has occurred. The relatives for whom it is usually claimed
include sons, daughters, fathers, mothers, wives or husbands.
As to the individual himself, it relates to pain and suffering connected
with personal injuries (light or great), defamation, the violation of privacy,
the abuse of one’s name, the appropriation of one’s image, and so on. As
already stated, the Civil Code has a provision (article 2059) concerning this
kind of damage, which is called ‘non-patrimonial’. The legal literature,
however, refers to it as danno morale (damage to the moral sphere, pain
and suffering).
179 In Nuovagiur. civ. comm., 1993, I, 680.
180 Paolo Cendon, Il prezzo della follia (Il Mulino, Bologna, 1984); Giuseppe D’Amico, Il danno
da emozioni (Giuffré, Milan, 1992).
181 Raffaella De Matteis, ‘Il c.d. “danno biologico da morte” come lesione di un diritto
riflesso,’ Nuova giur. civ. comm, 1994, I, 682.
182 Giulio Ponzanelli, ‘La Corte costituzionale e il danno da morte’, as an annotation to the
decision under examination, Foro it., 1994, I, 3303.
183 Giovanna Visintini, I fatti illeciti, I, Ingiustizia del danno. Imputabilità (Padova, 1987), p. 87
ff.; Guido Alpa, La responsabilità civile (Milano, 1999), p. 654 ff.
The said provision stipulates that this kind of damage can only be
awarded in cases ‘provided by law’. A strict interpretation of that for-
mula takes the view that ‘law’ means ‘criminal law’. It has thus led to the
view that this kind of damages should be awarded only where a crimi-
nal offence has been committed. This position is taken by most authors
and judges. Inevitably, however, such an approach has also had its critics,
mainly on the grounds that it runs counter to the Constitution. According
to this school of thought, danno morale should be awarded in any case, not
only in criminal offences. This dispute has been a long one.
The question whether, besides pecuniary losses, harm pertaining to the
sphere of feelings should also be compensated, arose in a number of cases
during the late nineteenth century. At this (early) stage in the (modern)
Italian law of damages, the courts showed a real inclination to favour the
victims. The reason was the belief that so-called ‘moral’ sufferings were
seen as being more serious than physical ones. Attributing to them a mon-
etary value was thus seen as compensation taking the form of satisfaction
for the injured party.184 The cases in which this happened were those
which amounted to both torts and crimes, especially where the victim’s
death followed the unlawful act. But non-pecuniary (or ‘moral’) damage
was also compensated in the event of conduct which amounted to a seri-
ous interference with the plaintiff’s honour or reputation.
The measure of the damages awarded was assessed equitably and was
calculated by taking into account the extent of the abuse and of the con-
sequences to the victim/plaintiff.185 Judges of the time were particularly
sensitive to the economic and social status of the victim and the persons to
whom compensation was granted. Allusion to such criteria was made in
various forms. The Court of Cassation of Turin, e.g., specified that ‘when
liquidating non-pecuniary damage caused to children by their father’s
death, the judge is to take into account the extent of the adversity, the
conditions of age and education of the claiming persons, and the fortunes
of the same’.186 Another court, when calculating the amount of compen-
sation, deemed it relevant to take into account the ‘quality of the persons’
and ‘the circumstances of the whole family’.187
The ‘social conditions of the person killed’188 were also seen as a
relevant factor. Others taken into account when fixing the amount of
184 e.g., App. Bologna, 11 October 1889, Riv. giur. bol. 1889, 309.
185 App. Bologna, 4 February 1889, Riv. giur. bol., 1889, 38.
186 22 November 1913, Giur. tor., 1914, 33.
187 App. Firenze, 13 September 1905, Monitore tribunali, 1906, 215.
188 App. Trani, 13 June 1898, Riv. giur. Trani, 1898, 747; App. Bologna, 14 February 1902,
Mon. trib., 1902, 750.
compensation included the (killed) father’s true affection for his children
or, in the reverse case of the child being killed, the fact that the imme-
diate victim was the only child of the suing survivor. The intensity of
the claimant’s grief and the premature and violent loss suffered by the
father were also given some weight in the appraisal process.189 The cir-
cumstances clearly varied from case to case; and judges could pay such
attention to them as they thought fit.190
In the case of interference with honour and reputation, the distinc-
tion between non-pecuniary damage (consisting of hurt feelings for the
insult) and the economic consequences of libellous or slanderous state-
ments was not always made clear. Sometimes when compensation was
decreed, reference was made to loss of custom deriving from the injuri-
ous statement. Thus, in a case regarding a libelled lawyer, the Court of
Cassation of Palermo argued that not only should it take into account
the loss of custom flowing from his defamation, but also the contempt,
low regard and grief experienced by the defamed person.191 And there
were decisions following the principle according to which non-pecuniary
damage could be – additionally – compensated insofar as it related to the
material damage flowing from the injury.192
Who was entitled to such compensation? The distinction that slowly
emerged from the case law of the period was rather clear. In the event of
the death of the victim, non-pecuniary damage was given to the relatives
in accordance with the variable criteria indicated above. In the event of
injury to honour and reputation, the compensation was given to the victim
himself, whether he was an individual or, even, a legal entity.193
At the time, attitudes towards non-pecuniary damage followed the ups
and downs of particular decisions found in the case law. Thus, around the
1920s, the rulings of some Courts of Appeal expressed the opinion that
non-pecuniary damage could be compensated regardless of any reper-
cussion on the wealth of the injured party (the subject being the grief
and anguish, or pain and suffering, which then had to be quantified
as pure non-pecuniary damage).194 Among academic writers such decisions
provoked both approval195 and criticism,196 leading to lively debates but
189 App. Torino, 3 November 1885, Giur. tor., 1886, 104.

190 App. Bologna, 14 February 1902, n. 188 above. 191 4 June 1898, Foro sic., 1898, 486.
192 App. Catania, 2 April 1900, Giur. cat., 1900, 48.
193 App. Parma, 14 June 1910, Giur. tor., 1910, 1054.
194 App. Milan, 11 May 1920; 15 December 1920; 21 January 1921, Riv. dir. comm, 1921, II,
448.
195 e.g. Biagio Brugi, Riv. dir. comm., 1921, II, 448.
196 Pacchioni, ivi, 1922, II, 178 ff. notes on Court of Appeal of Rome, 23 July 1921.
also helping to perpetuate variations – regional and in magnitude – of

awards.
Since its appearance in the Civil Code (1942) under article 2059, this rule
has been applied to civil cases. The victim of a crime can claim damages
either in the criminal courts or in the civil courts: the choice is his.
The question of constitutionality of this restrictive approach was, re-
cently, referred to the Constitutional Court by the Court of Rome.197 On
the basis of an elegant argumentative structure, dating back to well before
the nineteenth century, the order demonstrates how the legal conscience
has always been sympathetic towards the idea of compensation for non-
pecuniary damage, inseparable from the protection of the fundamental
rights of individuals. The drafter of the order – who is also one of the most
learned experts in this matter198 – argues that a provision like the one
under examination contrasts with the constitutional provision, since it
differentiates in an entirely irrational manner the treatment of those who
are struck by a non-pecuniary damage caused by an ascertained crime (and
who therefore receive satisfaction) from those who are struck by non-
pecuniary damage when the crime is only assumed (so that the injured
persons are not protected). The growing conviction nowadays is thus that
article 2059 of the Civil Code should be abrogated. As already stated in
chapter 1, the latest decision of the Constitutional Court opted for a wide
interpretation of the wording of the Code allowing the recovery of moral
damages even in the absence of a crime. Incidentally, in the context of
fatal accident claims (not discussed in this work) the result is that Italian
law has moved closer to the position adopted by French law than the one
found in England where solatium is compensated only within the narrow
ambit of the English statutory regime.
As danno morale is awarded in every case of injury to health or violation
of other personal rights (honour, defamation, name, image, privacy) there
are no doubts about its liquidation even if the victim was unconscious,
drunk, drugged and thus unable to appreciate the loss. The judge does not
decide if the victim really suffered from the tort.
Quantification of danno morale

Compensation for this heading of damage is based on equitable criteria.
The calculation of the amount is left to the ‘wise’ appreciation of the
judge.199
197 By order 20 June 2002, Foro it., 2002, I, 2882.

198 Marco Rossetti, Il danno da lesione della salute (Cedam, Padova, 2001).
199 Cass. 4 April 1982, no. 4815, Giur. it. Mass., 1982.
The law excludes a priori the possibility of producing specific evidence

with regard to danno morale. This involves a free judgment which, as stated,
is entrusted to the judge. This approach is favoured by those who believe
that everyone enjoys life in a different way.200 It is, however, criticised by
those who note that in this manner judicial awards are so different from
one another (as well as being very ‘casual’ in their assessment) that they
increase unfairness in the treatment of the injured parties.201 All agree,
however, that there has to be a link between the objective extent of dam-
age, particularly if prolonged in time, and its monetary compensation.202
In attempting the evaluation the courts tend to refer to many elements.
These include the following: (a) the seriousness of the crime:203 the more
intense, the greater the participation of the wrongdoer in the commission
of the tort; (b) the intensity of the anguish, which means that one must
take into account the duration of the pain, suffering or grief,204 as well as
the age and sex of the injured party; (c) the sensitivity of the injured party:
the Court of Cassation also takes into account the intellectual and moral
state of the victim – the higher this is, in the judges’ opinion, the greater
the sorrow205 – and the economic and social conditions of the parties.
These guidelines, however, many of which would cause much concern to
common lawyers and German lawyers, appear to have been superseded in
some recent decisions on the grounds that they conflict with human feel-
ing and with the principle of equality.206 The ties of marriage or kinship
and the presence or absence of cohabitation (for legitimate relatives) re-
main, however, important factors,207 in the latter case because common
law spouses are still denied compensation by the large majority of
judges.
Notwithstanding the above, a great number of trial judges have begun
to depart from all the criteria used by the Court of Cassation. They thus
tend to liquidate the danno morale in a few words, without much of an
explanation. In terms of amount, and as stated above, this heading of
damage tends to equal half (or less) the amount given to the victim for
the compensation of danno biologico.
200 Scalfi, Resp. civ. prev., 1988, 223.

201 In this regard see the accurate review by Grappiolo, Nuova giur. civ. comm., 1989, 224.
202 Cass. 6 April 1983, no. 2396, Resp. civ. prev., 1983, 760, on a case of noise pollution.
203 Cass. 7 October 1980, no. 537, Foro it., 1980, I, 1051.
204 Cass. 11 October 1985, no. 4947, Arch. giur. circ., 1986, 110.
205 Cass. 28 April 1967, no. 774, Resp. civ. prev., 1967, 572.
206 Cass. 13 October 1980, no. 5484, Resp. civ. prev., 1981, 403; 21 Cass. 11 July 1979,
no. 3996, Resp. civ. prev., 1980, 436.
207 Cass. 13 October 1980, no. 5484, Resp. civ. prev., 1981, 403.
This kind of reasoning and this kind of behaviour, again, raises the prob-
lem of equality in the treatment of victims. If moral suffering cannot be
the object of evidence, why compensate victims in different ways without
any justification?
In order to solve this problem, the Court of Genoa uses tables also for
the calculation of the amount of danno morale, while other courts appear
to have followed suit. But, as is the case with the liquidation of danno
biologico, the tables followed are not the same in all the courts.208 The
regional variations must thus remain a cause of concern.
208 See Court of Genoa, 13 January 1988 (unreported), quoted by Grappiolo, n. 201 above
at 242.
3 Special damages: past losses
English law
Introduction
In English law the expression ‘special damages’ can, as we stated in the In-
troduction, have several meanings. In this chapter it refers to the amounts
payable by a tortfeasor to his victim for the pecuniary losses actually suf-
fered between the date of the accident and the date of trial or, in the
case of less serious injury, the date of recovery. Thus the basic principle
is that the claimant must prove, on the balance of probabilities, either
what he has lost in financial terms (as for example in loss of earnings), or
what sums he has had to pay, or become liable to pay, in order to meet
expenditure directly incurred as a consequence of his injuries.
It is not, of course, every penny expended which is recoverable as dam-
ages. The court will look to see whether those payments were reasonably
necessary. The principle was explained by Megaw LJ in Donnelly v. Joyce.1
While the claimant may say, and believe, that it would aid his recovery to
travel in the style and comfort of a Rolls Royce motor car and to spend an
extended holiday in a five-star hotel in the Caribbean, the court is most
unlikely to accept that it was reasonably necessary for him to do so. How-
ever, judges are disinclined, where the matter is marginal, to say that it
was unreasonable for the claimant to have taken a certain course if he
has actually expended the money. Past losses are likely to be viewed less
strictly than claims for future losses where the money has not yet been
1 [1974] QB 454 at the text: ‘The Plaintiff ’s loss is not the expenditure of money to buy the
special boots or to pay for nursing attention. His loss is the existence of the need for
those special boots or for those nursing services, the value of which for purposes of
damages – for the purpose of the ascertainment of the amount of his loss – is the proper
and reasonable cost of supplying these needs.’
97
98 s p e c i a l da m a g e s : pa s t l o s s e s
expended and where the sums are likely to be greater. But the size of the
expenditure is not, of itself, necessarily going to make it unreasonable.
Thus, receiving treatment in New York rather than London has been held
to be reasonable,2 as has been treatment at home even if it would have
been cheaper to treat the victim at an institution.3
Loss of earnings
The principles are precisely the same for past as for future loss of earnings.
This subject will be covered extensively in relation to future loss in the
next chapter so the reader is referred to the discussion found therein.
One must, however, note that in this instance the exercise is much easier
in so far as (a) the multiplier is clearly known and is fixed by reference
to the time that has lapsed between injury and trial, and (b) the same is
(approximately) true of the multiplicand in so far as it can be ascertained
what the injured person/claimant would have been earning at the time
of the trial. But one must remember that what is given to the claimant is
his net loss i.e., his gross lost earnings minus taxation4 and social security
contributions.5
Past medical care

Medical treatment and therapies
An injured claimant is entitled to recover the costs incurred by him in
obtaining appropriate treatment and therapy for his injuries and disabili-
ties. The question is whether the expenses were reasonably incurred. This
crucial question is implied by section 2(4) of the Law Reform (Personal
Injuries) Act 1968.6 The availability of treatment on the National Health
Service is to be ignored.7 A claimant is not obliged to use the service even
though he could be treated free of charge.
The one exception to that rule is that if the injury occurred in a motor
accident on the highway or other public place the defendant’s insurer
is liable to reimburse the National Health Service, up to a maximum of
2 Winkworth v. Hubbard [1960] 1 Lloyd’s Rep. 150. 3 Rialas v. Mitchell (1984) 128 SJ 704, CA.
4 British Transport Commission v. Gourley [1956] AC 185.
5 Cooper v. Firth Brown Ltd [1963] 1 WLR 418. This includes the employee’s own contributions
to whatever pension scheme to which he belongs: Dews v. National Coal Board [1988] AC 1.
6 See also, Winkworth v. Hubbard [1960] 1 Lloyd’s Rep. 150; Cunningham v. Harrison [1973] QB
942.
7 Law Reform (Personal Injuries) Act 1948, s. 2(4). In relation to future treatment it is for
the claimant to prove that he will undergo private treatment rather than availing
himself of the National Health Service: Woodrup v. Nicol [1993] PIQR Q104.
£2,856 for in-patient treatment and £286 for out-patient treatment.8 The
insurer must, however, have already made some payment in respect of
the injury and know of the hospital treatment.9
House care etc.

Individuals who suffer personal injury may require nursing care or, at
a lower level, assistance at home with the ordinary tasks of daily living
such as personal hygiene, cooking, laundry, housework, shopping and
the like.
English courts approach this head of loss by considering evidence of how
many hours of care have been required for each day which has passed
between the time when the individual concerned was discharged from
hospital and the date of trial or the date of recovery. The amount of care
frequently varies as the individual makes a partial or complete recovery.
It is normal for expert evidence to be obtained as to precisely what level
of care has been necessary from the beginning.
The expert witness will produce for the court a schedule of how much
care has been required during that period. The level of expertise required
of the carer will also be considered. So, for example, an individual with a
broken leg may very well need assistance with simple household tasks for
which a home help is sufficient. On the other hand an individual who is
bedridden, but capable of living at home, may require nursing assistance
at least for part of the time. The victim of a catastrophic injury may require
more than one carer in order to enable him to be turned, lifted or put into
the bath. In those circumstances it may be reasonably necessary to employ
someone with nursing training.
In the cases of brain injury it is often reasonably necessary to employ
someone with special training to cope with the particular needs and dif-
ficulties of the victim.
The recoverable damages will be the amount which the court accepts
was reasonable to expend on paying for the appropriate level of assistance
for the appropriate number of hours.
The support needed may take other forms. Thus, there is also much
authority to support the view that an injured housewife is entitled to
claim the cost of employing domestic help.10 Indeed, a Canadian decision
8 Road Traffic Act 1988, s. 157.

9 Barnet Group Hospital Management Committee v. Eagle Star Insurance Co. Ltd [1960] 1 QB 107.
10 Daly v. General Steam Navigation Co. Ltd [1981] 1 WLR 120; Shaw v. Wirral Health Authority
[1993] 4 Med. LR 275.
recently awarded such a claimant the cost of her husband doing some of
this work (even though the minority objected that the tasks performed by
the husband were not, really, performed for his wife but for the household
which they shared).11 The Law Commission has proposed that in these
circumstances of ‘loss of . . . ability to do work in the home’, the claimant
should be able to recover for the costs of work done in the past by friends or
relatives and the claimant should then have a personal liability to account
to those helpers for that work done. Where the claimant has ‘soldiered
on’ and done the work himself, the Law Commission prefer to treat such
damages as non-pecuniary loss, in line with pain, suffering and loss of
amenity.12
In many cases care has not actually been provided by paid third par-
ties but by members of the claimant’s family who provided it through
their natural concern, love and affection for the victim. In those cir-
cumstances the court calculates the commercial cost of the care which
has been provided and then applies a discount, which will normally be
25 per cent.13 The cost of care is recoverable by a claimant irrespective
of whether he or she is under any legal liability to make recompense to
the person or persons who have provided the care. Most spouses or family
members would provide the care without any consideration of whether
they have a legal entitlement to be paid for it. Nevertheless, the claimant
is entitled to recover under this head subject only to the discount. Any
money received is, technically, held in trust for those who provided the
care.14 In the vast majority of cases, however, that principle is honoured
more in the breach than the observance. Most family members decide
that they do not want the money for themselves and that it is better
used providing a fund for the future of the injured person. That is their
decision. It is not open to a defendant to say, after judgment, that the
money should be paid back to them because the claimant is in breach
of trust. That accords with the principle that it is no business of the de-
fendant how a claimant actually spends the general damages which he
recovers.15
11 Kroeker v. Jansen (1995) 123 DLR (4th) 652.

12 See Law Com. No. 262 (1999), paras 3.87–3.93.
13 Evans v. Pontypridd Roofing Ltd [2001] EWCA Civ 1657.
14 Hunt v. Severs [1994] 2 AC 350, vindicating twenty years later the position first advanced
by Lord Denning in Cunningham v. Harrison [1973] QB 942 at 952, but rejected by a
differently constituted Court of Appeal in Donnelly v. Joyce [1974] QB 454.
15 This position in ‘practice’ comes closer to the current state of the law in Australia which
has refused to follow Hunt v. Severs. Thus see Kars v. Kars (1996) 141 ALR 37; Fitzgerald v.
Ford [1996] PIQR Q72.
The above rules do not apply to compensate a spouse who gives her
services to the claimant’s business in consequence of the injury.16 The
reason for the distinction is that in such a case it is the business and not
the individual who has suffered the loss. The word ‘business’ is, perhaps,
insufficiently precise. If the spouse is trading as a sole trader, the loss is
recoverable but not if the business is a partnership or a company.
In the case of family members there may be an alternative method of
calculating the loss. If the carer has given up paid employment to care for
the claimant there is an entitlement to the net loss of earnings of that
individual rather than the discounted cost of care. The overriding prin-
ciple is one of reasonableness. The question to which the court requires
an answer is whether it was reasonably necessary for the family member
concerned to give up work in order to care for the victim. Plainly, in some
cases it may appear disproportionate for the individual concerned to have
given up an extremely well paid job in order to provide the level of care
actually required. The court may well be sympathetic to the fact that, for
example, the mother of a young child has stopped work in the immediate
aftermath of the accident and not returned for a period of months, or in
some cases even years. That will depend upon the nature of the injury,
the level of care required and the strength of the evidence generally. The
court is far more likely to be sympathetic in the case of a mother-child or
husband-wife relationship than in others. It is impossible to provide any
hard and fast rule.
In normal circumstances the loss of earnings will be capped at the level
of the cost of commercial care had it been provided. Now, for example,
the court will have to assess the level of care required and what it would
have cost had it been provided by an outsider. That figure will then be the
ceiling of the claim for loss of earnings by the member of the family.17 It
does not follow that because a family member gives up work that would
have occupied him or her for eight hours but actually provides twenty-
four-hour care that she should be paid more than the amount which she
would have received in employment. On the other hand, in one case the
trial judge reached the conclusion that the claimant’s wife, who was a
nurse, had probably being doing the equivalent of the work of two full-
time nurses. He awarded one and a half times the net amount which she
would have earned in employment as a nurse.18
16 Hardwick v. Hudson [1999] 1 WLR 1770.

17 Housecroft v. Burnett [1986] 1 All ER 332; Fish v. Wilcox and Gwent Health Authority [1994] 5
Med. LR 230.
18 Hogg v. Doyle, CA, judgment of 6 March 1991 (unreported).
Personal expenses
This category covers claims for such items as additional heating costs
where an injured individual feels the cold19 or spends more time at home;
the provision of special clothing; extra clothing and extra costs of holidays.
That list is not intended to be exclusive.
The principle is precisely the same as it is in other areas, namely whether
there is, on all the evidence, a reasonable requirement for the additional
expenditure and whether the costs actually expended are themselves
reasonable.
In cases of more serious injury special clothing may be required. It may
also be necessary to wash clothes or bed clothes far more often than before
as a result of incontinence or sweating.20 In such case the household is
likely to use more electricity and soap powder and have to replace the
washing machine with greater frequency than normal.
Equally, a seriously injured individual may need to be accompanied on
holiday by a carer who will inevitably incur extra fares and additional
accommodation costs. Furthermore, the type of holiday undertaken may
well be more expensive. A younger person may have been used to going
camping or sharing a cheap apartment with others. That may well, as a
result of his disabilities, no longer be feasible. It must be remembered
that in accordance with general principles it is only the additional costs
incurred which are recoverable.
In relation to clothing one of the arguments, in the case of younger
individuals, which is frequently put forward by a defendant is that the
young person would, but for the accident, have spent a lot of money on
fashion clothes which he no longer does and that that is to be offset against
the claim under this head. Whether that argument succeeds depends upon
the judge’s impression of the evidence.21
Travel costs
In the case of past losses, this heading falls to be discussed under three
sections.
First, are costs incurred by the claimant himself in travelling to and
from hospital, medical appointments with his treating doctor and the
like. Secondly, the claimant is entitled to recover monies expended by im-
mediate relatives in travelling to visit him in hospital or, where reasonably
necessary, accompanying him to hospital and medical appointments. In
19 Hodgson v. Trapp [1989] AC 807. 20 Leong San Tan, 1986 (unreported).

21 Donnelly v. Joyce, n. 14 above.
both cases it is a matter of evidence as to how much has been expended.

Although some evidence is required, a court does not necessarily expect
to see a written receipt for every single journey by taxi or every single bus
ticket. It applies its common sense in assessing what is reasonable.
Thirdly, the claimant can recover monies expended on his own travel if
they are more than he would have expended had he not been injured. At
the lower end of the scale that may be the cost of taxis used to go shopping
or to get to and from work because the claimant is unable to utilise public
transport as a result of his injuries. Whether they were necessarily in-
curred will depend very largely upon whether the medical experts accept
that it was reasonably necessary for the claimant to utilise the more ex-
pensive form of travel.
Moving higher up the scale, it may be necessary for a claimant to pur-
chase a larger motor car than that which he previously owned or even to
adapt a vehicle. Those costs are calculated by looking, first, at whether, on
the medical evidence, a larger or adapted vehicle was actually required.
The costs of that type of vehicle or the adaptations will then be assessed
but there must be offset against them what the claimant would, but for
the accident, have spent on buying and/or replacing a motor vehicle.
As with other heads of damages it is for the judge to decide what is
reasonable. One matter which is frequently taken into account is that
it is generally necessary for an injured individual to have as reliable a
car as possible. Thus, the student using an elderly motor car prior to the
accident may reasonably require a newer, more comfortable and more
reliable vehicle as a result of his disabilities.
If the replacement vehicle costs more to insure and run than that used
by the claimant prior to the accident those additional costs will also be
recoverable on the same principles.
There exists a government scheme called the Motability Scheme
whereby government assistance is given for the purchase and running
of a motor vehicle. Such costs can and will be taken into account in as-
sessing what the claimant is reasonably entitled to recover. We consider
this issue further in chapter 5.
Aids and equipment

An injured individual may require all manner of aids and equipment to
assist him to get about, to help with day-to-day living in the home, or even
to amuse himself. The overriding principle is the same here as in what was
said before: has a reasonable need been demonstrated on the evidence for
purchasing, maintaining and replacing these items?
Expert evidence is almost invariably required to deal with these items.

The range is enormous, proceeding from major items such as special baths
and hoists to incontinence pads. The evidence will have to provide answers
to these questions:
(a) Was it reasonably necessary for the claimant to purchase or hire the
various aids and items of equipment claimed in his schedule?
(b) If so, was the type and model of each item reasonable or ought he to
have purchased something cheaper?
(c) Even if a particular item of equipment was purchased as a result of the
accident was that item something which the claimant would probably
have acquired in any event? So, e.g., in modern times the court will be
dubious about a claim that an individual has purchased a mobile
telephone – or cordless telephone – purely as a result of the accident.
The same might be said of a claim for subscriptions to one of the
multichannel television companies or the purchase of a computer.
However, each case must be looked at on its own particular facts and
the surrounding evidence.
Accommodation
There is, inevitably, an overlap between past and future costs of accommo-
dation. In those cases in which all that is required are minor adaptations
to a property, the expenditure may well already have been incurred. How-
ever, where it is necessary to purchase a property and/or carry out major
alterations, the injured individual is unlikely to have been able to afford
to meet such expenditure out of his own pocket. In general, therefore, the
accommodation is likely to have been provided out of interim payments
which are advances against the total sum of damages which he is likely
to recover at trial.
Thus, those costs are more properly considered when looking at the
damages recoverable for long-term losses. One must restate the general
proposition against allowing the total cost of new accommodation.22
It is, however, appropriate to consider the type of case in which the
claimant resides in rented accommodation and has moved to a larger or
better property since the accident. As with all the other categories, the
court has to consider whether the move has been justified. That will re-
quire looking at the medical evidence about the nature of his disabilities;
whether a resident carer has had to be engaged (be it a member of the
family or an outsider employed at commercial rates) or whether there
22 Cf. Cunningham v. Harrison [1973] QB 942 and Moriarty v. McCarthy [1978] 1 WLR 155 at 163.
g e r m a n l aw 105
were deficiencies in the property in which the claimant originally lived.

For example, if it was on the third floor of a block of flats without a lift
and the claimant has difficulty in walking, the move will be justified.
The amount recoverable in such a case is the difference between the
rent which the claimant was paying prior to the accident and the rent
which he is paying at the date of trial.
Other possible headings

In these days of greater numbers of cases of brain damage leading to
mental disability, one can claim fees payable to the Court of Protection
which often manages the sums awarded as damages.23 The Court of Ap-
peal, however, has recently been unwilling to treat as allowable expenses
the sums that the victim was ordered to pay in matrimonial proceedings
that followed the breakdown of her marriage as a result of her injury.24
The decision, apparently based on considerations of public policy, is not,
however, convincing; and the earlier contrary decision of Jones v. Jones25
seems preferable.
German law
Loss of earnings
Lost earnings will be calculated on the basis of the theory of difference
(Differenzhypothese) i.e., by comparing the victim’s actual state with that in
which he would have been but for the injury. The principle, it should be
noted, is the same for future, pecuniary losses though its application to
the present situation covering the period from injury to trial poses few
problems since it can be done on objectively available data and requires
no hypotheses and speculation.
Past medical care

Generally
Among the principles for medical treatment we note the following.
Treatment is compensable if it is necessary for the recovery of the victim,
or for the improvement of his state of health, or – at least – if it mitigates
23 Substantial sums can be awarded under this heading. See e.g., Jones v. Jones [1985] QB
704, CA (£28,000 including the Official Solicitor’s administration costs).
24 Pritchard v. J. H. Cobden Ltd [1987] 2 WLR 627.
25 [1985] QB 704 (where, however, the defendant had conceded the point).
his suffering.26 Even unconventional methods (like acupuncture) have

been held to be necessary.27 ‘Necessity’is determined according to medical
standards – the doctors’ opinion will be followed. If a treatment, medica-
ment or an aid has been recommended by a doctor, it has to be paid for
by the wrongdoer even if it has turned out to be ineffective or even coun-
terproductive.28
Only actual expenses have to be compensated; the victim has (in the
realm of §§ 249, 251 BGB) no freedom in the disposition of the money
(cf. below).29 If the treatment has not yet been performed or the aid not
yet been purchased, the victim has to declare his serious intent to do so.
These principles apply also to the question whether the victim may avail
himself of private treatment instead of being treated under the national
health scheme. The wrongdoer has to pay the additional costs if private
treatment enhances the chance of recovery – again, the doctors’ view will
be taken into account and it will be asked whether a reasonable man in
the special circumstance of the case would choose this alternative. The
kind of injury and the normal standard of living of the victim may be
important,30 too. Furthermore, the courts will ask whether the victim
would have chosen private treatment even if he had had to carry the
financial burden himself, or if he has taken out a special insurance for
these costs.31 Private treatment or better accommodation in the hospital
will not be paid for if the victim simply wants more comfort and had relied
on the compensation by the wrongdoer.32
If the victim is a foreign citizen, treatment by medical experts from his
home country may be appropriate in severe cases;33 members of allied
forces in Germany are entitled to choose the army hospital even if the
costs are higher than in a German hospital.34
26 Erman/Kuckuk (10th edn, 1999), § 249 BGB no. 40.

27 LG Karlsruhe 11 July 1997, VersR 1998, 1256.
28 BGH 8 June 1999, NJW 1999, 2819, 2820; BGH 8 January 1965, VersR 1965, 439;
Erman/Kuckuk § 249 BGB no. 41 (the risk of success is with the wrongdoer).
29 BGH 14 January 1986, BGHZ 97, 14.
30 Cf. BGH 19 February 1991, NJW 1991, 2340, 2342 = Basil Markesinis and Hannes
Unberath, The German Law of Torts: A Comparative Treatise (4th edn, Oxford, 2002), p. 546
(henceforth referred to as GLT). For further references see Staudinger and Schiemann §
249 BGB no. 238.
31 Erman/Kuckuk § 249 BGB no. 41.
32 OLG Düsseldorf 28 May 1984, VersR 1985, 644.
33 BGH 23 September 1969, NJW 1969, 2281; OLG Hamburg 7 August 1987, VersR 1988, 858.
34 BGH 18 October 1988, NJW-RR 1989, 670, 672 (British soldier).
Fringe costs of hospitalisation

Apart from medical treatment, the time in hospital is generally unpleasant
for patients. The tortfeasor has to pay for aids and facilities which allow
the victim a decent life in hospital.35 For example, the victim may need
additional personal equipment such as pyjamas, dressing-gown, slippers
or an additional set of cosmetic tools. The tortfeasor has to pay the full
amount necessary for the acquisition, if the items will no longer be used
after the hospitalisation; otherwise – if the victim uses them later on at
home – only a proportional amount has to be paid.36
The victim may also need entertainment to distract him from his mis-
erable situation and long, tedious days in bed. The courts have awarded
compensation for a rented television or radio;37 lump sums for reading
materials have been denied by some courts,38 but are paid by the insurers
voluntarily, at a modest level.39
If entertainment equipment is bought and later on taken home (e.g., a
television), the above-mentioned rules apply. The costs of lengthy phone
calls to friends and relatives cannot be reimbursed.40
For claims concerning aids and equipment see p. 113; for claims con-
cerning costs related to new accommodation see p. 114.
Travel costs
Travel expenses of the victim himself
Such expenses have to be compensated according to § 843 I BGB (special
needs) if they occur permanently (e.g., increased dependency of a handi-
capped person on public transportation).41 Travel expenses in connection
with the accident which are not permanent (cost of visits to the doctor
or to the hospital) are part of the damage which is recoverable under
§§ 249, 251 BGB.
35 MünchKomm-BGB/Oetker § 249 BGB no. 386.
36 MünchKomm-BGB/Oetker ibid. Cf. BGH 19 May 1981, NJW 1982, 757, 758: an aid which
would be useless for a healthy person has to be paid in full (e.g., a lift for handicapped
people in a private home); if the aid fulfils a basic function for everybody (a motorcar,
apartment), the tortfeasor has to pay only the surplus of the costs caused by the
handicap.
37 OLG Köln 13 April 1988, NJW 1988, 2957; OLG Düsseldorf 19 November 1993, NJW-RR
1994, 352.
38 OLG Köln 4 October 1989, VersR 1989, 1309.
39 MünchKomm-BGB/Oetker § 249 BGB no. 384 (€10–20 per week).
40 MünchKomm-BGB/Oetker §249 BGB no. 384.
41 BGH 10 November 1964, NJW 1965, 102.
Travel expenses of other persons42

Basic approach
Travel costs incurred by relatives or others to visit the victim or to take
him to the hospital, doctor etc., are expenses which do not fall upon the
victim himself but upon the relatives. As a matter of principle, German
tort law does not compensate for indirect damages to third persons; nor
does it provide compensation for pure financial loss – the exceptions laid
down in §§ 843–845 do not apply in this context. The courts, nevertheless,
feel that such expenses should be compensated; and for a long time now
have resorted to the idea that the visits of the relatives are intended to
meet the special needs of the victim for personal contact, consolation and
emotional support. These needs, and accordingly the appropriate costs to
meet them, are thus considered to form part and parcel of the damages
of the victim himself.43
Notwithstanding the above, the Federal Court feels uneasy with this
approach. It thus tends to add that this exception to general principles
has to be construed narrowly. The expenses as such and the actual amount
are thus recoverable only insofar as they were ‘unavoidable’ in the given
circumstances.44 Since 1991, this has become the guiding criterion for
German courts; it is also supported by § 254 II BGB (duty of the victim to
mitigate damages). It controls all the specific issues which are discussed
below.
Necessity of travels/visits
Since the starting point of reference is the needs of the victim, only such
visits by others are held to be compensable which are ‘medically necessary
for the recovery of the patient’.45 The Federal Court tries to distinguish this
medical necessity not only from the wishes of the relatives to see the vic-
tim (which would constitute only a ‘third party damage’), but also from
other needs of the victim himself, in a psychological or physical sense.
This has been criticised as disregarding the fact that medical recovery and
42 For further details (and a translation of the leading decision of BGH 19 February 1991,
NJW 1991, 2340) see GLT, pp. 42–548 and 909.
43 While this is the unanimous position of the courts, some authors would prefer a
different dogmatic approach: judge-made expansion of the statutory scheme in §§ 844,
845 BGB (Larenz and Canaris (1994) p. 586), or analogy to these provisions (Staudinger
and Schiemann (1999) § 249 BGB no. 240). For attempts to establish a direct claim on the
part of the relatives see p. 113.
44 BGH 13 February 1991, NJW 1991, 2340, 2341 = GLT, case no. 58, p. 544.
45 BGH ibid.; OLG Bremen 31 August 1999, FamRZ 2001, 1300, 1301.
psychological factors are inextricably intertwined.46 The line which the

