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Lowther v Chetwin, Court of Appeal, 21 May 2003

30 May 2003
The issues

Compensation Recovery Unit – Benefits – lost earnings.

The facts

The Claimant was a self-employed Insurance Broker who had a car accident. She was unable to work from December 1995 to August 1996 and closed her business. She worked from leased premises. She could not terminate the lease until May 1998. She settled a final payment with the Landlord of £13,355.00 plus interest. She did not pursue a claim for loss of earnings, but she claimed special damages for the rent liability. At Trial she was awarded a sum towards that liability. The Judge however refused to specify the award as falling within the loss of earnings head of compensation for the purposes of the Table and Schedule 2 Social Security (Recovery of Benefits) Act 1997 stating that the award was made for the destruction of the business and not loss of turnover.

The Defendant Appealed.

The decision

1. The Trial Judge’s award in respect of the rent was a significant benefit to the Claimant.

2. Parliament could not have intended that the Claimant should be better off as a result of the accident or that the Defendant would have to pay Income Replacement Benefit to the State as well as paying damages for lost earnings.

3. The award for rent liability was compensation for earnings loss within the meaning of Schedule 2 of the Act.

Appeal allowed.

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