Injury compensation – how is it calculated?

Compensation, or Damages, for an injury or medical accident claim has two separate heads. Firstly, there is the compensation for the injuries themselves, known as ‘General Damages’. Secondly, there is the compensation for specific past and future losses caused by the accident. These are known as ‘Special Damages’.

General Damages

These are based upon the nature of the injuries themselves; the pain and suffering associated with those injuries and the effect that the injuries have on a person’s lifestyle.

Except in a claim against the Criminal Injuries Compensation Board, there is no set tariff for particular injuries. However, the Judicial College, which trains the Judges in England and Wales, produces helpful guidelines on awards. The 13th edition of these guidelines have just been published.

Two examples give an illustration:

  • Fracture of an index finger, where pain remains and function is impaired with an ongoing risk of osteoarthritis – £7,620 to £10,230
  • Head injury, with moderate to severe intellectual deficit, a personality change, and effect on sight/speech/senses and a significant risk of epilepsy with no prospect of employment – £125,510 – £183,150

The maximum award for general damages, in the current guidelines, is £337,700 for conditions such as very severe brain injury or tetraplegia

It follows that awards in England and Wales that run into millions of pounds are largely made up of Special Damages.


Special Damages

The basis for this type of compensation is to put the Claimant back in the financial position that they would have been in, had the accident not taken place. To be successfully claimed, the losses must have a firm link to the accident or injury, and must be reasonable in the all circumstances.

In any claim, these losses are set out in a Schedule. The Schedule is divided into two parts. The first part is for losses and expenses that have already been incurred. The second part deals with future losses.

Losses often include loss of earnings; travel and family care; home help and medical treatment, including physiotherapy. In more serious cases there may be claims for such things as care (including residential care); care management; additional accommodation costs; house moving or home adaptation costs; pension loss; prosthetic costs and Court of Protection fees and expenses.

With future losses, actuarial tables – known as the Ogden Tables – are used to calculate the number of future years for each part of the claim. These tables take into account such things as life expectancy and the likely investment return on capital.