A recent decision of Mr. Justice Sheil in the High Court has revisited the question of recoupment of earnings claimed by Plaintiffs' employers on foot of proceedings brought by Plaintiffs arising out of accidents.
In the case of John Wilson Patterson -v- John Davis and William Davis, a judgment delivered on 28 June 2002 in the High Court, Mr. Justice Sheil allowed the sum of £6,115.03 recoupment to the Plaintiff's employers F G Wilson Engineering Limited and in doing so followed the reasoning of Mr. Justice Denning in an earlier case of Dennis -v- London Passenger Transport Board [1948] 1 All ER 779 rather than the frequently quoted case of Logan -v- Cahoon [1996] NI 266.
In simple terms the case of Logan -v- Cahoon (a judgment of Mr. Justice Girvan) indicated that such sums would only properly recoupable if there was either a written contractual term to that effect in the Plaintiff's contract of employment or an undertaking to repay such a sum to the Plaintif's employer for which good consideration was given. In the Logan -v- Cahoon case, the Plaintiff's employer had already paid the Plaintiff the wages in question before the undertaking was signed and the Defendant successfully argued that the Plaintiff had not shown that there was good consideration to make the undertaking an enforceable contractual obligation.
However, the case of Patterson -v- Davis allowed the sum claimed by the Plaintiff's employer despite the fact that the Plaintiff had no written contract with his employer and the sum was advanced gratuitously to him by his employer. His employer gave evidence that they expected the Plaintiff to repay the sum advanced to him although there was no legal obligation upon him to do so.
In the case of Dennis -v- London Passenger Transport Board (which Mr. Justice Girvan followed) the Court had held that the amount of wages lost by the Plaintiff should be included in the special damages awarded to him, although accepting at the same time that the Plaintiff was under only a moral and not a legal duty to refund that sum. Mr. Justice Denning (as he then was) in the Dennis case said that
"The cardinal point to remember is that it is the Defendants who are responsible for what has occurred. In my opinion a wrong-doer is not to be allowed to reduce damages by the fact that other persons have made up to the Plaintiff his wages, like the London County Council and the Ministry of Pensions in this case. The Plaintiff has lost his wages. In point of law, therefore, prima facie he should have them paid by the wrong-doer".
Both the cases of Logan -v- Cahoon and Patterson -v- Davis are High Court cases and of equal precedence.
However, given that the Patterson -v- Davis case is the more recent, it seems likely that it will be increasingly argued by the Plaintiff's solicitors to justify claims by employers for loss of earnings paid to employees during absence from work to be included in their claims even in the absence of formal contractual terms or undertakings.