Federal Court purports to draw causes problems, especially where the in-
fluence of visits on the recovery cannot be proved (as would be the case
with visits to patients who are in coma)47 or where there is no medical
chance of recovery. Likewise, should the visits paid to a dying child by
its parents be compensated?48 If one were to apply the criteria set out
by the Federal Court, the answer would have to be ‘no’. But the result
seems so harsh that it finds no support even in the courts. In one case
before the Court of Appeal of Bremen,49 the infant was incurably dam-
aged by the doctor’s malpractice. The personality of the child was, in fact,
destroyed forever. Although the child had to be placed in an institution,
the parents continued to visit the child or to take the child home over
the weekend. The court reiterated and confirmed the principles set out
by the above mentioned decision of the Federal Court of 1991, which
would preclude compensation in this case. But then the court allegedly
found a loophole and ordered compensation of the travel expenses of the
mother.50 Her duty of personal care and to remain in contact with her
child (§ 1606 III S. 2 BGB) could – in this case and because of the injury –
be performed only by continuous travel between the mother’s home and
the institution. Thus, these journeys were seen as responding to the spe-
cial, permanent needs of the child, which are the basis for compensation
under § 843 BGB. The result seems equitable, and the way it was reached
ingenious. But since the Federal Court had not distinguished in its 1991 de-
cision between temporary (§§ 249, 251 BGB) and permanent needs for visits
(§ 843 BGB), the decision of the Court of Appeal of Bremen in reality marks
a deviation from the decision of the Federal Court. The way out of the
apparent impasse created by the decision of the Federal Court was thus
achieved using distinguishing techniques which would be most familiar
to common lawyers. And the fact that the Federal Court refused an appli-
cation to review the decision of the Court of Appeal51 would suggest that a
first exception to the ‘medical necessity’ principle has now been accepted
by the Federal Court itself.
46 Wolfgang Grunsky JuS 1991, 907, 909 rejects the ‘medical-necessity approach’
altogether.
47 Visits compensable: OLG Saarbrücken 23 October 1987, NZV 1989, 25; LG Saarbrücken
18 December 1987, NJW 1988, 2958 (same case).
48 Yes: MünchKomm-BGB/Oetker § 249 BGB no. 380 (but not travels to the burial); Grunsky
JuS 1991, 907, 908.
49 FamRZ 2001, 1300. 50 As to the father see p. 110.
51 Publisher’s note FamRZ 2001, 1301.
In addition, the Federal Court restricts the necessity of visits to cases

where the victim had to stay in hospital for some time.52 This has been
criticised because it might be medically necessary for the victim to see
his relatives even if he is treated outside of a hospital but away from
home.53
Scope of ‘relatives’
While the hitherto prevailing practice used to speak of ‘close relatives’,
the expenses of which would be compensable, in 1991 the Federal Court
narrowed the concept to the ‘closest relatives’.54 The exact definition of
this group remains in doubt. Generally speaking, parents, spouses or reg-
istered partners (§ 11 I Lebenspartnerschaftsgesetz 2001) are regarded as
‘family members’. In one case the distinction has been made between
parents with or without parental authority.55 Although, in general, sib-
lings would also qualify, they have been excluded in the context of travel
expenses.56 Engaged partners, on the other hand, are said to be ‘close
family’,57 while de facto cohabitants are an especially disputed group.58
On the other hand, one should note that the current tendency seems to
be to look not so much at the legal relationship between the victim and
the ‘visitor’ but at the personal and emotional bonds between them. In
the light of the requirement that there is a ‘medical necessity’ for such
visits, this seems to be a preferable approach.59 Though desirable, visits
by friends, colleagues or other persons who have social contacts with the
victim do not fall under this heading.
Frequency of visits
In the light of ‘medical necessity’ and ‘unavoidability’, this question is
especially difficult to answer. There is much agreement that the answer
depends on the facts of each case: age of the victim, the nature of his
52 BGH 19 February 1991, NJW 1991, 2340, 2341 = GLT, p. 544; OLG Bremen 31 August
1999, FamRZ 2001, 1300, 1301.
53 MünchKomm-BGB/Oetker § 249 BGB no. 380; Soergel and Mertens § 249 BGB no. 42.
54 BGH 19 February 1991, NJW 1991, 2340, 2341 = GLT, p. 544 (nearest family).
55 OLG Bremen 31 August 1999, FamRZ 2001, 1300, 1301 (see p. 109: The travel expenses of
the unmarried father of the child were excluded from compensation); cf.
MünchKomm-BGB/Oetker § 249 BGB no. 378: if there are two parents, only the costs of
the ‘cheaper’ parent are compensable.
56 OLG Karlsruhe 11 July 1997, VersR 1998, 1256, 1258; Palandt/Heinrichs (62nd edn, 2003)
§ 249 BGB no. 11.
57 Palandt/Heinrichs § 249 BGB no. 11, vor § 249 BGB no. 71.
58 Included: LG Münster 12 June 1997, NJW 1998, 1801.
injury, the environment in which he is placed, the closeness of the relative,

the amount of costs for each visit. Daily visits are considered to be an
exception, but they may be necessary where young children are severely
injured.60 In other cases, the courts have accepted as ‘reasonable’ two or
three visits per week,61 or visits every other day.62
If frequent or even daily visits are necessary, an alternative to visits
which is increasingly offered by the hospitals would be allowing parents
to ‘live in’ with their injured children. There seems to be no decision
in Germany which deals with claims concerning the expenses of such an
arrangement. But it is very likely that the compensation would be granted
under the same principles and with the same caveats that apply to visits
in general.63
Compensable costs
According to the principles outlined above (see p. 108), only the ‘unavoid-
able costs’for visits or travels are compensable. The relatives have to choose
the cheapest means of transportation, accommodation etc.64 If there are
two parents of comparable importance to the child, the visit of only one
parent at a time is ‘necessary’.65
Travel costs The ‘cheapest means of transport’ is not an absolute standard,

but open to exceptions depending on the particular circumstances of each
case. Within a certain range, the relatives keep the freedom of choice. Thus,
the relative may use a private car if this is not substantially more expensive
than using public transportation. In this case, the compensation would
be calculated on the basis of kilometres travelled.66 In exceptional cases,
even the costs of an aeroplane ticket have to be paid.67
60 OLG Köln 9 January 1978, VersR 1979, 166 (six-year-old child); LG Saarbrücken
18 December 1987, NJW 1988, 2958 (daily visits for over one year); cf. OLG Frankfurt
2 November 1979, VersR 1981, 239, 240 (severely injured spouse).
61 OLG München 29 October 1980, VersR 1981, 560; OLG Koblenz 23 March 1981, VersR
1981, 887; LG Münster 15 May 1985, ZfS 1988, 69 (three visits).
62 LG Augsburg 11 March 1988, ZfS 1988, 239.
63 The regular costs of living at home would have to be deducted, however.
64 BGH 19 February 1991, NJW 1991, 2340, 2341 = GLT, p. 544.
65 MünchKomm-BGB/Oetker § 249 BGB no. 378; but see BGH 21 December 1978, NJW 1979,
598, where the spouse, the child and the mother of an injured woman had temporarily
moved to the place where she was hospitalised (the BGH remanded the case).
66 OLG Hamm 2 June 1995, VersR 1996, 1515; OLG Bremen 31 August 1999, FamRZ 2001,
1300, 1301; LG Münster 12 June 1997, NJW 1998, 1801.
67 OLG Düsseldorf 18 June 1973, NJW 1973, 2112 (severely injured, temporarily
unconscious child).
Overnight accommodation This is covered when overnight stays are unavoid-

able, which in Germany is considered to be an exception.68 The relatives
have to make use of opportunities to stay with family or friends; otherwise,
they must choose a reasonably cheap but adequate hotel.69
Costs of meals They may be covered, if necessary, but only to the extent that
they exceed the costs which the relatives would have incurred at home.70
Loss of earnings A loss of earnings caused by the visit has, as a matter

of principle, to be compensated, but the loss must have been avoidable.
The relative must use all means to avoid the loss71 e.g., by changing his
working hours72 or by making up for the uncompleted work after his
return. However, the relative is not required to use his annual paid leave
in order to visit the injured.73
Only the loss of salary or lost profits (in the case of self-employed persons)
is compensable.74 Other professional disadvantages suffered by the visit-
ing relatives are not covered. These would include the greater stress in get-
ting his work done, loss of chances or set-backs in professional promotions
or the necessity to postpone the opening of a business.75 No compensation
will be granted for the sacrifice of spare time.76
Borderline cases include visits by a non-employed, housekeeping parent.
Although he or she does not suffer a loss of earnings, the non-performance
of housework may be compensated in other contexts: injury to the house-
keeper himself (see p. 150), or personal care rendered gratuitously to an
injured family member (see p. 155). Visits to a hospitalised family mem-
ber, however, are equated by the Federal Court with the use of spare time.
Normally, the housework can be done before or after the visit.77 Probably
the courts would decide otherwise if there were no opportunity to make

72 BGH 21 May 1985, NJW 1985, 2757; this is increasingly possible in Germany not only for
self-employed persons, but also for employees.
74 The courts will grant compensation for the actual loss in a given case; more restrictive
Staudinger/Schiemann § 249 BGB no. 241: only the average hourly salary of employees.
75 BGH 19 February 1991, NJW 1991, 2340, 2341 = GLT, p. 545; for a critical view see
Grunsky, JuS 1991, 907, 909.
76 BGH 22 November 1988, NJW 1989, 766.
up for lost work, and substitute home help had been paid for. Thus, the
courts have ordered reimbursement of the costs of a babysitter during the
time of visit.78
This rich case law gives some indication of how detailed, indeed, sophis-
ticated, the German law of damages has become through the development
of detailed legal rules over many years of court practice.
Freedom of the victim to dispose of the money paid

As stated earlier, the costs of visits of relatives can be claimed by the victim
himself. There is no direct claim of the relatives against the wrongdoer.79
A recourse to §§ 683, 670 BGB80 is rejected by the prevailing view.81 Oth-
ers would apply § 255 BGB by analogy, which would give the relatives a
claim against the victim for assignment of the compensation claim.82 The
majority position, however, is that the victim is not obliged to pass on
the money to his visiting relatives. Prima facie a difference with English
law must be noted. However, because of the restriction of compensation
to visits of ‘close relatives’, the problem has little practical importance.83
If the victim is a minor child, the parents as legal representatives can as-
sign the claim of the child to themselves84 or can simply use the money
for the family.85
Aids and equipment

Aids and equipments are an integral part of the medical treatment of the
victim: compensation for such costs has to be paid according to §§ 249, 251
BGB, permanent costs according to § 843 BGB (see below) – a difference
exists only with regard to the method of calculation and payments.86 One
and the same need can be satisfied in one or the other way: by paying
an annuity for continuing handicaps (§ 843 I BGB), or by financing the
acquisition of equipment which can assist the victim to cope with the
handicaps (§§ 249, 251 BGB).87 The acquisition of such equipment has to
78 BGH 24 October 1989, NJW 1990, 1037. 79 Seidel, VersR 1991, 1322–4.
80 See GLT, p. 909; Völcker, JuS 1992, 176.
81 Cf. BGH 21 December 1978, NJW 1979, 598/9; Staudinger/Schiemann vor § 249 BGB
no. 56 with further references.
82 Selb, Schadensbegriff/Regressmethoden (1963), p. 71; Erman/Schiemann § 843 BGB
no. 20; Soergel/Zeuner § 843 BGB no. 29. Similar Hermann Lange and Gottfried
Schiemann, Schadensersatz (3rd edn, 2003), § 11 C V, pp. 753–4 (claim for assignment
based on the internal relations between victim and relatives).
83 Cf. p. 110. 84 Lange and Schiemann, n. 82 above at § 11 C V, pp. 753–4.
85 § 1649 II BGB. 86 Illustrative MünchKomm-BGB/Stein § 843 BGB no. 38.
87 BGH 19 May 1981, NJW 1982, 757.
be compensated if they have already been bought or if the victim intends

to buy them (§§ 249 II, 251 BGB); maintenance and periodical replace-
ment will be covered by the annuity payable under § 843 I BGB (see p. 4).
The standard for compensation is again ‘necessity’, not the ‘optimum’ or
‘desirability’. The point of comparison for the necessity is the quality of
life the victim has enjoyed before the injury.88 For details see below.
Accommodation
The tortfeasor has to pay the expenses if the existing apartment of the
victim has to be adapted to his special needs after the injury e.g., the
installation of a lift89 or even an indoor swimming pool.90
Sometimes, however, the victim has to look for another apartment
which is better suited to his handicapped living. In this case, the moving
costs are recoverable as well as a rent increase, compared to his previous
rent.91 Problems arise if the victim buys a new apartment or home. In
principle, the costs of acquisition have to be compensated too, but not to
the full extent: the tortfeasor owes compensation, but does not have to
contribute to the enrichment of the victim.92 The Federal Court has found
two aspects to be relevant: first, the normal costs of the use of a home have
to be deducted; secondly, the tortfeasor has to make possible the use of
the new home, but not the ownership of the victim. Thus, his share of the
burden of costs is limited to the costs of acquisition with the exclusion of
the property factor.93 How this share has to be calculated is not entirely
clear – the court refers to § 287 ZPO as last resort. One criterion mentioned
by the Federal Court as an example would be the costs of the bank loan
and the monthly instalments to be paid by the victim, which include the
interest as well as repayment of the capital.94 The method of payment may
vary: an annuity may be ordered under § 843 I BGB or a lump sum may be
preferable (§§ 249 II, 251 BGB), with which the victim could (in part) repay
the loan.95
88 BGH 8 November 1977, VersR 1978, 149, 150; OLG 17 September 1987, Köln VersR 1988,
61, 62; MünchKomm-BGB/Stein § 843 BGB no. 39.
89 Mentioned in BGH 19 May 1981, NJW 1982, 757, 758.
90 OLG Nürnberg 7 November 1969, VersR 1971, 260.
91 BGH 19 May 1981, NJW 1982, 757, 758; OLG Celle 22 January 1962, VersR 1962, 292.
92 A leading case is BGH 19 May 1981, NJW 1982, 757.
93 BGH, ibid. at 758: ‘bereinigter Anteil an den Baukosten’.
94 BGH, ibid. at 759; the inclusion of the repayment part of the instalments seems to be
inconsistent with the basic premise of the BGH: in the end the tortfeasor has paid for
the new property of the victim.
95 BGH, ibid. at 758 (not very clear with regard to the relation between §§ 843 III and 249,
251 BGB).
Italian law
As stated in the Introduction, Italian law does not appear to make a clear
and rigid distinction between past and future losses. Though the first,
covering the period from accident to trial, are easily ascertainable and
can, in most cases, be supported by bills and invoices, whereas the later
amounts (arising from claims from trial to the moment the victim dies)
are open-ended, Italian judges tend to award one sum for both and fail
to specify in their judgments how their figures have been reached. If, as
a result of this approach, the reader fails to discover indemnifiable items
of damage comparable to those that exist in his own system, he must not
jump to the conclusion that they are left uncompensated in Italian law.
For one must never forget that the amounts awarded under the umbrella
notions of danno biologico and danno morale can be fairly substantial; and
in some instances could well be covering losses which in the common law
would receive individual attention. We offer this suggestion in a tentative
manner, more on the basis of our collective and individual readings of
each other’s materials, than basing it on specific judgments (which, in the
light of the above, is impossible). If this way of handling matters makes
Italian law more opaque, it does not mean that it also makes it ‘worse’
than others. Each system has to operate within its own tradition; and all
we wish to suggest is that understanding the solutions of a foreign system
often requires evaluating its rules within their wider context.
4 Future pecuniary losses
English law
Introduction
In addition to general damages for pain, suffering and loss of amenity
an injured individual will be compensated for pecuniary loss suffered by
him as a direct consequence of his injuries and residual disabilities. The
various heads of loss are considered later in this chapter. In essence they
fall into two categories; monies which the claimant would have received
but for the accident, and expenditure which he would not have incurred
but for the accident. The court, inevitably, is involved in a degree of spec-
ulation. It is incumbent upon the claimant to prove, on the balance of
probabilities, what would have happened in the future or what is likely
to have happened in the future. The court considers the position as it is
at the date of trial and makes its assessment at that date. Save in one
exceptional case neither side has the opportunity to return to court to
review the level of damages. Once the damages are paid it is entirely a
matter for the claimant how the money is spent.1 The defendant is not
entitled to insist that the money be used for any specific purpose nor is
he entitled to return to court to complain that the claimant has not, in
fact, done what he said he was going to do in the course of the evidence.
Thus, for example, if a claimant persuades a court that he needs a cer-
tain sum of money for a property but then, in fact, buys it for less – or
remains in rented accommodation – it is not open to the defendant to
complain.
1 Fitzgerald v. Ford [1996] PIQR Q72.
116
Principle of full compensation

According to classical contract doctrine,2 ‘where a party sustains a loss
by reason of a breach of contract, he is, so far as money can do it, to be
placed in the same situation, with respect to damages, as if the contract
had been performed’. Tort law, by contrast, seeks to put the victim in the
position he was in before the tort.
In personal injuries cases, full compensation is achieved by making
damages earnings-related and by insisting that these represent, so far as
possible, the full amount of the loss. The difference from social security
compensation is thus marked whenever the latter tends to work on the ba-
sis of flat rates. For the tort system, more tailored as it is to the demands
of individual claimants rather than ‘average models’, such methods of
compensation appear unfair. For flat-rate benefits, unlike earnings-related
benefits, do not enable victims to maintain their pre-accident standard of
living. For example, a man who has taken out a mortgage or entered into
a number of hire-purchase agreements on the basis of his earnings will
not be able to continue meeting his commitments if after his injury his
compensation is unrelated to his pre-accident earnings but is, on the con-
trary, determined by pre-arranged flat rates. Moreover, flat-rate benefits,
depending as they do on some single figure selected from all earners, are
likely to lead to undercompensation for most and, perhaps, overcompen-
sation for a few. The inadequacies of social security flat-rate benefits are,
to some extent, avoided whenever certain additional payments are made
on an earnings-related basis. But here, too, compensation is unlikely (in
all cases) to be full, since ceilings tend to be imposed on earnings-related
benefits.
The proclaimed aim of full compensation is not always achieved in
practice, since three factors seem to have watered it down.
The first is that when awards are made for future economic loss, judges
tend to ‘discount’ their awards to take into account a number of con-
tingencies. The fact that our system of awards takes the form of a lump
sum makes this inevitable since the court has to try to make an educated
guess as to certain contingencies (possible life of the victim and his de-
pendants, his future earnings, etc.) and the tendency, apparently, is to
reduce awards too much rather than too little. Empirical studies that sub-
stantiate this argument are sadly lacking, though certainly cases can be
2 Robinson v. Harman (1848) 1 Exch. 850 at 855; 154 ER 363 at 365, per Parke B.
118 future pecuniary losses
cited where awards which appeared generous at the time of the trial have,
with the passage of time, proved to be inadequate. In fairness, however,
one must also note that the reverse may also be true i.e., the lump sum
award may turn to be excessive, something which will occur whenever
the victim dies earlier than expected at the time of calculation of his
damages.
The second factor that might lead to less than full compensation is the
refusal of judges to calculate damages on systematic actuarial evidence.
Though such evidence is admissible in court, the more rough-and-ready
method of multiplier and multiplicand, which will be explained below,
has always been preferred.3 There is, however, no conclusive evidence to
support this approach. What is more likely, however, is that damages tend
to be less adequate in all cases where the period of expected future loss
is great. This was clearly in the minds of the members of the Pearson
Committee who, by a majority, proposed a ‘modified multiplier’ system.
But Lord Hailsham LC informed the House of Lords4 that consultations
with the members of the legal profession had revealed great hostility to
this complicated proposal, so the government was not going to recom-
mend its acceptance.
The third and final factor undermining full compensation has been in-
flation. Courts tend to ignore it in their calculations except in the most
extreme cases, and the reasons they have given, though not entirely con-
vincing, are also not without value.5 Yet it is a matter of fact that inflation,
especially in the late 1970s and early 1980s when it reached record lev-
els, did eat into awards which, at the time they were made, appeared
generous, if not excessive.6 Nowadays, inflation rates are very low and
have been successfully kept under control so this factor is of diminished
importance.
3 For criticism by a leading actuary, see Prevett (1972) 35 MLR 140 at 257. In Mitchell v.
Mulholland (No. 2) [1972] 1 QB 65 at 77, Edmund Davies LJ put it as follows: ‘actuary and
accountant may to a limited degree provide the judge with a means of cross-checking his
calculations, and in arriving at the appropriate multiplier’. In Auty v. National Coal Board
[1985] 1 WLR 784, Oliver LJ used even stronger language when he said: ‘As a method of
providing a reliable guide to individual behaviour patterns or to future economical and
political events, the predictions of an actuary can be only a little more likely to be
accurate (and will almost certainly be less interesting) than those of an astrologer’ (at
800–1). See, however, the criticism of the traditional method by Thorpe LJ in Wells v. Wells
[1997] 1 WLR 652.
4 Hansard (HL) 1982, 621.
5 Taylor v. O’Connor [1971] AC 115; Lim Poh Choo v. Camden and Islington Area Health Authority
[1980] AC 174 at 193, per Lord Scarman.
6 For an earlier recorded instance see Thurston v. Todd (1966) 84 WN Pt 1 (NSW) 231.
Method of calculation
The basic method of calculation for all but the most speculative of heads
of claim is the multiplier-multiplicand approach. How does that work? It
is best to discuss this topic under three subheadings.
General observations
The assessment of damages for the loss of future (prospective) earnings
is, inevitably, less precise and fraught with difficulties to which we have
already alluded. These are largely due to the number of imponderables:
in addition to those set out above, they may include such questions as:
how long would the plaintiff live? How long would he continue working
and at what rate? Would he be promoted and receive a rise? Conversely,
might he lose his job? What will the rate of inflation be in the future?
Would there be any significant change in his personal tax status? This
tries to discover so far as possible the net annual loss suffered by the
victim (the ‘multiplicand’)7 and arrive at a figure for the award of lump
sum damages by applying to this a ‘multiplier’, which must reflect not
only the predicted number of years for which the loss will last but also
the elements of uncertainty contained in that prediction and the fact that
the plaintiff will receive immediately a lump sum, which he is expected
to invest. Actuarial techniques are now built into this process since the
adoption by the courts of a set of tables (the Ogden Tables) which give the
multiplier applicable to the claimant depending upon the circumstances
of the case. The tables cover all aspects of damages for loss for life, loss
up to various retiring ages, loss of pension and loss for a number of years
certain. The discount rate is fixed by the Lord Chancellor pursuant to
section 1 of the Damages Act 1996. It is currently set at 2.5 per cent as
explained below.
The guiding principle is that the damages must be assessed on the basis
that the total sum awarded will be exhausted at the end of the period
contemplated and that during that period the plaintiff will be expected
to draw upon both the income derived from the investment of the sum
awarded and upon part of the capital itself. Any other calculation which
7 Note the comments of Lord Lloyd in Wells v. Wells [1999] 1 AC 345 at 377F, that careful
scrutiny is needed of the elements which go to make up the multiplicand, especially
since ‘the effect of reducing the rate of discount is to increase the multiplier in every
case’. This case was decided before the Lord Chancellor had set the discount rate. At that
time it fell to the courts to set the rate and Wells was the case in which the House of
Lords had to deal with the first substantial challenge to the long established rate of
4.5 per cent. See below.
did not require the simultaneous use of income plus capital would result
in part of the capital remaining intact at the end of the contemplated pe-
riod and, consequently, in overcompensation of the plaintiff. This method
of calculation, however, also means that the chosen multiplier will be less
than the number of years taken as the period of the loss.
The multiplicand
The multiplicand is the annual figure representing each head of loss. So,
for example, if the injured individual requires care in the medium to long
term, evidence will be received of the current annual cost at the date
of trial. That is the multiplicand. In certain circumstances there may be
more than one multiplicand for a particular head of loss. Staying with
future care as an example, the evidence may well be that the claimant
will require a certain level of care for a number of years but, when he
gets to say sixty-five, more will be required and the cost will be greater.
In those circumstances the court will consider two multiplicands, one
for the period immediately following trial and one for a much later date.
The number of multiplicands is not limited. There may be any number.
However, that approach is only adopted in circumstances, such as care,
where there is a high degree of probability that by or at a certain date a
specific state of affairs will exist.
The multiplier
As already stated, the guiding principle is that the damages must be as-
sessed on the basis that the total sum awarded will be exhausted at the
end of the period contemplated and that during that period the plaintiff
will be expected to draw upon both the income derived from the invest-
ment of the sum awarded and upon part of the capital itself. Any other
calculation which did not require the simultaneous use of income plus cap-
ital would result in part of the capital remaining intact at the end of
the contemplated period and, consequently, in overcompensation of the
plaintiff. This method of calculation, however, also means that the chosen
multiplier may be less than the number of years taken as the period of
the loss.
For many years the courts assumed that the lump sum would be in-
vested in equities which, on average, yield a rate of return of around 4 to
5 per cent per annum, and reduced the multiplier accordingly. In Wells v.
Wells8 the House of Lords, in a decision which one expert commentator
8 [1999] 1 AC 345 (reversing the Court of Appeal [1997] 1 WLR 652).

described as ‘the most important decision in personal injury litigation

since the Second World War’,9 overturned this approach. The former prac-
tice had been based on the assumption that the victim should be taken to
be in the same position as any other ordinary prudent investor. However,
as Lord Lloyd explained:
Granted that a substantial proportion of equities is the best long-term investment

for the ordinary prudent investor, the question is whether the same is true for these
plaintiffs. The ordinary investor may be assumed to have enough to live on. He
can meet his day-to-day requirements. If the equity market suffers a catastrophic
fall, as it did in 1972, he has no immediate need to sell. He can abide his time and
wait until the equity market recovers.
The plaintiffs are not in the same happy position. They are not ‘ordinary’ in-
vestors in the sense that they can wait for long-term recovery, remembering that
it was not until 1989 that equity prices regained their old pre–1972 level in real
terms. For they need the income, and a portion of the capital, every year to meet
their current care.10
His Lordship concluded that it was more appropriate for the court to
assume that the victim would invest most of the lump sum in index-linked
government securities. These offer a guarantee of protection against fu-
ture inflation but, in part because of this protection against inflation, also
offer a lower rate of return than equities. On this basis, he said that the
multiplier should be calculated on the assumption of a rate of return of
3 per cent per annum instead of the hitherto 4 or 4.5 per cent. The change
has led to an inflation in the size of awards. Section 1 of the Damages
Act 1996 confers a power upon the Lord Chancellor to set by order the
expected rate of return which the courts should follow in such cases, in
the interests of achieving greater certainty and consistency of practice;
on 25 June 2001, the decision was taken by the Lord Chancellor to set
the discount rate at 2.5 per cent,11 which has inevitably further increased
the level of awards. The Lord Chancellor also has the power to alter the
9 David Kemp, ‘Damages for Personal Injury: A Sea Change’ (1998) 114 LQR 571 and which
the press of the time thought would bring an unprecedented increase in the level of
awards (The Times, 17 July 1998).
10 [1999] 1 AC 345 at 366.
11 Damages (Personal Injury) Order 2001, SI 2001/2301. It is, nevertheless, possible for the
courts to take a ‘different rate of return into account if any party to the proceedings
shows that it is more appropriate in the case in question’ (Damages Act 1996, s. 1(2)).
However, early evidence suggests that the courts are extremely reluctant even to hear
arguments that a different rate is more appropriate: see Warriner v. Warriner [2002]
EWCA Civ 81; [2003] 3 All ER 447, where accountancy evidence as to the correct rate was
refused.
discount rate in the future if he deems it appropriate to do so, but this is

unlikely to occur for a number of years.
The Ogden Tables are now updated on an annual basis by the Profes-
sional Negligence Bar Association. This confirmed the trend towards a
growth in the size of damages awards, heralded by the Wells v. Wells deci-
sion.12 There are a number of different tables setting out the appropriate
multipliers for the whole of the individual’s life; for working life to aged
sixty; for working life to aged sixty-five for a term certain or for future
loss of pension. Different tables exist for men and women.
The court is not entitled to deviate from those tables although it may, in
certain cases, apply a further discount for certain eventualities.13 That is,
however, really only applicable to loss of future earnings. The rationale for
that approach is that the court will already have received and taken into
account evidence about what is likely to happen in the future in setting
both the multiplier and the multiplicand.
The multiplier will also be affected by the age of the victim at the time
of the tort. Clearly, the older the victim the smaller the multiplier, the
younger the victim the greater the multiplier. It is equally obvious that
this method of calculation, despite the tendency to itemise awards, will in
the end only lead to approximate compensation for future pecuniary loss.
In fact, the number of imponderables in the calculation makes it likely
that, the longer the period of the expected future loss, the less adequate
the damages. Of the many imponderables, inflation is probably most to
blame, though in these days of reduced inflation levels this is not likely
to be as great a concern as it was in the late 1970s.
It is now clear that inflation beyond the date of the trial is not taken
into account when determining the multiplicand. In Cookson v. Knowles the
Court of Appeal held, and the House of Lords subsequently agreed, that
for the purposes of calculating the dependency in fatal accident cases, as
12 The escalation of damages awards was subjected to criticism in Harvey McGregor on

Damages (16th edn, London, 1997, as updated by the 3rd Supplement, 2001): see paras
1601A–1601H especially at 1601E–1601G, who argued that the 2.5 per cent rate would
lead to escalation ‘to a degree that is far higher than proper compensation’. The main
argument seemed to be that investment advice would be accepted by claimants
recovering substantial damages, who would ‘end up with a portfolio largely of equities,
thereby leading to over-compensation as history shows that in the long term the total
return on equities has always outstripped that on gilts, index-linked or otherwise’. One
will have to wait to see whether the more recent volatility of the stock markets will
return to the lessons of ‘history’ before assessing whether these consequences will be
the result of the new discount rate. Current evidence suggests that they are not.
13 Page v. Sheerness Steel Co. Plc, sub nom. Wells v. Wells, n. 7 above.
well as for the purposes of calculating loss of earnings in non-fatal cases,

the loss should be divided into two parts, the first from the date of the
death (or injury) to the date of trial, and the second from the date of trial
into the future. In determining the rate of earnings of the deceased (or
plaintiff) for the assessment of the first part of the loss, any increase in
earnings due to inflation, which he would have received but for the death
(or injury), should be taken into account. As to the second part of the loss
i.e., from the trial onwards, this should be assessed on the basis of the
assumed rate of earnings at the time of the trial (in our example, £5,000),
with no addition for further inflationary increases in the future.
In certain circumstances the court may decline to adopt the multiplier-
multiplicand approach at all. That is limited to the circumstance in which
the head of loss is undoubtedly genuine but is too speculative to be suscep-
tible to the usual method of calculation. In those circumstances the court
awards a lump sum which is more to do with instinct and experience than
any mathematical or scientific approach.14
Future loss of earnings

This is a head of damage which probably causes more difficulty and debate
than any other in the field of future pecuniary losses.
The essential basic principle is easily stated, namely that an injured
claimant is entitled to recover the net sum which he would have earned
but for the accident. In this context the word ‘net’ means after deduction
of income tax and national insurance.15 The court does not speculate as
to changes in the levels for incidents of tax or national insurance after
the date of trial. Earnings which have not been declared to the Inland
Revenue are, nevertheless, recoverable but tax and national insurance at
the appropriate rate must be deducted from the sums which the claimant
would have received.16 If, however, the earnings were derived from some
unlawful act they will not be recoverable at all. The distinction is that in
the former case the money came lawfully into the hands of the claimant
and his unlawful act occurred subsequently when he failed to declare it
to the Inland Revenue. In the latter case he never received the money
lawfully at all.17
14 Cookson v. Knowles [1979] AC 556; Blamire v. South Cumbria Health Authority [1993] PIQR Q1.
15 British Transport Commission v. Gourley [1956] AC 185; Cooper v. Firth Brown Ltd [1963] 1 WLR
418.
16 Duller v. South East Lincs Engineers [1981] CLY 585.
17 Burns v. Edman [1970] 2 QB 541; Hunter v. Butler [1996] RTR 396.
At the lowest level this will involve an investigation of the length of

the period for which the claimant, on the balance of probabilities, would
be unable to return to his pre-accident employment. It may be that his
injury is comparatively minor, in which case he will simply be absent
from work, post-trial, for a matter of months. It may be necessary, how-
ever, for him to have a gradual return to work, first undertaking light
duties at a lower wage than before. In those circumstances his loss is the
difference between what he is actually able to earn and what he would
have earned had he been fully fit. That includes the loss of opportunity
to work overtime. It matters not that the claimant has no absolute con-
tractual right to overtime payments. It is sufficient if, on the evidence, he
would have been likely to earn overtime. That is, quite simply, a matter of
evidence.
In the case of the more seriously injured individual the question is likely
to be far more complicated, although the overriding principle remains the
same.
In the case of a claimant who will never be able to return to work the loss
is his annual net earnings, including overtime and pecuniary benefits, at
the date of trial, times the appropriate multiplier. That figure will depend
upon the age of the claimant at the date of trial and the date on which
he would probably have retired.18 That depends on the evidence. A date
may be specified in the claimant’s contract of employment. The court is,
nevertheless, entitled to receive evidence that the particular employer
generally permits employees to work beyond that date.
If the claimant is unable to return to his pre-accident employment but
is, nevertheless, capable of undertaking some work it will be a question
for the judge to decide what he is capable of undertaking and how much
he is likely to earn in such a post. In those circumstances the loss of
earnings will be the difference between what he is capable of earning and
what he would have earned but for the accident. The claimant is not, of
course, compelled to undertake employment. But he does have a duty to
mitigate his loss. In those circumstances he is not entitled to say that the
jobs which he is capable of doing are beneath him. Plainly, however, it
may not be realistic for someone with a high-flying career pre-accident to
undertake the most menial of tasks in the sense that no one will actually
employ him. It is always worthwhile a claimant making job applications,
and being turned down, in order to provide the court with evidence as to
what is actually available to him. The court will also take account of such
18 Ogden Tables 3–10.

matters as the level of unemployment in the area in which the claimant

resides. Mitigation of loss does not involve his having to move from one
end of the country to the other in order to obtain low paid employment.
Difficulties arise in this area in the case of individuals who are on a ca-
reer ladder or who contend that they have lost a chance of promotion. In
the case of an individual on a career ladder the court is likely to adopt dif-
ferent multiplicands, and reduced multipliers, for each stage of his likely
career. Thus, the multiplier will be divided into a number of different
periods during each of which the claimant may be earning substantially
higher figures.19
In the case of promotion the court will have to evaluate the percentage
chance of the promotion having been achieved. It will then recalculate the
multiplicand for the relevant period, subject to a discount for the prospect
of the lost chance.
A defendant is entitled to provide evidence, or to argue, on the basis
of the claimant’s own evidence, that his employment record is poor and
that he would have been unlikely to have remained in employment for
the whole of his working life. If such evidence is accepted by the court
then the multiplier may be reduced.
Females, even nowadays, present a further problem in relation to the
likelihood of career breaks to have and/or bring up children. There is not
and cannot be any hard and fast rule. The matter must be looked at upon
the available evidence in each case. Would she have returned to work
immediately? Would she have sought to work part-time or become a full-
time mother? In either of the latter events would that have impinged on
the progression within her career? Those are all factors which fall to be
taken into account by the court.
What is the situation in the case of a young person who has not yet
embarked upon a career at all? In such a case the court will need to look at
his educational attainment prior to the accident and any stated intention
as to likely employment. It will also look, where appropriate, at the type
of employment in which his parents and siblings have engaged in order
to try and ascertain what type of work the claimant would, on the balance
of probabilities, have done.
The younger the claimant the more uncertain the position. In such a case
it may be necessary for the court to abandon the multiplier-multiplicand
approach altogether and simply award a lump sum on the basis that
19 Brittain v. Garner, The Times, 18 February 1989, but see for an alternative approach where
the court used an average figure, Housecroft v. Burnett [1986] 1 All ER 332.
anything else is pure guesswork.20 It is, however, more usual these days
for the court to take an average figure for the general type of employment
which the claimant’s family has undertaken as the multiplicand and to
use an appropriate multiplier.
In addition to loss of future earnings the court is entitled, in an appro-
priate case, to award an additional lump sum for the fact that the claimant
is handicapped in the labour market. This head of damage only applies to
an individual who is capable of returning to some form of employment
but who, because of his disability, may find it more difficult than the
average person to obtain further employment on his losing his job.21
This head of damage is not calculated in a scientific fashion. The court
makes a broad assessment of how long it is likely to take the claimant to
obtain further employment. It then awards net earnings for that period.
Awards vary between three to six months and three years.22

The principle in relation to recovery of the costs of medical treatment or
therapies is the same for the future as for expenditure prior to trial. The
guiding principle, as always, is that of reasonable need. The claimant must
also establish that he will, or probably will, require or undergo the treat-
ment for which he claims.23 He may be entitled to the cost of alternative
therapies provided that he proves on the balance of probabilities that he
will undergo them.24
The mere fact that a particular type of therapy (e.g., hydrotherapy) may
be desirable does not make it reasonably necessary. Furthermore, the mere
fact that the claimant would benefit from regular swimming does not
make the cost recoverable if either he would have been likely to go swim-
ming in any event or the cost replaces another sporting or athletic activity
in which he might have taken part had it not been for the accident.25
On the other hand, the court is prepared to accept, e.g., a claim for IVF
in the case of a claimant who is in an established relationship but is no
longer able to procreate.
As with other future losses the court will utilise the multiplier-
multiplicand method of calculation for future medical expenses. In the
20 Blamire v. South Cumbria Health Authority [1993] PIQR Q1.

