Category: Claims handling · Reviewed by Mark Fox, Broker · Renewals · Last reviewed 2026-06-11
Special damages are the precise financial losses a claimant has suffered or will suffer — past expenses, past losses of income, projected future expenses and future losses — calculated from evidence rather than estimated by reference to comparators.
Special damages are the bottom-up component of damages. Unlike general damages, which are assessed by comparison with other awards, special damages are computed from the actual financial impact on the claimant: invoices, payslips, expert projections, valuations and actuarial multipliers. Each item is specifically pleaded, supported by evidence and tested by the defendant.
In PI claims, special damages are usually the largest part of any significant award; in catastrophic injury cases they can run to many millions of pounds, dwarfing general damages.
The framework rests on:
For commercial special damages, the principles include foreseeability (Hadley v Baxendale (1854) 9 Exch 341), causation (the “but for” test refined by SAAMCO and Manchester Building Society), and mitigation (British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673).
Calculation proceeds head by head. For a PI special damages calculation:
Past loss of earnings: actual loss between accident and assessment, net of tax, National Insurance and benefits received under the CRU regime (Compensation Recovery Unit), with interest at half of judgment rates.
Future loss of earnings: the difference between pre-accident earning capacity (uninjured forecast) and post-accident earning capacity (injured forecast), multiplied by the Ogden Table multiplier appropriate to the claimant’s age, gender and retirement age. Tables A-D adjust for contingencies other than mortality (unemployment, illness, early retirement).
Pension loss: the loss to the claimant’s pension provision, calculated by an actuarial expert.
Care: hourly cost (commercial rate, less the gratuitous-care discount where care is provided by a family member — historically 25%, but the discount is contested and varies by case) multiplied by hours required, multiplied by the Ogden multiplier.
Treatment, aids, equipment, accommodation: each calculated as the cost incurred and projected, with replacement intervals for equipment and the Swift v Carpenter methodology for accommodation.
Past losses attract interest; future losses are discounted to present value through the multiplier.
For commercial special damages, the calculation depends on the cause of action. For breach of contract: the difference between the position the claimant would have been in had the contract been performed and the actual position. For negligence: the difference between the position with non-negligent advice/service and the actual position, subject to the SAAMCO scope-of-duty limit.
Forensic accountants are routinely instructed for commercial damages above a threshold (typically £250,000). They produce damages reports with detailed schedules and methodology notes. The opposing forensic accountant produces a counter-analysis. Quantum experts often meet to identify points of agreement and disagreement.
The Schedule of Loss is the operational document. It lists each head, the calculation, the supporting evidence and the resulting figure. The total is the claimant’s pleaded case on quantum. The defendant’s counter-schedule responds head by head; the differences are the subject of negotiation, mediation or judicial decision.
“Lump sum” damages combine all heads into a single award.
“Periodical payment orders” (PPOs) under Damages Act 1996 section 2 replace future-loss damages with annual payments. PPOs are particularly common for catastrophic injury cases involving long-life-expectancy claimants.
“Provisional damages” reserve the right to additional damages on a defined future event.
“Interim payments” under CPR 25 provide partial payment of damages before final assessment, useful where the claimant needs cash flow for treatment, accommodation or substitute services.
“Subrogated specials” — amounts paid by the claimant’s insurer that are recoverable by the insurer through subrogation.
A 38-year-old commercial driver suffers serious neck and shoulder injury, leaving him unable to return to long-distance driving. Special damages:
Special damages total: £318,210. Plus general damages (severe shoulder injury, JC bracket placement at £24,000): £24,000. Total claim: £342,210. Less contributory negligence at 10%: £307,989. Settlement at JSM: £290,000 plus costs.
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.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email hello@apexinsurancebrokers.co.uk, or request a quotation.
Get a quote