Damage awards have four components

1. Pain and suffering and loss of amenity
2. Past financial loss
3. Future financial loss
4. Interest.

1. Pain and suffering and loss of amenity

This sum is calculated by reference to what Courts have decided in previous cases. Size depends on the severity of injury. The maximum award for brain damage combined with quadriplegia is in the region of £240,000. In contrast, damages under this head for the unnecessary removal of an appendix might be in the region of £6,000. The Judicial Studies Board have published guidelines for this calculation. The guidelines are based on previously decided cases, save research time and make disagreement about valuation less likely. The Judicial Studies Board guidelines are published by Blackstone Press Limited and the fifth edition currently costs £19.95.

In many cases, damages under this head only account for a small proportion of the overall value of the claim.

2. Past Loss

This usually includes out of pocket expenditure and any loss of earnings, the costs of any special equipment purchased and the notional value of care and assistance provided by relatives and friends.

It is important to keep any documents that relate to this head of damage and to record any care and assistance received in a diary so that an accurate calculation may be made at a later stage.

3. Future Loss

This award represents the present value of expenditure or losses which will be incurred in the future. It may include items for which expenditure has already been incurred but it may also include entirely new things which it can be predicted may be required in the future or losses which will only begin to be incurred in many years time. An example of the latter would be loss of earnings when it can be predicted that it will not be possible to continue working until a planned retirement date.

This award is calculated by working out the annual loss and its anticipated duration.

Once an estimate of the annual cost or loss is established it is multiplied by a figure known to lawyers as a multiplier. The "multiplier" is selected from a table. The multiplier reflects the fact that to compensate someone for the annual loss of £1,000 for 10 years does not mean the correct award is £10,000 because interest can be earned on the sum awarded. The objective is not to over compensate but to provide a fund which will be exhausted when the loss or expenditure it was intended to cover comes to an end.

4. Interest

Interest on damages for pain, suffering and loss of amenities is calculated at the rate of 2% from the date proceedings are served.

The reason that this is a low figure is because awards for pain and suffering and loss of amenity increase with inflation. Therefore a delay in assessing this head of damage does not result in the same loss as a delay in the assessment of past financial loss since past financial loss is calculated by reference to its actual value at the time sustained.

Interest on past loss is calculated at an annual rate currently between 3.5% and 7% from the date of the injury.

In cases of continuing loss the rate is 3.5% per annum. Where the loss ceased at or about the time of injury 7% may be awarded. In practice, 3.5% is usually the figure chosen.

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