Date: Thu, 24 Jul 2003 11:28:44 -0400

From: Jason Neyers

Subject: New PC decision on Libel Awards

Dear Colleagues,

Well what a debate :)!

As Harold has noted, the nature of the disagreements between us call for a much longer argument than can be made in an e-mail. I will only say that it appears that he and I have very different concepts on the proper role of the judge in a constitutional democracy when deciding private law cases. I would also question in passing what seem to me to be two underlying and related hypotheses of his arguments:

1) That the fact that a particular decision has distributional consequences means that the reasoning which arrived at it is 'political' and therefore political concerns are relevant to that particular exercise of decision-making.

2) That when a legal question is particularly difficult, i.e. where reasonable minds applying the law can disagree, the door is then open to import whatever reasons the judge finds helpful in reaching a conclusion. (For an interesting take on these two hypothesis, see Steven J. Burton, Judging in Good Faith (Cambridge, CUP, 1992).

I would also point out that my quotation of Lord Goff was given not on the basis that it was authoritative as a matter of stare decisis, but rather on the basis that I took it to be a well-reasoned response to the arguments made by Lord Hoffmann (which as Harold notes were endorsed by the rest of the board).

Though if the matter came down to duelling authorities, I would hazard a guess that there would be more support for the proposition that matters of insurance are irrelevant to liability and damages than for the converse ("As Viscount Simonds noted in Lister v. Romford Ice & Cold Storage Co., [1957] 1 All E.R. 125 (H.L.) at p. 133: 'As a general proposition it has not, I think, been questioned for nearly two hundred years that, in determining the rights inter se of A and B, the fact that one or other of them is insured is to be disregarded'" per CORY J., speaking for the majority of the SCC in Dobson (Litigation Guardian of) v. Dobson, (1999) 174 D.L.R. (4th) 1 (SCC)).

Sincerely,

Jason

Harold Luntz wrote:

Jason's response to my brief comment calls, I fear, for a lengthy reply - one much longer than I can give here. It raises three questions:

1. Did Lord Hoffmann gratuitously bring in to this case issues relating to damages for non-pecuniary loss in personal injury cases?

2. Is it relevant to the measure of damages for non-pecuniary loss to consider who actually pays the damages?

3. What is meant by "compensation" for non-pecuniary loss?

Let me try to answer them as briefly as I can. By way of preliminary let me say that Lord Hoffmann was speaking on behalf of a unanimous PC (the days when dissenting judgments were not allowed in the PC ceased in 1965, I think it was). Presumably four other judges endorsed his remarks.

1. This is the easiest to answer. The argument before the PC was that, in assessing the damages for libel in this case, the Jamaican courts wrongly refused to consider the level of damages for personal injury. The PC held that the Jamaican courts were not wrong in so doing. It was clearly relevant to explain why this was so. One of the reasons given was that personal injury damages may be influenced by factors that may not have the same weight in libel cases. So it was relevant to consider what differences there are between the damages awarded in the two types of case. One answer given by Lord Hoffmann is that personal injury judgments are mostly paid by insurers, not the defendants themselves, and the premiums are not very sensitive to claims. Libel damages, on the other hand, may be paid by the defendants themselves or, if paid, by insurers, premiums are likely to be adjusted. This could account for differences between the types of judgment.

2. Jason says this is all irrelevant in "a judgment that purports to being about doing justice as between the joined parties". He invokes some authority against the use of distributive justice. That authority is found in a dissenting judgment. Be that as it may, let me also invoke authority, a much more concise statement: "The law should, so far as possible, avoid fictions" (Kirby J in 3. Even if one were concerned with pure corrective justice, what does compensation for non-pecuniary loss really mean? Years ago, Patrick Atiyah, in a remark recently quoted with approval by the Panel that reviewed the Law of Negligence in Australia, said: (1998) 192 CLR 330 at [231]). We all know that most personal injury damages are not paid by the named defendants. The damages are paid from insurance premiums or the prices of goods and services for which all of us pay. Leaving aside non-pecuniary damages, the tort system redistributes wealth from the poor to the rich because damages are largely earnings-related. When two people buy a defective product in the supermarket, they pay the same price, but the higher earner of the two receives larger damages if unable to work in consequence. I doubt that Lord Hoffmann was particularly concerned about his own car insurance premium (in any event, he was - maybe still is - a noted bicycle rider). He was probably more concerned about the poor motorist who may be unable to afford the premium to run a car at all if damages are not kept to a level that society can afford or the sick person who can't be treated in a NHS hospital because resources have been diverted to paying damages.

There appears to be simply no way of working out any relationship between the value of money - what it will buy - and damages awarded for pain and suffering and disabilities. All such damages awards could be multiplied or divided by two overnight and they would be just as defensible or indefensible as they are today.

In other words, when the Supreme Court of Canada fixed the upper level of damages for non-pecuniary loss in Canada at $100,000 (since increased only for inflation), they could just as well have chosen $200,000 or $50,000 and no one could say they were definitely wrong. The English Law Commission tried valiantly to arrive at the "appropriate" level of compensation in their report in 1999, commissioning (non-armchair) empirical research, including Hazel Genn's "How Much is Enough?" They recommended that legislation should be avoided, but failed to completely convince the five experienced judges (not including Lord Hoffmann) in Heil v Rankin [2001] QB 272 (CA) to increase the level as much as they wanted it to be. Maybe we would all (or some of us - "armchair empiricism"?) like to see more damages paid to injured persons, but if the courts do it, that too is a political judgment, which can't be avoided. If the level of damages is increased by the judges, we must recognise it as a form of taxation without representation. We in Australia are presently seeing a democratic backlash against what is perceived to be over-generous compensation by judges. Much of it is misguided and due to false perceptions, but the parliaments are giving effect to the wishes of those who squeal loudest.

Harold Luntz.

Jason Neyers
Assistant Professor of Law
Faculty of Law
University of Western Ontario
N6A 3K7
(519) 661-2111 x. 88435

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