Case - Dobson & Others v. Thames Water Utilities Limited (Damages)

[2012] EWHC 986 (TCC), Technology & Construction Court - John Bates

The court determined the appropriate basis for awarding interest on general damages for nuisance.

The court was required to determine the basis upon which to award the claimants (X) interest on damages they had received for nuisance due to odour caused by the defendant (T). 

X claimed interest under the Senior Courts Act 1981 s.35A; they argued that the damages were based on a percentage of the monthly rental values for each property owned by them, and were assessed as a sum by way of damages for each year, and therefore that the interest should be awarded at the full special account rate from the end of each calendar year during which the nuisance was suffered until payment. T contended that the damages awarded related to non-pecuniary loss for interference with the enjoyment and amenity of land, and therefore that the quantum of the damages was assessed as at the date of the judgment and not at any earlier point of time. T further submitted that the interest rate on general damages for non-economic loss, such as for nuisance or personal injury, should be two per cent per annum between the service of proceedings and the date of judgment. 

HELD: General damages for personal injury or death raised issues which were different and not relevant to an award of general damages for nuisance. The approach that had been taken was to assess the damages to which each claimant was entitled for a particular year; therefore the total sum awarded constituted a number of sums awarded for each year. That approach meant that there was an ascertainable amount of damages for each year to which a claimant was entitled for T's nuisance. Any award of interest was not compensation for that damage done, but for the particular claimant being kept out of the money which should have been paid to them, London Chatham & Dover Railway Co v South Eastern Railway Co [1893] A.C. 429 applied and Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v Inland Revenue Commissioners [2007] UKHL 34, [2008] 1 A.C. 561 considered. Accordingly, it was appropriate for the court to exercise its discretion and award interest under s.35A on each annual sum awarded as damages. There was no basis for applying the rate used in the context of damages for personal injury: the special account rate which varied from time to time reflected the fact that a party had been kept out of the money for a particular period. Whilst it was not generally used as a rate of interest applied to debt and damages outside personal injury claims, that rate had reflected a margin of 0 to 2.75 per cent above the Bank of England base rate over the relevant period, and, accordingly, it would not have under or overcompensated X (see paras 10, 17-19 of judgment). 

Judgment for claimants

Counsel for the claimants: Stephen Hockman QC, John Bates

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