21 Moeliker v. A. Reyrolle & Co. Ltd [1977] 1 WLR 132; Smith v. Manchester Corporation [1974] 17
KIR 1.
22 A helpful table of awards and reasons is to be found in Butterworths Personal Injury
Litigation Service, vol. I Part I.
23 Woodrup v. Nicol [1993] PIQR Q104. 24 George v. Stagecoach [2003] EWCH 2042.
25 Cassell v. Riverside Health Authority [1992] PIQR Q168.
case of surgical procedures which do not require to be undertaken annu-

ally, the calculation is similar to that used for aids and equipment.
Prospective medical expenses will be estimated as accurately as pos-
sible26 and will be awarded as part of the damages. Moreover, in accor-
dance with section 2(4) of the Law Reform (Personal Injuries) Act 1948,
failure to use the facilities of the National Health Service will not affect
the ‘reasonableness’ of the plaintiff’s expenses. As Slade J put it in Harris
v. Brights Asphalt Contractors Ltd,27 ‘when an injured plaintiff in fact incurs
expenses which are reasonable, that expenditure is not to be impeached
on the ground that, if he had taken advantage of the facilities under
the National Health Service Act 1946, these reasonable expenses might
have been avoided’. But if advantage is in fact taken of the NHS, then the
plaintiff will not be allowed to claim what he would have had to pay if he
had contracted for such services or facilities.28 In a society like ours the
victim’sright to be compensated for private hospitalisation is understand-
able, though some feel that this should not be allowed since even private
hospitalisation is nowadays subsidised by the state.29 What is less easy to
justify, however, is the victim’s right to claim such compensation, take
advantage of free NHS facilities, and use the award for other purposes.
This point, however, rarely arises in practice as far as the pre-trial medical
expenses are concerned since at this stage plaintiffs are never sure that
the defendant’s insurers will pay and, therefore, rarely risk incurring the
expenses themselves.
The Law Commission’sConsultation Paper on Damages for Personal Injury:
Medical, Nursing and other Expenses30 recommended the retention of section
2(4) of the 1948 Act, and also proposed that the NHS should be able to bring
a claim against tortfeasors for the costs of caring for their victims.31 In its
final Report on this issue,32 the Law Commission stood by this provisional
view,33 although no concrete proposals on the recoupment issue were
put forward. It should be noted, however, that during the consultation
period prior to the final Report, the Road Traffic (NHS Charges) Act 1999
26 Lim Poh Choo v. Camden and Islington Area Health Authority [1980] AC 174.
27 [1953] 1 QB 617 at 635. 28 Woodrup v. Nicol [1993] PIQR Q104.
29 The Pearson Committee (Cmnd. 7054–1, 1978) paras 339–42 felt that such expenses
should be recoverable only if private treatment was reasonable on medical grounds.
Note, also, the Administration of Justice Act 1982, s. 5, discussed below.
30 Law Com. No. 144, 1996. 31 See ibid., paras 4.2 and 4.3.
32 Damages for Personal Injury: Medical, Nursing and Other Expenses; Collateral Benefits (Law Com.
No. 262, 1999).
33 See ibid., paras 3.18 (on the retention of s. 2(4) of the 1948 Act) and 3.43 (on recoupment
by the NHS).
was passed, which provides a working example of how such recoupment

might operate on a broader basis (including tariffs determining costs to be
recouped and an appeals procedure). It is understood that the discussions
surrounding the Law Commission’s work in this area contributed to the
formulation of the 1999 Act.34 Most recently, the Department of Health
has issued The Recovery of National Health Service Costs in Cases involving Personal
Injury Compensation: A Consultation.35 This draws heavily on Law Com.
No. 262, especially in using the Road Traffic (NHS Charges) Act 1999 as
a basis and poses a number of questions for consultation (covering the
types of costs to be recovered,36 whether industrial illness should be in-
cluded, how to take account (if at all) of any findings or compromises
on contributory negligence and whether the proposed scheme should ap-
ply to all relevant compensation payments or only to cases covered by
insurance). This suggests a relatively strong political will to adopt this
scheme and may be seen to fit in with the current government’s prior-
ities in achieving a more stable financial base for the public provision
of health services. Equally, the impact on insurance companies and, ulti-
mately, the customers who must pay their premiums, must be recognised
as the source of this finance for the NHS. The progress of these proposals
is to be awaited with interest.
Third parties taking care of the claimant’s needs

Not infrequently, relatives or friends come to the assistance of a victim
and thereby incur financial loss (e.g., of wages) or expenses. The usual rea-
son for this is to ensure that the plaintiff/victim receives proper medical
and nursing care. To do this, the third party may have to give up his or
her paid job. In such cases, these third parties cannot claim these losses
in their own name, for as against them the tortfeasor has committed no
tort. The question thus arises whether the ‘primary’ or ‘direct’ victim37
can recover these sums and, if so, is he under a legal or (merely) moral
duty to reimburse his benefactor (the third party)? In Roach v. Yates38 the
Court of Appeal had no difficulty in awarding such compensation to the
‘primary’ victim since ‘he would naturally feel he ought to compensate
34 Ibid., para. 342. 35 September 2002, available at www.doh.gov.uk/nhscosts

36 NHS and ambulance costs only or also those incurred by GPs, etc.
37 In what follows, we refer to the injured person/claimant as the ‘primary’ or ‘indirect’
victim to distinguish him from the volunteer who comes to his aid (usually giving up his
job in order to nurse him) since, in a sense, he too is a victim (albeit indirect) of the tort.
38 [1938] 1 KB 256.
[in that case his wife and sister-in-law, who had given up their employ-
ment in order to nurse him] for what they had lost’. The italicised word
‘they’ could be taken to suggest that the loss in question was, in fact, the
third party’s (benefactor’s) though, for technical reasons, it was claimed
by what we have called the ‘primary’ or ‘direct’ victim of the tort. Indeed,
this position was adopted by Lord Denning in Cunningham v. Harrison39
where he also added the rider that the sum thus collected (by the ‘primary’
victim/claimant ) would then be held on trust for the third party (benefac-
tor). By a strange coincidence, however, one day later, in Donnelly v. Joyce,40
a differently constituted Court of Appeal reached the same final result
(i.e., that the tortfeasor should pay the loss of the third party/benefactor)
but via a different route. This was, quite simply, that the loss was that of
the primary (direct) victim and it consisted not of the expenditure itself, but
of the need for the nursing services.
The Donnelly v. Joyce ruling, which held sway for the next twenty years,
was probably prompted by the desire to put an end to uncertainties which
had crept into the practice of the law and concerned how the award thus
gained by the ‘primary’ victim should be handled (i.e., kept by him or held
in trust in the name of the benefactor, and should the latter course be
open only when there was a formal agreement to such effect between the
‘primary’ victim and the third party). These difficulties were, apparently,
avoided by making it clear that the claim for the award was that of the
‘primary’victim and not the third party/benefactor and it was then entirely
for him to decide how, in fact, the money would be used. But as Lord Bridge
put it in Hunt v. Severs,41 the decision which terminated the reign of the
Donnelly judgment:
By concentrating on the plaintiff ’s [primary victims] need and the plaintiff’s loss
as the basis of an award . . . the reasoning in Donnelly diverts attention from the
award’s central objective of compensating the voluntary carer. Once this is recog-
nised it becomes evident that there can be no ground in public policy or otherwise
for requiring the tortfeasor to pay to the plaintiff, in respect of services which
he himself has rendered, a sum of money which the plaintiff must then repay
to him.
39 [1973] QB 942.
40 [1974] QB 454. In Donnelly v. Joyce the young plaintiff claimed the cost of special boots,
which he needed as a result of the accident and which had been bought for him by his
parents, and for his mother’s lost earnings as a result of her giving up her job to look
after him. The defendant conceded the first claim but contested the second on the
ground that the plaintiff was under no legal obligation to reimburse his mother.
41 [1994] 2 AC 350 at 363.
One reason why the House of Lords felt obliged to return to the Denning
rationale (that what is at issue here is the benefactor’sand not the ‘primary’
victim’sloss, so that the primary victim held the damages recovered under
this heading on trust for the carer)42 were the unusual facts of the case
which revealed a basic flaw in the Donnelly approach, and which clarify the
last sentence of Lord Bridge’s statement. For in the Hunt case the volunteer
offering the services (and suffering the loss) was the plaintiff’s husband
who was also the defendant tortfeasor in the action! So, if the Donnelly
reasoning had applied, the claimant (wife) would have claimed the loss
suffered by her husband who gave up his job to look after her. But the
husband, it will be recalled, was also the tortfeasor who had injured her
in the first place so, on this kind of reasoning, he would be paying damages
for his own loss. The House of Lords was able to avoid this result in the
instant case while preserving intact the basic principle that in the more
run-of-the-mill kind of case, claimants will still be able to recover for the
gratuitous provision of services by third parties.
The logic of Hunt v. Severs is clear enough, but the House of Lords’decision
gives rise to numerous problems in the case where the defendant is also
the provider of care for the claimant.43 One is that the ruling apparently
does not apply if the victim and the carer enter into a contract under
which the latter becomes obliged to render the services in question, in
return for agreed remuneration. The courts have consistently taken the
view that it would be undesirable to place the victim and carer in the
position of being required to make a contract of this kind,44 yet that is
precisely the effect of Hunt v. Severs. The ruling also provides a disincentive
for accident victims to accept gratuitous care from close relatives who may
be in the best (and most cost-effective) position to provide it for them.45
These were among the considerations that led the Law Commission, in
its Consultation Paper on Damages for Personal Injury: Medical, Nursing and
42 This is similar to the approach taken in Scotland: see Administration of Justice Act 1982,
s. 8, although this section involves only a personal liability on the claimant to account to
the carer. For a discussion of the ‘trust’ or ‘personal liability’ issue, see Law Com. No. 262
(1999), para. 3.55 ff. (esp. 3.62), where the Law Commission recommends legislation to
make this a personal liability only (and then only for past, not future, care).
43 See David Kemp, ‘Voluntary Services Provided by Tortfeasor to his Victim’ (1994) 110 LQR
524; A. Reed, ‘A Commentary on Hunt v. Severs’ (1995) 15 OJLS 133.
44 See, in particular, Donnelly v. Joyce [1974] QB 454 at 463–4 (Megaw LJ); Hunt v. Severs [1993]
QB 815 at 831 (Sir Thomas Bingham MR).
45 In support of the need to promote such voluntary care, see Colman J’s observation in
Hardwick v. Hudson [1999] 1 WLR 1770 at 1777, that ‘personal physical care can often be
most effectively and economically provided by a family member or close friend’.
other Expenses,46 to recommend that Hunt v. Severs should be reversed by

statute, in favour of a rule to the effect that the defendant’s liability for
the claimant’s nursing care should be unaffected by any liability which
the claimant might incur to pay those damages back to the defendant,
and the final Report on this issue stood by this recommendation.47
It could also be said that there is an air of artificiality to the reasoning
in Hunt v. Severs: in practice, it is not the defendant who would have to
pay the damages in question (and then have them repaid by the plaintiff),
but the defendant’s insurance company. The effect of the House of Lords’
judgment, then, was that ‘plaintiff and defendant were unable collec-
tively to call upon the proceeds of the defendant’s indemnity insurance to
cover the cost of caring for the plaintiff’.48 Both the House of Lords49 and
the Law Commission50 rejected this line of argument, on the traditional
grounds that the courts should not be influenced in setting the extent of
the defendant’s liability by the fact that the defendant was carrying third
party insurance in respect of the loss in question. While this approach
may be correct in principle, in a case like Hunt v. Severs it runs the risk
of producing a result that is both unjust to the parties immediately con-
cerned and perverse in the incentives it creates for future parties in the
same position. Consideration of a number of these factors led to the Law
Commission’s proposal to reverse the result in Hunt v. Severs, as discussed
above.
The assessment of the award for the services given to the plaintiff by
these third parties has also posed a difficult dilemma. The dilemma is
this: should these services (of the third party) be valued at nil (which
is what happened prior to Donnelly) or at their full – and hence high –
commercial rate? The Court of Appeal’s compromise suggestion can be
found in Housecroft v. Burnett.51 There, the measure of the loss was said
to be ‘the proper and reasonable cost’ of taking care of the plaintiff’s
needs. In practice this means the relative’s lost earnings (where he or she
is engaged in gainful employment), with the commercial rate applicable to
46 Law Com. No. 144 (1996), para. 3.68.

47 Law Com. No. 262 (1999), para. 3.76, which should be read with the earlier
recommendation that the claimant should be under a personal obligation (laid down by
statute) to account to the carer for past care which has been provided gratuitously (see
para. 3.62). The ‘carer’ would have to be a ‘relative or friend’, which is wider than the
current position in Scotland (which includes only ‘relatives’).
48 Law Com. No. 144 (1996), para. 3.65. 49 [1994] 2 AC 350 at 363 (Lord Bridge).
50 See e.g., Law Com. No. 262 (1999), para. 3.74.
51 [1986] 1 All ER 332 at 343 per O’Connor LJ and see discussion in relation to past losses at
345.
such services serving as an upper limit. But where this ‘caring’relative does
not give up paid employment, the commercial rate will be inappropriate.52
In its recent report, the Law Commission refused to propose the setting
of any limits or thresholds on such damages and did not suggest any
legislative changes to the assessment of such damages. However, it did
stress that the commercial rate for such caring services represented a
‘good starting point’ and that the courts should be wary of discounting
from this too extensively (to take into account tax and other commercial
expenses). Finally, the courts were encouraged to ‘be more willing to award
damages to compensate carers for their lost earnings even though these
exceed the commercial cost of care’.53
Finally, in this context, section 5 of the Administration of Justice Act
1982 should be noted. This provides that any saving to the injured person
which is the result of his being wholly or partly maintained at public
expense in a hospital or nursing home or other institution should be set
off against any income lost by him as a result of his injuries.
American, Canadian and German courts have also been called to ad-
dress a complicated variation of the Donnelly problem, where what is
at issue is not financial loss but physical injury sustained by the third
party/volunteer in the interests of the ‘primary’ victim. Typically, in these
cases a person has had a kidney negligently removed in hospital. Unfortu-
nately (for everyone concerned), this ‘primary’victim turns out to have one
kidney only (apparently something that occurs in one out of 100 people)
and thus is in need of an immediate transplant or else he will die. So a close
relative (e.g., father/the benefactor) is asked and agrees to donate one of his
kidneys in order to save the life of the ‘primary’ victim. Can the ‘primary’
victim claim for such harm suffered by the third party/volunteer? The fact
that the volunteer’s (relative’s) loss was the result of his own, voluntary
act can present legal difficulties; and the decision to donate an organ,
coming after due deliberation, distinguishes these cases from the typical
rescue cases (where the intervention is on the spur of the moment and
unaccompanied by the certainty of hurt) which, otherwise, would appear
the closest legal concept which could be used as a starting point in the rea-
soning process. Yet, despite these difficulties, the Canadian and German
courts have allowed for the compensation of the donors – a much bet-
ter solution (it is submitted) than by channelling the claim through the
52 McCamley v. Cammell Laird Shipbuilders Ltd [1990] 1 WLR 963 at 966–7.

53 Law Com. No. 262 (1999), paras 377–86. But this is not reflected in the case law. See
nn. 50, 51 above.
primary victim.54 It must be hoped that if, or rather when, such a case
comes before our courts they will be willing to take note of the rich for-
eign case law on this topic.
Future loss: home care or an institution?

The guiding principle is, as with all heads of loss, what is reason-
ably required by the claimant. It is important to take full account of
reasonableness. The court is entitled to, and does, consider the quality
of life which the claimant would be capable of enjoying. A judge is not
going to be impressed with an argument put forward by a defendant that
a severely injured individual needs nothing more than a roof over his head
and his physical needs taken care of. Thus, an institution may not be able
to provide facilities or care that would stimulate the individual and give
him what little enjoyment of life he can manage. Home care may thus, in
many instances, be preferable.
Does this mean then that a claim to adapt or even change the home
may in some cases be accepted? We look at this question below. Here, suf-
fice it to say that in some circumstances this may, indeed, be allowable;
but the total cost of acquiring new accommodation (e.g., moving from
a two-storey house into a bungalow) is, it is submitted, rightly viewed
with disfavour.55 Courts are certainly unlikely to react favourably to such
claims if they obtain the impression that the family of the victim re-
ally cannot cope with the injured individual at home and comes to the
conclusion that they are only seeking enhanced accommodation (per-
haps accompanied by a large team of commercial carers) for their own
benefit.
The dilemma of whether to reside at home or go into an institution
is, in most cases, more apparent than real. In most instances, there is
broad agreement between the medical and other experts as to whether
the claimant should reside in some form of institution or whether he is
capable of being maintained in his own home or otherwise within the
community. Most families are equally realistic about such matters and,
in practice, are remarkably unselfish in caring for their injured relatives.
54 Thus, Urbanski v. Patel [1978] 84 DLR (3d) 650 (Canada); BGH JZ 1988, 150 (Germany)
(English translation in Basil Markesinis and Hannes Unberath, The German Law of Torts: A
Comparative Treatise (4th edn, Oxford, 2002), p. 660 (henceforth referred to as GLT); cf.
Sirianni v. Anna, 285 N.Y.S. 2d 709 (1967); Moore v. Shah, 458 N.Y.S. 2d 33 (1982); Ornelas v.
Fry, 727 P.2d 819 (Ariz. App. 1986).
55 Cf. Cunningham v. Harrison [1973] QB 942 and Moriarty v. McCarthy [1978] 1 WLR 155 at 163.
A slightly different problem relates to adaptations to the home to enable

the injured individual to return there, from time to time, for short visits.
There are no hard and fast rules on this and the matter can only be resolved
on the evidence put forward in each particular case.
If the claimant is to reside in an institution, he will not recover the
totality of the costs and the full amount of his loss of earnings claim. That
is because, but for the accident, he would have expended part of his income
on providing himself with accommodation and the ordinary necessaries
of everyday life out of his income. The court is careful, therefore, not
to permit double counting and to make a deduction from the amount
awarded under one or other of those heads of damage. The matter has
now become more complicated as a result of two first instance decisions,
neither of which has been the subject of an appeal.56 In both cases, the
court was concerned with the obligations of local authorities under the
National Assistance Act 1948 to provide care for the disabled. In both
cases, the court held that the local authority was not entitled to have
recourse to damages received by the claimant in a personal injury action
notwithstanding that it was those injuries which imposed upon the local
authority their obligations under the 1948 Act. That has led defendants to
argue that the cost of an institution will be borne by the local authority
and that, therefore, the claimant should not recover any damages from
them. The point has, thus far, not been decided. Such claims have tended
to settle on an apportionment of the risks found by the trial judge.
Accommodation
Adaptations
The claimant is entitled to recover the reasonable costs of adapting a prop-
erty to meet his needs by, e.g., installing a lift, widening doors to admit
a wheel-chair, installing ramps and the like. The amount recoverable is
simply a matter of evidence.
If, however, the nature of the adaptation is likely to enhance the value
of the property by, e.g., adding an extension to the existing building, the
full capital costs would not be allowed. The amount claimable would then
be calculated in exactly the same way as if capital was being used for the
purpose of purchasing a new property.
The converse is equally true. Many adaptations needed for an injured
person will actually reduce the value of the property. Its prospective
purchaser is likely to wish to restore the property to its ordinary condition.
56 Bell v. Todd [2002] Lloyd’s Rep. Med. 12; Ryan v. Liverpool Health Authority [2002] Lloyd’s Rep.
Med. 23.
If it be proved that the adaptations have actually diminished the value the
claimant is entitled to the difference between the value of the property
as it was and the value of the property as it is after the adaptations have
been carried out.57
Accommodation: purchase of a property

In cases of serious injury, it is often the case that the accommodation in
which the claimant has resided up to the date of the accident proves to be
too small or otherwise unsuitable for him. To give the simplest example: a
tetraplegic cannot be expected to live in a flat on the third floor of a block
which has no lift. It is necessary, therefore, for accommodation suitable
to his post-accident needs to be purchased.
In English law, he is not simply entitled to a capital sum to purchase the
new property. The reason lies in the nature of damages. They are there to
compensate for a loss and not to provide a benefit or to enrich the victim
or his estate. Since real property, historically, retains its value, the victim,
or more probably his estate, would be enriched by the capital value of the
property on his death or when he no longer needs it.
In order to overcome that problem the courts have adopted what may
be regarded as a somewhat artificial approach. The court decides, first,
on the capital sum required by the claimant to provide himself with
suitable accommodation. From that figure it then deducts the amount
which he would have spent on providing himself with housing, includ-
ing any mortgage which he might have obtained, had the accident not
occurred. The latter figure is then deducted from the capital sum re-
quired to provide the new house. The court allows a figure of a no-
tional 3 per cent interest on the excess capital.58 The 3 per cent be-
comes the multiplicand and the multiplier is used to calculate the global
amount.
An example can help illustrate this reasoning process:
Cost of accommodation post-accident £100,000
Amount which claimant would have expended £40,000
before the accident
Excess required £60,000
3% of £60,000 = £1,800
Multiplier for life = 24
General damages for accommodation £1,800 × 24 £43,20059
57 Brown v. Merton, Sutton and Wandsworth Health Authority (Teaching) [1982] 1 All ER 650.
58 Thomas v. Brighton Health Authority, sub nom. Wells v. Wells, n. 7 above.
59 Roberts v. Johnstone [1989] QB 878.
How does a claimant, in fact, fund the necessary balance? That is not a
matter for the courts but the practical answer is either that he does so out
of his general damages for pain and suffering and loss of amenity, or by
making savings in some other area, or by taking out a mortgage for the
balance and paying for it out of the investment income which he receives
on the totality of his award.
Costs which do not provide any sort of capital value are recoverable in
full. Thus, removal expenses and legal and estate agents’ fees are recover-
able as a subsidiary head of damage.
Equally, the additional costs of running a larger establishment than the
claimant would have required had he not been injured are recoverable.
The court will look at the additional amount, at the date of trial, and apply
the whole life multiplier. The price of the property and its value is, again,
a matter of reasonableness. Where, e.g., the claimant purchased a house
which happened to have a swimming pool, the defendant’s attempt to
reduce the capital cost of the house by its increased value attributable to
the swimming pool failed because the overall purchase price was reason-
able.60
Future loss: aids and equipment

The claimant is entitled to the cost of purchasing, maintaining and ul-
timately replacing aids and equipment which he reasonably requires in
order to assist him with the ordinary tasks of daily living. The items may
vary from a motor car to a two-handled drinking cup with a lid. The same
principle applies however large or small the item. The first task of the
court is to decide, on the evidence, whether a particular item is reason-
ably required. It must also decide, in an appropriate case, which make or
model is reasonably required. Plainly, there may be a considerable vari-
ation in the cost of larger or more expensive items of equipment, from
motor cars to reclining chairs, electric wheel-chairs and similar items.
Having decided that the equipment is reasonably required the court
then looks, first, at the cost. That sum is recoverable as an immediate
capital requirement. Secondly, the court must then consider the evidence
as to how frequently the item may require to be replaced. That is then
converted into an annual figure to which the appropriate multiplier is
applied. Thirdly, the court will consider what, if any, annual maintenance
is required for that particular item of equipment. Again, the appropriate
multiplier is applied to that figure.
60 Willett v. North Bedfordshire Health Authority (1992) 143 NLJ 745.

The following example may be of some use:

Cost of electric wheel-chair £6,000
Replacement every six years – annual cost £1,000
Annual maintenance £300
Whole life multiplier = 24
Recoverable damages:
Initial capital payment £6,000
Replacement cost £1,000 × 24 £24,000
Annual maintenance £300 × 24 £6,000
Total recoverable £36,000
The replacement figure may be reduced in cases in which the claimant

is unlikely to require the particular item of equipment for the entirety of
his life. The court will then look at how many times the item will in fact
be replaced and apply a different multiplier, namely one for a period of
years certain. So, e.g., if a thirty-year-old claimant would be unlikely to use
an electric wheel-chair after the age of sixty, it will utilise the multiplier
for the term certain for thirty years.
Loss of pension
There is no difference in principle between loss of pension and loss of
future earnings.
The question, of course, is whether the claimant was, or would have
been, in pensionable employment. That may not be such a straightfor-
ward question as it first appears. As one example, a secretary for a large
organisation may, at the date of the accident, be in pensionable employ-
ment. If, on the evidence, her employers would have shut that office so that
she would have been made redundant some two years after the accident in
any event, could she have obtained other pensionable employment? That
is a very open question and would need to be the subject of both factual
and expert evidence.61 In the actual case, the opinion of the employment
expert was that she would have been likely to obtain pensionable employ-
ment within nine to twelve months of the notional date of redundancy.
If, of course, there is no loss of pension rights there is no claim.62
One approach is to establish, first, what pension and lump sum the
claimant would have received had he retained his pre-accident employ-
ment to pensionable age. Consider, on the evidence, what pension provi-
sion the claimant is in fact likely to obtain, if any. The court can then adopt
61 The above is a real example from a case which settled shortly before trial.
62 Dews v. National Coal Board [1988] AC 1.
one of two approaches. One is to make enquiries in the insurance market

as to the cost of a deferred annuity to meet the net loss of pension to claim
that sum.63 Alternatively, the court can receive evidence as to the likely
pension loss and then apply a multiplier from the Ogden Tables. That was
the approach adopted, at first instance, by Dyson J in Page v. Sheerness Steel
Co. Plc.64 The discount to be adopted for imponderables will vary according
to the age of the claimant at the date of trial. The younger the claimant
the greater the discount rate. For example, in Page v. Sheerness Steel (above)
Dyson J assessed the discount at 10 per cent.
The lost years

In the case of a claimant who has a substantially reduced life expectancy,
which means that his working life will be foreshortened, the court awards
a reduced sum by way of future loss of earnings for the period after the
expected death of the claimant. Why is the award reduced? In the ordinary
case an individual would expend his earnings partly for his own benefit,
partly for the joint benefit of himself and his family and partly for the
sole benefit of his family. In consequence of his death, the expenditure of
the household will be reduced. Thus, in the case of a married person, the
earnings for the lost years will be reduced by 50 per cent. Where there are
children it will be reduced by 31.6 per cent.65 In the case of a young child
who has not yet embarked upon employment, no award will be made.
German law
Future pecuniary losses
Basic approach
The method of calculation depends on the form of payment: annuity or
lump sum (see p. 42). In both instances, however, the starting point is the
‘differential method’(Differenzhypothese) which is the basic principle under-
lying §§ 249–252 BGB.66 This principle applies equally to compensation for
loss of earnings or increased needs. The question asked is ‘what would the
economic situation of the victim be but for the injury?’. In assessing the
difference (= disadvantage to the victim), all known or foreseeable factors
63 London Ambulance Service NHS Trust v. Swan, CA, judgment of 12 March 1999 (unreported);
Auty v. National Coal Board [1985] 1 WLR 784.
64 [1996] PIQR Q26. Upheld by the House of Lords, sub nom. Wells v. Wells, n. 7 above.
65 Harris v. Empress Motors Ltd [1984] 1 WLR 212.
66 See Hermann Lange and Gottfried Schiemann, Schadensersatz (3rd edn, 2003), § 61, p. 248.
or likely future developments have to be taken into account. This includes

such things as pay rises, professional promotions, risks of labour market,
changes in inflation rate, end of gainful employment, etc.67
Periodic payments
The annuity payable according to § 843 I BGB for all continuing and fu-
ture losses is in practice calculated on a monthly basis.68 Although § 843 I
BGB provides for a uniform annuity, which covers both lost earnings and
increased needs (even though the basis of calculation of the two is differ-
ent), the courts nowadays have to distinguish explicitly in the judgment
between these two parts of the compensation package. This is because the
annuity for lost income is subject to income tax, whereas the annuity for
increased needs is not.69
With regard to the loss of earnings, the judge has to prognosticate fu-
ture developments as accurately as possible.70 If a child is injured, the
likely beginning of gainful employment has to be determined, as well
as the date when the victim would have given up such employment. If
not otherwise indicated, this will be the age of 65, after which the victim
will be entitled to an old age pension (the contributions to the pension
scheme have to be paid by the tortfeasor, because without the injury they
would have been paid by the victim out of his salary and (partly) by his
employer).71
As to the value of the lost income, two alternative points of reference
may be used: the income the victim would have earned but for the in-
jury, or the market value of his work.72 The latter approach is important
where the victim was not, actually, working for a salary at the time of the
injury – for instance a spouse engaged in housework – but must still
be compensated for the loss of his or her working ability.73 With regard
to the former approach, two methods of calculation are adopted by the
German courts, the result of which are essentially the same: according to
the ‘Bruttolohnmethode’, the calculation proceeds from the (hypothetical)
67 BGH 17 January 1995, NJW 1995, 1023, 1024.

68 Despite §§ 843 II, 760 II BGB, which would call for a three-month period.
69 MünchKomm-BGB/Stein § 843 BGB no. 43; cf. pp. 42–3.
70 BGH 20 December 1960, BGHZ 34, 110, 118.
71 BGH 26 September 1995, NJW 1995, 3313; BGH 27 June 1995, NJW-RR 1995, 1272;
cf. pp. 142–3.
72 ‘Konkrete/abstrakte arbeitswertorientierte Betrachtungsweise’, see MünchKomm-BGB/Stein
§ 843 BGB no. 25, 27.
73 See p. 143.
gross income, but costs and expenditures which the victim (as compared
to an actually working employee) does not have to incur will be deducted.74
The ‘Nettolohnmethode’proceeds from the net income, but the court will add
all payments which the victim as an employee would have paid out of his
gross salary to the state (taxes) or social security and which he now has
to continue to pay.75 The Federal Court has declared both approaches to
be equivalent methods of calculation which – if applied properly – do not
produce different results.76
Periodical payments based on increased needs are especially difficult to
calculate. If the necessary costs vary from month to month, the court has to
assess an average amount of monthly costs.77 If the needs can be expected
to end after some time, the court has to set a time limit for the periodical
payments.78 In case of foreseeable changes, the court may define different
periods of time with different amounts of monthly payments, respectively.
The plaintiff must, to the extent that this is possible, itemise and prove
his increased needs.79 Therefore, he may not claim an overall excess pay-
ment as compensation for future inflation – he has to show the specific
costs which will be necessary to meet his needs.80 If the future needs are
not foreseeable at the time of trial, he may, instead of suing for damages,
bring an action for a declaratory judgment (Feststellungsklage, § 256 ZPO),
which declares the defendant liable for all future damages caused by the
injury to be proved by the plaintiff at a later stage (see p. 43).
The plaintiff may also confine his claim to certain items of his damages,
and later bring another claim with regard to other parts of his damages
(Teilklage, § 258 ZPO).81 In pursuing this tactic, however, plaintiffs must
keep a watchful eye on the danger of claims becoming statute barred
(see pp. 191–2).
If, after a court decree ordering periodical payments, the health or
economic situation of the victim changes, either party may return to
court and ask for a modification of the judgment (§ 323 ZPO).82 Since
the original judgment was – by necessity – based on a prognosis of future
developments, a ‘change of facts’ (§ 323 I ZPO) requires that the actual
74 Cf. BGH 22 January 1980, NJW 1980, 1787. 75 BGH 12 July 1957, VersR 1957, 574.
76 BGH 15 November 1994, NJW 1995, 389, 390.
77 Gerhard Küppersbusch, Ersatzansprüche bei Personenschäden, no. 183.
78 MünchKomm-BGB/Stein § 843 BGB no. 44.
79 BGH 13 January 1970, MDR 1970, 315; BayObLG 11 July 1968, BayObLGZ 1968, 184, 187.
80 OLG Köln 19 May 1988, VersR 1988, 185, 186.
81 Thomas/Putzo/Reichhold, ZPO (24th edn, 2002) § 323 nos 39, 40.
82 BGH 20 December 1960, BGHZ 34, 110, 118; Palandt/Thomas § 843 BGB no. 17.
development was substantially different from that prognosticated in the

original judgment.83
Compensation by means of a lump sum

As long as the parties agree on some kind of capitalised compensation, the
courts will not interfere – the issue is left to contractual freedom. Legal
rules exist only insofar as a lump sum has to be assessed by court decree
according to § 843 III BGB. As a basic principle, the capital payment is
to put the victim in the same position as if he were receiving periodical
payments owed by the tortfeasor under § 843 I BGB. This means that he
should not receive less nor, on the other hand, should he end up getting
more money than he would have received under the annuity system. As in
English law, therefore, the capital has to be calculated in such a way as to
equal the amount that he would receive at the end of the estimated period
of monthly payments. The general idea is thus to avoid any ‘enrichment’
which could follow from an unused part of the capital remaining at the
end of the relevant period and after the annual losses of the victim had
been taken care of.84
Payments made in this way entail risks (and opportunities) for both
parties which are associated with the well-known difficulties associated
with any system of lump sum payments. Thus, unlike the annuity system,
which allows a return to the court for an upward or downward adjustment
of the award, the BGH has held that the parties do not have this right if
they have opted for a lump sum payment.85
The calculation in detail follows very much the ‘multiplicand and mul-
tiplier method’ found in English law, though it is not explicitly called
this.86 Thus, at first instance the compensable damage and its value per
year expressed in periodical payments have to be assessed. The relevant
factors taken into account are lost income or alimony and increased
needs. In addition, the hypothetical time of periodical payments has to
be determined. The result may be called the ‘multiplicand’, which then –
in a second step – has to be multiplied by a Kapitalisierungsfaktor (mul-
tiplier), which also takes account of the income the victim can expect
83 BGH 20 December 1960, BGHZ 34, 110, 118; see also chapter 1.
84 Cf. BGH 8 January 1981, NJW 1981, 818, 820: ‘A lump sum is largely nothing else than
the cash value of the owed periodical payments.’
85 BGH 8 January 1981, NJW 1981, 818, 820; for a different view see MünchKomm-BGB/
Stein § 843 BGB nos 49, 62.
86 Cf. Gerhard Küppersbusch no. 650 ff.; Schlund, ‘Juristische Aspekte der Kapitalisierung
von Renten- und Unterhaltsansprüchen’, BB 1993, 2025; Eckelmann-Boos,
Versicherungsrecht 1978, 210.
from the capital sum, and other aspects of risk allocation. Last but not
least, one must recall the imperative that the capital itself must be ex-
hausted at the end of the (hypothetical) periodical payments. The private
practice of the insurance companies has established detailed and compre-
hensive Kapitalisierungstabellen87 which though they have no legally bind-
ing force have much persuasive authority. Since the future income from
the capital is not exactly predictable, an average income of between 5 to
5.5 per cent is usually taken as the basis of calculation (Abzinsungsfaktor).88
These principles may be illustrated by a practical example. A five-year-old
child is severely injured and entitled to a monthly income for the rest of
his life. The income would be €2,500 per month (= €30,000 per year). The
statistical life expectation is seventy-eight years (for 2000), the duration of
periodical payments would therefore be seventy-three years. The overall
value of such payments would be 73 × €30,000 = €2,190,000. The multi-
plier (Kapitalisierungsfaktor) according to the established tables would be
19,755. The annual damages (€30,000) have to be multiplied by this factor;
consequently, a lump sum of €592, 650 would have to be paid.89
If, as sometimes happens, the Kapitalisierungsfaktor expresses only the
period of (hypothetical) annuities, the income from the capital has to be
deducted in addition (Abzinsungsfaktor).
The Federal Court has stressed that all dates in actuarial tables are no
more than a starting point for the judge and may be modified according
to the circumstances of the case and the overall economic situation. His
discretion to do so and to fix a certain amount of capital as a lump sum
is based on § 287 ZPO.90
Loss of earnings
In general
The basic rule is that the defendant who is bound to make compensation
must restore the situation which would have existed if the circumstances
making him liable to compensation had not occurred (§ 249 sentence
1 BGB). The claimant is to be put in the same position as if he had not
been injured, which also includes his hypothetical economic position, in
particular the loss of future earnings.91 This principle is specified in the
87 See, e.g., Schneider, Schlund and Haas, Kapitalisierungs- und Verrentungstabellen (2nd edn,
1992); Gerhard Küppersbusch p. 283.
88 Cf. Schlund BB 1993, 2025, 2027; BGH 8 January 1981, NJW 1981, 818, 821.
89 Example taken from Gerhard Küppersbusch no. 650 (adapted to the euro currency).
90 BGH 8 January 1981, NJW 1981, 818, 821. 91 See GLT, p. 909.
context of tort law in §§ 842, 843 BGB (cf. p. 138). The ‘damage’ which is to
be compensated as loss of earnings is the difference between the economic
position after the accident and the hypothetical economic position if the
injury had not occurred. Thus, the award and the calculation of future
loss of earnings are based on the court’s conclusion: what the claimant
would have earned but for the injury.
Principles
Concrete loss/damage
Compensation for future loss of earnings requires that the claimant would
have worked in the future or had other income but for the injury. There-
fore, the claimant cannot recover a loss of earnings merely due to the fact
that the injury to body or health causes the destruction or diminution
of his earning capacity. His loss does not result from the destruction of
the earning capacity as such, but from the non-utilisation of it in return
for payment.92 Likewise, damages are not awarded if the claimant would
have lost his income in any event e.g., through an imminent dismissal or
because of the insolvency of the employer.93 The ‘loss of a chance’ to make
a profit is not yet considered to be a compensable damage under German
law (but see pp. 144–5).94
The injury may, additionally, cause pecuniary benefits for the claimant;
alternatively, the loss of earnings may be compensated by other persons.
If so, the claimant actually does not suffer a loss or, at the very least, his
loss is correspondingly decreased if we compare his current economic po-
sition with his hypothetical economic position if not for the injury. The
rule in this respect is that even though the victim is to be indemnified
for his loss he must not make a profit from his injury. Thus, pecuniary
benefits due to the injury may exclude or decrease his claim if the rule
of ‘Vorteilsausgleichung’ is applicable. This is the case if the victim receives
benefits due to the injury, these benefits do not contradict the purpose
of the damages and a deduction of these benefits from the award is rea-
sonable.95 From there, the court must deduct tax advantages, tax or social
security contributions which the claimant may no longer have to incur96
92 BGH 20 April 1999, VersR 2000, 233, 234.
93 See GLT, p. 909; BGH 17 January 1995, NJW 1995, 1023, 1024 (insolvency); BGH 13 May
1953, BGHZ 10, 6, 9 ff. (dismissal).
94 For a different view see Gerald Mäsch, Chance und Schaden – Zur Dienstleisterhaftung bei
unaufklärbaren Kausalverläufen (Mohr Siebeck, Tübingen, 2004).
96 Palandt/Heinrichs, vor § 249 BGB no. 144 ff. with a summary concerning deductible tax
advantages.
or saved expenses such as the community expenses97 from the award,

unless these deductions are unreasonable. Furthermore, if the claimant’s
loss is compensated by an innocent absentee, the court must take into ac-
count that this may cause a transfer of the victim’s rights to the innocent
absentee.98
Contributory fault
According to § 254 II BGB, the claimant is obliged to mitigate his loss as
much as reasonably possible.99 So if, as a result of the injury, the claimant
works in another, but less well paid job, he can merely ask for the differ-
ence between his former and his current earnings. Likewise, the claimant
cannot recover the full amount of earnings he had earned before the acci-
dent if he is unemployed but does not look for or take up any available and
reasonable employment. The court must consider the circumstances of the
claimant, e.g., the family situation, the kind of injury, age, professional
training or the employment situation in general, in order to assess if and
to what extent the claimant is obliged to work. According to this rule, the
claimant can be obliged to change his profession and thus submit himself
to retraining, unless this would substantially worsen his professional and
social status.100 The decision on this point, however, is objectively reached
and it is not sufficient for the claimant alone to say that the alternative oc-
cupation falls below his professional standards and status. Furthermore,
the Federal Court has said that even a move to another town or city could
be reasonable in exceptional cases.101 If the claimant does not look for or
take up reasonable employment, the court will take into account what
the claimant hypothetically could have earned from such alternative em-
ployment. On the other hand, if the injured person has earnings from an
alternative employment, which he would not have been obliged to take
up, the court will not take them into account.102
Evidence
The claimant has to prove that he would have continued to work in the
future and also show what he would have earned but for the injury. In
cases in which damages are to be awarded, the burden of proof is alleviated
by § 287 ZPO and § 252 sentence 2 BGB to the effect that the court has a
97 BGH 22 January 1980, NJW 1980, 1787. 98 For further information cf. pp. 189–92.
99 See GLT, pp. 905–7. 100 MünchKomm-BGB/Stein § 843 BGB no. 34.
101 BGH 3 July 1962, VersR 1962, 1100. 102 BGH 25 September 1973, VersR 1974, 142.
discretion to estimate the amount of damages. However, this ‘damage’

must be based on an ordinary (or probable) course of events. Thus, the
claimant has to prove that a loss of earnings is likely to have happened.103
In doing so, the claimant must show facts, indications or circumstances
as to what he would have earned but for the injury. Furthermore, he must
produce the facts of what happened after the injury but no later than the
end of the trial, since the court considers the position as it is at the time
of the trial and makes its assessment at that time.104
Under German law as it stands today, the compensation of ‘lost chances’
is a question of likelihood of lost income. If the court decides in favour of
the plaintiff, it is not the chance which is compensated but the income
the plaintiff would probably have had.105
How does one determine what is ‘likely’ to have happened in the future
but for the injury? The Federal Court stated that there is no fixed standard
of likelihood. The claimant’s burden of proof, therefore, differs from case
to case.106 However, a loss of earnings is not proven if it is not based on
a course which is at least more probable than any course from which a
loss of earnings can be excluded. On the other hand, the Federal Court
has insisted that the assessment whether or not the claimant would have
suffered a loss of earnings should not be subjected to overrigorous proof at
the expense of the claimant.107 If the injury prevents a reliable prediction,
the court must consider the fact that a rigorous standard of proof would
benefit the defendant who is actually responsible for the claimant’sinjury
and the difficulty he faces in proving the resulting loss.
By contrast, the burden of proof falls upon the defendant with respect to
the reasons which may exclude (or reduce) the loss of earnings. Therefore,
the defendant must show facts which may suggest why the claimant would
not have worked, or that the claimant would have earned less than actually
claimed by the latter. If the victim cannot continue to work in his former
profession, the defendant must also prove that an alternative employment
103 BGH 22 September 1992, VersR 1993, 55, 56; BGH 17 January 1995, NJW 1995, 1023,
1024.
104 BGH 20 April 1999, VersR 2000, 233, 234; BGH 24 January 1995, VersR 1995, 469, 470.
105 For a detailed account of German law in comparison to French law see Helge
Großerichter, Hypothetischer Geschehensverlauf und Schadensfeststellung (Beck, München,
2001); cf. p. 143.
106 BGH 22 September 1992, VersR 1993, 55, 56; BGH 17 January 1995, NJW 1995, 1023,
1024.
107 BGH 20 April 1999, VersR 2000, 233, 234; BGH 17 January 1995, NJW 1995, 1023, 1024;
see GLT, p. 909.
would be available and reasonable.108 In this context, the claimant must

first show what he has done in order to take up an alternative employment.
Calculation
As already stated, §§ 287 ZPO and 252 BGB are applicable and the court has
a discretion to evaluate the damage. Therefore, the problem is rarely the
calculation of earnings, but the conclusion as to what the victim would
have earned but for the injury. Generally, the court can assume that the
claimant would have earned as much as before if he was employed at
the time of injury. If the claimant was unemployed before the accident,
he must prove that he would have taken up a certain employment. If so, the
court would award the usual income that would result from such employ-
ment. In addition, the court must also consider the possible rise of wages
(or other income) in the future.109 In doing so, the court will normally re-
sort to collective labour agreements or the German civil service pay scale,
if applicable to the claimant’s hypothetical employment.110 Nevertheless,
if substantial and non-foreseeable facts should occur later on, and these
facts would reduce or increase the loss of earnings, the claimant and/or
the defendant can, under § 323 ZPO, ask for a judgment to modify the orig-
inal award for the future. As to the method of calculation in particular,
see pp. 138–9.
Particular problems
Promotion and substantially increased earnings in the future
In the case of a claimant who asserts that he would have been promoted
or had substantial earnings in the future, the court has to consider his
professional skills and his employment record in order to determine if this
is likely to have happened. In accordance with § 287 ZPO and § 252 sentence
2 BGB, promotion and increased earnings can be expected according to
the ordinary course of events and, therefore, are likely to happen for a
diligent person with a good professional record up to the moment of the
accident. On the other hand, the hypothetical prognosis may be negative
and this may well be inferred for a person with a poor employment record.
Nonetheless, even a less qualified claimant can also prove that he probably
could have had higher earnings by showing plausible facts for the alleged
course of events, e.g., his efforts to gain further job training111 which
108 BGH 23 January 1979, NJW 1979, 2142.
109 BGH 20 December 1960, BGHZ 34, 110, 118 ff.
he can pursue even after the accident. Even if the victim failed in his
efforts for further job training, the award for loss of earnings can include
increased earnings if it can be shown that he would have been successful
but for the injury.112
If a reliable prediction is not possible, the court will assume that the
claimant would have had average success in his profession but for the
injury.113 Thus, pay rises or promotions which can regularly be expected
in the occupation which the victim had chosen before the injury have
to be taken into account.114 Relevant provisions in collective agreements
or statutes (for public employees), which link the rise or promotion to
age or seniority, are thus used as guidelines by the courts.115 However,
in the absence of such guidelines, difficulties may arise. The court thus
cannot say that a claimant who was a professional football player would
not have earned money as a football team manager for an indefinite time
after his playing career had come to an end because such a change is un-
likely to have happened. To put it differently, the court cannot assume
that the claimant would not be successful at finding a permanent job as
team manager. Since the claimant is prevented from proving himself as
team manager due to the injury, and because the injury is caused by the
defendant, the court must assume that the claimant would have had at
least average success. However, the Federal Court stresses that the remain-
ing risks concerning the claimant’s professional course could, eventually,
justify proportional deductions if a reliable prediction cannot be made.116
Children and apprentices

The claimant has to supply convincing facts for a hypothetical career in
the course of which he would have earned money. In the case of children
or apprentices, these facts could be their performance at school (or during
the employment training period) prior to the injury or their skills, inter-
ests or career aspirations. In one case the Federal Court117 accepted the
lower court’s decision that the claimant would have found employment
as a teacher in a primary school despite an excess supply of teaching staff,
even though she had not yet finished her first year in university to become
113 BGH 17 February 1998, VersR 1998, 770, 772.
114 BGH 2 April 1963, VersR 1963, 682.
115 BGH 20 March 1962, NJW 1962, 1054, 1055; BGH 28 April 1992, NJW-RR 1992, 1050.
116 BGH 20 April 1999, VersR 2000, 233, 234; BGH 17 February 1998, VersR 1998, 770, 772;
BGH 24 January 1995, VersR 1995, 469, 470.
117 BGH 5 July 1983, VI ZR 269/82 (unreported).
a teacher and her grades had not been outstanding. In another decision
the Court of Appeal of Saarbrücken118 awarded compensation for a loss
of earnings on the basis that the claimant would have been a motor me-
chanic, although the claimant did not finish his job training. The court was
convinced that the claimant, who was injured at the age of sixteen, would
successfully have completed his apprenticeship as a motor mechanic. The
reason for this conclusion was evidence concerning the claimant’s career
aspirations, technical interests and skills and his performance in school.
However, if there is no indication at all for the hypothetical professional
development of the victim, it is then acceptable to take into account the
profession of the parents, brothers or sisters of the victim.119
But the younger the injured claimant the more uncertain is the hy-
pothetical course of events. For this reason German courts reject claims
(Leistungsklage) for the loss of earnings, if the plaintiff is not yet old enough
to embark upon a career.120 The victim, however, can ask for a declara-
tory judgment (Feststellungsklage) that at a later stage of his life he will be
entitled to damages for lost earnings, if such losses can be established.121
Self-employed persons
The Federal Court pointed out that the loss of earnings of a self-employed
person is to be based on the loss of profits from his business. His loss of
earnings cannot be simply calculated by means of the costs for an equiv-
alent substitute.122 The claimant must show his loss of profits by means
of the operating results in the past years from which the court can cal-
culate the loss as best it can.123 In doing so, it is recommended that the
claimant bring forward as much evidence as possible. This should include
118 OLG Saarbrücken 27 November 1997, OLGR 1998, 381.

