Scottish Court of Session Decisions

Robert B. Wright, Dalmuir, pursuer, brought an action of damages for personal injuries in the Sheriff Court at Glasgow against J. S. Lindsay and others, motor car hirers there, defenders.

The following narrative, taken from the opinion of Lord Salvesen, gives the facts of the case—“This case raises an important question under the Workmen's Compensation Act 1906, which, as it has a general application, deserves careful consideration. The pursuer was injured by a collision with a motor car which belonged to the defenders. He was at the time employed as a night watchman with the firm of J. & H. Williamson. Both the Sheriffs have found that the injuries which the pursuer received were due to the fault of the person in charge of the motor car, for whom the defenders are responsible; and if the case had stopped there the Sheriff-Substitute would as a matter of course have assessed the damages to which he considered the pursuer entitled. The defenders, however, pleaded that the pursuer had already received compensation from his employers, and that his right to recover damages against them is barred by section 6 of the Act. The only findings in fact with regard to this matter are as follows—‘Finds that after the accident the pursuer claimed and received compensation from his employers under the Workmen's Compensation Act for the period from 6th July 1909 to 16th November1909, amounting to £11, 7s. 5d., and granted receipts therefor: Finds that this compensation was received by the pursuer under reservation of his claims against third parties, conform to the receipt No. 15/1 of process.’ The Sheriff has, however, supplemented these findings in his opinion by saying that the payments made by the employers’ agent were so made ‘on the footing that the pursuer was to recover from the party in fault,’ and that ‘it was understood that under the Act the pursuer would have to pay them back if he recovered anything from the party in fault.’ These findings were not seriously challenged.”

The terms of the receipt granted by the pursuer are set forth in the Sheriff's note, infra.

On 19th May 1910 the Sheriff-Substitute ( Balfour) pronounced this interlocutor—“… Finds that after the accident the pursuer claimed and received compensation

Page: 211↓

from his employers under the Workmen's Compensation Act for the period from 6th July 1909 to 16th November 1909 amounting to £11, 7s. 5d., and granted receipts therefor: Finds that this compensation was received by the pursuer under reservation of his claims against third parties, conform to the receipt No. 15/1 of process: Finds, however, that that reservation has no effect, and the pursuer having elected to take compensation under the Workmen's Compensation Act is now barred from recovering damages in respect of the accident from third parties: Therefore … dismisses the action and decerns.”

Note—[ After dealing with the facts of the case].—“While the defenders' liability for the accident is clear, it appears to me that the pursuer is barred from recovering damages from them in respect that he has claimed and obtained compensation under the Workmen's Compensation Act from his employers. The sixth section of the Act provides—[ quotes, v. sup.]. In this case the pursuer elected to take compensation under the Act, and he agreed to accept the weekly sums paid to him in satisfaction of the compensation payable by his employers, but he reserved his claims against third parties. It appears to me, however, that according to the sixth section of the Act the pursuer cannot obtain both damages and compensation, and that having elected to accept compensation according to the receipts produced he cannot now recover damages against third parties.

The English case of Oliver v. Nautilus Steam Shipping Company, 2 K.B.D., L.R. 1902, was referred to by the pursuer as showing that a receipt given without prejudice did not bar the workman from taking an action against a third party, but the Scotch case of Mulligan v. Dick & Son, 6 F. 126, throws a different light upon the effect of such a receipt. It was held in that case that a workman who made a claim for damages at common law against a person other than his employers, and without having taken legal proceedings received a payment in settlement of his claim, had taken proceedings in the sense of the Act, and that therefore he had exercised his option and was barred from claiming compensation against his employers, and it was further held that a clause in the receipt granted by him reserving a right to claim compensation from his employers did not prevent this result, and the English case of Oliver already referred to was distinguished. The opinions of the judges are instructive, and show distinctly that a workman cannot recover both damages and compensation, and that receipts with a reservation such as occurs in the present case will not prevent the application of the statute.”

The pursuer appealed to the Sheriff, who on 25th October 1910 adhered to the interlocutor of the Sheriff-Substitute.

