Pragmatic Apportionment of Interest on Solatium and Past Wage Loss in Lump Sum Awards

Introduction

F v Gordon Chalmers & Others [2025] CSOH 43 is a Note on Interest delivered by Lord Clark in the Scottish Court of Session on 28 April 2025. It follows his earlier Opinion ([2025] CSOH 23) on damages in a personal injury and abuse case brought by “F” against five defenders, of whom only the second defender (R C Diocese of Galloway) remained. The core issue in this Note is the method and quantum of interest to be applied to two elements of the lump‐sum award already determined: (1) solatium (non‐pecuniary loss) and (2) past wage loss included within the broad lump sum for consequential losses.

Key parties:

• Pursuer: “F” (represented by Milligan KC and McCaffery of A & WM Urquhart)
• Second Defender (R C Diocese of Galloway): Primrose KC and Rolfe of Keoghs Scotland LLP

The Note responds to competing written submissions on interest following a failure to agree between the parties.

Summary of the Judgment

Lord Clark awarded a total of £217,319 in interest, apportioned as follows:

• £122,319 on solatium (non‐pecuniary loss of £135,000)
• £95,000 on past wage loss (part of the £350,000 lump sum for past and future earnings loss)

The court adopted a pragmatic, three-period apportionment for wage loss (5% up to 2012; 45% from 2012 to early 2025; 50% thereafter) and, recognizing imponderables, applied half the standard interest rate (4%). For solatium, the court corrected an earlier percentage attribution of interim payments, adopting 21.53% rather than 27% and calculated interest accordingly.

Analysis

Precedents Cited

The Note is tightly linked to Lord Clark’s own Opinion ([2025] CSOH 23). Key paragraphs relied upon:

• Para [119]–[126]: Assessment of the pursuer’s realistic working life absent abuse, and the difficulty of quantifying lost earnings precisely.
• Para [137]: Initial suggestion that 27% of interim payments be attributed to solatium—a point later revised.

While no other external cases are cited, the Note implicitly draws on established Scots practice for interest on damages (standard 8% per annum, subject to adjustment) and on principles governing apportionment of lump sums between past and future losses.

Legal Reasoning

The court proceeded in two stages: 1. Interest on Solatium
• The pursuer’s calculation yielded £120,646; the defender’s £124,779.44.
• The pivotal issue was the percentage by which interim payments should reduce the interest‐bearing base. Lord Clark agreed with the defender that solatium (£135,000) constitutes 21.53% of the total award (£627,000), not 27%.
• After confirming the correct interim‐payment figure (£5,939.14), the court calculated interest at the standard rate over approximately 46.5 years, resulting in £122,319.

2. Interest on Past Wage Loss
• The original lump sum (£350,000) covered both past and future wage loss. No explicit breakdown had been made in the Opinion.
• The pursuer proposed a simple time-pro rata split (70% past, 30% future), yielding £245,000 past loss.
• The court rejected that method, emphasizing the Opinion’s observations that full earning capacity would have ceased long before retirement age, with only “ten years or so” of constructive work post-2012 and limited work before 2012.
• Adopting a three-period apportionment—5% of £350,000 up to 2012 (£17,500), 45% (£157,500) from 2012 until early 2025, and 50% (£175,000) thereafter—the court applied interest at 4% (half the standard 8%) over each period.
• This produced an unadjusted interest figure of £97,300, which was rounded down to £95,000 to account for interim payments.

Impact on Future Cases

• Establishes clear guidance on attributing interim payments to different heads of damage by reference to their share of the total award.
• Confirms that, in cases of significant uncertainty (“serious imponderables”), courts may halve the standard interest rate rather than attempt finely calibrated dating of each pound of loss.
• Affirms a pragmatic three-period apportionment where lump sums cover both past and future losses and detailed records are lacking.
• Encourages parties to provide detailed breakdowns when negotiating or pleading lump-sum awards to minimize post-judgment disputes on interest.

Complex Concepts Simplified

• Solatium: Compensation for pain, suffering, emotional and social consequences of wrongdoing (non‐pecuniary damage).
• Interim Payments: Advances made on account of the final award, which reduce the amount on which interest accrues.
• Standard Interest Rate: In Scots civil procedure, damages generally carry interest at 8% per annum (Court of Session Rules 2002), unless adjusted for fairness or uncertainty.
• Imponderables: Situations where precise quantification of loss over time is impossible due to incomplete evidence or inherent uncertainty.
• Pragmatic Apportionment: Dividing a lump sum into broad time slices to approximate past versus future loss when detailed evidence is lacking.

Conclusion

F v Gordon Chalmers & Others [2025] CSOH 43 provides a structured methodology for calculating interest on lump-sum awards involving both non-pecuniary damages and combined past/future wage loss. By refining interim‐payment apportionment, endorsing pragmatic time-slice allocations, and applying a halved interest rate in the face of serious imponderables, Lord Clark’s Note offers valuable guidance for practitioners and courts dealing with long-running personal injury claims. The decision underscores the importance of precision in pleadings on interest and affirms a fair, transparent approach to post-judgment interest in Scots law.