119 OLG Karlsruhe 25 November 1988, VersR 1989, 1101, 1102; cf. also BGH 23 March 1982,
VI ZR 85/81 (unreported): the court accepted the award of the OLG Köln 29 January
1981, 7 U 85/80 where the claimant was injured right from his birth and became deaf.
In this case, the victim, who had become a public servant on an inferior level, was
entitled to additional payments as compensation for lost higher earnings. The court
held that the claimant would have entered a more successful career as a public servant
but for the injury. One of the reasons for this award was that his brother was a lecturer
(Studienrat), his sister was a doctor and his father was a judge.
120 RG 5 April 1906, JW 1906, 359, 360; RG 27 September 1906, JW 1906, 718, 719; cf.
Steffen, DAR 1984, 1.
121 BGH 3 December 1951, BGHZ 4, 133, 137; OLG Köln 19 May 1988, VersR 1988, 1185,
1186.
122 BGH 5 May 1970, BGHZ 54, 45, 53; for a different view see MünchKomm-BGB/Stein § 843
BGB no. 29.
123 BGH 6 February 2000, NJW 2001, 1640 ff.; BGH 10 December 1996, NJW 1997, 941 ff.
the balances, profits and loss accounts (Gewinn- und Verlustmeldungen), in-
come tax assessment notices and tax returns (Einkommensteuerbescheide und
-erklärungen), advanced notification of purchase tax and purchase tax no-
tice within the crucial period of time (Umsatzsteuervoranmeldungen und -
bescheide für den maßgeblichen Zeitraum).124 It is not sufficient, if the claimant
only supplies the sales figures (Umsatzzahlen) of his business.125 In this re-
gard it is important to note that there is no fixed rule as to which period
of time is crucial to determine the future loss of earnings – this depends
on the circumstances of each case.
On the other hand, a self-employed person can recover the costs of a sub-
stitute (Ersatzkräfte), if he actually employs one. The employment of such
substitutes causes additional costs which reduce the profits. However,
the employment must be reasonable from an economic point of view.126
Given that the employment is reasonable, it is irrelevant whether or not
the claimant’s business operates less well with the substitute. But even if
the operating results achieved by the substitute are better, the court can
assume that the claimant would have done as well but for the injury.127
Therefore, the court does not apply the rule of Vorteilsausgleichung in such
cases.
If family members or friends take over the claimant’sjob without asking
for compensation, the claimant is entitled to demand the market price
for necessary substitutes (with regard to personal care, see pp. 156–7).
However, he can only recover the net sum, since his family or friends do
not have to pay taxes or social security contributions.128
Even if the self-employed person had not made any profits up until the
date of his injury, he could claim loss of earnings provided he can prove
that profits were likely to have occurred from business connections and
that these connections were broken up by the injury.129 To that end he
must deliver plausible facts, e.g., the establishment of business connec-
tions and expected orders likely to result from such connections. How-
ever, it will not be convincing if the claimant merely proves that he was
in touch with two companies, but received orders only for a few months
or days over a period of two years.130
124 Küppersbusch, Ersatzansprüche bei Personenschäden (7th edn, 2000), no. 97.
125 OLG Brandenburg 24 October 1995, OLGR 1996, 76, 77.
126 BGH 10 December 1996, NJW 1997, 941, 942.
127 BGH 10 December 1996, NJW 1997, 941, 942; BGH 31 March 1992, NJW-RR 1992, 852.
128 OLG Oldenburg 10 November 1992, NJW-RR 1993, 798.
129 BGH 3 March 1998, NJW 1998, 1634, 1636; BGH 6 July 1993, NJW 1993, 2673.
130 BGH 3 March 1998, NJW 1998, 1634, 1636.
Female claimants
In the case of female claimants, two questions have to be distinguished.
The first is to decide whether a housewife suffers a loss of earnings
and if so, how is that to be calculated. Secondly, how should a court ap-
proach a claim by a woman who may either give up work altogether,
work part-time, or have breaks in her career, in order to bear and/or rear
her children? It should be noted that this traditional approach nowadays
strikes many as being sex-oriented discrimination. Even more commenta-
tors, however, would regard it as being substantially incorrect, for house-
work is not necessarily done by women (Germans prefer to speak of the
‘home-spouse’ = Hausgatte) and the statutory leave for the upbringing of
small children (Elternzeit) is, nowadays, available to both parents, even
cumulatively. This should not, however, obscure the fact that the like-
lihood of such events occurring is still much greater where females are
concerned.
Housewife According to the original concept of the BGB, the wife had the
statutory duty to keep the house and to care for the children. If she was
injured, the husband lost her ‘service’ and could claim under § 845 BGB.
Under modern family law, the spouses are partners with equal rights;
housekeeping is not a service owed by one spouse to the other, but an
alternative and equivalent way of contributing to the family support:
§ 1360 sentence 2 BGB. Taking this as a starting point, the Federal Court
has found that housewives suffer a loss of earnings as well, which has
to be compensated according to § 842 BGB.131 A loss of earnings can be
claimed if the injured party cannot perform his or her domestic work
which is considered to be an economic value by which he or she is able
to fulfil his or her maintenance obligation towards the family. House-
hold chores are in this context an economic activity which is comparable
to any other gainful employment.132 Nevertheless, it has to be pointed
out that an injured homemaker cannot ask for damages, if the domestic
work is performed without a legal maintenance obligation, e.g., within a
131 BGH 25 September 1962, BGHZ 38, 55, 57; BGH 25 September 1973, NJW 1974, 41,
42.
132 BGH 25 September 1962, BGHZ 38, 55, 57; BGH 25 September 1973, NJW 1974, 41, 42:
‘Nicht schon die Betätigung der Arbeitskraft als solche, sondern nur die für andere in
Erfüllung einer gesetzlich geschuldeten Unterhaltsverpflichtung geleistete
Haushaltstätigkeit ist eine der Erwerbstätigkeit vergleichbare, wirtschaftlich ins
Gewicht fallende Arbeitsleistung und stellt somit einen Erwerbsschaden dar’.
non-marital partnership133 or in cases of voluntary care of the grandson

by the grandmother.134
Though the dogmatic approach to these problems nowadays seems to
be settled, the problem of calculation of the actual loss still remains to be
solved.
The victim is entitled to claim the costs of a substitute, but the calcula-
tion of the costs of an adequate substitute causes further difficulties. In
this context the tables of Schulz-Borck and Hoffmann are very helpful.135
These tables provide information about the labour time of a homemaker
in relation to the number of family members and standard of living of the
family (Anspruchsstufe des Haushalts), the time a substitute is needed (con-
sidering the claimant’s injury) and lastly the market price of qualified
substitutes. The Federal Court136 has accepted the application of these ta-
bles, if the court knows and uses them as an aid in order to assert the real
or concrete loss and not in order to evaluate an abstract loss. Moreover,
the claimant can demand the gross costs including social security contri-
butions, which he has to pay as employer for his employee, if he actually
employs a substitute. If the claimant does not hire a substitute, she or he
is only entitled to ask for the net costs.137 (Compare the slightly different
situation where family care is concerned, pp. 156–7).
Pregnancy and child care

Pregnancy and birth: the defendant cannot argue that the female victim
would have had no earnings during the time of her pregnancy if maternity
protection rules are applicable. The German Mutterschutzgesetz (now backed
by EC law138 ) provides for maternity pay whenever an employee is unable
133 OLG Köln 11 March 1982, ZfS 1984, 132; against it OLG Karlsruhe 6 March 1992, DAR
1993, 391; the BGH has not ruled on this question yet but it stated that the loss of
earnings of a claimant who was injured before her marriage is realised at the time she
celebrates the marriage, since the partial destruction of her earning capacity
subsequently lowers her contribution to the maintenance of her family, BGH 25
September 1962, BGHZ 38, 55, 57; in another case the BGH held that the household
chores of a widow in a subsequent non-marital partnership was not to be seen as a
gainful employment or something comparable, BGH 19 June 1984, NJW 1984, 2520.
Domestic work is therefore not comparable with a gainful employment as long as the
claimant is not married or living in a registered partnership.
134 OLG Celle 12 November 1981, VersR 1983, 40.
135 Cf. Schulz-Borck and Hofmann, Schadensersatz bei Ausfall von Hausfrauen im Haushalt (5th
edn, 1997).
136 BGH 10 October 1989, NJW-RR 1990, 34. 137 BGH 10 October 1989, NJW-RR 1990, 34.
138 Directive 92/85/EC of 19 October 1992 [1992] OJ L348/1, 28 November 1992.
to work because of her pregnancy, especially six weeks before and eight
weeks after the birth. Therefore, she would have had earnings during this
time. Pregnancy and birth are not facts which exclude earnings in this
regard.139
Child care: the Federal Court has not yet ruled on this matter for the time
after birth, but the Court of Appeal of Zweibrücken140 has held that the
mother is entitled to claim compensation for loss of earnings, unless it
appears that she would not have been able to perform her paid work and
the child care cumulatively. Thus, it has to be asked if the claimant would
have had a break in her career in order to care for the child. According to
the court, the claimant must show that she would have handled employ-
ment and child care together, for instance by support of her family or by
sending the child to the Kindergarten. Today, the burden of proof might
have changed because more and more women manage to reconcile child
care and professional work, and the state provides more assistance in this
respect. But there is no recent court decision on this point.
Even if a female claimant has had a career break to raise a family, she
can still recover loss of earnings as a homemaker under the preconditions
stated above. The Federal Court141 has also decided that the victim could
recover the costs of a housekeeper as loss of earnings while she was study-
ing, as she was unable to combine child care and her studies, but she
would have managed both but for the injury.
Key man in an incorporated business

It is disputed how the court should compensate the ‘key’ man or woman
in a small, incorporated business where the real loss is that of the com-
pany and not the individual. The company is not entitled to recover its
economic losses under § 823 BGB. According to § 823 paragraph 1 BGB,
only the injured can claim compensation for an economic loss which
results from a violation of his interests and rights protected by the above-
mentioned statute. Even though the established and operating business142
is protected by § 823 paragraph 1 BGB as ‘another right’, it is not a direct
interference with the business if an employee of the company is injured
by the tortfeasor.143 On the other hand, § 823 paragraph 2 BGB requires
the violation of a ‘protective law’, i.e., that the defendant must violate a
139 LG Hamburg 19 January 1979, MDR 1970, 670.
140 OLG Zweibrücken 24 February 1978, VersR 1978, 1029 ff.
141 BGH 4 December 1985, VersR 1985, 356 ff. 142 See GLT, pp. 71–3.
143 BGH 19 June 1952, BGHZ 7, 30, 35 ff.
statutory provision designed for the protection of the claimant. However,

there is no statutory provision which protects the economic interests of
the employer in the working ability of his employees. Only § 826 BGB may,
in exceptional cases, serve as a basis for a claim of the company (inten-
tional injury to an employee in order to cause damage to the company).
The ‘key’ person himself may claim compensation for lost earnings ac-
cording to the rules stated above. If he is not an employee in terms of
labour law but had worked for the company as shareholder or company
organ (executive director), the calculation of his lost income may cause
problems.144 But, as a matter of principle, the key person can only claim
his own damage, not the damage of the company (no Drittschadensliqui-
dation145 ). The Federal Court, however, insists that there is one exception
to this general rule,146 although its case law has been strongly criticised
in academic literature. Under certain circumstances the Federal Court
considers the damage of the company to be part of the damage of the ‘key’
person.147 For this to happen certain conditions must be satisfied.
First, the injured party must hold all (or the crucial majority) of the
shares of the company. To put it differently, in practical terms the com-
pany must be owned by the injured party. Secondly, the injured party,
prior to the accident, must have been working for his company. Lastly, he
must show that he would have earned money for his company but for the
accident. Under these circumstances, the defendant has to compensate
the hypothetical profits of the company. The Federal Court has thus held
that in this case the incorporated company is nothing but a part of the
claimant’s assets (Sondervermögen) which the claimant has set apart for rea-
son of tax, liability, and so on. If the injury causes a damage in this special
asset, because the claimant is prevented from working for his company,
he also suffers a personal loss which is a set-back for his personal assets.
In the first decision of the Federal Court it remained doubtful whether
the claimant was entitled to claim damages for himself or in the name of
his company.148 Later, the Federal Court pointed out that only the injured
partner is entitled to recover the company’s loss in respect of his shares
144 For details see Staudinger/Schiemann (1998) § 252 BGB nos 50–52; Vorbemerkung zu §
249 BGB no. 61.
145 For a discussion of this notion see GLT, pp. 64 ff.
146 BGH 13 November 1973, NJW 1974, 143 ff.; BGH 8 February 1977, NJW 1977, 1283 ff.;
BGH 6 October 1988, VersR 1989, 94 ff.; BGH 15 November 1990, VersR 1991, 678 ff.
147 Cf. Karsten Schmidt, Gesellschaftsrecht (4th edn, 2002), § 40 III 4: ‘gesellschaftsfreundlicher
Durchgriff ’.
148 BGH 13 November 1973, NJW 1974, 134.
and thus neither the company nor other partners can claim compensa-
tion.149 Therefore, the defendant has to make payments to the claimant
and not to the claimant’s company.
Future medical care

In general
If the injured person needs care by others, he or she can claim the resulting
costs from the tortfeasor. According to § 843 I BGB the costs have to be
paid in the form of an annuity. If, however, the injured person can show
convincing reasons, he may ask for (and receive) a lump sum, § 843 III BGB
(see chapter 4 as to the method of calculation).
The ‘damage’ which is to be compensated under § 843 I BGB is not the
costs of the care, but the special needs of the injured party caused by the
wrongful act.150 The plaintiff has to show and prove these needs;151 then
the court will award damages on the basis of actual or future expenses
which are deemed necessary and reasonable to meet such needs.
What care is adequate?

Adequate care in this sense does not mean the cheapest alternative. Al-
though the injured person/claimant is generally expected to mitigate his
loss as much as is reasonably possible (§ 254 II BGB), the question of proper
care is to a large extent a personal decision; and it is accepted that the
law of damages may not impinge on the freedom of choice of the injured
party as to how he wants to live (or how his representatives think it best for
him to live). According to a fundamental principle of the law of damages,
adequate compensation has to take the dignity of the victim and his right
to adequate compensation into account.152 On the other hand, adequate
care does not mean ‘optimal care’ either. If the decision of the victim is
reasonable (within a broad range of discretion), it will be accepted and
form the factual basis of his compensation claim.153 If the costs of the
chosen lifestyle are disproportionately high, the injured party will not be
149 BGH 8 February 1977, NJW 1977, 1283 ff.; BGH 6 October 1988, VersR 1989, 94 ff.;
15 November 1990, VersR 1991, 678 ff. For a detailed discussion and critique see
Staudinger/Schiemann (1998), Vorb. vor § 249 BGB nos 59, 60 with further
references.
150 RG 23 May 1935, RGZ 148, 68, 70/71; BGH 29 October 1957, NJW 1958, 627; BGH 15
December 1970, VersR 1971, 442, 444; MünchKomm-BGB/Stein (3rd edn, 1997), § 843
BGB no. 40.
151 BGH 13 January 1970, MDR 1970, 315. 152 BGH 19 May 1981, NJW 1982, 757, 758.
153 BGH 8 November 1977, VersR 1978, 149; OLG Stuttgart 30 January 1997, VersR 1998,
366; OLG Bremen 21 April 1998, NJW-RR 1999, 1115, 1116.
able to recover the full amount.154 Hence, the costs of care within the fam-
ily have to be compensated even if they are higher than institutional care,
because they are outweighed by personal and emotional benefits for the
injured.155 On the other hand, the tremendous costs of permanent total
care in an institution are no argument against full compensation, if such
an arrangement is chosen by the representative of the injured party and
is medically indicated.156
How are the costs of care calculated?

Professional care
If the victim intends to rely on professional care, the recoverable costs
include not only the net salary of the carers, but also their tax and social
security contributions.157
Family care
Principle If the care is performed by family members (spouse, parents, chil-
dren), it is normally free of charge vis-à-vis the victim, notwithstanding
the possibility that the care is based on a regular employment contract –
in this case the same rules apply as with regard to professional care. If the
family help is gratuitous, this does not preclude a compensation claim
by the victim. It is his special needs which justify the claim, not actual
expenses (see p. 154). The explanation for this rule is simple: the Federal
Court sees no reason why the altruistic help of family members should
relieve the wrongdoer of his liability. In addition, the court refers to the
principle underlying § 843 IV BGB: support by family members is not to be
deducted from the amount of damages which the wrongdoer has to pay
to the victim.158 It does not matter whether the family members would
have a profitable income but for the care-taking – the value of the care as
such has to be compensated, even if it is performed by a housewife or by
a retired or otherwise not gainfully employed person.159
How are the damages assessed in these cases? If there is a loss of earnings on the
part of the carer, this may be indicative of the value of the care, the market
154 OLG Bremen, ibid. 155 OLG Bremen 21 April 1998, NJW-RR 1999, 1115, 1116.
156 BGH 25 June 1996, NJW 1996, 2508; cf. OLG Bremen ibid.: monthly DM42,000
(= €22,000)!
157 BGH 10 November 1998, NJW 1999, 421, 422/3.
158 BGH 22 November 1988, NJW 1989, 766; see also BGH 8 November 1977, VersR 1978,
149, 150; BGH 24 November 1995, NJW 1996, 921; BGH 4 March 1997, NJW 1997, 1853;
BGH 8 June 1999, NJW 1999, 2819.
159 BGH 8 November 1977, VersR 1978, 149.
value of the care being the upper limit. The market value is the decisive
standard for the assessment of damages in all cases: how much would the
victim have to pay for comparable care by professional persons?160
Restrictions and modifications The courts apply this standard, albeit with
some restrictions. The first concerns that part of the salary which is de-
ducted for tax and social security contributions: since a non-employed
family member does not have to pay these contributions, they are not
awarded by the courts.161 This has been criticised in the literature, because,
as a general principle, the amount of damages is not determined by the
actual expenses but by the special needs of the victim (see p. 154). The com-
pensation is to enable him to buy the necessary care ‘in the market’ – this
would include the gross payments to an employed carer.162 The Federal
Court has confirmed its position recently, but – at the same time – indi-
cated some doubts and allowed an exception to the net salary rule.163 In
that case, a severely injured daughter was cared for by her mother, a
housewife who was never in gainful employment. The statutory regula-
tion of care insurance, introduced in Germany as a new branch of the
social security system, tries to instigate home care instead of institutional
care, and therefore pays benefits for family members who provide the nec-
essary care which otherwise would have to be performed by professional
(and paid) staff.164 The payments made by the insurer to family care-takers
mirror the salary for gainful employment, including contributions to the
old age pension insurance (so the carer may acquire pension rights in his
own right). When it comes to the scope of tortious liability, the Federal
Court then argues in the usual way. The fact that the social security has a
statutory duty to pay the family carer should not relieve the tortfeasor of
his duty to compensate all the damages caused by him. The damage of the
daughter is her need of intensive care, and this need persists even if it is
(professionally) met by others. As a result, the defendant has to reimburse
all payments which the care insurer has made (and will have to make)
to the mother, including contributions to social security.165 It is unclear
whether this judgment could be regarded as a first step away from the
established net salary rule of the court.
160 BGH 15 October 1985, VersR 1986, 264; BGH 10 November 1998, VersR 1999, 252.
161 BGH 29 March 1988, NJW 1988, 1783, 1784; BGH 10 October 1989, NJW-RR 1990, 34;
BGH 24 April 1990, NJW-RR 1990, 962.
163 BGH 10 November 1998, NJW 1999, 421.
164 § 3 S. 1 Nr. 1 a Sozialgesetzbuch VI (Rentenversicherung; Retirement Insurance Act);
§ 44 Sozialgesetzbuch XI (Pflegeversicherung; Geriatric Care Insurance Act).
165 For subrogation rights see chapter 4.
The second restriction concerns the level of compensation for a fam-

ily carer. Some courts tend to allow further deductions from the ‘market
price’ for adequate care. More precisely, they argue that: (a) care within
the family unit is less burdensome to the provider (no distance to the
workplace, less time-consuming); (b) some care is owed by the relatives
anyway (basic personal contact and help); and (c) the ‘market salary’ is cal-
culated for professional staff while family members usually are untrained
and cannot provide the same quality of care.166 It seems doubtful whether
these decisions are compatible with the leading principle of § 843 I BGB
(see p. 154).
The third restriction draws a delicate line between compensatory care
by family members and emotional or psychological attachment and help
which only close relatives are able to provide and which, accordingly,
cannot be bought for money on the commercial market. Interpersonal
emotions and love cannot be measured in economic terms.167 The Federal
Court speaks of ‘non-fungible functions’ of parents, which include time
spent for conciliation, appeasement, distraction or some training for reha-
bilitation.168 The court admits that even such functions can be performed
by professionals, but they are compensable only if (a) professional care
would be of comparable quality, and (b) professional care would have
been reasonably considered in the given circumstances. If parents spend
an additional hour per day with the injured child, professional care would
rarely be considered as a substitute – the time spent is therefore not re-
coverable care.169
Care performed by the wrongdoer If the injury has been caused by a fam-
ily member (e.g., negligent supervision of a child), this relative may pro-
vide the necessary care later on.170 Although the wrongdoer may feel
himself under a moral duty to take over the care, there is no such duty
in German law. According to §§ 251 I, 843 BGB the victim has to be com-
pensated in money, the tortfeasor does not owe personal care. But such
an obligation may arise from family law.171 In any event, if the tortfeasor
166 OLG Hamm 17 August 1993, NJW-RR 1994, 415 (allowing, however, a special bonus for
the mother who had undergone special training to care for an injured child); OLG
Bremen 21 April 1998, NJW-RR 1999, 1115; see also BGH 22 November 1988, NJW 1989,
766, 767.
167 BGH 22 November 1988, NJW 1989, 766, 767 (cf. GLT, p. 909).
168 BGH 8 June 1999, NJW 1999, 2819, concerning destruction of the teeth by sugared
baby tea.
169 BGH 8 June 1999, NJW 1999, 2819, 2820. 170 Cf. Hunt v. Severs [1994] 2 AC 350.
171 OLG München 30 May 1995, NJW-RR 1995, 1239, quoting §§ 1601, 1610 II BGB in a case
where a mother has negligently caused the injury of her child.
actually takes over the care, he or she fulfils the claim of the child for
proper care ‘in natura’ – there is no right of the child to obtain addi-
tional financial compensation.172 On the other hand, the carer cannot
charge a salary because, in one or the other way, he or she is liable to
provide adequate care and has chosen this alternative to meet his or her
responsibility.
A problem arises if others are liable as well. In the only case reported
in Germany, the negligent mother had taken out liability insurance and,
according to § 3 no. 2 Pflichtversicherungsgesetz, the injured child had a
claim against his mother and the insurance company as joint and several
debtors. In the internal relationship between the debtors, it is the insur-
ance company which has to carry the burden of compensation in the end
(§ 3 no. 9 Pflichtversicherungsgesetz). Since the mother has already satis-
fied the needs of her child for personal care in natura, the financial claim
of the child against both debtors switches by cessio legis to the mother
(§ 426 II BGB), who can then claim from the insurer an appropriate sum
for her care (see p. 152).
Is the victim bound to use the money he has received for adequate care,
or can he do with it as he likes?
In general
German law in this respect seems to be somewhat inconsistent. If a person
is injured, the tortfeasor owes in principle ‘restitutio in integro’: § 249 S. 1
BGB. Alternatively, the victim may ask for a sum of money in order to
organise the reparation himself: § 249 II 1 BGB. This applies to damage
to property as well as to personal injuries.173 But whether the victim is
then free to dispose of the money he receives is, according to the case
law, answered differently: in the case of damage to property, the owner may
take the money and leave his property, e.g., his car, unrepaired.174 This
rule has been implicitly confirmed by the latest statutory reform, which
now denies the claim of the owner with regard to the VAT (which is to be
paid only in case of actual repair), but thereby acknowledges the claim in
all other respects (§ 249 II 2 BGB).
In case of personal injury, a comparable freedom of disposition is denied
by the courts, because money paid for an operation or medical treatment
which is not performed would amount to non-pecuniary damage, which
172 OLG München ibid. 173 See GLT, p. 907.

174 BGH 23 March 1976, BGHZ 66, 239, 241; BGH 4 May 1982, NJW 1982, 1864, 1865.
is recoverable only under special circumstances (see p. 60).175 If the victim

receives the money, but does not have the operation, he has to pay the
money back.176
These rules do not apply, however, if damage can be claimed under
§ 843 BGB (Financial compensation for persisting special needs, see
p. 160). The legitimating basis for compensation under this provision is
not the actual expenses of the victim, but his existing, additional needs
caused by the injury (see p. 154). Thus, if the victim needs someone to
help him or care for him, and collects money which is to enable him to
pay for future care, he is entitled to keep the money if later on he decides
to manage without help177 – but only if and as long as the need for care
continues to exist. Should the care become unnecessary from an objective
point of view, the tortfeasor can ask for a judgment to modify the original
award with effect for the future (§ 323 ZPO).
Money received as compensation for family care178
The victim recovers the money as compensation for his own damage (i.e.,
his special needs, see p. 154), but in reality the economic loss is on the side
of family members. Does the victim have to reimburse them?179 There
seems to be no published court decision on this issue, and the views ex-
pressed by academic writers are split. Some would base a claim by the
relative on §§ 683, 670 BGB (agency without mandate). Yet this is not with-
out its difficulties since the relative did not act with the (necessary) intent
to do the ‘business’ of the tortfeasor; and this would make it difficult
to reply on these provisions of the Code.180 Other authors try to rely on
provisions of family law analogously, which would give the carer a claim
against the victim: § 1648 or § 1607 III BGB.181 But these theories seem to
have little practical relevance where personal care is provided by family
members. For in these cases there exists a functioning family unit with
175 BGH 14 January 1986, NJW 1986, 1538 = GLT, case no. 142; OLG Köln 19 May 1999, VersR
2000, 1021; Hermann Lange and Gottfried Schiemann, Schadensersatz (3rd edn, 2003)
§5 IV 6, pp. 228–30; cf. GLT, p. 908.
176 Condictio ob rem, § 812 I 2 Alt. 2 BGB, MünchKomm-BGB/Oetker (4th edn, 2000), § 249
BGB no. 355; Lange/Schiemann, n. 175 above, § 5 IV 6, pp. 228–30.
177 RG 23 May 1935, RGZ 148, 68, 70/71; RG 11 June 1936, RGZ 151, 298; BGH 15 December
1970, VersR 1971, 442, 444; KG 15 February 1982, VersR 1982, 978, 979;
Erman/Schiemann, BGB (10th edn, 2000), § 843 nos 11, 12.
178 For the dogmatic problems under German law, see GLT, pp. 546–7.
179 See GLT, p. 909.
180 Cf. Esser and Weyers, Schuldrecht (8th edn, 2000), II/2, p. 15; Karl Larenz, Schuldrecht
(14th edn, 1987), I, p. 536 no. 40.
181 Thiele AcP 167 (1967) 193, 221.
close mutual bonds. The sums recovered are considered part of the family
budget which is not split up into individual claims. The distribution of
the money seems to be left to family autonomy.
Other potential heads of damage

Functions of § 843 BGB, beyond loss of earnings and the need of special
care, are essentially as follows.
Preservation of physical health; improvements through

operations/medical treatment after the injury
To this end, the victim may need a special diet or better food in gen-
eral,182 or he has continuously to take medicaments, tonics and the like183
or he has to have a medical check-up from time to time.
Mitigation of persisting physical or emotional impairments

Under this heading, the victim may claim the costs of a sanatorium or
therapy,184 and the maintenance or replacement of various aids and equip-
ment (wheel-chair, lift in his home, glasses, hearing aids etc., the original
acquisition being financed under § 249 II BGB).
Compensation for continuing losses or disadvantages in a

professional career
The most important example in this context is the loss of earnings (see
p. 70); the costs of a special school education or special vocational training
may also fall under this head of damages.185
Compensation for increased needs in daily life

The need for personal care is the most prominent example (see p. 154).
But German courts have granted compensation in many other respects.
Thus, a rent increase has been granted if the victim, because of his injury,
had to move to another, more expensive apartment (see p. 114). Likewise,
the increased costs of public transportation (or the use of a car) have
182 RG 11 June 1936, RGZ 151, 298.

183 BGH 29 October 1957, NJW 1958, 627; BGH 11 February 1992, NJW-RR 1992, 791.
184 LG Bonn 12 April 1995, VersR 1996, 381, 382.
185 BGH 11 February 1992, NJW-RR 1992, 791. If, however, it takes more time for the victim
to finish his education and to enter gainful employment, this particular damage has to
be compensated under § 842 BGB (loss of earnings); see also BGH 23 October 1984,
NJW 1985, 791, 792; OLG Düsseldorf 30 December 1968, VersR 1969, 671.
been allowed where the circumstances so demanded.186 An award has,

likewise, been made to cover the cost of shuttling a child between the
institution where they have to live and the family home.187 The cost of
professional help in the household has also been awarded.188 Finally, to
give one last illustration, maintenance work in the house or garden, if
such work had previously been done by the injured himself, has also been
compensated.189
Lost years
Under this heading, we refer to the problem addressed in Pickett v. British
Rail Engineering Ltd.190 There is no comparable discussion in Germany:
the interests of surviving relatives are taken care of with regard to lost
maintenance claims against the deceased (§ 844 II BGB); the expectation
of inheriting savings which the deceased would have accumulated but for
his death has – as far as we can see – never been considered a potential
head of damages: Germans would probably view this loss as a ‘risk of
life’.
Premature death, though, can influence compensation for the victim in
two respects. First, the non-pecuniary damages awarded to a severely injured
person (Schmerzensgeld) have been reduced by the BGH in proportion to the
reduced life expectancy: the damages are to compensate for suffering,
and the period of suffering is shortened by the imminent death.191 This
has been criticised by other courts and in the literature. According to
these views, the loss of years should be a criterion for awarding a higher
amount of non-pecuniary damages than usual.192 Other decisions seem
to steer a middle course: in cases of HIV infection, they grant annuity
payments because the remaining life expectancy is too uncertain to allow
the calculation of a lump sum payment. In this context the loss of years
works in the way mentioned above: shorter life means less compensation.
186 BGH 10 November 1964, NJW 1965, 102; BGH 18 February 1992, NJW-RR 1992, 792 ff.
187 OLG Hamm 17 March 1994, DAR 1994, 496, 498.
188 BGH 25 September 1973, NJW 1974, 41, 42; BGH 4 December 1984, NJW 1985, 735; BGH
18 February 1992, NJW-RR 1992, 792; OLG Karlsruhe 6 March 1992, DAR 1993, 391; OLG
Oldenburg 28 July 1992, VersR 1993, 1491; KG 15 February 1982, VersR 1982, 978, 979;
OLG Bremen 21 April 1998, NJW-RR 1999, 1115.
189 OLG Koblenz 7 October 1993, NJW-RR 1994, 1049, 1050. 190 [1980] AC 136.
191 BGH 16 December 1975, NJW 1976, 1147, 1149 (the victim had survived the accident
only for a short time); KG 26 February 1973, NJW 1974, 607, 608; OLG München
16 December 1969, VersR 1970, 643.
192 OLG Oldenburg 19 April 1994, VersR 1994, 1071, 1072; MünchKomm-BGB/Stein § 847
BGB no. 8, 31, 32; Staudinger/Schäfer § 847 BGB no. 82.
But in calculating the monthly instalment, the courts tend to take into
account the reduced quality of life of the victim, who knows that his life
chances are severely impaired. Thus, the monthly payments have to be
calculated generously.193
Secondly, premature death influences the loss of earnings which is com-
pensated, as a matter of rule rather than of facts, by periodical payments
(§ 843 I BGB) which end at the time when the victim is likely to die. But
even in the case of compensation by a capital award (§ 843 III BGB), life
expectancy is an important factor of calculation. Consequently, loss of
earnings is a head of damages only as long as the victim lives; lost earn-
ings because of lost years are disregarded in German law.
Italian law
Introduction
In addition to damage qualified as danno biologico (injury to health per se
including loss of amenity of life, aesthetic loss, social life, etc., discussed
in chapters 1 and 3) and danno morale (pain and suffering, in the sense
explained above), which are the headings of damage of Italian law which
correspond to non-pecuniary losses of the common law, the victim is also
entitled to be compensated for pecuniary loss suffered by him as a direct
consequence of his injuries. In Italian legal terminology this damage is
referred to as danno patrimoniale.
The term is a product of academic writing since the text of the Civil
Code, in the general rules governing damages from non-performance of
obligations (article 1223 ff.), refers simply to danno without any adjec-
tive. Only in tort law does the Code deal with ‘non-patrimonial’ damages,
which courts and academics refer to as danno morale. Two inferences fol-
low from the above. First, all losses not qualified as ‘non-patrimonial’ are
to be considered as ‘patrimonial’ (i.e., affecting the estate of the victim).
Secondly, danno morale is awarded only in tort cases, and it is considered
exceptional;194 non-performance of a contractual obligation cannot entail
danno morale.
Following the terminology of Roman law, the Italian law of danno pat-
rimoniale is divided into two general headings: damnum emergens (danno
193 OLG Hamburg 20 April 1990, NJW 1990, 2322, 2324; similar, but less clear BGH 30 April
1991, NJW 1991, 1948, 1951 (GLT, p. 45).
194 Subject to the very recent liberalising decisions of the Italian Supreme Court regarding
danno morale discussed in chapters 1 and 2.
emergente), which means all expenses paid by the victim and lucrum cessans
(lucro cessante), which means lost profits. Roughly speaking, we can say that
the first head of loss comes close to the English concept of special damages/
past losses while the second head of loss is nearer the English concept of
general/future pecuniary losses. But the analogy is not complete. For danno
emergente can refer to real, though future, losses and not to failed gains
which would be part of what the English would then call general damages.
Italian (like English) judges may well be tempted to start their calcu-
lations with the first item of damages but, for the reasons given in the
previous chapter, this separation does not figure in their judgments. Re-
ferring, as they do, to the future, these kind of losses involve a degree of
speculation. The court must thus begin with the position of the victim at
the date of the trial, and then be guided in its evaluation of the future by
the evidence offered by the victim and by the reports usually prepared by
different types of experts (doctors, actuaries etc.).
The court often sets out to liquidate a life annuity. This will happen if it
has been requested by the claimant to do so or if it is considered as more
appropriate by the court itself. As already stated, however, lump sums
seem to be the rule. No control is exercised over the use which the claimant
will make of any sums awarded. In practice this means that awards made
to the claimant for, say, equipment or specialised care may subsequently
be diverted by him to other purposes with complete impunity.
The calculation of future losses makes reference to the pre-accident
earnings, and to the future possible earnings which the victim could ex-
pect, taking into account his training, education, abilities, choices and
the opportunities available to him. According to the circumstances, past
earnings can serve as the basis of the calculation, but the victim is allowed
to give evidence that in the future his earnings could be greater.
Method of calculation
Such calculations, inevitably, include a certain amount of speculation. In
order to work out what level of earnings the victim could have reached in
the future, courts use the same techniques connected with the multiplier-
multiplicand approach. No statute requests the courts to use this method;
but it has been in practice for many decades now.
In Italian case law, courts refer to this kind of calculation in terms of
an abstract concept, which looks at the victim as a worker as an employee
or self-employed person. This concept is called ‘specific working capacity’
(capacità lavorativa specifica). Before the invention of the head of loss named
danno biologico the courts, in order to give the victim greater compensation,
also used another head of loss called ‘general working capacity’ (capacità
lavorativa generica) which has now been abandoned, being included in the
notion of danno biologico.
The term ‘work’ includes employment, self-employment, the activity of
entrepreneurs, as well as the activity of persons who do not receive regular
remuneration, such as housewives, pensioners, the unemployed, minors
and the like.
Future loss of earnings (capacità lavorativa

specifica, specific working incapacity)
This item concerns the reduction or cessation of earnings. It may refer
to the present or to the future, and it may concern merely a temporary
reduction or a permanent reduction or cessation. The injured party must
overcome difficult problems concerning evidence of the loss sustained by
him. Case law is not based on uniform criteria related to the appreciation
of evidence. Thus, we find decisions having recourse to presumption of
evidence (presumed damage, danno presunto) and others which require,
as is deemed more appropriate, evidence of actual damage (danno attuale).
This, of course, must be adduced by the victim of the tort.
An example of the former trend can be found in a decision which con-
tains the following dicta:
The economic damage to an individual can be liquidated only if it is ascertained,
even through rebuttable presumptions, that the injured party, due to the impair-
ment of his psycho-physical integrity, will incur a loss of his specific future earning
capacity.
In that case the Italian Court of Cassation confirmed the decision of

the Court of Appeal which, notwithstanding the existence of ascertained
disability equal to 25 per cent, had excluded future losses because the
victim, instead of providing evidence of the reduction in earnings, had
merely claimed an automatic economic relevance of damage to health, in
particular aesthetic damage.195
An example of the second approach can be found in a decision of the
Supreme Court of 2001.196 According to this decision the ascertainment of
after-effects, which influence the specific working capacity, does not imply
the automatic obligation of the wrongdoer to compensate the economic
195 Cass. 28 April 1999, no. 4231, Resp. civ. e prev., 2000, 110.
196 Cass. 29 October 2001, no. 13409, Giust. civ. Mass., 2001, 1814.
damage consequent on the reduction of the earning capacity, as a result of

the reduced specific working capacity. Therefore, such economic damage
due to disability must be ascertained ‘through evidence that the injured
party performed or, if such person was not working yet, would presumably
perform an income-producing activity. However, the damage cannot auto-
matically be liquidated on the presumption that the reduction of specific
working capacity is certain’.
This conclusion seems to be more appropriate, because it conforms
to the function of compensation of civil liability rules on injury to the
psycho-physical integrity of the individual. The Court of Cassation has long
since maintained this opinion. Thus, in its decision of 18 November 1982,
no. 6234, it stated that:
the assessment of the economic damage suffered because of personal disability
by a working person, once the injury and its correlation with the damaging event
have been proved, must still be based upon an actual reference-situation, be-
cause compensation for the damage deriving from torts – having the function
of restoring the assets of the injured party to the same situation as they would
have been without the damaging event – is based upon and limited by the ac-
tual loss incurred, to be determined on the basis of an element of certainty.
Consequently, the trial judge must consider the actual amount of the injured
party’s earnings, and he is not allowed to replace such an element with the
salary due in theory to the workers of the category to which the injured party
belongs.197
Case law makes a distinction between methods of calculation, according

to the kind of employment, if any, in which the victim was involved. So
the results in the amount of damages depend upon the category in which
the victim is included.
Categories of victims
Employees
As regards employees, proof must be given concerning the salary received.
This must include the tax returns and any other evidence suitable for
such a purpose. The reduction or loss of earnings is connected with the
prospective or actual working capability.
Income from employment includes all earnings relevant to the worker’s
remuneration, namely wages (or salary), production bonuses, additional
monthly payments as well as all reimbursements connected with the per-
formance of the working activity. If the victim has two occupations (as
197 Cass. 18 November 1982, no. 6234.

