Provisional Damages: Forecasting and Planning for the Future

Provisional damages operate as an exception to the general rule that damages are assessed on a once-and-for-all basis.

Where a claimant finds themselves at a risk of developing a disease or deterioration in their physical or mental condition in the future, the general rule would require the court to assess that risk and compensate the claimant for it at trial. Provisional damages allow such a claimant, instead, to claim an initial award for damages on the assumption that the disease or deterioration will not occur, with a proviso that they can come back to court on a later occasion and seek additional damages for the disease or deterioration should it in fact occur.

When Will the Court Award Provisional Damages?

The Senior Courts Act 1981 (section 32A) and the County Courts Act 1984 (section 51) make provision for the court to award provisional damages where “there is proved or admitted to be a chance that at some definite or indefinite time in the future the injured person will, as a result of the act or omission which gave rise to the cause of action, develop some serious disease or suffer some serious deterioration in his physical or mental condition”.

It is further provided, in CPR 41.2(1), that the court “may” award provisional damages where the above criteria are satisfied, but only if a claim for provisional damages is included in the particulars of claim; the choice of provisional damages over once-and-for-all damages is a matter for the claimant.

The principal authority on the court’s power to award provisional damages is Willson v Ministry of Defence [1991] ICR 595, where Scott Baker J identified three questions which the court must determine (and which were subsequently approved by the Court of Appeal in Curi v Colina, The Times, 14 October 1998):

1. Is there a chance of the claimant developing the disease or deterioration in question?
2. Is the disease or deterioration serious?
3. Should the court exercise its discretion to make an award of provisional damages? 

1. Chance

Scott Baker J noted that the chance must be “measurable rather than fanciful … [h]owever slim”, noting that the legislature had “used a wide word here and used it deliberately” (Willson at 599).

The chance may be extremely small: in Kotula v EDF Energy Networks (EDN) Plc [2011] EWHC 1546 (QB), for example, Irwin J considered that a 0.1% risk of serious consequences of syringomyelia was sufficient to satisfy this requirement.

An interesting recent judgment on this question is that of Hill J in Mathieu v Hinds & Aviva [2022] EWHC 924 (QB). There the claimant had suffered a traumatic brain injury (TBI) and sought provisional damages on two bases: that he would develop epilepsy at some point in the future (on which he succeeded) and that he would develop dementia at some point in the future (on which he lost). As to provisional damages in respect of dementia, the court heard expert evidence on the claimant’s future risk of developing dementia as well as the potential causative link between TBI and dementia. Having heard such evidence, Hill J concluded that the claimant failed in his claim for provisional damages on account that he was unable to show “on the current state of the science … the existence of a more than fanciful chance that the TBI will lead to him developing dementia” (at [341]). Hill J noted that it was not necessary for the claimant to prove that the TBI will be the cause of his dementia (at [342] – such issues of causation being a matter to be determined at the restored hearing for provisional damages) but considered at [328] that the claimant was still required to prove that “there is a more than fanciful chance that the TBI will cause him dementia in the future. This requires him to prove that as a matter of generality a single TBI can cause dementia, and that this risk applies to him”.

2. Seriousness

Scott Baker J noted that this is “a question of fact depending on the circumstances of [the] case, including the effect of the deterioration upon the plaintiff” and that “what is envisaged here is something beyond ordinary deterioration” (Willson at 599). In Willson, the claimant was principally seeking provisional damages on the basis that he would not develop arthritis to the extent that it required surgery and/or a change of employment. Scott Baker J held that osteoarthritis is a “progressive condition” and that the future development of it to the extent that it would require surgery and/or a change of employment was “simply an aspect of a progression of this particular disease” – it was not, therefore, a “serious” deterioration.

In Curi, Roch LJ considered that, in order to be sufficiently “serious”, “the disease or deterioration must be such that an award of damages which included a sum for the ‘chance’ will be wholly inadequate to compensate the plaintiff for the position in which he would find himself once the chance had materialised” (at 9).

