Pecuniary and Non Pecuniary Damages: Losses Money Can Measure and Losses It Can Only Mark

This division is about the nature of the loss and not about how it is proved. Pecuniary losses are those to which money attaches naturally: earnings not received, expenses incurred, care that must be bought, property destroyed. They can be computed, and the exercise is arithmetical once the inputs are established. Non pecuniary losses are those to which money attaches only by convention: pain, suffering, the loss of a faculty, disfigurement, the destruction of a family relationship. They cannot be computed at all, and the court awards a conventional figure because it must award something. The division is not the same as that between general and special damages, and the two cut across one another.

1. The Comparison

2. Pecuniary Loss and How It Is Computed

• Loss of earnings to the date of trial is arithmetic: the income proved, for the period proved, less anything actually earned.
• Future loss of earnings or of earning capacity is computed by the multiplier method: an annual figure, the multiplicand, is multiplied by a figure representing the capitalised value of future years, the multiplier.
• Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121 fixed the multiplier table, running from 18 down to 5 according to age, and the deductions for personal and living expenses: one third where the dependants number two to three, one fourth where they number four to six, one fifth where they exceed six, and fifty per cent where the deceased was a bachelor.
• National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680 settled future prospects: fifty, thirty and fifteen per cent for a deceased in permanent employment aged below forty, forty to fifty, and fifty to sixty; and forty, twenty five and fifteen per cent for the self employed or those on a fixed salary.
• Future medical care, attendant care and prosthetics are costed on medical evidence and multiplied in the same way, with an allowance for periodic replacement.
• The services of a homemaker are pecuniary and are not valued at nil, the measure being what it would cost to replace them: TORT 084 and TORT 085.

3. Non Pecuniary Loss and the Conventional Figures

• The exercise is not compensation in the ordinary sense, because no sum restores a lost faculty. What the court does is award a figure that convention has settled as appropriate to an injury of that gravity.
• Consistency is the governing value. Since there is no objective measure, the only protection against arbitrariness is that like injuries receive like sums, which is why precedent matters more here than anywhere else in the assessment.
• Pranay Sethi fixed the conventional heads in fatal cases at Rs 15,000 for loss of estate, Rs 40,000 for loss of consortium and Rs 15,000 for funeral expenses, to be enhanced by ten per cent every three years, precisely in order to produce that consistency and to end the divergence between High Courts.
• United India Insurance Co. Ltd. v. Satinder Kaur, decided 30 June 2020, holds that consortium is payable to each claimant entitled to it, so a widow and three children receive four awards under that head, and that loss of love and affection is not a separate head, being comprehended within consortium.
• Magma General Insurance Co. Ltd. v. Nanu Ram, decided 18 September 2018, divides consortium into spousal, parental and filial, and recognised filial consortium in India for the first time.
• In injury cases the heads are pain and suffering, loss of amenity, disfigurement, loss of marriage prospects and loss of expectation of life, and the figures are drawn from the decided cases.

4. How the Two Divisions Cut Across Each Other

• The lower right cell is empty, and that is the key to the relationship. Non pecuniary loss cannot be proved in figures, so it can never be special damages.
• All special damages are pecuniary, but not all pecuniary damages are special: future earnings are pecuniary and general.
• The two divisions answer different questions. General and special is about proof and pleading; pecuniary and non pecuniary is about the nature of the loss: TORT 156.

5. Why Non Pecuniary Awards Are Kept Conventional

• There is no measure, so there must be a convention. If each court fixed its own figure for a lost limb, two claimants with identical injuries would receive wholly different sums for no reason, which is a failure of justice quite apart from the amounts.
• A conventional figure makes claims settleable. Parties can predict the award and compromise on it, and a system in which the non pecuniary head were genuinely at large would push every case to trial.
• It prevents the award from tracking the wrong things, such as the eloquence of the witness or the sympathy the claimant happens to evoke, which are not measures of injury.
• And it permits indexation. Because the figures are conventional rather than evidentiary, the Supreme Court could direct in Pranay Sethi that they rise by ten per cent every three years, which keeps them current without fresh litigation.
• The cost of the convention is that it is insensitive to the individual. A professional musician who loses a hand has lost more amenity than most, and the conventional figure does not reflect it, though the pecuniary head will.

6. What This Means for a Claim

• The pecuniary heads carry the value of a serious claim. Future earnings and future care will ordinarily dwarf the non pecuniary award, and they are the heads that reward preparation.
• Prove the multiplicand properly. Income established by returns, certificates and bank records produces a real figure; income asserted from the witness box produces a small one.
• Get the medical evidence on future need, since future care and future treatment are pecuniary but depend entirely on a doctor being asked the right questions.
• Do not over invest in the non pecuniary head, which is conventional and will not move far whatever is said about it.
• Claim each consortium separately for each claimant entitled, following Satinder Kaur, and do not plead loss of love and affection as a separate head.
• Check the indexation, since the Pranay Sethi figures rise every three years and an award computed on the original sums is out of date.

7. The Position Stated Shortly

1. Pecuniary losses are those money naturally measures; non pecuniary losses are those money can only mark.

2. Pecuniary loss is computed; non pecuniary loss is awarded at a conventional figure.

3. The division is about the nature of the loss, and is not the same as the division between general and special damages.

4. All special damages are pecuniary, but not all pecuniary damages are special, and non pecuniary loss is never special damages.

5. Sarla Verma fixed the multiplier table from 18 down to 5, and the deductions of one third, one fourth, one fifth and fifty per cent for a bachelor.

6. Pranay Sethi settled future prospects and fixed the conventional heads at Rs 15,000, Rs 40,000 and Rs 15,000, enhanced ten per cent every three years.

7. Satinder Kaur holds consortium payable to each claimant entitled to it, and loss of love and affection not to be a separate head.

8. Magma General v. Nanu Ram divides consortium into spousal, parental and filial, recognising filial consortium in India.

9. Conventional figures exist because there is no measure, and they make awards consistent, predictable and capable of indexation.

10. The pecuniary heads carry the value of a serious claim, and they are the heads that reward preparation.