is notoriously frequent in Italy) the income from the second occupation

must also be taken into account, provided that it does not come from an
unlawful activity and, always, on condition that it can be proved (which
may not always be easy to do if it was paid in ‘cash’ in order to evade tax).
Income is calculated before tax.
The income taken into account is only earned income, not unearned
income. The loss of profit must be direct and immediate. Net business
income is included among the items, thereby excluding expenditure in-
curred for the production of such income. Social security contributions
are also included (provided that they are not charged to third parties). It is
disputed whether taxes are to be included or not: the Court of Cassation
deems that they are not included in the event of temporary incapacity,
while they are included in the event of permanent incapacity.
Social security contributions are reimbursed to the employee only if
the accident has resulted in a permanent inability to work; in all other
cases such costs are charged to the employer and do not affect the worker’s
income.
Self-employment and entrepreneurial activities

For earnings from self-employment, the highest net income produced
in the last three years is considered. However, the earnings of an en-
trepreneur carrying out his activity for a medium or large firm are dif-
ferentiated from the income of a small entrepreneur. In the first case, it is
difficult to separate earned income from capital gains. As the two kinds of
income are to be differentiated – the former alone being compensated198 –
an ideal percentage of income reduction is determined. In the second case,
on the other hand, where capital gains are mixed with earned income, all
the net profit of the firm is to be taken into account.199 Production costs
are excluded from income and therefore from compensation.200 For the
self-employed, social security contributions are also calculated.
Housewives
There is a dispute in case law with regard to compensation for future
loss to housewives. Some judges deem that housewives are entitled only
to compensation of danno biologico;201 others have awarded for damages
arising from the loss of future employment.202 Yet a third group, have
198 Cass. 24 May 1993, no. 5832. 199 Cass. 13 October 1997, no. 9959.
200 Cass. 15 November 1993, no. 11271. 201 e.g., App. Milan, 19 October 1993.
202 Trib. Pisa, 16 January 1985.
liquidated damages arising from the economic value of the employment

of a domestic helper.203
The Court of Cassation has accepted this argument. It has further main-
tained that the housewife’s work is not limited to doing the housework,
but also consists of the management of family life and it has also awarded
damages for the loss deriving from the impossibility of carrying out work
outside the household.204 In any event, courts state that the activity of
housewives has its own dignity and is therefore considered in its eco-
nomic effects, which are reduced if the housewife is impaired because of
the injury. As the Supreme Court has put it:
A housewife incurs an injury, to be recognised as an economic damage in the strict

sense, therefore compensatable separately from and in addition to danno biologico,
every time the tort results in an impairment of the productive capacity, expressed
in this case by fulfilment of the so-called household tasks. This conclusion is sup-
ported by the acknowledgement of the housewife’s activity as a working activity
in the strict sense, which is, therefore, protected by art. 4 of the Constitution, and
by the principle of full compensation for personal injuries. This means that not
only health, a value protected by art. 32 of the Constitution, is to be compensated,
but also any injury to any constitutionally relevant interests. Such damage is to
be compensated equitably by the method of capitalisation of the housewife’s no-
tional income. The income can be determined by referring to the daily income
of a full-time domestic helper, or to the income of a domestic helper who works
by the hour, or to the income compared with the triple of the non-contributory
pension, and in any case in accordance with art. 2056 of the It. Civil Code.205
Compensation for damages for gains arising from unlawful activities

is excluded (e.g., prostitution) even though the possibility of subjecting
even this income to tax levy is now being discussed.
Pensioners
Pensioners are not entitled to compensation. But they can prove that they
have a residual specific working capacity or that they have an occupation
concurrent with their pension. In such case, compensation will be calcu-
lated in accordance with the above-mentioned rules.
Minors
In order to calculate the income from permanent incapacity of minors the
courts used to resort to forecasts that took into consideration, in a me-
chanical and class-oriented way, the father’s profession or employment,
203 Trib. Venice, 8 June 1994. 204 Cass. 6 November 1997.

205 Cass. 11 December 2000, no. 15580, Resp. civ. e prev., 2001, 609.
while now other elements are taken into account such as age, social envi-
ronment, social life, as well as the aptitudes and talents of the child.
The circumstances of the case are decisive in order to establish the
quantum of compensation. For example, in a case concerning a young
girl who had completely lost her hair, it was specified that:
this serious impairment (affecting social life) implies, besides a psycho-physical
element in a strict sense, included in the scope of damage to health, an eco-
nomic element as well, connected with the negative influence that such impair-
ment has in the performance of activities ancillary to or integrating the normal
working activity, causing a reduction of the so-called competition capacity of the
individual.206
Loss of opportunities
The prospects of income acquisition are referred to as ‘loss of opportuni-
ties’. Courts are in disagreement on their qualification, i.e., whether they
are actual damages or loss of profit, but it seems more appropriate to
think of this as a case of loss of profit, such as future prospects for career
improvement.
Method for the calculation of compensation: lump sum, life annuity

For temporary inability to work, earnings lost for non-worked days are
added up and revalued, including holidays. For future earnings, reference
is made to temporary capitalisation. For total loss of income reference is
made to a capitalisation ratio taking into account the future years of life of
the injured party.207 The age taken into account is the age of the individual
at the time of liquidation of damages, considering the difference between
physical life and working life.208 If, however, the victim obtains a disability
pension, this is to be deducted from the result of the calculation.209 For
partial loss of income the same calculations are reduced in proportion.
In the event that re-employment is possible, it is necessary to consider
the kind of occupation and the relevant income that the victim will be
able to obtain.210
As stated above, in the domain of tort law alone the Civil Code pro-
vides211 that a settlement in liquidation can be ordered by the judge in the
form of a life annuity. The judge takes into account the conditions of the
206 Cass. 23 January 1995, no. 755. 207 Cass. 18 November 1999, no. 174.
208 These calculations are usually done by medical experts.
209 Cass. 12 July 2000, no. 9228. 210 Cass. 30 December 1993, no. 13013.
211 Article 2057.
parties and the nature of the injury. In such a case, the judge shall order
suitable precautionary measures. There are two conditions to be satisfied:
the damage must arise from a personal injury and the injury must be
permanent. Temporary inabilities are not included in the application of
this rule even if they entail long periods of treatment and rehabilitation.
The annuity is considered as established for life. Temporary annuities
are not allowed. Unlike French and German law, the choice between lump
sum and annuity is left to the judge, who decides according to the condi-
tions of the parties. The matter is not seen as a question of which is the
best way of sanctioning the wrongdoer. The prime consideration is what
best helps the recovery of the injured party. In deciding this, the judge
takes into account the following factors: on the side of the victim, his
age, his position in society, his culture and his hobbies. On the side of the
debtor/defendant he scrutinises carefully his ability to pay the amount
awarded to the claimant by the court.
The future length of the victim’s life is calculated according to the aver-
age foreseeable life in abstracto, not in concreto, i.e., in connection with the
seriousness of the injury that has been suffered. The average life’s length
is nowadays estimated as being seventy-five years.
Life annuity ordered by the judge is governed by the same provisions
concerning the special contract of life annuity included in the Civil Code
(article 1872). It is an aleatory contract, and the annuity can be established
by the transfer of movable or immovable property or the assignment of
capital.

All kinds of expenses due to medical treatment paid by the victim before
the trial or in the future are considered a loss to be compensated (danno
emergente). Evidence is usually easy to adduce. This head of damages results
in a variety of items: fees paid to doctors and other professionals, nursing
care, rehabilitation therapies, physical and health improvement, equip-
ment, means of transportation to reach the hospitals where the therapies
are offered, medical check-ups (whenever needed), etc. In these instances,
case law seems to be mainly concerned with the causal link of these costs
with the consequences of the injury. Expenses are considered recoverable
if they were necessary or even only useful – terms which, in substance,
come close to the common law requirement of reasonableness. The prin-
ciple in relation to recovery is always the same as referred to above: the
victim must be put in the same situation in which he found himself before
the accident, in order to avoid any unjust reduction of the award.
The necessity or utility of this kind of expenses are evaluated in concreto,

taking account of all the circumstances of the case. So, if serious injury
can be treated abroad, courts allow the victim to be compensated for the
medical treatment and for the necessary travel. If injuries are light, and
the victim can be cured in national hospitals, no recovery is allowed, due
to the lack of causal link, but also because the victim is under a duty to
mitigate his losses (article 1227 cod. civ.).
Medical treatment can be afforded by the national health service or
by private hospitals. Though some decisions have refused the award of
damages for expenses incurred in private hospitals,212 most courts al-
low the victim to receive private treatment, provided what he seeks sat-
isfies the requirements of ‘necessary or useful’. The debtor has to give
evidence of the lack of causality between the expenses and the injury.
Unnecessary expenses are those connected, e.g., with the provision of a
television in a hospital room, or visits to doctors following the accident
but for reasons unconnected to it. Evidence of this kind of (permissible)
expenses must be submitted in written form. Evidence is not implied, but
has to be adduced by the victim.213
Future medical expenses are recoverable if they are foreseeable accord-
ing to special calculations. A claim for future private treatment will suc-
ceed, provided it satisfies the requirement of necessity; and repayment of
this amount will not be possible if, in the event, the claimant decides not
to use these funds for the requested purpose but diverts them to other
uses.
Sums paid by private insurances relieve the debtor from paying this
kind of expenses according to the principle that the victim cannot profit
from a double compensation.214
212 e.g., Trib. Trieste, 14 January 1988.

213 Corte di Cassazione, 2 February 2000, no. 2037.
214 Appeal Court of Rome, 12 December 1998.
5 Collateral sources of revenue:
subrogation rights and
miscellaneous matters
English law
Social security payments
In England, the recovery and deduction of benefits is governed by the
Social Security (Recovery of Benefits) Act 1997. That came into force on
6 October 1997 and applies to all cases concluded after that date irrespec-
tive of when the litigation began, the accident occurred or the condition
complained of was contracted.
Major changes were instituted by the 1997 Act. First, general damages
for pain, suffering and loss of amenities are not subject to any deduction.
Secondly, loss of earnings, cost of care and damages for loss of mobility are
subject to recoupment of certain specified benefits particularly applicable
to each of those heads of damage.1 Thirdly, it is the defendant who is
liable to make the repayment to the Compensation Recovery Unit, not
the claimant. The full amount of all recoverable benefits must be paid
irrespective of whether they have been claimed by the claimant or not. It
is the responsibility of the defendants to obtain the relevant certificate
from the Unit and to pay what is due. The payment which is made to a
claimant must be, or is taken to be, net of repayable benefits. No interest
is payable on the benefits so recouped.
That is equally applicable to any interim payments of damages agreed
(or ordered to) be paid during the course of the proceedings. The defendant
must obtain the relevant certificate and make the payment to the Unit of
the sum recoverable by them up to the date on which the interim payment
1 See s. 8 of and Sch. 2 to the 1997 Act.
171
172 coll ateral sources of revenue
is made. There is, however, a cut-off date which is five years from the date
of the accident or the first claim for the relevant benefit.
The defendant is bound to repay the full amount of the recoverable
benefit notwithstanding that, in consequence of a finding of contributory
negligence, he is not liable for 100 per cent of the recoverable damages.
Benefits which are deductible are set out in Schedule 2 to the Act. As ex-
plained above, certain types of benefit fall to be set against specific heads
of claim. In consequence, any judgment at trial must identify specifically
the amounts recovered in respect of care, loss of earnings and loss of mo-
bility. It matters not, however, whether the sums recovered are in respect
of past or future loss. If a settlement is being negotiated it may be worth-
while reducing the amount recovered under specified heads of damage
and loading others, if that can properly be done, in order to reduce the
recoupment. That is particularly the case where a degree of contributory
negligence has been accepted because, as set out above, recoupment is
still 100 per cent even though the claimant does not recover 100 per cent
of his damages.
Do social security payments fall to be deducted from the award?

The position is as set out in the preceding paragraph but with a time limit
of five years from the date of the accident or the date of the claim in the
case of an industrial or other illness. Once the five-year period has expired
no account is to be taken of state benefits. The court is not permitted to
make a deduction from an award of damages for the fact that a claimant
has obtained or will, in the future, obtain or continue to obtain monies
from the state which will, in part, reduce his loss.
We have already considered the position of treatment available on the
National Health Service in chapter 4.
Pension losses
We have already considered, in chapter 4, what is recoverable by way of loss
of pension. Retirement pensions, disability pensions or ex gratia pensions
paid by an employer are not normally deductible.2 That rule is, however,
subject to two exceptions. The first relates to a lump sum payable to an
injured person of which part is attributable to the period after retire-
ment.3 The second exception relates to that part of the disability pension
2 Hewson v. Downs [1970] 1 QB 73; Cunningham v. Harrison [1973] QB 942.

3 Longden v. British Coal Corporation [1998] AC 653.
which the claimant will receive during the period when his retirement
pension would normally have been payable.4
Monies provided by the employer

If an employer continues to make payments to an employee after the
accident do such payments fall to be repaid or is the claim for past loss of
earnings reduced? The answer depends upon the nature of the payments
and the legal liability of the claimant to repay his employer.
If there is a legal liability to repay, then those monies must form part of
the special damages claim.5 The position is the same if the claimant has
given an undertaking to repay his employer.
If the employer makes a voluntary payment that sum does not fall to
be deducted from the special damages claim. However, if he expects to
be reimbursed, and has entered into a legally binding contract with the
claimant that he should be reimbursed out of the damages recovered,
then the amount should be added to the special damages claim and is
then usually subject to a direction that the money should be paid to the
employer.
There is one exception to the exception. If, by the terms of his contract
of employment, the claimant is entitled to part or all of his wages or salary
during a period of incapacity, such sum then falls to be deducted from his
special damages claim for past loss of earnings because he has, of course,
suffered no loss. That rule applies even where the money is paid by an
insurance company under a permanent disability scheme. Whether or not
the payments are deductible depends upon who has paid the premiums
and how the money is actually paid. So, e.g., if the employer takes out the
policy and pays the premiums and the money is paid to him to be passed
on to the claimant as wages or salary, the money will be deducted from
any past or future loss of earnings.6 There is no difference in principle
between that situation and the one in which the less seriously injured
individual is capable of doing, and in fact does, some work.
Benevolence of third parties

Payments made to claimants by third parties as an act of benevolence
are not to be taken into account when assessing damages.7 That does
4 Smoker v. London Fire and Civil Defence Authority; Wood v. British Coal Corporation [1991] 2 AC
502.
5 Browning v. War Office [1963] 1 QB 750.
6 Hussain v. New Taplow Paper Mills Ltd [1988] AC 514. 7 Hodgson v. Trapp [1989] AC 807.
not apply when the benevolence comes from the tortfeasor himself. So,
monies paid by an employer, who was the tortfeasor, out of benevolence
were to be taken into account.8
Insurance policies taken out by the injured person

Any monies received from such insurance policies are to be wholly dis-
regarded by the court. That is so even if, e.g., a claimant has taken out
and paid for a policy which, in the event of his incapacity, pays him a
sum equivalent to his net earnings. There is no logical reason for the dis-
tinction. The courts have attempted to justify it by saying that justice
demands that a tortfeasor should not be relieved of his obligations be-
cause his victim has been sufficiently prudent to pay for such a policy and
that the payments are made not by reason of the accident but because of
the contract between the victim and his insurer.
Duties of local authorities

Pursuant to the provisions of section 26 of the National Assistance Act
1948 a local authority has a duty to provide, and pay for, the care of a
disabled person. It is also required to recover those costs from the indi-
vidual concerned unless he satisfies them that he is unable to make a full
refund. However, damages paid into the Court of Protection on behalf of a
patient, and the income derived from that capital, are to be ignored for the
purposes of recoupment by a local authority.9 These two decisions have
led some defendants to argue that they should not have to pay for costs
of care since the same will be met by the local authority. In the majority
of cases the level of care which the local authority are able or willing to
provide falls below that which is reasonably required by a claimant and
the point does not arise. There are cases, as for instance that of an injured
child who has been placed in the care of a local authority, where it is very
important. There has not, as yet, been any reported authority on whether
a local authority can be compelled to provide that level of care which the
trial judge considers to be reasonably required by the claimant or whether
the tortfeasor is liable for a ‘top up’ over the sums provided or to be pro-
vided by the local authority. Equally, the courts have not considered in
any reported case what is to happen in the event of a change in the law
absolving local authorities from this duty.
8 Williams v. BOC Gases Ltd [2000] ICR 1181.

9 Bell v. Todd [2002] Lloyd’s Rep. Med. 12 and Ryan v. Liverpool Health Authority [2002] Lloyd’s
Rep. Med. 23. Neither decision has been appealed.
Interest
The claimant is entitled to interest on general damages for pain, suffering
and loss of amenity at 2 per cent per annum from the date of service of
the proceedings until judgment.10
In the case of special damages, the rule is that the claimant is entitled
to interest at one-half of the appropriate rate from the date of the accident
until trial. The appropriate rate is the rate of interest allowed on money in
court placed on special account. Interest is payable on the full amount of
special damages without making any deduction for recoupable benefits.11
In exceptional cases, such as where one party or the other has been guilty
of gross and culpable delay in bringing the matter to trial, the court may
increase or diminish the award of interest or alter the period for which it
is allowed.12
Limitation periods
It is beyond the scope of this book to deal with periods of limitation other
than in the barest outline.
The primary limitation period for cases involving personal injuries is
three years from the date on which the cause of action accrued or the date
of knowledge (if later) of the person injured.13 Thus, in the simplest case,
the claimant will have three years from the date of his accident or injury
in which to institute proceedings.
The date of knowledge is defined by section 14 of the Limitation Act
1980. It is the date on which the claimant first had knowledge:
(i) that the injury in question was significant; and
(ii) that the injury was attributable in whole or in part to the act or
omission which is alleged to constitute negligence, nuisance or breach
of duty; and
(iii) of the identity of the defendant; and
(iv) if it is alleged that the act or omission was that of a person other than
the defendant, the identity of that person and the additional facts
supporting the bringing of an action against the defendant. Knowledge
that any act or omission did or did not, as a matter of law, involve
negligence, nuisance or breach of duty is irrelevant.
Injury is significant if the person whose date of knowledge is in ques-

tion would reasonably have considered it sufficiently serious to justify
10 Wright v. British Railways Board [1983] 2 AC 773.

11 Wadey v. Surrey County Council [2000] 1 WLR 820.
12 Spittle v. Bunney [1988] 1 WLR 847. 13 Limitation Act 1980, s. 11.
his instituting proceedings for damages against a defendant who did not
dispute liability and was able to satisfy a judgment.14
An individual is not required to know what the specific act of negligence
was. So, e.g., a woman who knew that she had undergone a mastectomy
unnecessarily, because the lump was benign, had the knowledge required
to satisfy section 14.15
A person’s knowledge is deemed to include knowledge which he might
reasonably have been expected to acquire from facts observable or as-
certainable by him or from facts ascertainable by him with the help of
medical or other appropriate expert advice which it is reasonable for him
to request. If, however, he has taken all reasonable steps to obtain (and
act upon) that advice, such knowledge will not be imputed to him.16
If a defendant wishes to take a limitation defence he must specifically
plead it. The court is not entitled to take the point of its own motion.
Once a limitation defence has been raised, the burden of proving that
the claim was brought within the primary limitation period is upon the
claimant. However, the burden of proof in constructive knowledge under
section 14(3) as opposed to actual knowledge is upon the defendant.17
In the case of a person under a disability, the primary limitation period
does not begin to run until the claimant is free of that disability. Thus, in
the case of a child the primary limitation period is three years from the
date on which he attains his majority. In England that is his eighteenth
birthday. In the case of a person with a disability the limitation period
may never expire. However, once time has begun to run, it does not cease
to do so. If, therefore, a person becomes a patient after the date of an
accident, the primary limitation period remains three years. However, in
those particular circumstances the claimant may have a good case for
inviting the court to disapply the primary limitation period pursuant to
section 33 of the Limitation Act 1980, of which more below.
There are two exceptions to that rule. First, in the case of an intentional
tort, such as trespass to the person, the primary limitation period is six
years and there is no power to extend the period under section 33 of the
Limitation Act 1980.18 The second relates to claims brought under the
Consumer Protection Act 1987. In that Act, a claim may not be brought
14 Limitation Act 1980, s. 14(2). 15 Dobbie v. Medway Health Authority [1994] 1 WLR 1234.
16 Limitation Act 1980, s. 14(3). For a detailed exposition of this area of the law, see Nash v.
Eli Lilly & Co. [1993] 1 WLR 782.
17 Nash v. Eli Lilly & Co., n. 16 above.
18 Stubbings v. Webb [1993] AC 498. An attempt by the claimant to challenge this decision in
the ECHR failed. See Stubbings v. United Kingdom [1997] 1 FLR 105.
more than ten years after the product is first supplied irrespective of the
date on which the claimant acquired knowledge or whether he is or was
under a disability.
As set out above, in cases not covered by the two exceptions dealt with
in the preceding paragraph the court may override the primary limitation
period.19 The court is only entitled to do this if it appears that it would
be equitable to allow an action to proceed having regard to the degree
to which the primary limitation period prejudices the claimant balanced
against the degree to which any decision which the court may make ex-
tending the limitation period would prejudice the defendant. Section 33(3)
sets out the specific circumstances as to which the court is required to have
regard in coming to that decision.20
The limitation period may also be extended in a case where any fact
relevant to the claimant’s right of action has been deliberately concealed
from him by the defendant.21
If the claimant dies prior to the expiration of the primary limitation
period the surviving cause of action for the benefit of his estate has to be
brought within either three years of the date of the death or three years
of the date of knowledge of the personal representative of the deceased.22
Persons under a disability

Generally
There are two classes of persons who are regarded, in English law, as being
under a disability. They are infants and patients. An infant is a person
under the age of eighteen.
A patient is an individual who is medically certified as being incapable of
managing his own affairs.23 That expression admits of no easy definition.
What is clear, however, is that the fact that a claimant may not be capable
of managing a very large sum of money does not make him a patient
for these purposes. The test is whether he is capable of giving proper
instructions to his legal team and of taking all decisions germane to the
litigation, including whether or not to accept an offer of settlement.
In each case the proceedings must be brought by a litigation friend. That
individual may be a parent or relation of the person under a disability or
a stranger, such as a solicitor. The court must be satisfied, however, that
19 Limitation Act 1980, s. 33.

20 For a full exposition of this area of the law see Nash v Eli Lilly & Co., n. 16 above.
21 Limitation Act 1980, s. 32. 22 Limitation Act 1980, s. 11(5).
23 Mastermann-Lister v. Jewell [2003]1 WLR 1511.
the litigation friend is a responsible individual. He is obliged to act in the

best interests of the claimant and may be removed by the court if he does
not do so.
A claim brought by a person under a disability may not be settled unless
the settlement is approved by the court. Such approval will involve the
judge considering all the circumstances of the case, including an opinion
from counsel, or leading counsel, instructed on behalf of the claimant.
That opinion is not, normally, shown to the defendant. It will normally
contain a statement that counsel is of the opinion that the settlement is
a proper one. It will also explain to the court, in a case where the claim
is settled for less than the full amount of damages which might ordinar-
ily be recoverable, why counsel is of the view that such a settlement is
proper.
To whom are the damages recovered paid in such a case?

In the case of a child, the monies are usually invested in court. That is
so where the injury is minor, the child has made, or will make, a full
recovery before attaining the age of eighteen and the damages are not
enormous. The parents are entitled to apply, at the time of settlement or
at a later stage, for money to be paid out of court for a specific purpose
which benefits the child. It is frequently the case, for example, that the
court will sanction a sum of money being paid out of the damages to
purchase a particular item such as a new bicycle for a child or to enable
him and his parents to go on holiday.
If the child is so seriously injured that he is likely to become a patient
as soon as he attains the age of eighteen then his damages will be dealt
with in the same way as that of a patient.
In the last century the Supreme Court of Judicature had jurisdiction
over what were then called lunatics under a special department headed
by the Master of Lunacy. Nowadays, that part of the Supreme Court is a
special department entitled the Court of Protection. It has a substantial
staff, headed by the Master, or when it is a woman, the Mistress of the
Court of Protection. Their duty is to administer the affairs of persons
under a disability. The sanction of the Court of Protection is required for
any settlement of a case involving a patient. The approval of the court is
also required as in the case of a child.
In the case of a patient, a receiver is appointed in addition to a litigation
friend, although it may be the same person. The receiver will manage
the day-to-day financial affairs of the patient and must prepare annual
accounts for the Court of Protection.
While the case is continuing the Court of Protection will monitor, and
must approve, any major expenditure on behalf of the patient. For ex-
ample, if an interim payment of sufficient size is obtained to enable a
property to be purchased for the patient and his family, the approval of
the purchase by the Master of the Court of Protection, or one of his officers,
is required.
Until very recently damages paid into the Court of Protection, at the
time of final settlement, were invested and overseen by the Public Trust
Office. As a result of its poor investment performance that role of the
Public Trust Office is now being abolished. The Court of Protection will
utilise outside assistance in relation to the investment strategy.
With the sanction and approval of the Court of Protection, private trusts
may be set up in order to invest and administer the damages. In such a
case the approval of the Court of Protection is sought for the terms of the
trust, the identity of the trustees and the proposed investment strategy.
That route is being used with increasing frequency because those advising
patients believe that they will be able to achieve better capital growth and
higher levels of income, if the damages are invested by a specialist outside
agency. Lower levels of Court of Protection fees are also payable where the
court is not itself administering the money.
Miscellaneous matters
In the Introduction we mentioned the possibility of damages reaching the
claimant in the form of structured settlements. Here is the place to refer
to this (relatively) new institution and explain it briefly.
In the ordinary or conventional case, the court assesses or calculates the
sum payable by the defendant to the claimant in respect of each head of
damage. The total award is then expressed as a single lump sum payable
within fourteen days of the judgment.
It is then a matter for the claimant, or the Court of Protection, to in-
vest his damages and spend both income and capital as he thinks fit. Of
course, with the vagaries of the investment market, capital can be lost.
Equally, less income may be received than is either necessary or desirable.
The damages can run out before, and sometimes long before, the injured
individual dies.
In an attempt to overcome that difficulty, structured settlements have
come into existence and, until the recent drop in annuity rates, were
extremely popular.
What is a structured settlement? It is the purchase, by the parties at the
time of settlement, of an annuity for the injured individual. The annuity
so purchased can either be at a level rate or index-linked. The annual sum

payable will then continue for as long as the claimant lives. If he survives
for only a short period then the annuity dies with him subject only to one
proviso. If, on the other hand, he lives for far longer than was expected at
the date of trial, he will continue to receive the income from the annuity
throughout his life. The one proviso is that structured settlements will
generally have a guaranteed period, which may be five or more years. The
annual income will then continue for the remainder of the guarantee
period even if the claimant dies.
A structured settlement can only be entered into by agreement between
the parties. The court is unable to impose one. In practice, it is the claimant
who decides whether to structure part or all of his damages. It is of little
moment or interest to a defendant since he either pays the lump sum to
the claimant or his representatives or pays part or all of it to a financial
institution for the purchase of the annuity.
The income from the annuity is tax free in the hands of the claimant or
his representative. The money is treated by the Inland Revenue as if it was
the return of capital and not as income. That has substantial advantages.
Take a working example: if £100,000 purchases an annuity at 4 per cent
per annum, the claimant’s net income will be £4,000. In order to achieve
the same figure from the investment of a conventional award an annual
return of £6,000 gross would be required.
Of course, the disadvantage of the structured settlement is that the
claimant has no access to the capital which has been used for the purchase
of the annuity. He does not, therefore, have lump sums available to deal
with major emergencies. In times when annuity rates are low, as now, an
investment adviser may well be able to achieve a better overall return if
he is free to invest partly for capital growth and partly for income.
Specialist advice is invariably needed before a party decides whether to
structure part or all of his damages. The current practice generally entails
structuring part of the award whilst leaving another part to be paid and
invested in the conventional manner.
An important and radical change in the law is proposed by the amend-
ment to section 2 of the Damages Act 1996 by section 100(1) of the Courts
Act 2003. It will give the court power to order that the defendant pay for
future losses by means of periodical payments. The court will be bound to
consider whether it should make such an order but can only do so if it is
satisfied that continuity of the payments is reasonably secure. That will
be secured by section 6 of the Act. The new section 2(B) would also give the
court power to vary the periodical payments in certain circumstances.
From the point of view of a claimant, periodical payments would have
distinct advantages since he will be assured that future costs will be met
for the duration of his life and that he will not be dependent upon the
success of his investment. There does not appear to be any good reason
why such a regime should not work well. Both sides can take a degree of
comfort from them. A claimant and his family will know that there will
always be enough money to meet his needs. Insurers will know that they
will not overpay as they might if the claimant lived only for a short time
after the award of a lump sum. The legislation is not, however, yet in force.
The court has also used its case management powers to adjourn part of
a damages claim and direct that the claimant could return for a further
award of both special and general damages if they underwent additional
treatment in the future.24 The power to take that step has not been chal-
lenged in the Court of Appeal. It is likely to be used sparingly.
German law
Introductory observations
The guiding principle is that the injured is to be indemnified for his loss;
however, he must not make a profit from his injury. The victim must not
reap the benefits of double compensation.25 Consequently, if the victim’s
loss is compensated by persons other than the tortfeasor, he may not be
allowed to claim compensation from him as well. In order to prevent
a double compensation, the court must take the following points into
account.
First, the court must consider, if benefits which the victim may re-
ceive due to his injury are deductible from the award under the rule of
‘Vorteilsausgleichung’. This is the case if the victim receives benefits because
of the injury: these benefits do not contradict the purpose of the obliga-
tion to pay damages and a deduction of the benefits from the award is
reasonable.26
Secondly, if the victim is compensated by a third party e.g., an insurance
company, German law often provides for statutory subrogation rights.27
Accordingly, the victim’s rights are transferred to the third party ex lege
24 A v. National Blood Authority [2002] Lloyd’s Rep. Med. 487.

25 See Basil Markesinis and Hannes Unberath, The German Law of Torts: A Comparative Treatise
(4th edn, 2002), p. 904 (henceforth referred to as GLT); BGH 10 November 1998, BGHZ
140, 39, 42; Pickel, SGB X, § 116 no. 19.
27 e.g., §§ 116 Sozialgesetzbuch X (Verwaltungsverfahren; Administrative Procedure Act),
87a Bundesbeamtengesetz, 30 para. 2 Soldatengesetz, 6 Entgeltfortzahlungsgesetz,
67 para. 1 Versicherungsvertragsgesetz.
to the extent that he has indemnified the victim.28 A tort action of the
victim himself will then be dismissed by the court.29 Moreover, the sub-
rogation occurs at the moment of the accident and results in the vic-
tim automatically and immediately losing all control over the claim (or
part of the claim) which he may have,30 i.e., the victim can no longer dis-
pose of his claim. Therefore, claims settlement between the victim and
the tortfeasor or his insurer would be ineffective in respect of the ‘in-
nocent absentee’.31 Where statutory subrogation is not provided for, the
victim may be obliged to confer his claim against the tortfeasor on the
insurer or another institution which has already compensated him for his
loss.32

Vorteilsausgleichung
Payments/services which are rendered by the social security carrier may
benefit the claimant, but not relieve the tortfeasor of his duty to com-
pensate the victim.33 Thus, it would not be reasonable, if these social
security payments/services were to be deducted from the damages by way
of ‘Vorteilsausgleichung’.
Subrogation according to § 116 SGB X

Preconditions of a subrogation under § 116 SGB X
According to § 116 para. 1 SGB X the social security carrier can seek reim-
bursement from the wrongdoer or his insurance company, if the victim
is entitled to claim compensation from the wrongdoer and if the social
security carrier has compensated the victim fully or in part.
Social security carrier

§ 116 para. 1 SGB X applies to services/payments of the social security car-
rier under the health insurance scheme, the retirement insurance scheme,
the care insurance scheme and the accidents at work insurance scheme.
The relevance of this rule can be illustrated by the following figures. In
2001, roughly 90 per cent of the population or 71 million people were
28 See GLT, pp. 903, 904. 29 BGH 28 September 1999, NJW 1999, 3711, 3712.
30 See GLT, p. 903.
31 BGH 30 November 1955, BGHZ 19, 177, 181; BGH 12 December 1995, NJW 1996, 726,
727 ff.
32 ‘Conventional subrogation’, see GLT, p. 905; cf. p. 188. 33 Pickel, SGB X, § 116 no. 19.
insured under the health insurance scheme.34 In 1999, about 50.7 million
were covered by the retirement insurance scheme which is generally ap-
plied to employees.35 Furthermore, 36 million employees and 17 million
students and pupils were insured under the accidents at work insurance
scheme.36 In addition, services/payments of the public welfare institutions
(Sozialhilfeträger) or of the public employment agencies may also cause a
subrogation according to § 116 para. 1 and 10 SGB X.
Services/payments from the social security carrier

The above-mentioned social security insurance schemes provide for many
services in the case of their members being injured.37 The social secu-
rity carriers are obliged to compensate their insured members in many
respects, for example in respect of medical treatment, loss of earnings,
special needs etc. The compensation may be made in natura (medical treat-
ment by doctors) or payment of money.
Compensation must cover the victim’s loss

As to congruity of social security benefits and damages, see next para-
graph.
Kind of damage
Subrogation occurs only when and insofar as the social security carrier
has actually indemnified the victim for losses for which the tortfeasor was
obliged to compensate. Two points are crucial in this context.
First, the purpose of the services and payments by the social security
have to be determined. This is important to know, since the subrogation is
limited to the type of loss for which the social security carrier has rendered
services or compensated the victim.38 Personal injuries often cause differ-
ent types of losses, as for instance the loss of earnings or maintenance, the
34 Sozialbericht [Social Report] 2001 of the German government, Teil B, no. 78

(www.bundeskanzler.de/Anlage18039/sozialbericht2001); Schulin and Igl, Sozialrecht
(7th edn, 2002), nos 82, 155.
35 Sozialbericht 2001, Teil B, no. 70 with reference to a statistic of the Verband Deutscher
Rentenversicherungsträger. However, according to Schulin and Igl, Sozialrecht (7th edn,
2002), no. 82, only 44.3 million people are insured under this scheme with reference to
the Sozialbericht 1997, Teil B, no. 68. These figures are taken from the
Rentenversicherungsbericht [Retirement Insurance Report] 1997 of the German
government.
36 Schulin and Igl, Sozialrecht (7th edn, 2002), no. 82, with reference to the Sozialbericht
1997, Teil B, no. 84.
37 GLT, p. 910. 38 BGH 10 November 1998, BGHZ 140, 39, 42.
costs of medical treatment or funeral and special needs. Hence, if a vic-

tim is reimbursed for the costs of medical treatment under the statutory
health insurance scheme, the carrier cannot take over the claim for loss
of earnings as well but only the claim for the costs of medical treatment.
As long as the social security carrier does not compensate a certain type
of loss, the victim still has control over this part of the claim.39 Accord-
ingly, e.g., the victim’s right to demand damages for pain and suffering
cannot be transferred to any social security carrier, since compensation
for pain and suffering is not provided for by any social security insurance
scheme.40
Secondly, temporal congruity must also be ascertained. If the victim is
prevented from working merely for two weeks, but the payments of the
social security carrier were made for a longer period of time, the social
security carrier can only seek reimbursement from the wrongdoer for
those two weeks.41 However, the court must take into account whether
the earnings from a short period of employment would have been used
for the time of unemployment and, if so, for how long. For example: if the
victim who is permanently entitled to public welfare (Sozialhilfe) works
only for a few months in a year, but these earnings are sufficient to live on
for a whole year, the welfare agency can subrogate against the wrongdoer
for the whole amount.42
Amount of compensation
Even if a loss has been compensated by the social security carrier, the
victim keeps control over his claim insofar as these payments/services did
not fully cover this kind of loss.43
Restrictions
Family A subrogation does not occur if the wrongdoer is a family member
who lives with the victim and has not caused the injury deliberately (§ 116
VI SGB X). This exception has been enacted to safeguard family peace and
takes account of the fact that the family lives on a common budget.44
39 BGH 10 April 1979, VersR 1979, 640, 641; MünchKomm-BGB/Oetker § 249 BGB no. 449
(with many other examples in nos. 451–60).
40 BGH 22 September 1970, VersR 1970, 1053, 1054; MünchKomm/Oetker § 249 BGB no. 454.
41 MünchKomm-BGB/Oetker § 249 BGB no. 461 with reference to BGH 23 March 1973, LM
RVO § 1542 no. 78.
42 BGH 4 March 1997, NJW 1997, 2175, 2176. 43 GLT, p. 910.
44 For details see MünchKomm-BGB/Oetker § 249 BGB nos. 469–471.
Contributory negligence The social security carrier cannot recover the full
amount which has been paid if there has been contributory negligence
by the injured party (§ 116 para. 3 SGB X). The social security carrier can
claim from the wrongdoer only a proportional amount in these cases.45
For example: the victim had a loss of earnings amounting to €3,000 and
receives €1,400 from the social security carrier. The victim’s contributory
fault amounts to 50 per cent. As a result, the tortfeasor’s obligation to pay
damages is 50 per cent out of €3,000, which is €1,500. Hence, the social
security carrier can recover only the amount which it has paid to the victim
in relation to the tortfeasor’s fault. This is 50 per cent of €1,400 = €700.
Therefore, the victim can still claim €800 in his tort action against the
tortfeasor. As a result, the victim recovers €2,200 from the social security
carrier and the tortfeasor.46
Maximum rate of damage § 116 para. 5 SGB X limits the subrogation or

the transfer of the victim’s right in respect of maximum rates of dam-
ages, as e.g., provided for in § 12 Strassenverkehrsgesetz. These rates nor-
mally include all types of loss (pain and suffering, loss of earnings etc.).
If the victim’s loss is higher than the maximum rate, the victim has to
be fully indemnified first for ‘his’ part of the damages before the social
security carrier can claim the part of damages the right to which has been
transferred to him (preferential quota in favour of the victim, ‘Quoten-
vorrecht’). For example: the victim’s loss amounts to €750,000 (€500,000
for loss of earnings and €250,000 for pain and suffering) and the maxi-
mum rate of damages is €600,000 (§ 12 Strassenverkehrsgesetz). So, if he
receives €400,000 from the social security carrier for his loss of earnings,
he still has a loss which amounts to €350,000. Therefore, he will be able
to claim €350,000 in his tort action against the tortfeasor. Only there-
after can the social security carrier enforce its subrogated rights against
the tortfeasor – but only up to the maximum limit of liability (€600,000),
hence €250,000.
Public welfare (Sozialhilfe) If the victim is principally entitled to demand

services from the public welfare institution and his rights are transferred
to the respective carrier, even so he will be entitled to sue the wrong-
doer for damages. The reason is that, according to § 2 Bundessozialhil-
fegesetz, social services are granted only if the victim is not capable of
45 See MünchKomm-BGB/Oetker § 249 BGB no. 466.

