CALCULATION OF DAMAGES UNDER THE PRIVATE INTERNATIONAL LAW WITH SPECIAL REFERENCE TO TORTIOUS LIABILITY By Abhishek Rana at Lexcliq

The Conflict of Law problems can arise in the field of torts in number of situations. For example if a person of Indian origin travel abroad to England for business purpose in the cores of doing his business in that country he met with the accident by a car which made in Germany registered in England by an Ireland origin person so conflict as to which law will apply can arise. Problem may also arise in the case of a collision between ships on the high seas so how are such problems to be resolved? How the damages be calculated? What all factors need to be taken into consideration?

Going by the theories two systems of the law can be chosen as the applicable law in a case of tort the lex foriand the lex loci delicti. As applicability of every law is not as Pigen hole theory i.e. perfectly made and understood in every condition so is the case with these two systems. If lex foriis adopted it has the advantage of simplicity because there is no need to ascertain where the tort took place or to prove the law of the country where the act happened. The selection of the lex foriis however arbitrary and even unfair if a tort took place in a foreign country and the victim is also a national of that country who would expect a solution based on a law with which he is familiar and may result into forum shopping particularly in the federal countries. In most of the situations of conflict of laws in tort cases the application of the lex loci delicti is the fairest solution and also complies with what may be regarded as legitimate expectations of the parties.

Factors to consider while Calculating Damages:

The following factors are typically considered:

  • Medical treatment expenses
  • Estimated costs of future medical treatment or therapy
  • Past lost wages or income
  • Future lost wages or income;
  • Costs to repair or replace damaged property
  • Your out-of-pocket expenses, such as insurance deductibles or copayments
  • Rental car expenses
  • Funeral expenses, in wrongful death cases
  • Emotional distress
  • Pain and suffering
  • Punitive damages if the underlying act was particularly egregious or intentional

In all the legal system, damages are intended to compensate the plaintiff sufficiently to make him or her whole i.e. restore the plaintiff to the same position he or she was in prior to the accident or injury. So taking into account these factors are very important to know the position of the person who is injured so that court can come to a conclusion that this will monetary help will nearly restore to it sold position.

Calculation of Damage:

Rules To Calculate Damages:

  1. Damages in case of Negligence (Hand Rule or Hand Formula):

The Damages are calculated in the Negligence case by applying Hand Rule. Courts calculate damages for in compensable losses based on the response of reasonable people to daily risks. Specifically the courts compute damages based on the reasonable person’s point of indifference between less risk and more expenditure on precaution. Hand Rule describes this point of indifference. In its original notation Hand Rule is based on the equation B= pxL,

where “B” is the burden of the precaution “p” is the reduction in the probability of harm caused by precaution “x” is the multiplication sign and L is “liability”.

Equation describes the tipping point between negligent and non-negligent behavior. If B equals or exceeds pxL then behavior is non-negligent. If pxL exceeds B then behavior is negligent.

 

  1. Damages in case of shortening of expectation of life:

Cases in which the life of a person because short due to tortious wrong done by the other person so the question as to how the damages will be paid as according to this rule. This rule to determine the quantum of damages in the situations where a person’s normal span of life is shortened due to the wrongs done by the defendant. The test to determine compensation is not the length of time of life of which a person has been deprived, but it should be the prospect of a predominantly happy life. The test of happiness of life is not to be subjective i.e. how the deceased thought about the chances of his own happiness the test is an objective one. Very moderate damages should be should be allowed for an action under this head.

  1. Damages in case of death of a person:

To calculate the damages in the case of death as a result from tortious wrong by other person, there are multiple theories. Court has to decide as to which formula suits the best for the case and courts can if it becomes necessary to follow multiple formulas then it can consider more than one formula

  1. Interest Theory:

    2.  Multiplier Theory:

  1. other instances of damage calculation:
    1. The age of the dependents is also taken into view. So, in such cases, the courts deduct a percentage of the capitalized amount in view of the fact of uncertainties like the deceased or dependent’s chance of dying before the expiry of the years for which the multiplier has been used.
    2. While deciding on the quantum of damage under the (Indian) Fatal Accidents Act, 1855 factors such as if the plaintiff was being supported by the deceased or had a legal claim to be supported or if the plaintiff can claim damages when the deceased was not an employed person, needs to be kept in mind.

 

The Position at Common Law

The basic rule in Phillips v. Eyre was laid down as follows:

“As a general rule in order to found a suit in England for a wrong alleged to have been committed abroad two conditions must be fulfilled. First the wrong must be of such a character that it would have been actionable if committed in England, Secondly the act must not have been justifiable by the law of the place where it was done.”

The “Double Actionability Rule” was thus established as the general rule relating to cross border torts. The two limbs of the rule are:

  • The act must be “actionable” as a tort in England and

(b) The act must be “non-justifiable” by the law of the place where it was committed.

To this general rule an exception was created by English law in Boys v. Chaplin, which may mean that in a particular case a court could apply either English law alone the law of the place where the tort or delict occurred alone or another law alone.

 

Position in India

The first decision on the matter is of the Madras High Court. The court was dealing with a claim of defamation. The facts of the case are: The then Raja of Cochin (which was at the time an independent Indian State) sent a communication to the plaintiff excommunicating him from his caste. This communication was then sent to British India. The Madras High Court applying the “double actionability” rule dismissed the claim stating that as the communication was from a superior to a subordinate with no trace of malice the defence of qualified privilege would apply thus not giving rise to civil liability under the laws of the State of Cochin.

The second case is that of The Kotah Transport Ltd. V. The Jhalawar Bus Service Ltd. In this case the plaintiff filed for damages for injury caused due to rash and negligent driving by the defendant’s driver. The accident took place in Jhalawar and the action was brought in Kotah; both these places were then independent Indian States. The court found for the plaintiff as there was nothing in the law of the state of Jhalawar that justified his actions, and the act was a tort under the laws of the state of Kotah, and thus the requirements of “double actionability” was satisfied.

 

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