3. Discretion

Scott Baker J outlined three important factors for the court to consider in deciding whether to exercise its discretion (Willson at 602):

1. whether there can truly be said to be a clear-cut identifiable threshold for returning to court – Scott Baker J noted that the Courts Acts envisage “a clear and severable risk rather than a continuing deterioration, as is the typical osteoarthritic picture” and so “there should be some clear-cut event which, if it occurs, triggers an entitlement to further compensation”;
2. the degree of risk and the consequences of the risk; and
3. weighing up the possibilities of doing justice by a once-and-for-all assessment of damages against the possibility of doing better justice by reserving the claimant’s right to return.

In outlining those factors, he endorsed the general observation of Michael Davis J, in Allott v Central Electricity Generating Board, unreported, 19 December 1988, that (Willson at 601): 

“I am not very enthusiastic, save in the clearest case … in assessing provisional damages because judges are experienced in assessing damages in which they have to quantify a risk”.

He also endorsed the observation of Simon Brown J in Patterson v Ministry of Defence [1987] CLY 1194 that (Willson at 601):

“… generally speaking, it appears to me desirable to limit the employment of this valuable new statutory power to cases where the adverse prospect is reasonably clear-cut and where there would be little room for later dispute whether or not the contemplated deterioration had actually occurred”.

Further, in Kotula, Irwin J, in making an award for provisional damages, noted as follows (at [48]):

“I bear fully in mind the desirability of finality of awards. Finality brings great benefit not merely to insurers and to the court system, but also to Claimants. However in this context that must be set against the potentially enormous inadequacy of an award, in that very small but measurable group of patients who go on to develop really significant incremental spinal compromise as a consequence of syringomyelia. It does seem to me that this is precisely the kind of rare but highly damaging contingency which Parliament must be taken to have in mind, when permitting damages awards to be provisional, and permitting the variation of periodical payments.”

Accordingly, much of the court’s consideration at this stage in the assessment turns on broad fairness: which party will, potentially, be more substantially adversely impacted and does that therefore point towards assessing damages now or leaving them open to a future assessment.

How to Approach a Provisional Damages Case

It is clear from the above that an award of provisional damages is highly fact specific. Moreover, the question of whether provisional damages should be sought/disputed is necessarily fact and client specific.

Accordingly, in the first instance, succeeding or failing in a provisional damages case will turn upon the evidence. Whether acting for a claimant or a defendant it is imperative that the evidence, and particularly the expert evidence, deals with all of the issues head on. The evidence should deal with the issues of ‘chance’ and ‘seriousness’ and, for instance, outline the particular impact of the future disease or deterioration on the claimant and whether future symptoms could be controlled or remedied with treatment. The evidence should also deal with the issue of ‘broad fairness’ – why, and to what extent, will one party be more substantially adversely impacted than the other party.

Secondly, whether acting for a claimant or a defendant, it is imperative that the issue of provisional damages vs once-and-for-all damages is fully discussed with the client as early as possible so that they are appraised of the risks and can make an informed decision on their preferrable course. That necessarily requires a detailed evaluation of the evidence in the case, on the background of the legal matrix detailed above.

From a defendant perspective, most defendants would wish to see the once-and-for-all end to a case in order to obtain certainty and finality. However, that may not be the position where the risk is particularly small and inherently unlikely to eventuate on the particular facts of a case (given the low risk, the claimant’s age, the claimant’s condition etc) such that, although uncertain, it is a risk worth taking. Much will turn on the precise future risk and its significance – and, most notably, the amount of any necessary additional payment to buy off that future risk – but it is important to assess the position as early as possible in order to make effective and timely Part 36 offers (which can be particularly difficult to assess in provisional damages cases).

From a claimant perspective, seeking provisional damages may well encourage a defendant to make an additional increased offer as a one-off lump sum to buy off any future risk. Of course, caution must be exercised in balancing the benefit of accepting an increased sum now, with the risk of being out of pocket further down the line. However, one matter which a claimant may take into account is the fact that the NHS and state care provision may potentially ameliorate some (albeit in a limited way) of the future risk of being left out of pocket if the case is dealt with on a once-and-for-all basis.