46 Example taken from MünchKomm-BGB/Oetker § 249 BGB no. 466.
paying for himself. Thus, the victim must first enforce his claims against
the tortfeasor before he is entitled to public funds or continues to receive
them.47
Pension losses
In general
The BGH held that a loss is not to be compensated until the loss actually
occurs.48 Hence, the wrongdoer need not compensate a loss of pension
until the victim has reached the age of retirement.
Pension losses and the retirement insurance scheme

However, the tortfeasor may be obliged to prevent a future loss of pension.
If the victim is employed at the time of the accident, the contributions of
the employee to the social security insurance scheme, in particular the
contributions to the retirement insurance scheme and the claims there-
from, are considered as part of the earnings that the victim would have
made.49 Therefore, the wrongdoer must also pay these contributions to
ensure that the victim’s future pension will not be decreased because
of lost premiums. According to § 119 SGB X the claims to contributions
to the retirement insurance scheme are transferred to the carrier of the
retirement insurance scheme. As a result, it is not the victim who even-
tually recovers the contributions from the tortfeasor and passes them on
to the retirement insurance scheme but it is the carrier of the retirement
insurance scheme himself who takes over the claim. Furthermore, in ac-
cordance with § 62 SGB VI the wrongdoer must pay the contributions, even
if a loss in premium would not cause a reduction of the victim’s pension.
This rule assumes a loss of pension which would not have occurred and
is therefore criticised by some authors. Before § 62 SGB VI was enacted in
1992, the BGH, too, had denied a loss of pension in these cases, but this
case law has now become obsolete.50
Although the legislator intended to have the amount of the contribu-
tions calculated on the basis of earnings at the time of the accident, the
47 BGH 12 December 1995, NJW 1996, 726, 728.

48 BGH 19 October 1993, VersR 1994, 186, 187; BGH 12 April 1983, VersR 1983, 663, 665.
49 BGH 25 January 2000, NZV 2000, 252, 254; BGH 19 October 1993, VersR 1994, 186; BGH
12 April 1983, VersR 1983, 663.
50 See now BGH 25 January 2000, NZV 2000, 252, 254; BGH 10 December 1991, BGHZ 116,
260, 267; BGH 9 May 1995, BGHZ 129, 366, 369; in the past BGH 18 October 1977, BGHZ
69, 347, 350; BGH 30 June 1987, BGHZ 101, 207, 211 denied a loss of pension.
BGH decided that the contributions have to be calculated on the basis of

the earnings which the victim would have earned but for the accident.51
However, the amount of contributions is to be diminished, if another
social security carrier pays benefits to compensate for lost income (Lohner-
satzleistungen), which also include contributions to the retirement insur-
ance scheme (e.g., sick pay, workmen’scompensation, unemployment ben-
efits, etc.) for the victim. In these cases § 116 SGB X takes priority over
§ 119 SGB X and therefore the latter social security carrier will first be
subrogated to the tort claim against the wrongdoer under § 116 SGB X.
Afterwards, the carrier of the retirement insurance scheme can recover
the balance from the defendant.52
The defendant must pay the contributions as long as the victim would
have been in gainful employment. Therefore, he may be obliged to pay
the contributions until the victim reaches retirement age.
Pension losses and the occupational

pension plan
The expenditures which the employer incurs in order to fulfil his pension
promise are part of the employee’s earnings which he would have had but
for the injury.53 If the employer is now obliged to continue to pay wages
or premiums to the occupational pension plan, although his employee is
prevented from working due to the injury,54 he can recover these expen-
ditures from the wrongdoer according to § 6 Entgeltfortzahlungsgesetz.
Likewise, the employer can recover the expenditures, if he makes ex gratia
payments and § 255 BGB can be applied analogously.55
However, if the employer is no longer bound to pay into the occupa-
tional pension plan, the victim cannot demand from the wrongdoer the
expenditures which his employer would have made in order to contribute
to the occupational pension scheme or to use them otherwise for himself.
A resulting pension loss will not be compensated until the loss has mate-
rialised i.e., the victim has reached retirement age.
51 BGH 25 January 2000, NZV 2000, 252, 253; cf. also Hauck-Haines/Nehls, SGB X/3
§ 119 no. 25; Gerhard Küppersbusch, Ersatzansprüche bei Personenschäden, no. 574; but
see Bundestag, Bundestags-Drucksache 9/95, 29.
52 Cf. further § 170 I no. 2a SGB VI.
53 BGH 7 July 1998, NJW 1998, 3276, 3278; BGH 11 November 1975, NJW 1976, 326, 327.
54 Normally the employer must continue paying wages in accordance with the
Entgeltfortzahlungsgesetz, but he can be obliged to do so also by employment contract
or collective agreement.
55 Cf. p. 188.
Services/payments from the employer, insurer, family

and friends
Vorteilsausgleichung
Normally, payments/services from the employer, insurer or family and
friends are granted to benefit the victim and not the tortfeasor. Therefore,
a deduction of these benefits from the award by way of ‘Vorteilsausgleichung’
would be unreasonable, unless the payments/services are rendered for rea-
sons other than compensation of the victim because of the injury56 or even
if the purpose of the payments/services is the relief of the wrongdoer.57
Subrogation
Services/payments from the employer
Generally, the employer has to continue to pay the wages and salaries of
his injured employees for a period of six weeks (§ 3 Entgeltfortzahlungs-
gesetz). For this reason, § 6 Entgeltfortzahlungsgesetz provides for a sub-
rogation in favour of the employer to the extent that he has paid wages
according to § 3 Entgeltfortzahlungsgesetz. This includes the employee’s
gross earnings and the employer’s part of the contributions to the so-
cial security insurance scheme. Likewise, § 87a Bundesbeamtengesetz or
§ 52 Beamtenrechtsrahmengesetz ensure a subrogation for the benefit of
the public authorities who have similar obligations towards their injured
public servants.
If the employer makes ex gratia payments although he is not under a
legal duty to pay wages to his injured employee, he can demand that the
employee cedes his claim to him. The BGH applied § 255 BGB analogously
and held that the employee was obliged to cede his claim to the employer,
if the employer had compensated his loss of earnings.58 However, the
employer cannot seek reimbursement for more than the gross earnings
including the employer’s contribution to the social security insurance
scheme, even if he voluntarily pays more to the injured employee.
We have already said that under § 116 SGB X the rights of the victim
are transferred to the social security carrier by operation of law at the
56 GLT, p. 911. If the early retirement pension did not aim at compensating the victim for
the consequences of the accident, but the purpose of the pension was to relieve pressure
from the labour market, a ‘Vorteilsausgleichung’ would not unreasonably relieve the
defendant, BGH 7 November 2000, NJW 2001, 1274, 1275.
57 BGH 7 May 1975, BGHZ 64, 260, 266 in a case in which the defendant’s insurer made the
payments.
58 BGH 22 June 1956, BGHZ 21, 112, 119; BGH 9 April 1964, BGHZ 41, 292, 294; BGH 23 May
1989, BGHZ 107, 325, 329.
moment of the accident. As a result, the victim cannot (fully) cede his
claim to the employer who makes ex gratia payments. The recovery claim
of the social security carrier has priority in this respect.
Services/payments from the insurer

See below.
Services/payments by family and friends

A statutory subrogation rule does not exist in this respect. Payments/
services rendered by family members or friends normally do not reduce
the amount of damages which the tortfeasor has to pay. The victim is free
to cede his claim, but he is not bound to do so.
Insurance policies
There are various collateral sources of revenue in Germany, including pri-
vate life insurances or insurances against the consequences of accidents.59
The question whether benefits from such insurances have to be taken into
account in assessing the damages of the victim is not regulated by statute
in Germany.60 The principles developed by the courts are summarised un-
der the key-word ‘Vorteilsausgleichung’.61 The courts look at the legislative
intent of the rule which orders compensation and at the purpose of the
contribution of third parties – are they paid for the benefit of the victim
or to discharge the tortfeasor?62
With regard to private insurances, the following has to be distinguished:
if accident insurance is taken out by the victim, the claim of the victim
against the tortfeasor is transferred to the insurer when and insofar as he
pays the damages (§ 67 I Versicherungsvertragsgesetz: ‘cessio legis’). From
this it follows that the payments do not reduce the amount of damages the
tortfeasor has to pay.63 This rule does not apply, however, if the tortfeasor
is a family member (§ 67 II VVG), or if the insurance has been taken out
by the tortfeasor – in both cases it is the purpose of the insurance to give
relief to him.
Where § 67 VVG does not apply (e.g., life insurances), the de-
ductibility depends essentially upon the person who has taken out the
59 See Hein Kötz and Gerhard Wagner, Deliktsrecht (9th edn, 2001), nos. 211–26.
60 Note, however, § 843 IV BGB: maintenance payments by relatives have to be
disregarded.
61 See Christian von Bar, Gemeineuropäisches Deliktsrecht (1999), vol. II, p. 451 ff.
62 The arguments in particular are very much like those put forward by British courts, see
Basil Markesinis and Simon Deakin, Tort Law (5th edn, OUP, 2003), ch. 8.
63 Staudinger/Schiemann § 249 BGB no. 159.
insurance: insurance taken out by the victim or by third parties to the

benefit of the victim will not be taken into account.64 This includes sick-
ness insurance which entitles the victim to a certain amount of money per
day in hospital (hospital per diem allowance insurance), or legal expenses
insurance (with regard to the lawyer’s fees of the victim).65 However, if the
insurance has been taken out by the wrongdoer (possibly in favour of the
victim), the payments by the insurer have to be deducted.66
Finally, it should be noted that a liability insurance taken out by the
tortfeasor may influence the amount of non-pecuniary damages awarded
to the victim. Such damages have to be assessed as the court deems equi-
table and just in the case before it, and all factors of a case will be taken
into account, including the financial situation of both parties. The liabil-
ity insurance puts the tortfeasor on the same footing as ‘rich’ tortfeasors,
and the damages will be assessed accordingly.67
Interest
Interest is payable on all damages as long as their object is the payment of
money. As there are no special provisions in the law of torts, the general
provisions of §§ 280 ff. BGB apply. Interest can thus be claimed for faulty
delay of payment.
The payment of damages is due at the time the damage occurs. Delay
of payment in principle requires the claimant to give a reminder, which
is, however, dispensable in certain legally defined cases (§ 286 BGB).
If the plaintiff claims the payment of money, he is at any rate entitled to
interest as from the time the suit is pending (§ 290 BGB). This also applies if
the claimant makes use of the possibility to leave the amount of damages
for non-pecuniary headings up to the discretion of the judge.68
The interest rate amounts to five points above the basis rate established
by the Central European Bank (§ 288 I BGB).
A higher rate may be claimed if the plaintiff proves that he had the
possibility and intention to invest the money more profitably or else
that he had to borrow money at a higher interest rate for the period
of the delay.69 The basis for the claim then is § 280 I BGB as the loss of
64 BGH 19 November 1955, BGHZ 19, 94, 99; BGH 17 November 1957, BGHZ 25, 322, 328;
BGH 7 January 1969, VersR 1969, 350, 351; BGH 13 July 1971, NJW 1971, 2069, 2070; BGH
19 December 1978, NJW 1979, 760.
65 OLG München 14 May 1959, VersR 1959, 957, 959; MünchKomm-BGB/Oetker § 249 BGB
no. 248.
66 MünchKomm-BGB/Oetker § 249 BGB no. 248. 67 BGH 6 July 1955, BGHZ 18, 149, 165 ff.
68 BGH 5 January 1965, NJW 1965, 1376.
69 Palandt/Heinrichs (62nd edn, 2003), § 288 BGB nos. 4, 12 ff.
interest or the interest paid to the bank are a damage resulting from the
delay.
The claim is, however, not to be reduced if the creditor’s actual damage
falls short of the standard rate as in § 288 I BGB.70 For this claim, it is in
fact not even necessary for there to have been an actual loss or payment
of interest at all.71
Limitation periods
Basic rules
After the reform of the law of obligations, there is in general no special
period of limitation for tort claims. The general limitation period of three
years (§ 195 BGB) also applies to such claims.
According to § 199 I BGB, this general period begins at the end of the year
in which the claim came into existence and the creditor has or negligently
has not, any knowledge of it and of the person of the debtor.
For the existence of the claim, it is mandatory that the damage was
suffered by the claimant. At that moment, the limitation period begins
for all damages resulting from the tortious act, even if further damage
occurs only later.72 Knowledge of the claim in the sense of § 199 I BGB
means knowledge of all facts that are the basis of its existence. These facts
are essentially the violating act, the tortfeasor’s negligence, the damage
as such, as well as the fact that the claimant is himself affected by the
damage.73 It is, however, not required that the claimant is informed of
every detail or all circumstances. It is sufficient that there are reasonable
prospects for a civil action.74
An error in law does not prevent knowledge.75
Maximum periods
Additionally, maximum limitation periods are stated in § 199 II–IV BGB.
As for claims for damages, the maximum limitation period depends on
the kind of injury. § 199 II BGB states that claims for damages resulting
from a violation of either life, body, health or freedom, as do most claims
under tort law, are limited to thirty years from the date of the tortious
70 Palandt/Heinrichs (62nd edn, 2003), § 288 BGB no. 4.

71 BGH 26 April 1979, BGHZ 74, 231. 72 BGH 15 October 1992, NJW 1993, 648, 650.
73 BGH 15 October 1992, NJW 1993, 648 ff.
74 BGH 17 February 2000, NJW 2000, 1498; BGH 6 March 2001, NJW 2001, 1721.
75 BGH 25 February 1999, NJW 1999, 2041.
act. It is of no relevance when the claim actually arose or whether the

claimant had knowledge of it.
For other claims for damages, § 199 III BGB provides a double-tracked
model which is independent of the creditor’s knowledge or negligent lack
of knowledge. According to § 199 III no. 1 BGB, the limitation period for
other claims for damages than those named in § 199 II BGB is ten years from
the date of their coming into existence. Additionally, there is a maximum
limitation period in § 199 III no. 2 of thirty years from the date of the
tortious act, regardless of the date when the victim’s claim came into
existence.
Interruption and suspension

of limitation periods
German civil law distinguishes between the interruption and the suspen-
sion of limitation periods (§§ 203 ff. BGB).
Subsequent to an interruption, the limitation period begins to run anew
for its full length. According to § 212 I BGB, the limitation period is in-
terrupted when the creditor acknowledges the claim or an act of judicial
execution is performed concerning the claim.
The suspension only hinders the running or ending of the limitation
period for the time being (§ 209 BGB). The most important cases of sus-
pension are the filing of a lawsuit or comparable motions that aim at
enforcing the claim (§ 204 I BGB). The limitation period is also suspended
during negotiations concerning the claim (§ 203 BGB); in this case, the
limitation period ends no sooner than three months after the end of the
negotiations.
There are other reasons for the suspension of the limitation period:
a persisting familial relationship between creditor and debtor, force
majeure or the infringement of sexual self-determination (§§ 205–211
BGB).
Persons under a disability

The estates and the income of a child are administered by his parents, if
they have parental responsibility (Vermögenssorge) (§§ 1626 I, 1638–1649
BGB), otherwise by guardians who have been appointed by the court
(Pfleger) (§§ 1909 BGB or ‘Vormund’, 1773 ff. BGB). If the injured party is
not a child but is unable to care for his own interests, his assets or income
will be administered by persons who had been given power of agency by
the injured party himself (at a time when he was still capable of acting
for himself), or by a court-appointed guardian (Betreuer) (§ 1896 BGB).
If the parents act for their child, they have great discretion over how to
invest a lump sum or other capital paid to the victim. According to § 1652
BGB, their investment decisions have to be economically reasonable e.g.,
the investment has to be safe, on the one hand, but also profitable on the
other hand.76 Within these broadly defined limits the parents are free to
act on behalf of the child. The family court has the power to intervene if
they disregard these limits (§§ 1666 I, II, 1667 BGB), but this power is used
only in cases of severe parental mismanagement.77 If the injured child is
paid an annuity instead of a lump sum, this will be treated like income
or maintenance of the child. It has to be used to meet the living expenses
and other needs of the child (§ 1649 BGB).
If the administrator is a guardian (for a child or a disabled adult), he is less
free than parents: He is bound by a statutory catalogue of the admissible
forms of investment (§§ 1806, 1807, 1908 i BGB), and even then he should
ask for court permission (§ 1810 BGB). He may, however, propose other
forms of investment, which have to be approved by the court (§ 1811 BGB).
Under no circumstances is the guardian entitled to use money received
by his ward for himself (§§ 1805, 1908 i; parents are in a slightly better
position: § 1649 II BGB).
The costs of property administration by third parties are part of the
‘damages’ which have to be paid by the wrongdoer, if the inability of the
victim to act for himself is the consequence of his injury (e.g., an adult
has become mentally disabled because of medical malpractice). If an al-
ready incapable person has been injured, however, the need for admin-
istration of his assets is not caused by the injury, and the costs are not
compensable.
If parents are the administrators, they may not claim money for their
own expenditures (§ 1648 BGB). The costs and fees of guardians are regu-
lated in detail by a statute (§§ 1835–1836, 1908 i BGB).
These principles apply also when an injured child will never become
able to manage his own affairs: until the age of eighteen, he is cared for by
his parents according to the above-mentioned rules; afterwards, the court
has to appoint guardians for him (these might well be the parents who,
from now on, are subject to the law on guardians, but also entitled like
guardians).
76 Staudinger/Engler (2000) § 1642 BGB no. 7.

77 For examples see Staudinger/Coester (2000) § 1666 BGB no. 171.
Italian law
Introductory observations
Under the Italian legal system as well, the guiding principle is that the
victim will recover damages for his loss (qualified in legal terms and
quantity). But since a balance has to be struck between the competing
interests of the two sides – injurer and injured – he cannot receive more
than that. As the Roman maxim put it ‘nemo locupletari potest aliena iactura’.
So the victim is a creditor who cannot ask from the debtor more than
is due according to law and must not end up by making a profit. This
means that double compensation is prohibited; and if another person,
besides the tortfeasor, performs this obligation, the victim cannot claim
compensation from the tortfeasor as well.
In the case of joint liability e.g., when the injury is caused by a minor,
and his parents are also liable,78 or by an employee, and the employer is
liable as well,79 the victim can sue the tortfeasor and the person jointly
liable with him. Of course, in such cases he will receive compensation only
once. In special cases (e.g., car accident insurance) the victim can use the
‘azione diretta’ – the direct action – against the insurer of the tortfeasor,
thus saving time and effort. The solution is, of course, well known to most
legal systems.
When the victim receives some profit from the accident, another prin-
ciple is usually applied, ‘compensatio lucri cum damno,’ so that the profit is
deducted from the recovery. But this rule is not always applied in cases
concerning damages for personal injury.

Social security payments are provided by two national institutions, accord-
ing to the state or condition of the beneficiary. The Istituto nazionale della
providenza sociale (INPS) provides assistance and pensions to persons suf-
fering from a disability. These include blind people, physically impaired
persons and the elderly who are resident in Italy, have no revenue, or
revenue below €4,666.41 per year. The monthly allowance amounts to
€295.85.
According to article 14 of the statute governing this subject matter (Law
no. 22 of 12 June 1984), the social security carrier (INPS) can be subrogated
in the victim’s rights and recover all the losses caused by the tortfeasor if
it provides the social pension to the victim.
78 On the basis of art. 2048 cod. civ. 79 On the basis of art. 2049 cod. civ.
The national health system (‘sistema sanitario nazionale, SSN) is governed

by a special statute;80 local hospitals are obliged to give assistance to
all in need. The above-mentioned social security insurance schemes also
provide for services to their members in cases where they have been in-
jured while already members, or where they become members due to the
accident.
Case law draws a sharp distinction between the sums or services offered
to the victim by the social security systems and the sums due from a
private insurer. The first must be given in any case, and they cannot be
calculated in the recovery, except for INAIL. This means that the principle
‘compensatio lucri cum damno’ does not usually apply in connection with
social security services. The rules concerning INAIL form an exception to
the rule introduced by case law. The reason is that the obligation arising
from the health system or social pension system is based on the law, while
the obligation of recovery is based on the tort.81
Insurance policies
Private insurance may be connected with the consequences of the acci-
dents. According to EC Directives, insurance for car accidents is manda-
tory in Italy.82 As stated, the injured person is given a direct claim against
the insurer.83 He can receive only the maximum amount provided by the
insurance contract. If the injured party cannot obtain full compensation
from the insurance, he must ask for the difference from the tortfeasor.
If the tortfeasor is unknown, or if he is known but did not comply with
the mandatory rules concerning car insurance or, finally, if the insurance
company has gone bankrupt, the injured party can claim damages from
the Guarantee Fund for Car Accident Victims84 which does not provide
complete compensation for the victim, but just an indemnity which is
the subject of negotiation between the victim and the Fund.
The victim who could recover damages from the insurer of the tortfeasor
cannot claim damages also from the tortfeasor. All compensation received
by the insurer is deducted from the amount of damages the tortfeasor has
to pay.85
As to the insurer of the victim himself, there is not a uniform interpre-
tation of the principles of the law applied to the cases. This uncertainty
80 See Legislative Decree no. 229 of 19 June 1999.

81 Cass. 1 July 1994, no. 6228, Riv. giur. Enel, 1996, 467.
82 See Law no. 990 of 24 December 1969 and susbsequent modifications.
83 Ibid., art. 18. 84 Ibid., art. 20. 85 Cass. 7 October 1997, no. 9742.
also applies to the judges of the Supreme Court, some of whom favour
the application of the principle ‘compensatio lucri cum damno’ (as in the
decision mentioned above). Others, however, believe that this principle
should not be applied so they allow the victim to ask his own insurer for
the compensation due for the accident.86
Interest
In Italian law the violation of personality rights (e.g., injury to personal
health) is considered a loss which results in a debt of ‘value’ (debito di
valore), which is converted into a debt of money only at the moment of the
liquidation of damages (‘debito di valuta’).87 Since it has been converted into
an obligation of money (pecuniary obligation, ‘obbligazione pecuniaria’),
article 1224 cod. civ. applies. Usually ‘legal interest’ is due, i.e., the rate
determined every year by the Treasury Department.
Limitation period
According to the Civil Code, the right to compensation for damages aris-
ing from unlawful acts lapses five years from the date on which the act
occurred.88 With respect to damages arising from the circulation of vehi-
cles of any kind, the right to compensation lapses in two years (article 2).
In products liability cases, according to the statute concerning this sub-
ject,89 the limitation period is three years. Different limitation periods are
connected with crimes, and for personal injury cases.
As to the date from which the period begins, case law draws a distinc-
tion between injuries with permanent effects and injuries with temporary
effects. In the first case the period begins when the temporary effects have
disappeared.90
The Civil Code distinguishes between suspension and interruption of
limitation periods.91 In tort law, for example, the limitation period is
suspended if the injury has been brought against a minor or a handicapped
person, and they lacked legal representatives. It is interrupted when the
creditor acknowledges the claim, or when the creditor begins any judicial
execution concerning the claim.
86 Cass. 10 February 1999, no. 1135.

87 Cass. 11 June 1992, no. 7194, Foro it., 1992, I, 2079.
88 See art. 2947 § 1. 89 Presidential Decree no. 224 of 24 May 1988.
90 Cass. 4 February 1992, no. 1210. 91 See art. 2941 ff.
6 Conclusions
This monograph has been concerned with the law of damages in three
major European legal systems. In accordance with the proclaimed belief
of one of us,1 and in this instance also shared by all of its co-authors, this
study has targeted mainly (but not exclusively) judges and international
practitioners not only in order to inform them about an area of tort law of
growing international significance, but also in the belief that they are the
most important propagators of the comparative study of the law. Wider
reflections of a more speculative nature have, on the whole, thus been
restricted to the Introduction and the Conclusions; and they are concerned
with mainly two issues.
The first is how to present the law of one country to lawyers of another
in a way that makes sense to them. We have referred to this problem
as being one of ‘suitable packaging’. Readers must not be put off by a
term which could be seen in a pejorative light. The packaging does not
alter the product; it just makes it more saleable. National laws have their
own intrinsic value. The systems under comparison also have their own
long and very respectable history to support and explain their national
solutions. Last but by no means least, their lawyers have their own ways
of expressing their thoughts; and we are not here referring simply to
1 See, e.g., Basil Markesinis, Comparative Law in the Courtroom and the Classroom (Hart
Publishing 2003). In a similar vein, Foreign Law, and Comparative Methodology (1997) and
Always on the Same Path (Hart Publishing, 2001), both containing essays in comparative
private and public law, and explaining why judges rather than academics are,
potentially, the most important human resource for promoting the study of foreign law.
We italicise human for, naturally, impersonal phenomena, such as the current
globalisation of markets and business, are providing an even greater impetus for the
study of foreign law.
197
198 conclusions
special features of the grammar of each national language. But all these
‘individual’ or ‘peculiar’ characteristics also make them indigestible to
‘outsiders’ unless ‘served’ in an attractive way. That is where the issue
of packaging enters the scene; and it is one which raises interesting and
controversial methodological issues.
Our second concern has been to warn readers that if a concept or an
idea is, or appears to be, missing in one system it does not mean that the
practical concern behind it is not addressed in a different way. This theme
is interlinked with the previous one; and if successfully tackled, the two
themes together are meant to suggest to readers – judges, practitioners,
academics, students – ways of looking at foreign law in order to under-
stand it better.
Yet even here, the transnational litigation phenomenon – in our view
likely to increase and not decrease in the years to come – has not been
far from our minds. And that is why in this last chapter we have broad-
ened the brush-strokes to cover, where necessary, the picture in the USA.
Inevitably, and to the extent that these statements refer to the situation
‘in America’ (as an abbreviation for the law of fifty-one jurisdictions), they
are of a generalised nature. They also appear to go beyond the self-imposed
parameters of this book. Notwithstanding the above, we have added them
here for two reasons.
First is the fact that the gradual expansion of the American class ac-
tion so as to have ‘international effects’ is leading American courts and
American lawyers to enquire about foreign law. This is an important au-
dience for this book. The question, which our book tries to answer, is not
focused on what one could call the ‘substantive’ part of the (foreign) law
of tort – is there a ‘notion of a duty of care?’, ‘which theory of causation
do the German courts adopt?’ or ‘what alternatives do we have to the
tort system?’ – on which there is a fair amount of academic discussion,
but on the ‘remedial’ part of tort law which has not been well served by
academic literature. Here the questions, in their simplest form, are: ‘can
the claimant obtain damages for this or that heading of damage?’ (in this
book formulated in accordance with the Anglo-American taxonomy with-
out even pausing to ask the question if this is the same in other systems)
and, if so, ‘how much’?
In our view, and on the basis of the practical experience of two of the
authors of this study, an American court (or practitioner) is unlikely to ‘un-
derstand’ the foreign solution – English, German, Italian or any other –
simply by being told that, say, in Germany or Italy they do not recog-
nise punitive damages but in England they do; or that German law (like
g e n e r a l o b s e r va t i o n s 199
American law) also recognises strict liability for harm caused by defective
products. Such answers, correct at one level, are inadequate or even mis-
leading at another. For they fail to take into account a variety of other
factors which affect the final result and thus give rise to wrong impres-
sions for the ‘foreign’ lawyer who encounters them. Some of these factors
have been mentioned in the preceding narrative; others will be touched
upon in this conclusion; but they must be taken into account since they
help put the foreign law in its proper context.
The American-propelled internationalisation of tort law and practice is
thus one reason why we venture here into some of the features of that sys-
tem’s law even though otherwise it is not the main subject of our enquiry.
Once again, this represents an acknowledgement of the fact that this book
might prove ‘of use’ to American transnational litigation. ‘Use’ here is ital-
icised for we think it would be of little use to provide practitioners with
detailed lists of amounts of damages awarded for the loss of an eye, an
imploding breast – the Dow Corning terminology – or total blindness. Such
figures, even if they could be assembled accurately, would change over
time. The law of damages is a fast moving subject, so a snapshot of it is
only of a limited value. Instead, we thus chose to give our readers some
idea of levels of damages but set them in the national contexts and tried
to show how they are worked out, why they can be elusive, how they came
to be recognised and questions of that kind. For anyone who pauses to
think about these matters, this is a tall order. But that is the difference
between a monograph and a loose-leaf practitioner’s manual.
The second reason why we cannot allow American law to escape our
mind completely is of an even more academic nature. Simply put, it is
because we wish to lay the foundations for a future argument namely,
that English law – in some areas of the law but not in all – is moving
closer to the European systems and in many respects is refusing to es-
pouse American ideas and trends. This is a bold thesis to stomach.2 For
Continental European lawyers often believe English and American law
to be very similar; and English lawyers are romantically attached to the
belief that the famous ‘special relationship’ between the two countries is
still alive in the legal world as many believe it is in the political sphere. To
achieve this aim, we have to jump out of the main area of investigation
2 Perhaps less bold or surprising when one considers that European law has become so
much part of the domestic law of each EU member state. So, e.g., A v. National Blood
Authority [2001] 3 All ER 289, where Burton J looked at the Product Liability Directive
1985/374 directly rather than the provisions of the Consumer Protection Act 1987. See
[2001] Lloyd’s Rep. Med. 187 at 190 col. 2.
200 conclusions
and invite the reader to reflect upon the American material against its
well-known, wider background. It is precisely because this background is
so well known that we feel we can refer to it without doing too much
injustice to American law in its full (nuanced, complex and sophisticated)
beauty. So what is this background which affects their tort law in practice
and also colours their view about our laws?
The wider background

The law of damages cannot be separated, nor properly understood, apart
from the substantive law which determines whether there is a cause of
action and what is its proper ambit. European lawyers, who in the 1970s
were reforming their law of product liability, often fell under the fasci-
nation of American law by ignoring this simple but essential truth. The
reverse is also true, namely, that the substantive law of a particular system
may be explicable by the fact that its law of damages is less generous than
others.3
This warning is even more important in international tort practice.
For it is almost meaningless to try to work out the measure of damages
a claimant might potentially try to claim without taking into account
whether the rules of substantive law establish fault or strict liability, what
role is played by social security (and other auxiliary sources of compen-
sation), whether a particular legal system recognises subrogation rights
against the defendant (or can seek recoupment from the victim/claimant),
how litigation is financed, and the like. Ignoring these background fac-
tors can make a system look similar to another when, in fact, it is very
different. Conversely, it might make a legal system seem mean or ungen-
erous, especially if compared to American law. This, for instance, is likely
to happen when one ‘forgets’ that in most European countries medical
expenses can (and often are) covered by the state or other social security
carriers. This is not the case in American law with the result that Ameri-
can tort law has to be more generous than German or Italian if it is not to
leave a deserving victim totally (or almost totally) without redress. Here,
then, is one important difference between, on the one hand English and
3 An illustration of this can be found in the domain of tortious liability for breach of
statutory duties imposed on the state or other state organs. At one level, the differences
between English and French law are thus substantial. At another level, however, these
differences may be attenuated. The greater willingness of French law to impose liability
may, in part, be explicable by the (apparently) lower levels of awards. On this, see Duncan
Fairgrieve, State Liability in Tort (OUP, 2003), passim.
the wider background 201
Continental European law and, on the other, American law.4 The Amer-
ican reader of this work must thus make allowances for the fact that
European awards are lower.
In our experience, differences (and similarities) of this kind do not (and
often cannot) emerge from the mere study of books. On the contrary,
they manifest themselves gradually as one gets a deeper appreciation of
how the foreign system works in practice. In short, what one needs to
do is to try to understand the law in action; and that does not come
easily except to those who have either lived abroad, studied abroad, done
business abroad or, better still, all three. This law-in-action approach thus
involves looking at other branches of the law besides tort law proper. The
way trials are conducted (i.e., with or without juries) is thus an issue of
paramount importance, as is the question ‘how is litigation financed?’:
through legal aid, insurance coverage, contingent fees or a combination
of some or all. These are factors which may not only affect the size of
awards but also ancillary rules relevant to the law of damages such as the
collateral source rule (as we explain briefly later on). More importantly
(and as already stated), they may make awards appear larger or smaller
than they really are; and in the law of transnational tort litigation one
must always try to avoid the danger of comparing ‘apples with oranges’.
To these ‘procedural’ factors one must add the decisive, persuasive or
partially significant role that other semi-official reports may play in the
commencing of a legal action and, therefore, in the likely award of dam-
ages at the end of the entire process. Because of lack of space, we offer here
one example drawn from our own experience; but others could easily be
given.
In the Dow Corning international litigation, the impact of preliminary
reports prepared by medical officials of the government had a significant
outcome both at the level of national litigation and at the level of the final,
international settlement. In England, for instance,5 reports coming from
the Chief Medical Officer of the government, to the effect that silicone had
4 Conversely, the European Convention on Human Rights may have, unwittingly or

otherwise, widened the ambit of those situations in which a person can be compensated
for injury. The attempt by the English courts to narrow the scope of the duty of care in X
(Minors) v. Bedfordshire County Council [1995] 2 AC 633 has been limited by two decisions of
the ECHR, namely Osman v. United Kingdom [1999] 1 FLR 193 and Z v. United Kingdom [2000]
2 LGLR 212.
5 In Germany, as well, similar ‘official’ reports were produced. Though they were
vindicated by the sparse litigation that ensued from this tragedy, they did not, however,
appear to have stopped it altogether as they seem to have done in England. The German
and English position thus seem to be closer to one another than either is to the
202 conclusions
not been shown conclusively to have the deleterious effects attributed to it

by the claimants, seemed to have worked decisively against their attempts
to obtain legal aid and commence litigation.6 Similar reports in the USA
were, on the other hand, deemed to have had much less value and thus
were of less influence in commencing litigation. To put it differently, in
the USA there was no preliminary hurdle to overcome in order to show
that there was an arguable case in order to obtain the necessary funds to
commence litigation, whereas in England there was. These are not factors
which immediately spring to mind when one is considering suing in an-
other country7 or are taken into account when attempting to compare the
generosity of the tort awards made by the respective systems. Yet they are
important, as two of the authors of this work found out when they were
professionally involved in two such international settlements.8
The law of damages, and some of its related issues such as the capping of
awards, must also be examined closely with respect to the prevailing sys-
tems of social security available for accident and disease. This is important
for at least three reasons.
First, an award made to the plaintiff for various types of medical ex-
penses will invariably make American awards larger (or seem larger) than
they are since many of these items are, in the European (and other) sys-
tems, covered directly by the state (or other social security carriers) and
may not always and immediately be visible. One could even go further and
argue that the non-existence of these (different) sources of compensation
in the USA may, in part at least, justify the larger awards one often finds
in that continent.
American. These nuances must not escape the attention of either the comparatist or the
practitioner.
6 This is not always the case. The persistent efforts of the government to promote the MMR
vaccine did not prevent the Legal Services Commission from granting public funding to
autistic children who claimed that their condition was due to the vaccine: Sayers v.
SmithKline Beecham plc [2002] EWHC 1280.
7 Forum shopping is limited, at least amongst European states, by the terms of the
Brussels Regulation or Convention. However, courts in almost every jurisdiction can
assess damages on the basis of the law of the country in which the claimant resides.
Thus, American courts have accepted jurisdiction to try a tort action but applied English
law to questions of quantum in a number of cases. That was, e.g., the decision of the
court in Florida trying claims arising from the explosion of a motor boat at a resort in St
Lucia. English claimants stayed actions in England and joined an action in Florida only
to find that their award was restricted to damages recoverable in England and at the
rates normally awarded in England.
8 Bowling v. Pfizer (Shiley Heart Valve Litigation) sub nom. Bowling v. Pfizer Inc. 143 F.R.D. 141
(S. D. Ohio 1992) and 159 F.R.D. 492 (S. D.Ohio 1994) and Dow Corning (Silicone Breast Implant
Litigation) sub nom. In Re Dow Corning 255 B.R. (Bankr E.D. Mich 2000).
Secondly, the existence of these parallel systems of compensation must

at least trigger off thoughts (concerns?) about subrogation or return of
money received by claimants. To put it differently, is it not possible that
part of an award made by an American court to a French or German
claimant might well end up going into the account of some other ‘payer’
(insurance, social security carrier)? Knowing which head of damages is
covered by these rules can thus make a difference at the end of the day.9
But on this score, the European legal systems do not speak with one voice
with the result that in many cases part of these awards never actually
reaches the claimant’s hands.
Thirdly, and on a purely intellectual level, one must, occasionally at
least, raise the question whether one could not eliminate some types of
litigation by replacing the adversarial tort process with a different way
of handling the vicissitudes of daily life.10 Generosity may in some cases
be best sacrificed to speed. Likewise, legal entrepreneurship may have to
be made to yield to a more bureaucratic way of remedying the conse-
quences of accidents if it means more money reaching more claimants
rather than being absorbed by the actors of a legal dispute. Uniformity,
finally, may win over diversity (often excessive and even capricious). These
are not only changes worth considering; they are changes which will exact
a price, both literally and metaphorically. On the other hand, this price
may well be worth paying – at any rate for some types of accident-causing
situations. Thus, in German practice, full litigation of matters of medical
malpractice leading to physical harm is avoided through administrative
adjudication of such disputes. If the awards made in such cases may strike
some – especially American lawyers – as small, they are also achieved with
a relatively low level of hassle; and this, too, is worth something!
There is another economic and not legal kind of consideration which
must be carefully weighed in transnational litigation, though, hitherto,
it has received little attention by academics and even practitioners. This
is linked to the different wealth of different nations or, to put it more
9 English courts are very much alive to this problem. In the case of a foreign resident
suing in England the court will be required to decide (where it is in issue) where the
claimant is likely to reside and what the rates are in that country for the cost of care,
housing etc. This can, however, work both ways. If a seriously injured claimant is a
patient and is likely to return to his or her native land, the cost of administering the
damages may be much higher than in England. That is the case, e.g., in South Africa.
10 The peculiarities of the national workmen’s compensation schemes is another factor
which must be taken into account, for the extent to which national schemes exclude
recourse to tort law can have a significant bearing on what the successful claimant can
receive.
204 conclusions
mundanely, the differences in the per capita income and the cost of living
of the various nations of the world.
At first blush this may seem an odd consideration to try and factor
into any internationally-flavoured class action settlement. After all, vic-
tims of defective products – usually pharmaceutical – or those affected by
transborder pollution (or other such torts) are suffering similar injuries
from the same product, often marketed under similar or identical con-
ditions. Why should the legal consequences of things going wrong lead
to a different legal treatment at the compensation phase of the process?
After all, humans are the same the world over; and are not ‘worth’ more in
some systems and less in others. But that is where different state wealth,
differing annual national incomes and the different purchasing power of
some currencies, enter the calculation.11
The questions advanced above, so obviously in favour of equal treatment
of plaintiffs the world over, are thus seriously weakened when one takes
into account national incomes and standards of living. For why should
a woman, literally on or below the poverty line in India, or Somalia, or
Nigeria, become a millionaire by the standards of her own country for
having received a defective heart valve designed in the USA by Shelley-
Borg or suffering from an ‘imploding’ silicon breast implant?12 And if
one were to remark that such examples are exaggerated if applied to
the poorest women of some of the world’s poorest countries, one can
retort that other toxic torts, such as the Bhopal incident in Northern
India approximately two decades ago, can raise essentially the same type
of questions and objections against equal treatment. And in between,
one can envisage a whole host of examples, involving claimants from
poor, moderately rich, to rich countries where incomes, earning capacity
and a variety of legal rules combine to produce much smaller awards. In
such cases, the arguments against equal compensation are less convincing
11 However, it is essential if justice is to be done that the awards should properly

