Category: Claims handling · Reviewed by Matt Bartlett, Director · Founder · Last reviewed 2026-06-11
Heads of loss are the discrete categories of damage and consequential cost into which a claim for damages is decomposed for assessment — each head being assessed by reference to its own evidential and legal criteria.
Definition
The heads-of-loss approach is the structural framework by which English courts and insurance practitioners assess damages. Rather than producing a single global figure, a quantum analysis identifies each category of loss (each “head”), values it on its own evidence, applies the relevant legal rules and aggregates. This approach produces transparency, allows scrutiny of each component, and structures negotiation and judicial decision.
For personal injury, the established heads are general damages for pain, suffering and loss of amenity; past loss of earnings; future loss of earnings; care and assistance; treatment; aids and equipment; accommodation; gratuitous care provided by family members; smith v Manchester (loss of earning capacity); miscellaneous out-of-pockets. For commercial loss, the heads vary by claim type but typically include direct loss, consequential loss, mitigation costs and interest.
Legal / Regulatory basis
The framework is grounded in:
The compensatory principle: damages should restore the claimant to the position it would have occupied but for the breach (Robinson v Harman (1848) 1 Exch 850).
The categorisation of damages developed through case law and codified in practice texts (Kemp & Kemp on Personal Injury Law and Practice for PI; McGregor on Damages for general damages law).
The CPR Part 16.4 requirement that the claim form and Particulars of Claim set out the heads of damage claimed.
The Damages Act 1996 and related authorities on future-loss multipliers, periodical payments and provisional damages.
The Senior Courts Act 1981 section 35A on interest.
For specific heads:
General damages for PSLA: the Judicial College Guidelines as updated by the Court of Appeal in successive guideline judgments (most recently Simmons v Castle [2012] EWCA Civ 1039 which produced the 10% Jackson uplift).
Loss of earnings: actuarial multipliers from the Ogden Tables (8th Edition currently in force, with Tables A-D for contingencies other than mortality).
Care costs: the leading authority is Housecroft v Burnett [1986] 1 All ER 332 on commercial rates and the gratuitous care discount.
Smith v Manchester awards: Smith v Manchester Corporation (1974) 17 KIR 1.
Loss of a chance damages: Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602.
How it works in practice
A schedule of loss is the operational document. The claimant’s schedule lists each head with the underlying calculation and supporting evidence. The defendant’s counter-schedule responds head by head.
For PI claims, a typical schedule structure:
General damages: by reference to the JC bracket for the injury, with reasoning for placement within the bracket.
Past loss of earnings: actual loss from the date of injury to the assessment, net of tax and benefits, with interest.
Future loss of earnings: residual earning capacity reduced from the no-injury position, multiplied by the relevant Ogden multiplier.
Pension loss: a separate calculation reflecting the impact on the claimant’s retirement provision.
Care: hourly cost of professional care (or a discounted gratuitous-care rate) multiplied by hours required, multiplied by the relevant multiplier.
Treatment: the cost of past and future treatment.
Aids and equipment: itemised with replacement intervals and the relevant multipliers.
Accommodation: the cost of adapted housing under Roberts v Johnstone methodology (now superseded by Swift v Carpenter [2020] EWCA Civ 1295).
For commercial loss, the heads are case-specific. For breach of contract: lost profits, wasted expenditure, mitigation costs. For professional negligence: the SAAMCO analysis identifies which heads of loss fall within the scope of the duty owed.
Each head is assessed on its own evidence. The Schedule sets out the calculation; the counter-schedule responds; the court adjudicates each. At settlement, the parties reach a global figure but with implicit reference to the heads.
Common variations
“Lump sum” damages combine all heads into a single award.
“Periodical payment orders” (PPOs) under Damages Act 1996 section 2 (as amended) replace future-loss heads with annual payments for the claimant’s life.
“Provisional damages” under section 32A of the Senior Courts Act 1981 reserve the right to additional damages if a defined deterioration occurs.
“Interim payments” under CPR 25 are advances against the eventual damages.
“Subrogated heads” — losses paid for by an insurer that are recovered through subrogation against the tortfeasor.
Example
A 32-year-old claimant suffers severe leg injury in a road traffic accident, resulting in below-knee amputation and chronic phantom-limb pain. Heads of loss:
General damages: severe leg amputation, JC bracket £150,000 to £200,000; placed at £175,000.
Past loss of earnings: 14 months off work at £42,000 per year = £49,000 plus interest of £4,200 = £53,200.
Future loss of earnings: residual earning capacity reduced from £45,000 to £28,000; loss £17,000 per year; multiplier (Ogden Table A) 28 = £476,000.
Pension loss: £42,000.
Care: 12 hours per week commercial rate £15/hr = £9,360 per year; multiplier 24 = £224,640.
Aids and equipment (prosthesis programme, mobility aids): £180,000 across the multiplier period.
Accommodation under Swift v Carpenter: £160,000 capital adjustment.
Smith v Manchester: included within the future earnings calculation.
Miscellaneous (travel, prescriptions): £8,000.
Schedule total: £1.36m gross. Contributory negligence assessed at 25% (the claimant was walking on a poorly-lit road wearing dark clothing); net schedule £1.02m. Defendant’s counter-schedule at £760,000 (lower multipliers, lower care hours, lower equipment estimates). Settlement at JSM: £880,000 plus costs.
Judicial College Guidelines for the Assessment of General Damages in Personal Injury Cases (current edition).
Simmons v Castle [2012] EWCA Civ 1039.
Ogden Tables (8th Edition).
Swift v Carpenter [2020] EWCA Civ 1295.
Damages Act 1996 (as amended).
Smith v Manchester Corporation (1974) 17 KIR 1.
Last reviewed
By Matt Bartlett, Director, on 2026-06-11. Next review: 2026-12-11.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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