Jurisdiction(s):
United Kingdom

Set-off of insurance benefits in personal injury damages: applying Bradburn, Parry, Gaca and Boyd v Hughes; benevolence exception; employer-funded schemes; evidence strategies

Published on: 19 May 2025

Published by a LexisNexis PI & Clinical Negligence expert

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Article summary

Under what circumstances can insurance payments be deducted from personal injury compensation?

The starting point, as explained in Hodgson v Trapp [1989] AC 807, is that a claimant should account for advantages obtained because of the accident, since damages are there to compensate rather than to allow recovery twice over. There are, however, exceptions. The most frequently encountered concerns social security benefits, which are subject to a distinct statutory framework, ie CRU deductions, with which personal injury practitioners will be acquainted. Another exception, first formally recognised in the late nineteenth century in Bradburn v Great Western Rail Co [1874] LR 10 Exch 1, is the insurance exception. Under this rule, sums paid to a claimant under an insurance policy, consequent upon the claimant suffering an accident, are not to be taken off the damages award. The rationale for this principle, confirmed in Parry v Cleaver [1970] AC 1, is straightforward: the defendant tortfeasor should not profit from the claimant’s own prudence. This reflects the compensatory aim of damages and the need to avoid double recovery entirely...

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