compensate the victims. In England, as in the USA, there is a Vaccine Damage
Compensation Scheme. The limit of compensation is £30,000 irrespective of the
seriousness of the injury. In many cases that is wholly insufficient. Contrast the position
in the USA where proper compensation is provided to a successful applicant to the
scheme.
12 The awards made by the Foreign Fracture Panel in the Shiley Heart Valve litigation, n. 8
above, took careful account of these differences both in relation to poor nations and
those where either earnings and/or the cost of living was higher than in the USA. In
order for justice to be done it was necessary to ensure, as far as possible, that the
amounts awarded were truly compensatory and neither provided a windfall to the
claimant nor left them short of sufficient money to meet their future needs.
than one might think at first instance.13 The downscaling of American

awards in a way that is even moderately appropriate for each of these
systems becomes a complex exercise14 which, it must be admitted, can
only attempt to reach an overall ‘fair’ conclusion.
The necessity to attempt the above task, however distasteful it may be in
some of its aspects, will become more obvious as the early attempts in the
USA on extending class settlements to overseas (probably)15 gains momen-
tum. But the exercise at that stage becomes not just potentially unsavoury
but also very complex since it involves evidence about how the compen-
sation systems of foreign countries work in practice. Collecting reliable
information about law, access to courts, judicial delays, costs, standards
of available medical treatment and the like is as difficult as getting a re-
alistic picture of the economic standard of living in many countries of
the world. For, generally speaking, the statistical and electronic evidence
available in the USA to answer these questions is excellent, as it is good (or
fairly good) for most Continental European countries. Such confidence in
accessing the relevant data can be extended to countries such as Israel,
South Africa, Japan and, of course, Australia, Canada and New Zealand (to
give some of the most obvious examples). But the difficulties become in-
creasingly frustrating as one moves to other countries and systems which,
for better or worse, are less known to practitioners and academics and for
which it is simply impossible to find experts to testify in court, short of
augmenting the numbers already called to unworkable limits.
13 See above. True equality is to be found in meeting the needs of the individual, not in the
amount of the award. For example, a claimant should be compensated for loss of
earnings by an amount equal to what they would, on the balance of probabilities, have
been able to earn in the country in which they reside and not by a comparison with
what a similar individual might have earned in a different country.
14 It was attempted in the USA for the first time in Bowling v. Pfizer, Inc. 143 F.R.D. 141 (S. D.
Ohio 1992); Bowling v. Pfizer, Inc. 159 F.R.D. 492 (S. D. Ohio 1994). Two of the authors of
this book (Basil Markesinis and Augustus Ullstein) were members of the panel of experts
that helped design the formula which is described in detail by Professor Harold Luntz
(also a panel member) in his illuminating (and partly critical) article ‘Heart Valves, Class
Actions and Remedies: Lessons for Australia?’ in Nicholas Mullany (ed.), Torts in the
Nineties (1997), p. 72 ff. The principles were subsequently applied in In Re Dow Corning
Corporation 255 B.R. 445 (Bankr. E. D. Mich. 2000), a case in which the above-mentioned
three lawyers were, again, involved.
15 Given the cost of defending mass action in the USA, the desire of American companies,
faced with class actions, to reach worldwide settlements is not, in our view, to be
underestimated. But we have injected a word of caution in our text, above, for in at
least one European country – Germany – considerable doubts have been voiced about
class actions. The Constitutional Court took this view in its judgment of 25 July 2003,
BVerfG NJW 2003, 2598.
206 conclusions
It is here that comparative methodology can play a part to alleviate these

problems. For comparative methodology can help trace the movement of
ideas from one ‘parent’ (or exporting) system to an ‘importer’ and then, in
a variety of different ways, try to make allowances for local variations. The
Korean Civil Code, for instance, can trace its origins to the French which,
as is well known, acted as a model for a substantial number of legal sys-
tems in the world. If the French codal model, however, is based (as it is) on
the notion of fault, the search must then extend to specific statutes (often
consumer in nature) which have tried to alleviate the codal harshness.
As this shift from primary legislation moves into a more specific regime,
other dangers, connected with local social habits, begin to become ap-
parent. True enough, the relevant Korean statute at the time of the Dow
Corning litigation16 was said to be used not, as an American strict liability
statute would be, to facilitate the case of a plaintiff, but as a spur towards
some kind of extra-judicial conciliation given the (known) far-Eastern dis-
like for litigation.17 Citing these enactments before an American court
could thus easily lead to the erroneous belief that the Korean implantee
of a silicon breast was more or less in the same position as the American.
But she is not. And that is why so many Korean litigants tried to receive
the same treatment as their American counterparts. The different level of
damages was not the only reason; the difficulty of bringing a successful
action in Korea was also an important factor. The Korean litigants in the
Dow Corning cases thus had to settle for lower amounts than their Amer-
ican counterparts; and did so not just because of rules of law but also
because of a complex evaluation of a wide variety of factors.
‘Applied’ comparative law thus holds part of the answer to these types
of questions and issues which we suspect will increase not decrease with
the passage of time. We call it ‘applied’ for, as one of us explained in a
monograph recently published,18 these kinds of real issues will help revive
the comparative study of the legal systems of the world. But this revival
16 Since then, a new (Korean) Product Liability Act (in force since 1 July 2002) has expanded
manufacturers’ liability by introducing strict liability for defective products. This latest
change is reviewed in General Cologne Re, Special Report from Phi5/2001: see
www.gcr.com/sharedfile/pdf/PHi20015-KoreanPLA.pdf
17 The English courts under the CPR have moved towards mediation and ADR. They now
have the power to order a stay to enable the parties to mediate. That may be done of the
court’s own motion: CPR 26.4. Further, the Court of Appeal refused the successful party
their costs because they had refused to consider mediation (Dunnett v. Railtrack plc (in
railway administration) [2002] EWCA Civ 303; [2002] 1 WLR 2434).
18 Basil Markesinis, Comparative Law in the Courtroom and the Classroom (Hart Publishing,
2003).
more specific conclusions 207
will also mean that comparative law or methodology will have to move
away from legal history and Roman law and even trendy subjects such as
feminist or critical legal studies and get its teeth into the law in action
and its actual functions in practice. Such a re-orientation of the subject
should not cause concern to academic purists. For the exercise involved
is not just relevant; it is also intellectually stretching and, indeed, very
stimulating. In its need also to involve data from other disciplines such as
politics, economics, statistics etc., it will also fit in well with the prevailing
trend in the leading universities of the Western world to approach law in
an interdisciplinary manner.
The above general observations form part of the beliefs which under-
lie this book. But we have tried to flesh them out by providing solid,
legal evidence about the rules which shape the law of damages in three
major European legal systems. The aim thus is obvious: to facilitate the
theoretical and practical attempts to note and then study the areas of
divergence and convergence which can then be put to some kind of ap-
plied use. If the method (still, it must be admitted, in its infancy) remains
far from perfect, we submit this does not invalidate the basic assump-
tion that the major legal systems must be brought into some sort of
logical juxtaposition not for the sake of then grouping them into fam-
ilies, but for the sake of drawing practical conclusions in national reform,
harmonisation attempts and, finally, international litigation. The term
used earlier on – applied comparative law – captures, we think, this idea
neatly.
More specific conclusions

The preceding general observations, along with the contents of this book,
merit the following more specific observations which are mentioned sum-
marily under eight headings. We stress ‘summarily’ since we wish to em-
phasise that we are here raising these points for the sake of further re-
search and consideration and not advancing them as incontrovertible
conclusions.
‘European’ and ‘American’ law

We mention first the appreciable similarity in the level of awards between
the three major European legal systems discussed in this book and also
stress the apparent (and often very real) difference with American awards.
This statement is, in our view, significant and in need of at least one major
qualification. We start with the latter since it is relevant for much of what
208 conclusions
has been said thus far and will be repeated in this chapter about American
law.
The caveat is born of the obvious difficulty already alluded to and associ-
ated with the term of ‘convenience’ we have used, namely, American law.
In fact, there is no such thing as American law but a law of fifty states (or
fifty-one if we include the federal jurisdiction). One is not being pedantic
in reminding the readers of this well-known fact, for the differences in
awards between various states (and within various counties of the same
state) can be very significant indeed.19 This divergence may be caused by
the presence or absence of particular legal notions or institutions (e.g., no
punitive damages in Louisiana law), different rules about the collateral
source rule (emanating from statute or case law practice), and different
(and highly) complex ‘capping’statutes which can lay down highly varying
caps for damage flowing from different types of tortious situations (e.g.,
medical malpractice, car accidents etc.). Statistical information about jury
awards also reveals significant local variations which are not, necessarily,
attributable to rules of the kind mentioned above but which can often be
linked (tenuously?) to a variety of other, non-quantifiable (or even verifi-
able) factors such as local wealth, jury predilections, political affiliations.
The list is both endless and intriguing. The European victim who is con-
templating a legal action in the USA must bear these variations in mind.
And the American lawyer who might be tempted to describe European
awards as pitifully small should be aware of the fact that he must be
explicit in what he is comparing.
The wider and, for lack of a better term, ‘jurisprudential’ observation is
the one alluded to at the very beginning of this chapter, namely, that En-
glish law is increasingly diverging from American law20 and converging
19 A glimpse of this can be obtained by looking at Table 11 of ‘Litigation-Mania in England,

Germany and the United States: Are We So Very Different?’ originally published in
(1990) CLJ 233 and republished as ch. 20 in Basil Markesinis, Foreign Law and Comparative
Methodology (Hart Publishing, 1997).
20 Perhaps the reverse is just as true and American law is, itself, either abandoning
original English practice (and case law) or, increasingly true nowadays, refusing even to
consider it. An example of the first trend, particularly appropriate to this monograph, is
found in the American Wrongful Death Statutes. Originally modelled on Lord
Campbell’s Act of 1845 (and the subsequent Fatal Accident Acts), the American statutes
only compensated economic losses affecting the dependants of persons killed as a result
of a tort. Progressively, however, the wording of these statutes was changed to allow
solatium type claims to cater for (mainly) the death of young children who were not, at
the time of their death, supporting parents or relatives (listed by the statutes as
‘dependants in law’). We discuss this below along with the more modern tendency to
call these claims for loss of ‘companionship or consortium’.
with Continental European law. This not being a monograph about sub-
stantive law, it is not necessary to labour this point too much. Yet one
cannot help but note that in a wide spectrum of subjects – defamation,
privacy, patterns of federalism, employment law, protection against sex-
ual discrimination – this estrangement seems to be taking place. If this
thesis is arguable, it certainly gains further support by comparing Ameri-
can with European levels of damages.
Yet, it is the misfortune of lawyers – if few other professions – to see (or
force themselves to see) ‘the other side of the coin’ and in this case this
means that, once again, European lawyers must approach the issue of size
of American awards. For allowances must be made for (a) the absence of
social security coverage for medical necessities of all kinds; (b) a significant
reduction of the award itself, in order to cover the costs (or combined
costs) of litigation; and (c) the other background factors alluded to earlier
on in this book. In this context, one must also mention the often ignored
fact that the American awards that reach European audiences tend to be
the original jury awards which (because of their size) attract considerable
publicity. On the other hand, the fact that these awards are subsequently
reduced because of settlements, remittiturs,21 appeals and the like, rarely
receive much attention,22 even by the members of the (European) legal
profession. All that one can say is that we Europeans are different from
the Americans but, maybe, not that different when all these additional
but important elements are factored into our calculations.
Punitive damages
In terms of specifics, the single greatest difference between American
law on the one hand and European law (including English law) is the
prominence of the punitive element in American tort awards. Here, the
danger lies largely on the American side, who can be tempted to believe
that punitive awards are made in systems which theoretically at least
21 In the USA, despite the constitutionally protected status of jury trial, a widespread
practice exists which allows a trial judge the discretion to offer a claimant a smaller
amount than that offered by an (excessive) jury award. Remittiturs have survived
constitutional challenge, whereas the exact reverse – an additur, where the judge offers
the defendant a larger amount to that awarded by the jury – has been condemned by
the US Supreme Court as long ago as Dimick v. Schiedt, 293 U.S. 474 (1935).
22 The famous ‘Ford Pinto’ case which in Grimshaw v. Ford Motor Company, 119 Cal. App. 3d
757, 174 Cal. Rptr. 348 (1981) led to one of the highest awards of those times – US $125
million – was remitted to US $3.5 million! As the late Professor John Fleming observed:
‘The discrepancy by a factor of more than thirty illustrates the subjectivity of assessing
these damages’. John Fleming, The American Tort Process (OUP, 1988), p. 136.
210 conclusions
seem to sanction them in principle. This issue was hotly debated in the
Dow Corning litigation, especially as far as Australia is concerned, where it
was shown that such awards (though claimed) are very rarely made23 in
product liability cases.
The availability of punitive damages, combined with the contingent fee
system, in our view makes (parts) of the American legal profession fairly
aggressive in raising and pursuing such claims, arguably even in cases
where they may not be truly meritorious. But the ‘nuisance effect’ that
such claims can have on corporate defendants may well ‘force’ them to
settle, thus augmenting the trend (or the image) of large awards.24
A growing volume of empirical studies in the USA can substantiate some
of these observations while making others more questionable. But here
we raise some of these points not simply in order to reinforce observations
already made elsewhere, but also to lament the (relative) absence of such
empirical studies in the European area. This absence of this different and
we submit additional ‘tool’ may be particularly linked to the more ‘dog-
matic’ study of the law in Continental European universities, though it is
less easy to explain in Britain.
This difference is important not only if one compares and contrasts
‘American’ law on the one hand and ‘European’ law on the other but
also if one is comparing and contrasting English law, German law and
Italian law. Here the comparison is easy at a superficial level – England
recognises the heading, the other countries do not – but more difficult
at a more sophisticated level. For, first, one must decide to what extent
the ever-changing dicta of English judges reflect a tendency to restrict or
expand the availability of punitive damages. In addition, one must take
into account the fact that European systems – German and Italian in par-
ticular (but also French) – conceal a punitive element under a different
heading. So, if one disregards terminology for a moment, one can see
that from the German perspective, the ‘deterrent effect’ which has been
23 In fact only one case was found making such an award in a product liability setting.
24 It was the view of many defence lawyers in England that legal aid served to fuel the
same aggression. Certainly the absence of legal aid for personal injury cases and the
advent of conditional fees have led to a downturn in the number of claims. Defendants
are also becoming more aggressive in their approach to litigation. As Michael Spencer
QC said on behalf of SmithKline Beecham in the MMR litigation: ‘The days of
commencing wholly speculative litigation in the hope of forcing defendants to pay off
cases through a costs blackmail are, we say, over. The courts will be astute to ensure that
only properly viable cases are brought and will be quick to strike down cases which are
wholly speculative and brought without any evidentiary foundation’: Sayers v. SmithKline
Beecham plc [2002] EWHC 1280, 1st case management conference, 3 September 1999.
attributed to the ‘Schmerzensgeld’ in the yellow-press cases (such as the fa-

mous ‘Caroline of Monaco’ cases) may well be understood as to imply an
element of ‘punitive damages’. Moreover, the well-established ‘Genugtu-
ungsfunktion’ of the ‘Schmerzensgeld’, whether it is translated as satisfaction
or atonement, clearly also conceals a punitive component. Indeed, one of
the earliest cases on this topic, the case of the Professor of Law,25 is replete
with words and ideas that can be taken to have punishment in mind. The
above observations, important though they are, must not mislead anyone
into thinking that such punitive or deterrent elements can be found in
German and Italian awards in the domain of personal injury. Here, the dif-
ference with the common law systems – especially the American common
law – is more marked.
Variations in awards within national European systems

The regional variations in American awards mentioned above must be
more than simply noteworthy to a foreign litigant who is considering the
possibility of a legal action in the USA. But just as noteworthy and, in geo-
graphical terms, unjustified, is the regional variation of damage awards in
European systems such as the Italian.26 The contrast here with Germany
and, even more so with Britain, is striking; and the degree of variation
is not, in our view, justified by looking at the undoubted difference of
wealth between North and South which, after all, can also be found in
other countries (including Britain). A glance at the tables reproduced in
the Appendix thus shows that these differences of levels do not follow
strictly the pattern: North (rich), South (poor).
The above observation does more than point out a point which directly
affects the level of awards – the primary concern of this book. Indeed, it
goes even further than giving an insight to law reform or, if that sounds
too ‘highfaluting’ a term, law change. For attempts under foot in Italy to
extend the national, medium award for danno biologico to instances of (per-
manent) invalidity exceeding 9 per cent reveal some further differences
between the systems. The idea that this could be fixed by delegated legisla-
tion, or simple ministerial decision, largely on the basis of a mathematical
calculation of the average amount of the regional variations, is surprising
to say the least. For in other systems one would envisage a prolonged pro-
cess of hearings, lobbying and other such ways of trying to fix this crucial
25 BGH 19 September 1961, BGHZ 35, 363 = NJW 1961, 2059; English translation in Basil
Markesinis and Hannes Unberath, The German Law of Torts: A Comparative Treatise (4th edn,
2002), p. 420 (henceforth referred to as GLT).
26 And the French which, however, is not the subject of examination in this work.
212 conclusions
amount, which insurers would like to see set at lower levels and claimants
at higher ones. Prophesying the future is a hazardous activity; but we ven-
ture the thought that the chances of some Italian litigant challenging the
statute (or the new tables) on the grounds that they are incompatible with
articles 2 and 32 of the Italian Constitution (protection of health and per-
sonality) cannot be a fanciful possibility. This question of ‘levels’, by the
way, must not be seen as raising issues of tort law or constitutional law.
For, as we noted in passing in the Introduction, the question of damages
and thus insurance costs is also one in which the government has a strong
interest.
But the Italian experience on this point also underscores the point made
earlier in the Introduction about local allegiances. For history, not covered
in this book for reasons of space, shows how some local courts branched
out in their own, individual evaluation of these amounts under the influ-
ence of writings for their local law school. Here, then, we not only have
an instance of academic/judicial co-operation which is such a hallmark of
Continental European law and so absent, until recently, from English law;
we also have an excellent example of judicial deference to the academic
side of the legal profession. The Genovese and Pisa schools thus deserve
to be singled out for praise by us now as they were nearly a decade ago by
the Corte Costituzionale.27 This is mentioned not merely for its historical
significance but also because of the impact this tradition has had in the
writing of Italian law books. To put it differently, what was contributed
in this volume by our Italian colleague is not simply an accurate account
of Italian law but also an account recast for an Anglo-Saxon readership. If
properly done, this presentation of local law does not betray its substance
but merely transforms aspects of its appearance for the purposes of mak-
ing it accessible to interested foreign observers. How well it was done in
this book is not the real question. The question is: did it have to be done?
On this question none of us has any doubt that the answer is in the affirma-
tive. Those common lawyers who have happened to have glanced at Italian
works on the subject will agree with us that without such adaptations,
the presentation of Italian law to a non-Italian readership is extremely
difficult, if not impossible.
Easy access to justice as a prerequisite to obtaining compensation

The American way of financing litigation largely through the contin-
gency fee system has another effect on the different operation in practice
27 14 April 1995, no. 4255, 1955, Resp. civ.prev. 519 and note Ponzanelli.
of apparently similar tort law rules. Thus, all systems to a greater or

lesser extent realise that modern tort law must take into account the
fact that its rules are no longer the only ones that determine compen-
sation for loss. The need to regulate the interrelationship between all
these disparate rules of compensation is thus manifest in all of them;
and if one were to rely solely on books (or even the majority of judicial
decisions), one might easily be led to the conclusion that the systems
reason in a very similar manner: the tort victim must be indemnified
for his loss but he must not make a profit out of it. This should mean
that ‘cumulation of benefits’ should be avoided wherever possible and,
indeed, this is the case in Germany, Italy and, perhaps somewhat less
rigidly, in English law.28 But in the USA, once again, the position – in so
far as there is a unified position – is different, since the ‘system’ there
shows greater tolerance towards the possibility of cumulation of differ-
ent benefits. To European lawyers, the different result may, at first blush,
appear confusing since so many of the arguments invoked in this debate
are perfectly familiar to them, as well. A simple glance at the leading
American tort textbooks confirms this instantly. Yet, arguably, the dif-
ferent result is really justified (or becomes justifiable) by the fact that
a substantial part of the award goes towards financing the costs of tort
litigation and if this were to be removed from the plaintiff’s award, he
would not be made whole. Though this ‘background’ difference may thus
seriously affect the operation of tort law in practice, it seems rarely
to be openly acknowledged. There does, however, exist the occasional
frank judicial admission which makes such an idea plausible and thereby
underscores the need to study legal rules within their wider political
and socio-legal context in which they operate.29 Here, therefore, is an-
other example of these ‘background factors’ which, in practice, trans-
forms the operation of rules which, in the books, are the same in most
countries.
28 English law rules in relation to whether collateral benefits fall to be deducted from
awards are too long and complicated to explain here. It is right to say, however, that
they are not entirely logical and need to be looked at on a case by case basis.
29 In Helfend v. Southern California Rapid Transit District, 2 Cal. 3d 1, 465 P.2d 61 (1970), the
Supreme Court of California did just that. It thus argued that: ‘Generally the jury is not
informed that plaintiff’s attorney will receive a large portion of the plaintiff’s recovery
in contingent fees or that personal injury damages are not taxable to the plaintiff and
are normally deductible by the defendant. Hence [the plaintiff] rarely actually receives
full compensation for his injuries as computed by the jury. The collateral source rule
partially serves to compensate for the attorney’s share and does not actually render
‘double recovery’ for the plaintiff’.
214 conclusions
Problems of comparison with non-pecuniary damages

Another highly significant difference lies in the area of non-pecuniary
damages sometimes referred to (rather incorrectly) as damages for pain
and suffering or (rather vaguely) as ‘dommage morale’.
We touch upon this issue in the Conclusions not in order to repeat
figures given in earlier chapters. Nor do we wish to stress that in the USA
this heading can represent the largest30 and most subjectively determined
part of the award. This time the issue is raised in order to stress that
such awards are often made in the USA in areas in which they would be
unknown in Europe (including England). Additionally, these awards also
raise another problem. For not only do they cover items which are not
recognised by European law; they also often result in overcompensation
of the parents of the deceased foetus or child, who end up as the ultimate
beneficiaries of these amounts. It will be clear from the preceding sentence
that we are referring to claims for compensation for the death of children
and also for claims for foetal injuries which often (but not always) are
linked to claims for loss of consortium or companionship. This, again, is
an area where English law should be bracketed with Continental European
law rather than its American relation.
Deaths of young children or infants can rarely generate in European
(including English) law substantial awards under Fatal Accidents Act leg-
islation. This is clearly because none of the systems under comparison is
willing to recognise such claims or, if they do, they do little more than
provide very modest or conventional sums. If the ‘bereavement’ or ‘loss
of companionship’ claims receive such short shrift, the possible claim for
lost dependency fares even worse. We submit rightly so, not only because
it is speculative, particularly where the victim who was killed was very
young, but also because such claims, if they were ever to be recognised,
should also entail an appropriate reduction for expenses ‘saved’ by the
parent/claimant. A parent should thus not be allowed to make a claim for
a possible future dependency and not have it adjusted to take into account
the fact that, but for the child’s death, he would have had to incur (sub-
stantial) expenses to maintain, bring up and educate the child which, one
day, was to become its supporter.
30 Like all general statements, however, this must be qualified in at least one sense,
namely, that in Germany, as well, the largest amount of money – DM1.7 billion – was,
according to figures of insurance payments in the context of traffic accidents for the
year 1999, reserved for compensating pain and suffering. This must be contrasted with
DM300 million being paid for medical treatment. For further details see Hein Kötz and
Gerhard Wagner, Deliktsrecht (9th edn, 2001), no. 511.
The American courts which do allow such claims are conceptually at

any rate on safer grounds when they admit that these are claims for loss
of companionship rather than claims for loss of what is often a highly
speculative loss of consortium or companionship. Or, in pursuing this
line of reasoning, they are making up for a deliberate omission from the
original English Fatal Accident Acts which, as already stated, served as
models to the late nineteenth century American legislation of all claims
for bereavement or solatium. Notwithstanding this, such awards can still be
very substantial;31 and coupled with the contingent fee system, enticing
enough to give rise to litigation which can fall little short of gold-digging.
Claims arising from foetal injuries (or pre-conception injuries, typically
to the mother) are, in our view, even more worrisome, especially in those
American jurisdictions which allow them even where there is no live birth
of the foetus.32
The idea that damages can ‘compensate’ the parents for having being
deprived of the opportunity of having the child (and enjoying its company)
31 Some American courts have extended this attempt to do ‘justice’ to borderline
situations. Thus, see Haumersen v. Ford Motor Company, 257 N.W.2d 7 (Iowa 1977) awarding
US $100,000 for the loss of a seven-year-old child ‘with a talent as a cartoonist’. A handful
of cases, seem, literally, to have gone overboard. See Andrews v. Reynolds Memorial
Hospital, Inc., 499 S.E.2d 846 (W.Va. 1997) where the court awarded US $1.75 million for
loss of future earnings attributable to the death of a one-day-old baby! Note, however,
that not all courts have been willing to depart from the original model of the Fatal
Accident Acts. Thus, see, Prather v. Lockwood, 19 Ill.App.3d 146; 310 N.E.2d 815 (1974).
32 On the ‘born alive’ requirement, the American courts seem divided. Most take the view
that live birth is not necessary for a wrongful death action. Thus Volk v. Baldazo, 103
Idaho 570, 651 P.2d 11 (1982); Dunn v. Rose Way, Inc., 333 N.W.2d 830 (Iowa 1983);
Summerfield v. Superior Court, 144 Ariz. 467, 698 P.2d 712 (1985); Moen v. Hanson, 85 Wn.2d
597, 537 P. 2d 266 (Wash. 1975). Others, probably under the influence of Roe v. Wade, 410
U.S. 113, 93 S. Ct. 705 (1973), have held that live birth is a prerequisite of recovery. Thus,
see, State of Missouri ex rel. Hardin v. Sanders, 538 S.W.2d 336 (1976); Justus v. Atchison, 19
Cal. 3d 564, 565 P.2d 122 (1977); Chatelain v. Kelley, 322 Ark. 517, 910 S.W.2d 215 (1995). A
number of recent decisions have adopted this position, often reaching this result on the
ground that a stillborn foetus is not a ‘person’ under applicable wrongful death
legislation. Thus Witty v. American General Capital Distributors, Inc., 727 S.W.2d 503 (Tex.
1987); Milton v. Cary Medical Center, 538 A.2d 252 (Me. 1988); Giardina v. Bennett, 111 N.J.
412; 545 A.2d 139 (1988), criticised in (1989) 21 Rutgers LJ 227. A final variation to this
kaleidoscope of differing solutions can be found in cases that refuse wrongful death
actions where foetuses are born dead, but allow the mother to recover for her mental
anguish. Thus, see, Tanner v. Hartog, 696 So. 2d 705 (Fla. 1997); Giardina v. Bennett, 545 A.
2d 139 (1988); Krishnan v. Sepulveda, 916 S.W.2d 478 (Tex. 1995). Though these last cases
do not come anywhere near representing the majority of jurisdictions, they seem to
have much to commend them since, at least, they seem to have grasped the nettle.
Simply put, this is that compensating parents under wrongful statute clauses seems
inappropriate given that these enactments were always intended to compensate the
loss of a provable pecuniary advantage i.e., the lost dependency.
216 conclusions
is debatable or, at the very least, the idea of the damages being anything
more than a small conventional figure, seems to be unconvincing. The
outcome – compensation – becomes even less convincing if we realise
that these amounts can, in effect, duplicate the parents own claims for
pain and suffering. Yet, this risk is not, apparently, accounted for when
determining the award. The fact that little if any judicial guidance seems
to be given on this point might also suggest that the augmented size of
the award may reflect American realities i.e., that part of it will not end
up in the pocket of the parents but of their lawyers. But though there is
some evidence to suggest that this kind of ‘concealed’ calculation takes
place in other instances, e.g., the collateral source rule, we found none to
support our supposition in those cases which we were able to examine.
The objections against such awards reach a climax when one realises
that the viability at the time of the injury (rather than the live birth
requirement) can result in the never-born-alive foetus claiming money
(through whom? for what?) under one of the Survival Statutes (the Amer-
ican equivalents of the English Law Reform Act 1934). On this possibility
we feel no further comment is called for.
Though these illustrations come from the domain of fatal accident liti-
gation, which was not included in the purview of this monograph, they are
mentioned because they tie in well with the American claims for pain and
suffering and the rather open-ended nature of awards made under this
heading. Such tendencies are not to be found in Continental European
law – indeed, they are also absent from English law. In this sense, they
confirm once again our perception of the English position as being closer
philosophically – as well as de lega lata – to that of Continental Europe
than to the USA.
The above discussion, however, also shows that the courts may be us-
ing this amorphous heading of non-pecuniary damages to perform func-
tions other than compensation. The occasionally very substantial damages
awarded by American courts under headings such as loss of companion-
ship may thus owe their origins to the fact that in fatal accident claims
parents had no lost dependency that they could plausibly claim from the
tortfeasor for the death of their infant child. The feeling that such ‘injus-
tice’ could not be left without a remedy may lie behind some of the most
recent developments described briefly above.
Though European law has nothing comparable to show in the kind of
cases discussed above, European judges may also be taking advantage of
the amorphous nature of the heading in order to achieve other aims.
The discussions in Italian law about danno morale, its availability when no
crime was committed, and its extent, likewise seem to conceal judicial
preoccupation with Italian factors such as variation of awards depending
on the social status of the victim. The frequent reference in Italian aca-
demic and judicial literature that the amount of compensation is to be
left to the fair or equitable discretion of the judge only helps to facilitate
flexibility but, it could be argued, affects the transparency of the judicial
process. Still, points such as these can only be put tentatively for the sake
of further discussion and nothing more.
Danno morale as well as danno biologico (and, indeed, the German equiv-
alent of ‘Schmerzensgeld’) may also conceal the award of a sum of money
which in the common law might appear under a distinct heading. All of
which goes to show that an attempt to impose upon other legal systems
the taxonomy known to the common law can work up to a point but no
further.
Specificity about the size of awards

Closer to the contents of this book is another observation. It concerns the
highly developed and systematic nature of the German law of damages.
Overall we find this feature less obvious in Italian law, with the result
that one must often admit the considerable difficulty in finding reliable
sources of damages awards. On the issue of quantum of damages, in our
experience, the position in French law may even be more problematic;
but we do no more than touch on this point since French law was not
included in the purview of this study.33
The English position calls for a different comment. The starting point
must be the fact that everything that pertained to damages was within
the province of juries. Not surprisingly, therefore, even a cursory glance
at books of all kinds of forty or more years ago would reveal paucity –
relative at any rate compared to the German scene – of principles, rules
and guidelines on all of the issues discussed in this book. Yet the scene
has radically changed since the ‘revolution’ of the mid-1960s mentioned
in the Introduction of this book and the entrusting of this topic in the
hands of trained judges.
This observation has more than a historical significance. For it shows
that some systems have spent more time in thinking about what should be
compensated and how it should be classified (in law books) or explained
to litigants and practitioners. From a comparative (and transnational
33 One of the most recent and thorough surveys on this elusive topic can be found in
Duncan Fairgrieve, State Liability in Tort (2003), esp. p. 218 ff.
218 conclusions
litigation) point of view the consequence of this difference is that the

headings of damages are not always identical. Care must thus be taken
when comparing notions which sound similar or, conversely, where they
do not sound identical but nonetheless may conceal in them headings of
damage which in other systems might be dealt with independently. At
the risk of some (minor) repetition we thus note that these distinctions
and subdivisions are not always made clear in the German books on the
subject; yet they are in the judges’ minds when fixing the level of com-
pensation for Schmerzensgeld as is seen from the actual decisions and books
which contain summaries of awards. Yet, it is in a certain respect narrower
than some of its common law counterparts. For an award of Schmerzensgeld
presupposes that the victim suffered personal injury. In short, the object
of an award of Schmerzensgeld is to compensate for all kinds of non-material
harm suffered as a consequence of personal injury.
The difficulty alluded to in the previous section and connected to the
fact that the compensable heading of damage are not identical or cotermi-
nous is complicated by the fact that often a court may deal with a heading
of damage not by compensating it directly but by augmenting some other
recognisable heading. There are many reasons why this may happen; but
the way this is brought about may conceal the fact that compensation for
a heading (a) has taken place or may, alternatively, (b) give the impression
that it has been undercompensated. For transnational litigation purposes
this practice has its dangers in so far as it may lead the uninitiated to
assume that two systems compensate a particular type of injury in a very
different way. An illustration from German law can help make this point.
In a decision delivered on 3 December 1974,34 the Federal Supreme
Court had, inter alia, to decide what compensation if any were to be given
to a woman who had suffered a facial scar. The claim included the cost
of remedial operation (estimated at that time at DM2,590) to remove a
2.5cm scar next to the claimant’s right ear. At the same time, in some
extreme cases there may be reasons for rejecting claims for cost of med-
ical treatment for personal injury. As already stated, the final award de-
pends upon the court’s appreciation of the reasonableness of the request.
While re-affirming the general view that purely cosmetic surgery could
be recovered as part of the ‘restoration’ owed by the defendant under
§ 249 BGB, the court also stated that the starting point was the ascertain-
ment of the reasonableness of the request. The Federal Court stressed that
34 BGHZ 63, 295. But see OLG München 30 November 1984, VersR 1985, 868 (scar on the
face of a beautician) (see p. 70).
reasonableness depends on the circumstances of each case. Accordingly,

a balancing operation had to be undertaken. This included the severity
of the injury, the scale of the claimed cost and the motives of the plain-
tiff. The Federal Court accepted the Court of Appeal’s finding that award-
ing compensation would be unreasonable in the present case. It seems35
that this was because the scar was regarded as insignificant and, in any
event, hardly visible and likely to disappear over time. Yet, the final result
was not as harsh as it may appear at first sight since the court pointed
out that the plaintiff was awarded a correspondingly higher amount of
money under the heading of damages for pain and suffering. The deci-
sion, the correctness of which has never been doubted, would thus sug-
gest that where the cost of reinstatement to the status quo ante appears
unreasonable, the plaintiff may obtain some other monetary compensa-
tion, e.g., in the form of an increased award of damages for pain and
suffering.
Nature and wealth of the defendant as a determinant

of the size of the award
To an English and Italian lawyer this heading is almost meaningless; but
to American tort claimants this can be a very relevant factor. For there
is ample statistical evidence to show that tort litigation, heard in the
states before juries, can produce differing levels of awards depending upon
whether the defendant is an individual defendant, a government entity or
a corporate defendant. In one of his most original books,36 the late Profes-
sor John Fleming of the University of Berkeley at California demonstrated
this to European readers in a vivid manner; and many (less well-known
but fascinating) empirical studies of the Rand Corporation have supplied
ample, additional and intriguing evidence about this phenomenon.37
We mention this ‘unusual feature’ not because we wish, again, to di-
verge into American law but because in this instance one finds a ‘distant
relative’ in the German provision of § 829 BGB. This, it will be remem-
bered, allows the judge in some cases to take into account the financial
35 We stress ‘it seems’ for the facts are not fully and clearly stated – something which
marks out German from Anglo-American cases which have to consider facts in detail if
they are to perform the distinguishing function which is so central to the common law
process of deciding cases.
36 The American Tort Process (OUP, 1988), p. 111 ff.
37 Chin and Paterson, Deep Pockets, Empty Pockets: Who Wins in Cook County Jury Trials (Rand
Corp., 1985); Hensler, Vaiana, Kakalik and Peterson, Trends in Tort Litigation: The Story
Behind the Statistics (Rand Corp., 1987).
220 conclusions
means of the defendant38 (including the availability of insurance) and ad-

just accordingly the amount of compensation. The desirability of such an
option, especially in the context of personal injury litigation, may strike many
as dubious; and we put the point in that way in order to lead up to our
last observation.
Proposals for reform?

