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In his last message to the group, Duncan Sheehan wrote:

'Charles Mitchell mentions cases of where fairy godmother payments still allow claims against the tortfeasor and cases where they do not. I would be interested in knowing how he can justify a distinction between the two sets of cases.'

I'm not sure I would particularly want to 'justify' this distinction. I simply wished to make the point that it exists in the case law which we've got. I would personally prefer a system under which all third party payments to tort victims operate to discharge the tortfeasor's liability, except those which have expressly been made on the basis that the third party wishes the victim to keep his payment over and above anything he might additionally recover from the tortfeasor. But I am aware that there are problems with this position - eg wastefulness and also evidential problems where the third party would have thought this if he had turned his mind to the question but actually he didn't. These and other problems are all usefully discussed in the LCCP on Collateral Benefits, in Peter Cane's book, Tort Law and Economic Interests, and in Prof Atiyah's Accidents, Compensation and the Law.

He also asks:

'Can you allow the fairy godmother to recover by an analogy with subrogation, in those cases where a live claim seems to continue in existence?'

The short answer to this is: Yes, if you want to.

I would add that it follows from this that although the rules about when a third party payment does and does not discharge a tortfeasor's liability to his victim are in a mess, this ultimately doesn't really matter, since the law has sufficient mechanisms at its disposal to shift the burden of paying for the loss around in any case.

To illustrate this point, imagine the following situations:

1) FG pays V in respect of a loss caused to V by T's tort. The rules say that T's liability is thereby discharged. If the view is taken that FG rather than T is the 'right person' to bear the burden of paying for V's loss, then we can just leave things at that, and refuse to give FG any right to recover from T. On the other hand, if we think that it should be T rather than FG who winds up paying at the end of the story, then we let FG sue him for money paid.

2) FG pays V in respect of a loss caused to V by T's tort. The rules say that T's liability is not thereby discharged. If we think that it should be T rather than FG who winds up paying at the end of the story, and also that we don't want V to let recover twice over, then we can let FG take over his right of action against V via subrogation and enforce it for his own benefit.

Both these examples are obviously premised on the view that V shouldn't be allowed to recover twice over for himself. In example (1), he can't do this because the rules say his action against V is extinguished by FG's payment - and indeed, we might even say that it is precisely because it is thought undesirable to let V recover twice over that FG's payment is deemed to have this effect. In example (2), he could potentially recover twice over, and if we decided to let him, then we wouldn't award FG subrogation, but would leave V to sue T for himself.

I discuss all this at slightly greater length in my chapter in Restitution and Banking Law.

Charles

Dr Charles Mitchell
Lecturer in Law
School of Law
King's College London
Strand
LONDON WC2R 2LS

tel: 0171 873 2290 fax:
0171 873 2465