We approach this subheading first from the point of view of a narrow but
important topic – that of costs and method of payment of the award – and
then from the wider angle of European law reform.
Litigation costs and how the award should be paid to the successful
claimant are topics which are currently under review in English law. The
reader will have noticed that we did not discuss them beyond what was
strictly speaking necessary for our stated aims. But these are topics that
could spiral out of control and provide a monograph of their own. Yet,
one cannot – and should not – allow the opportunity to be missed and fail
to signpost two points. First, to our knowledge there is no similar debate
currently taking place in the two other systems discussed in this book.
This does not mean that the topic is not important; but it does mean
that non-English lawyers reading this book may well wish to glance at
these English debates and see what the issues currently occupying their
English counterparts are. Secondly, one must note the growing dissatis-
faction with the lump sum method of payment of awards and the growing
interest in the annuity system. Without going into the drawbacks of this
alternative – and there are some – we note, again, the fact that they are
not used as often as one might have thought in the two systems (German
and Italian) which already have them.
So much, then, for the narrower topic; what about the wider discussion
of reform?
While the information contained in this monograph and, perhaps, some
of its ideas, may prove of some interest to law reformers, this book was
not written with them in mind. It thus contains no express formulations
on this subject. For a variety of reasons we refrained from even becoming
involved in this task despite the fact that it is quite en vogue these days on
the European Continent. Here are some.
38 It is disputed, however, whether the poverty of the defendant should set a barrier to
claims which otherwise would be successful (Sozialstaatsprinzip; see MünchKomm-BGB,
vor §§ 823 ff BGB no. 77). It is different at the ‘procedural level’ where rules regulating
execution of judgments preserve certain minimum assets of impecunious defendants in
order to allow them to survive financially. This, of course, is true of all systems.
First, as the reader of our Preface will recall, this was never one of our
stated aims. Nor could it be, given that this study focused on three coun-
tries only and, for a variety of technical (not doctrinal or philosophical)
reasons, left out many others, including the very important French legal
system. Proposals of the kind we have submitted can only be credibly for-
mulated by looking at all the legal systems concerned though, contrary
to what might be termed the ‘politically correct’ view, we do not believe
that all of them deserve the same degree of scrutiny.
Secondly, we are aware of course of the fact that many jurists from a
number of European countries are clamouring for unification or harmon-
isation. These ambitions range from the entire domain usually covered by
civil codes to the matter here in hand. Two of the countries whose lawyers
seem to be in the forefront of this movement – Germany and Italy – are
represented in this survey, while the sceptics are headed by England (and
the Netherlands, whose law is not included in this study). Yet, in writing
this small monograph we experienced at first hand the difficulties of even
presenting the three systems in a reasonably coherent and logical juxtapo-
sition and also noted in various parts of this book how awards can be made
under different guises, how they can differ, in some cases substantially,
and how their real value is actually determined only by taking additional
factors into account, such as, e.g., the cost of living and earning levels in
each country in question. Moreover, we noted how in Italy the measure
of awards, influencing as it does insurance payments and thus insurance
premiums, has attracted the attention of the government. Additionally,
we also noted in various parts of the book the unusual degree of variation
of awards, even for danno biologico. If that is the picture that emerges from
one country alone, how can one realistically talk – at this stage of the process of
European integration – of a unification movement with a realistic chance
of success? For a unification attempt that would try to push awards39 up
towards the highest currently available level in Europe would be costly,
just as any attempt to move them downwards towards the lowest figures
would be unacceptable to those countries (and their citizens) who would
be asked to give up existing rights. A compromise in the middle would,
we suspect, leave everyone unhappy while lacking any rational justifica-
tion. There is a time for everything; and, at present, we suggest that for
39 We are, of course, talking here about awards for non-pecuniary losses, for (a) these are
the ones which, logically it could be argued, should be the same across Europe and (b)
are less income/earnings related than the pecuniary losses. In our view, unification or
harmonisation attempts for this heading of damages are even further away.
222 conclusions
those who believe in Europe the first priority is to streamline the Euro-
pean Constitution, more threatened than ever by the enlargement of the
Union.
The above should not be taken to suggest that the differences between
the European legal systems – certainly the ones we have discussed in
this book – overshadow their similarities. On the contrary, we hope we
have shown that the similarities are notable and cover both basic general
principles and technical quantification rules.
Thus, on the first front we note indicatively that all three of our systems
accept compensation as the prime aim of the law of torts; make40 the car-
dinal distinction between pecuniary and non-pecuniary damages;41 dis-
tinguish, in principle, between (what English law calls) psychiatric injury
and mere mental pain or grief (and treat the former more sympathetically
than the latter); accept the position that the defendant’s characteristics
and (on the whole) his financial resources should not affect the measure
of the award; treat as unacceptable the a priori capping of awards for
negligently inflicted harm; and accept the heritability of pecuniary and
non-pecuniary loss damages. Many important, practical rules flow from
these commonly accepted wide principles, so the coincidence of views is
of great significance.
Similarities of great import can also be found at the level of techni-
cal rules concerning indemnification for tortiously inflicted harm. Thus,
to mention but a few, we note that our systems take the same sympa-
thetic view towards non-sentient victims (even though strict logic might
require no compensation); there is a growing convergence in practice on
the award of damages for bereavement (where English law made a move
towards the Continental solution of awarding damages for bereavement,
but Continental systems, on the whole, award small amounts42 under this
heading); all our systems acknowledge that non-pecuniary damages are,
40 Germany, as stated, providing a limited exception for damages which aim to provide
satisfaction rather than compensation.
41 Spain seems to depart from this (important) rule, at any rate in the area of traffic
accidents which generate the bulk of tort litigation.
42 France is not included in the scope of this book but one notes with interest that French
law, most generous in its definition of dependants liable to obtain compensation for the
death of a third person, makes awards which on average are almost indistinguishable in
size from the statutory amount given in English law. We have stressed, in this book and
elsewhere, the importance of qualifying the generosity of French substantive law by
reference to the low levels of awards made in some types of claims. On the whole, this is
true of individual awards for dommage morale. On the other hand, it is likely – but to our
knowledge not yet demonstrated by any survey – that the total amount of these awards
may be considerable.
essentially, arbitrary in nature, lacking the degree of objectivity one finds

in the case of compensation of pecuniary losses; and finally, and surpris-
ingly perhaps, accept fairly similar awards for the most serious kind of
injury – quadriplegia.43 Continuing such a list would be tantamount to
summarising in a crass and unqualified way the preceding chapters of this
book, though we do refer the reader to a table produced by Dr Fairgrieve44
which gives levels of damages in England and France for a variety of forms
of impairment ranging from the most serious, persistent vegetative state,
to amputation of two legs, one leg, total loss of hearing in one ear, total
loss of one eye, down to a serious injury to a thumb. This table shows how
remarkably similar the awards made in these two systems can be; indeed,
the French awards may, in reality, be even higher given the lower cost of
living in France than in England.
However, our last observation does need to be elaborated somewhat
since it prompts thoughts of its own.
It is, we believe, correct to assert that the awards made for quadriple-
gia are amazingly similar in the three systems we have discussed in this
book,45 especially if one tries to factor in the appropriate adjustments for cost
of living, earnings and the like. But this, after all, is one type of permanent
injury; and it says little about other (lesser) types of permanent invalidity,
not to mention transient forms of injury which represent a considerable
proportion of the total number of tort claims. Yet, the figure given for
quadriplegia is significant for three reasons. The conclusions of a book
are no place to solve these complex issues; but we raise them as being all
suitable topics for further comparative study.
First, the amount given for quadriplegia is the top amount and helps
set a benchmark for all, lesser, forms of permanent injury. Yet, as we move
down the scale, we note that some European systems (e.g., the Italian) do
not continue this de facto parallel policy and thus do not compensate the
lesser forms of permanent incapacity in an entirely comparable manner.
Total blindness, for instance, receives a lesser amount in England than in
Italy (though in France, it seems, the parallel approach prevails). Though
the difference between English and Italian law is not huge, the reasoning
process behind the size may be important in so far as it may suggest not a
different ‘valuation’ but a difference in legal methodology. Thus, in Italy,
43 This is broadly speaking true of English, French, German and Italian law but not so for
other (significantly less generous) systems such as the Dutch and the Austrian.
44 See n. 33 above at p. 222.
45 For present purposes, and for the reasons given earlier in this chapter, we include
France in this statement.
224 conclusions
blindness is treated by the tables as tantamount to a 95 per cent incapac-

ity and will thus produce a compensation figure that comes close to the
quadriplegia amount. In England, by contrast, where there is no recourse
to tables of incapacity but a search for judicial precedents and guidelines,
the amount seems to be set at a lower level. Though in both systems there
is judicial discretion to correct these ‘pre-existing’ determinations, the
fact of the matter is that the one system approaches compensation from
the point of view of how the injury affects the claimant’s working ability
(in which case the Italian approach may be more commendable) whereas
the other approaches the question in a more holistic manner, relying on
the guiding value of earlier precedents.
Secondly, most systems need to give more thought to the question of
the overcompensation or undercompensation that may result from one-
off awards. This is a hugely complex topic which in England recently
attracted the attention of the Master of the Rolls.46 Though the problem
need not be so acute in systems which opt for annuities or rents, we have
seen that both the German and, even more so the Italian, systems do not
always make extensive use of this option which is theoretically available
to them. It is at this stage that one must also mention the mechanism of
structured settlements and ask the question – one can do no more here –
whether other systems would not be well-advised to study more carefully
this device.
The third and final issue we raise returns our concluding thoughts to
the unification or harmonisation debate. Might it thus not be more prag-
matic, realistic and, indeed, necessary for immediate practical needs if
this initially took the form of trying to discover and understand compa-
rable headings of compensation? For one of the difficulties experienced
in this book and, we submit, in international litigation, is to discover
what is compensated and where a particular heading may be ‘hidden’ if
it is obviously missing from a particular system’s list of reparable head-
ings of damage. Such an approach would also be truer to the purpose of
comparative studies. For comparative methodology is as much the art of
overcoming the obscurity generated by packaging as it is of discovering a
presentation method which makes a foreign idea or concept recognisable
and thus welcome to other lawyers. This modest study of the law of dam-
ages of three major legal systems of the world shows that more work still
has to be done both on the substance and the art of presentation of the
law of compensation for personal injury.
46 Lord Phillips (unpublished) lecture.

Appendix
Comparative tables on the evaluation of
physical injury (IP) for micro-permanent
injuries
April 2000 (and subsequent updating)

Arranged in decreasing order in relation to the compensation considered on the
basis of the indicative tables applied by the courts of the chief towns of Italian
regions.
PERMANENT INVALIDITY 2%
Typology of injury according to current forensic medical doctrine:
Anatomic loss of the left hand ring finger ungual phalange
Outcome of partial meniscectomy performed in arthroscopy
Scars due to previous laparotomy for every 10 cm of length
Outcome of fracture of the right or left foot II, III, IV metatarsus
Age 20 40 60
Bologna 7.544.000 6.420.000 4.045.000

Bari 7.544.000 6.420.000 4.045.000
Triveneto 5.412.000 4.888.000 4.138.000
Genova 5.648.000 4.806.000 3.029.000
Cagliari 4.600.000 4.180.000 3.100.000
Medium average of the courts 3.937.000 3.437.000 2.613.000
Ancona 3.600.000 3.300.000 3.000.000
Torino 3.200.000 3.000.000 2.800.000
Aosta 3.765.000 3.204.000 2.019.000
Milano 3.077.000 2.737.000 2.297.000
Napoli 3.077.000 2.737.000 2.297.000
Potenza 3.077.000 2.737.000 2.297.000
Perugia 2.769.000 2.463.000 2.157.000
Statute 5.3.2001, n. 57 2.508.000 2.224.000 1.980.000
Firenze 2.800.000 2.240.000 1.680.000
Palermo 2.461.000 2.190.000 1.918.000
Roma 2.210.000 1.841.000 1.350.000
Reggio. C. 2.210.000 1.841.000 1.350.000
225
226 appendix
Typology of injury according to the current forensic medical doctrine:
Loss of olfaction
Loss of taste
Anatomic loss of the two phalanges of the right ring finger
Complete monolaterar nasal stenosis
Articular relaxation of the knee due to non surgically treated ligamental lesions
Outcome of a kneecap breaking without anatomic losses
Outcome of the I metatarsus of the left or right foot fracture
Age 20 40 60
Bologna 23.536.000 20.027.000 12.620.000

Genova 20.536.000 20.027.000 12.620.000
Bari 18.862.000 16.050.000 10.114.000
Triveneto 13.875.000 12.530.000 10.615.000
Aosta 13.203.000 11.235.000 7.079.000
Cagliari 11.500.000 10.500.000 8.500.000
Palermo 11.500.000 9.500.000 8.000.000
Ancona 9.000.000 8.250.000 7.250.000
Milano 9.050.000 8.050.000 7.050.000
Napoli 9.050.000 8.050.000 7.050.000
Potenza 9.050.000 8.050.000 7.050.000
Torino 9.080.000 8.142.000 6.692.000
Statute 5.3.2001, n. 57 8.550.000 7.650.000 6.750.000
Perugia 8.145.000 7.245.000 6.345.000
Firenze 9.000.000 7.200.000 5.400.000
Roma 7.533.000 6.278.000 4.604.000
Reggio. C. 7.533.000 6.278.000 4.604.000
appendix 227
Typology of injury according to the current forensic medical doctrine:
Splenectomy (around 9%)
Post traumatic scapulohumeral periarthritis with muscular strength reduction
and slight limitation of the upper limb movements (around 9%)
Ankylosis of the radius-carpus articulation (wrist) in rectilinear extension with
movements of free prono-supination (around 9%)
Tight pseudarthrosis of the right radius (around 9%)
Outcome in exuberant callus of the combined shinbone-peroneal fracture with
slight deflection of the longitudinal axis and functional limitation, between 1/3
and 1/4, of the ankle movements (around 9%)
Occasional but documented fits of convulsions with epileptic
electroencephalographic changes in patient suitable for long-term anti-epilepsy
therapy (around 9%)
Age 20 40 60
Bologna 42.365.000 36.049.000 22.717.000

Genova 42.365.000 36.049.000 22.717.000
Bari 33.951.000 28.890.000 18.205.000
Triveneto 27.783.000 24.777.000 21.870.000
Aosta 27.160.000 23.112.000 14.564.000
Statute 5.3.2001, n. 57 23.598.000 21.114.000 18.630.000
Cagliari 25.047.000 20.691.000 16.879.000
Ancona 22.806.000 20.286.000 17.776.000
Milano 22.806.000 20.286.000 17.776.000
Napoli 22.806.000 20.286.000 17.776.000
Potenza 22.806.000 20.286.000 17.776.000
Torino 21.334.000 19.138.000 15.723.000
Perugia 20.525.000 18.257.000 15.989.000
Palermo 20.700.000 17.100.000 14.400.000
Firenze 21.600.000 17.280.000 12.960.000
Roma 20.791.000 17.326.000 12.706.000
Reggio. C. 20.791.000 17.326.000 12.706.000
(Elaboration by Luigi Cipriano)

Index
abuse of process, 21 unpaid services, 100–1

access to justice, 212–13 use of damages for, 158–9, 160
accommodation. See housing causation, English law, 56
actuarial tables, 118, 142 children
administrative acts, Italian law, 15 care performed by tortfeasors, 158
age, and assessment of damages, 68, 122, child care, 152
124, 125–6 English law, 177
aggravated damages, 3, 45, 83 German law, 11, 109, 147–8, 158,
aids and equipment 192–3
English law, 103–4, 136–7 infants, 177
future losses, 136–7, 160 limitation periods, 176
German law, 113–14, 160 loss of earnings, 125–6, 147–8,
past losses, 103–4, 113–14 167–8
animals, German law, 11 management of damages, 178,
annuities, 38, 43, 138, 139–41, 154, 163, 192–3
168–9, 179–81 non-pecuniary damages, 214–16
apprentices, 147–8 parents’ costs, 109
assault and battery, 46 unborn children, 214–16
Atiyah, Patrick, 34 class actions, 1, 204–6
Australia, 210 clothing, 102
cohabitants, 110, 151
benevolent funds, 173–4 companies, key personnel’s loss of earnings,
bereavement, 222 152–4
Bhopal incident, 204 comparative law
blindness, 223 approach, 197–8
bullying, 55 use of methodology, 206–7
wider background, 200–7
carers competition law, and Italian insurance,
assessment of services, 131–2 25–6
care insurance, 156 conditional fee agreements, 30, 32, 33
care performed by tortfeasors, 130–1, consumer protection, 176
157–8 contingency fees, 30, 32, 210, 212–13
cost of past services, 99–101 contract law, 117
deductions from damages, 156 contributory negligence, 172, 185
English law, 128–33 Court of Protection, 105, 174, 178–9
family carers, 157 courts
future expenses, 128–33, 155–8 Germany, 27
German law, 155–8 Italy, 28
loss of earnings, 101 cumulation of benefits, 35, 213
228
index 229
damages defamation
cumulation, 35, 213 English law, 22
deductions. See deductions Italian law, 93
future losses. See future losses levels of awards, 17
law reform, 220–4 defendants, nature and wealth, 219–20
levels. See levels of awards delay
management. See financial management and interest, 175
national contexts, 200–7 Italian judicial proceedings, 28
non-pecuniary. See non-pecuniary payment of damages, 81, 190
damages Deliktsrecht, meaning, 5
past losses. See past losses disability pensions, 172–3
reports on, 201 discretion, judicial discretion, 65–7, 88, 94,
specificity, 217–19 142, 209
danno alla persona, 7 discrimination, gender discrimination, 150
danno biologico dispute resolution
assessment, 84–91 England, 206
and German law, 4 Germany, 203
judicial powers, 88 duty of care, 8, 20, 22, 54–8
levels of awards, 18–19
life and death, 89–90 earnings. See loss of earnings
meaning, 7 employers’ liability
methods of liquidation, 87–9 German law, 11
regional variations, 88 Italian law, 7, 15
statutory rules, 86–7 psychiatric injury of secondary victims,
danno contratuale, 5–6 56–8
danno extracontratuale, 5–8 vicarious liability, 46
danno imprevedible, 6 employment
danno ingiustio, 15 deduction of employment payments, 173,
danno morale 188–9
generally, 91–6 earnings. See loss of earnings
meaning, 6–7 loss of congenial employment, 58–9, 70,
quantification, 18, 94–6 85
danno non-patrimoniale, 83 promotions, 125, 146–7
See also non-pecuniary damages English law
danno patrimoniale assessment of damages, 9–10
assessment, 84 deductions, 171–4
calculation, 18 direction, 199–200
meaning, 83, 162–3 future losses, 116–38
death history, 8–10
close relatives, 81–2, 93 interest, 175
and danno biologico, 89–90 judicial proceedings, 26–7
early death of injured persons, 77–8 legal aid, 30, 210
deductions legal costs, 29–30
benevolent funds, 173–4 levels of awards, 16–17, 223–4
carers’ damages, 156 limitation periods, 46, 175–7
contributory negligence, 172, 185 non-pecuniary losses, 45–59
employers’ payments, 173, 188–9 past losses, 97–105
English law, 35, 171–4 payment methods, 36–42
German law, 181–90 persons under disability, 177–9
insurance payments, 174, 189–90, 195 social security, 33–5, 117, 171
Italian law, 194–6 structured settlements, 38, 179–81
local authority payments, 174 terminology, 2–3
loss of earnings, 123 tort law principles, 20–2
pensions, 172–3 and US law, 199–200, 208
social security payments, 35, 156, 171, See also specific subjects
182–6, 194–5 enrichment, 134, 141, 181, 194
time limits, 172 entertainment costs, 107
230 index
equal treatment multiplier–multiplicand approach, 118,

German law, 18, 64–5, 67 119–23, 141–2
Italian law, 96 pensions, 130, 137–8, 186–7
equipment. See aids and equipment periodic payments, 139–41, 168–9
equities, 120–2 reduced life expectancy, 130, 138,
EU law, 25, 151, 195–6 161–2
Europe reduction of awards, 117–18
harmonisation of laws, 221–2, 224 third parties’ injuries, 132–3
regional variations in levels of awards, use of damages by victims, 116, 127,
211–12 158–60, 163
and US law, 207–9
exemplary damages, 3, 45, 83 gender discrimination, 150
Genoa, 212
Fairgrieve, Duncan, 217, 223 German law
fault principle, 11, 14, 79 additional claims, 140–1
financial management deductions, 181–90
children’s awards, 178, 193 future losses, 4, 138–62
costs, 193 history, 10–11
Court of Protection, 105, 174, 178–9 interest, 190
equity investment of damages, judicial proceedings, 27–8
120–2 law reports, 27
government securities, 121–2 legal costs, 30–2
patients’ awards, 178–9, 193 levels of awards, 17–18
Fleming, John, 219 limitation periods, 191–2
forum shopping, 202 nature and wealth of defendants, 79–80,
France 219
bereavement, 222 non-pecuniary damages, 59–82
Civil Code, 10, 14, 206 past losses, 105–14
levels of awards, 222, 223 payment methods, 42–4
payment methods, 44 persons under disability, 192–3
psychiatric injury, 20, 91 psychiatric injury, 20, 23, 78–9,
punitive damages, 210 81–2
pure economic loss, 20 punitive damages, 210
regional variations, 211 social security, 11, 35, 182–6
specificity of awards, 217 special statutory rules, 11
future losses specificity of awards, 217–19
actuarial evidence, 118, 142 terminology, 3–5
additional claims, 140–1 tort law principles, 22–3
basic German approach, 138–9 See also specific subjects
calculation methods, 119–23 Gioja, Melchiorre, 12
carers’ expenses, 128–33, 155–8 government securities, 121–2
English law, 116–38 guardians, 193
full compensation principle, 117–18
German law, 4, 138–62 Haftungsrecht, meaning, 5–8
home and institutional care, 133–4, Hailsham, Lord, 40, 118
154–8 harmonisation of laws, 221–2, 224
housing needs, 133, 134–6 heart valve litigation, 204, 205
inadequacy of damages, 118 hedonistic damage, 86
increased needs, 140, 160–1 history
and inflation, 118, 122–3 English law, 8–10
Italian law, 162–70 German law, 10–11
judicial discretion, 142 Italian law, 11–16
loss of earnings, 123, 138, 142–54, HIV, 161
163–8 hobbies, 47, 71
lump sums, 141–2, 168–9 holidays
medical treatment, 126–8, 154–8, 160, additional costs, 102
169–70 spoilt holidays, 47, 61
index 231
home care giudici di pace, 15

English law, 133–4 history, 11–16
future losses, 133–4, 155 interest, 196
German law, 155–8 judicial discretion, 88, 94, 217
past losses, 99–101 law reports, 28
honour, interference with, 61–2, 64–5, legal costs, 32
77, 93 legal machinery, 15–16
hospital visits, 23, 102, 107–13 legal proceedings, 28–9
housewives levels of awards, 18–19, 223–4
English law, 99–100, 112–13 limitation periods, 196
German law, 150–1 macroeconomic consequences of
Italian law, 166–7 compensation decisions, 24–5
loss of earnings, 150–1, 166–7 national health system, 195
replacing services, 99–100 non-pecuniary damages, 82–96
visiting costs, 112–13 past losses, 115
housing payment methods, 44
adaptations, 134–5 psychiatric injury, 20, 90–1
English law, 104–5, 133, 134–6 punitive damages, 210
future losses, 133, 134–6, 160 pure economic loss, 20
German law, 114, 160 regional tables, 225–7
past losses, 104–5, 114 regional variations, 13–14, 19, 88, 96,
purchase of property, 135–6 211–12
social security, 8, 36, 166, 194–5
infants, meaning, 177 special statutory rules, 7–8
inflation, 118, 122–3 specificity of awards, 217
institutional care, 133–4, 155 terminology, 5
insurance tort law principles, 23–6
anti-competitive agreements, 25–6 values, 15
care insurance, 156 See also specific subjects
German accidents at work insurance, 183 IVF treatment, 126
and German compensation levels, 79–80,
190, 191 joint liability, 194
German health insurance scheme, judicial discretion, 65–7, 88, 94, 142,
182–3 209
German retirement insurance scheme, judicial proceedings
186–7 access to justice, 212–13
and Italian compensation law, 24–6, 221 and comparative law, 201
Italian Guarantee Fund, 195 costs. See legal costs
Italian law, 195 English law, 26–7
legal expenses insurance, 31–2, 33 generally, 26–9
and medical treatment costs, 128 German additional claims, 140–1
payments deducted from damages, 174, German law, 27–8
189–90, 195 Italian law, 28–9
subrogation, 181–2 transparency, 217
interest jury trials
English law, 175 English law, 8–9
German law, 190 German law, 11
Italian law, 196 Italian law, 15
interim damages, 39–40, 171 United States, 209
investment. See financial management
Italian law Korea, 206
case load, 16
codes, 14–15 Law Commission, 40, 49, 127–8, 130, 131,
courts, 15–16 132
deductions, 194–6 law reform, 220–4
delay, 28 law reports, 27, 28
future losses, 162–70 legal aid, 30, 31, 33, 210
232 index
legal costs future earnings, 123, 139–40, 142–54,

commercial financing of litigation, 32 163–8
conditional fee agreements, 30, 32, 33 German law, 66, 70, 105, 139–40,
contingency fees, 30, 32, 210, 212–13 142–54
England, 26, 29–30 German principles, 143–6
generally, 29–33 Italian law, 84, 163–8
Germany, 27–8, 30–2 key company personnel, 152–4
Italy, 29, 32 lost chances, 125, 143, 145, 168
law reform, 220 mitigation of losses, 144
legal aid, 30, 31, 33, 210 Nettolohnmethode, 140
legal expenses insurance, 31–2, 33 past earnings, 98, 105
legal expenses insurance, 31–2 promotion, 125, 146–7
legal proceedings. See judicial reduced capacity for work, 124, 160
proceedings reduced life expectancy, 138, 162
leisure activities, loss of, 47, 71 retired persons, 167
levels of awards self-employed persons, 148–9, 166
comparative approach, 16–19, 200–7 and unemployment levels, 125
English law, 16–17, 223 United States, 215
forum shopping, 202 unlawful earnings, 123, 167
France, 222, 223 visiting relatives, 112–13
German law, 17–18 women, 125, 150–2, 166–7
Italian law, 13–14, 18–19, 88, 96 Louisiana, 208
Italian tables, 225–7 lump sums, 36–8, 42–3, 141–2, 154, 163,
and national wealth, 203–5 168–9, 220, 224
nature and wealth of defendants, 79–80,
219–20 Maitland, William, 8
regional variations, 13–14, 19, 88, 96, marriage prospects, loss of, 47–50, 58, 66,
211–12 68–70
and social security, 202–3 Master of Lunacy, 178
United States, 17, 18, 209 medical care
limitation periods English law, 98–101, 126–8
burden of proof, 176 European and US context, 200–1
commencement, 176–7, 191 fringe costs, 107
English law, 46, 175–7 future losses, 126–8, 154–8, 160,
extension, 177 169–70
German law, 191–2 German law, 105–7, 154–8
interruption, 192, 196 health improvement operations, 160
Italian law, 196 home care, 99–101, 133–4, 155–8
knowledge, 175–6, 191 Italian law, 169–70
maximum periods, 191–2 multiplier–multiplicand method, 126
persons under disability, 196 past losses, 98–101, 105–7
litigation friends, 177–8 private treatment, 127, 170
local authorities, obligations, 174 public services, 132
loss of amenity recoupment of costs, 98–9, 128
English law, 47–50 sanatoria, 160
German law, 62 therapy, 160
Italian law, 84–91 transport costs, 102
loss of earnings treatment, 98–9
apprentices, 147–8 unpaid services, 100–1
calculation, 146, 163–8 mitigation of losses, 144, 154
carers, 101 Motability Scheme, 103
children and young persons, 125–6, Mullany, Nicholas, 56
147–8, 167–8 multiplier–multiplicand approach
deductions, 123 actuarial tables, 118, 142
employees, 163–4, 165–6 English law, 118, 119–23
English law, 98, 123, 138 future losses, 118, 119–23, 141–2
evidence, 144–6 German law, 141–2
index 233
guiding principle, 119–20 occupational pensions, 187

and inflation, 122–3 Ogden Tables, 119, 122
medical care, 126
mulitplicands, 120 pain and suffering
multipliers, 120–3 English law, 46–7
Ogden Tables, 119, 122 German law, 66–7
Italian law, 83, 84, 91–6
National Health Service, recoupment of partnerships, break-ups, 68–70
costs, 98–9, 128 past losses
Naturalrestitution, principle, 22–3 accommodation, 104–5, 114
nervous shock. See psychiatric injury aids and equipment, 103–4, 113–14
Netherlands, 20, 221 disposal of relatives’ damages by victims,
Nettolohnmethode, 140 100, 113
non-pecuniary damages English law, 97–105
and age of injured persons, 68 German law, 4, 105–14
assessment, 50–1, 65–82 house care, 99–101
burden of proof, 84 Italian law, 115
capping, 49–50 loss of earnings, 98, 105
comparisons with US, 214–17 medical care, 98–101, 105–7
compensation principles, 62–5, 83–4 personal expenses, 102
danno biologico. See danno biologico transport costs, 102–3, 107–13
death of close relatives, 81–2, 93 patients
and early death of injured persons, English law, 177, 178–9
77–8 financial management, 178–9, 193
English concepts, 46–51 German law, 193
English law, 45–59 meaning, 177
family life, 86 patrimonial losses, Italian law, 6
and fault, 79 payment methods
and financial means of tortfeasors, annuities, 38, 43, 138, 139–41, 154, 163,
79–80, 219–20 168–9, 179–81
German law, 4–5, 23, 59–82 English law, 36–42
German principles, 59–61 generally, 36–44
hedonistic damage, 86 German law, 42–4
honour and reputation, 61–2, 64–5, 77, interim damages, 39–40
93 Italian law, 44
Italian law, 6–8, 82–96 lump sums, 36–8, 42–3, 141–2, 154, 163,
judicial discretion, 65–7, 88, 94 168–9, 220, 224
loss of amenity, 47–50 provisional damages, 40–2
loss of congenial employment, 58–9, 70, split trials, 39
85 structured settlements, 38, 43–4, 179–81
loss of leisure activities, 47, 71 payments into court, 29
loss of marriage prospects, 47–50, 58, 66, Pearson Committee, 33, 40, 118, 127
68–70 pensions
loss of professional possibilities, 70 deductions, 172–3
mitigating factors, 79 English law, 137–8, 172–3
pain and suffering, 46–7, 66–7, 83, 84, German law, 139, 186–7
91–6 German occupational pensions, 187
and payment delay, 81 German retirement insurance scheme,
personality changes, 72 186–7
pre-existing damages, 75–7 loss of pensions, 137–8, 139, 186–7
psychiatric injury. See psychiatric personality changes, 72
injury persons under disability
relatives, torts by, 80–1 English law, 177–9
similar cases as guidelines, 66–7, 68 German law, 192–3
and social background, 77, 84–5 Italian law, 196
social life, 86 phone calls, 107
unforeseeable future effects, 74–5 Pisa, 212
234 index
pregnancy, 151–2 restitutio in integrum, 60, 158–60

product liability retired persons, loss of earnings, 167
English law, 177 ricochet victims, 23, 91
Italian law, 7, 15, 196 Roman law, 10, 12–13
Korea, 206
limitation periods, 177, 196 sanatoria, 160
US law, 200 Schmerzensgeld
professional prospects, 58–9, 70 assessment, 65–82
promotions, 125, 146–7 deterrent effect, 211
provisional damages, 40–2 meaning, 4, 73
psychiatric injury See also non-pecuniary damages
and common law, 20–1 schools, duty of care, 55
employers’ liability, 56–8 Schulz-Borck/Hoffmann tables, 151
English law, 51–8 self-employed persons, 148–9, 166
German law, 20, 23, 78–9, 81–2 senses, loss of, 72–4
Italian law, 24, 90–1 services
national attitudes, 20 assessment of carers’ services, 131–2
primary victims, 52–3 carers’ future expenses, 128–33
secondary victims, 53–8, 81–2 domestic services, 99–100
public policy, 105 housewives, 150–1
Public Trust Office, 179 loss of relatives’ services, 23
public welfare services, 132, 174, 185–6 public services, 132, 174, 185–6
punitive damages unpaid services, 100–1, 151
comparisons, 210–11 sexual life, 47, 58, 60, 68–70
English law, 45 shock. See psychiatric injury
German law, 62–4, 79 silicone, 201
Italian law, 83 social background, 77, 84–5
United States, 209–11 social life, 86
pure economic loss, 20, 23 social security
deductions, 35, 156, 171, 182–6,
quadriplegia, 223 194–5
English law, 33–5, 117, 171
Rand Corporation, 219 German law, 11, 35, 182–6
rape, 18 Italian law, 8, 36, 166, 194–5
receivers, 178 and levels of awards, 202–3
regional variations and past loss of earnings, 98
European systems, 211–12 and tort law, 33–6
Italian tables, 225–7 United States, 209
Italy, 13–14, 19, 88, 96, 211–12 Sozialhilfe, 185–6
relatives Spain, 222
carers. See carers special damages
death of close relatives, 81–2, 93 meaning, 3, 97
disposal of damages by victims, 100, past losses. See past losses
113 specificity of awards, 217–19
loss of earnings, 112–13 split trials, 39
loss of services, 23 sterilisations, 74–5
meaning, 110 structured settlements, 38, 43–4, 179–81
torts by, 80–1 subrogation, 181–4, 188–9
travel costs, 23, 102–3, 108–13 Switzerland, 62
violation of peaceful life, 86
voluntary care, 100–1, 151 taxation
remittiturs, 209 carers’ damages, 156
remoteness, English law, 22 German law, 44, 139
reports, on damages, 201 and past loss of earnings, 98
reputation, interference with, 61–2, 64–5, structured settlements, 180
77, 93 telephone calls. See phone calls
index 235
terminology and European law, 207–9

English law, 2–3 international legal impact, 198–200
German law, 3–5 levels of awards, 17, 18, 200–1, 209
Italian law, 5 medical care, 200–1
terrorism, 8 nature and wealth of defendants, 219–20
therapy, 160 non-pecuniary damages, 214–17
tort law psychiatric injury, 20
basic principles, 20–6 punitive damages, 45, 83, 209–11
English principles, 20–2 social security, 209
German principles, 22–3 state laws, 208
Italian principles, 23–6
Totalreparation, principle, 22 vaccination, 8, 202, 204
transport, Italian law, 7 vicarious liability, 46
transport costs visiting forces, Germany, 106
English law, 102–3
German law, 107–13 Winn Committee, 39
overnight accommodation, 112 without prejudice letters, 29–30
past losses, 102–3, 107–13 women
relatives’ costs, 23, 102–3, 108–13 child care, 152
trespass to the person, 45–6, 176 English law, 125
trusts, services by relatives, 100 German law, 150–2
housewives, 99–100, 112–13
unborn children, 214–16 Italian law, 166–7
United States loss of earnings, 125, 150–2
access to justice, 212–13 pregnancy, 151–2
class actions, 1, 204–6 Woolf reforms, 26, 27
context, 200–7
and English law, 199–200, 208 young persons. See children
cambridge studies in international and comparative law
Books in the series
Compensation for Personal Injury in English, German and Italian Law

A Comparative Outline
Basil Markesinis, Michael Coester, Guido Alpa, Augustus Ullstein
Dispute Settlement in the UN Convention on the Law of the Sea
Natalie Klein
The International Protection of Internally Displaced Persons
Catherine Phuong
Colonialism, Sovereignty and the Making of International Law
Antony Anghie
Necessity, Proportionality and the Use of Force by States
Judith Gardam
International Legal Argument in the Permanent Court of International Justice
The Rise of the International Judiciary
Ole Spiermann
Great Powers and Outlaw States
Unequal Sovereigns in the International Legal Order
Gerry Simpson
Local Remedies in International Law
C. F. Amerasinghe
Reading Humanitarian Intervention
Human Rights and the Use of Force in International Law
Anne Orford
Conflict of Norms in Public International Law
How WTO Law Relates to Other Rules of Law
Joost Pauwelyn
The Search for Good Governance in Africa
Making Constitutions in the States of the Commonwealth
Peter Slinn and John Hatchard
Transboundary Damage in International Law
Hanqin Xue
European Criminal Procedures
Edited by Mireille Delmas-Marty and John Spencer
The Accountability of Armed Opposition Groups in International Law
Liesbeth Zegveld
Sharing Transboundary Resources
International Law and Optimal Resource Use
Eyal Benvenisti
236
International Human Rights and Humanitarian Law
René Provost
Remedies Against International Organisations
Basic Issues
Karel Wellens
Diversity and Self-Determination in International Law
Karen Knop
The Law of Internal Armed Conflict
Lindsay Moir
International Commercial Arbitration and African States
Amazu A. Asouzu
The Enforceability of Promises in European Contract Law
James Gordley
International Law in Antiquity
David J. Bederman
Money-Laundering
Guy Stessens
Good Faith in European Contract Law
Reinhard Zimmerman and Simon Whittaker
On Civil Procedure
J. A. Jolowicz
Trusts
A Comparative Study
Maurizio Lupoi
The Right to Property in Commonwealth Constitutions
Tom Allen
International Organizations Before National Courts
August Reinisch
The Changing International Law of High Seas Fisheries
Francisco Orrego Vicua
Trade and the Environment
Damien Geradin
Unjust Enrichment
Hanoch Dagan
Religious Liberty and International Law in Europe
Malcolm D. Evans
Ethics and Authority in International Law
Alfred P. Rubin
237
Sovereignty Over Natural Resources
Nico Schrijver
The Polar Regions and the Development of International Law
Donald R. Rothwell
Fragmentation and the International Relations of Micro-States
Jorri Duursma
Principles of the Institutional Law of International Organizations
C. F. Amerasinghe
238

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Compensation for Personal Injury in English,

Cross-border claims for personal injuries are becoming more common.

b a s i l m a r k e s i n i s q c , f b a is Professor of Common and Civil Law

m i c h a e l c o e s t e r has been an Ordinarius Professor of Law at the

g u i d o a l pa f b a is Professor of Civil Law at the University of Rome

a u g u s t u s u l l s t e i n l l b . q . c . is a barrister practising in London.

With a Foreword by the Rt Hon. the Lord Steyn.

General Editors James Crawford SC FBA

Editorial Board Professor Hilary Charlesworth University of Adelaide

Advisory Committee Professor D.W. Bowett QC

(list continues at the end of the book)

Basil Markesinis, Michael Coester, Guido Alpa

Cambridge University Press

This book is in copyright. Subject to statutory exception and to the provision of

First published in print format 2005

- ---- eBook (EBL)

- ---- hardback

Cambridge University Press has no responsibility for the persistence or accuracy of

Foreword page xiii

2. General damages: non-pecuniary losses 45

3. Special damages: past losses 97

4. Future pecuniary losses 116

Is the victim bound to use the money he has received for

5. Collateral sources of revenue: subrogation rights and

Italian law 194

Appendix: Comparative tables on the evaluation of physical

In 1871, when reviewing Addison’s recently published The Law of Torts,

A number of contemporary comparatists have objected to such efforts

Common law cases

Blamire v. South Cumbria Health Authority [1993] PIQR Q 1 123, 126

Daly v. General Steam Navigation Co. Ltd [1981] 1 WLR 120, CA 99

Evans v. Pontyprida Roofing Ltd [2001] EWCR Civ 1657 100

Galt v. British Railways Board (1983) 133 NLJ 870 56

H. v. Ministry of Defence [1991] 2 QB 103, CA 9

Hodgson v. Trapp [1989] AC 807, HL(E) 102, 173

Ichard v. Frangoulis [1977] 1 WLR 556 47

Jaensch v. Coffey (1984) 155 CLR 549 53

Kars v. Kars (1996) 141 ALR 37 100

Lanford v. Hebran [2001] EWCA Civ 361; [2001] PIQR Q160 59

Masterman-Lister v. Jewell [2003] 1 WLR 1511, CA 177

Ornelas v. Fry, 727 P.2d 819 (Ariz. App., 1986) 133

Ramsay v. Rivers [2002] QB 272, CA 49

Sayers v. SmithKline Beecham plc [2002] EWHC 1280 202, 210

Smith v. Manchester Corporation [1974] 17 KIR 1, CA 126

Tanner v. Hartog, 696 So. 2d 705 (Fla. 1997) 215

Urbanski v. Patel [1978] 84 DLR (3d) 650 133

Victorian Railways Commissioners v. Coultas (1888) 3 App. Cas. 222, PC 53

W. v. Meah (1986) 1 All ER 935 45

Woodrup v. Nicol [1993] PIQR Q104 98, 126, 127

X (Minors) v. Bedfordshire County Council [1995] 2 AC 633, HL(E) 55,

Z v. United Kingdom [2000] 2 LGLR 212 201

Decisions of the Federal Supreme Court

BGH 2 December 1966, VersR 1967, 256 81

BGH 30 March 1983, NJW 1984, 1552 43

BGH 18 March 1992, NJW-RR 1992, 1091 43

BGH 3 March 1998, NJW 1998, 1634 149

Decisions of the Courts of Appeal and Lower Courts

OLG Köln 11 March 1982, ZfS 1984, 132 151

OLG Hamm 17 August 1993, NJW-RR 1994, 415 157

Decisions of the Supreme Court of the German Reich

2000, n. 15580 (11 December 2000) in Resp.civ.prev. 2001, 609 167

Courts of Appeal and Lower Courts