Note.—[ After dealing with the facts]—“But there is the defence that the pursuer had claimed and received compensation from his employers, and that his right to recover damages is barred by section 6 of the Workmen's Compensation Act 1906. The facts are that his employers gave notice to the Railway Passengers Assurance Company, with which they were insured, of the accident, and that as a result the pursuer received from them, from 6th July to 16th November 1909, sums amounting in all to £11, 7s. 5d. The circumstances in which the payments were made are described by Robert Beattie, the manager of the insurance company. In his evidence Mr Beattie says that he recognised these payments as full compensation to pursuer in terms of the Act. They stood in the employer's place, and these payments were made by them on the footing that the pursuer was to recover from the party in fault, and that the pursuer reserved his right to common law action against that party. It was understood that under the Act the pursuer would have to pay them back if he recovered anything from the party in fault. The receipts granted by the pursuer werein these terms—‘I, Robert Wright, having elected to take compensation under the Workmen's Compensation Act, hereby agree to accept the weekly sum of 11s. 4 1 2d. in satisfaction of the compensation payable by Messrs J. & H. Williamson for the accident I met with when engaged in their employment on the 29th day of June 1909, under reservation of my claims against third parties.’ The statute says in clause 6—[ The Sheriff here quoted section 6]. Now it is clear in the present case that the injury for which compensation is payable under this Act was caused under circumstances creating a legal liability in some person (namely, the defenders) other than the employer to pay damages. Therefore clause 6 would apply to the defenders. The workman therefore might take proceedings both against the defenders to recover damages and against his master to pay compensation, but the statute expressly declares that he shall not be entitled to recover both damages and compensation. In this respect the statute differs from the Workmen's Compensation Act 1897, where the workman was put to his election of either-raising an action for damages against the other person or claiming compensation from his employer, and in the event of his choosing the one remedy his claim for the other came to an end. He might find by raising the action which turned out not to be good in law that he had excluded himself from the other remedy in which he had a perfectly good claim. All the cases to which I was referred, or have been able to discover, were brought under the previous Act, and owing to the difference in the terms of the two statutes do not seem to give very much aid in this matter. The question is, Has the pursuer, in the circumstances, recovered the compensation which was paid to him by the insurance company? If he has, then there is a statutory bar to any decree being pronounced in his favour in the present action. I think it is enough that he should have made a claim upon his master, or the insurance company, under the Act, and received payment

Page: 212↓

in respect of that claim, to bring his action under the word ‘recover’ in the statute. The further question therefore is, did the agreement between him and the representative of the insurance company, that he should be free to raise an action of damages against the person otherwise responsible for the accident, and that he was to repay out of the sum recovered any money he got under the Compensation Act to the company, take him outside of the meaning of the word ‘recover’ in the section referred to? That must be taken along with his reservation, in the receipt given, of his claims against the third parties. I think the question whether he has recovered compensation is one of fact, and that the reservation in the receipt and the agreement with the company did not alter the fact that he did recover these payments from the company. If before raising this action the pursuer had repaid the money to the insurance company another question might have been raised, but we have the evidence of Mr Beattie that he recognised those payments which as a matter of fact had been made as full compensation to the pursuer in terms of the Act. If that be so, it seems to me that the statute applies, and that the pursuer is barred from recovering damages from the person other than his master liable for the injury, namely, the defenders. Accordingly I think the action should be dismissed.…”

The pursuer appealed, and argued—By section 6 of the Workmen's Compensation Act 1906 (6 Edw. VII, cap. 58) a workman was entitled to take proceedings both against his employer and against a third party liable to him in damages. He could follow both proceedings out to judgment, and was not bound to elect between compensation and damages till both questions of liability had been determined. These were his statutory rights, and it was for the respondents to show that he had waived them. If in accepting a weekly sum from his employers, the workman expressly reserved his right to proceed against third parties, he had not exercised his right of election. Section 6 was passed to remedy the defect in the Workmen's Compensation Act 1897 (60 and 61 Vict. cap. 37). By section 6 of that Act the workman could only take one set of proceedings. He had the option of suing the third party at law to recover damages, or of proceeding against his employer for compensation. The new Act was altered so as to make sure that the workman would get his compensation one way or the other. It was not, of course, intended that at the end of the day he should be in the position of recovering both compensation and damages. He was certainly not to be paid twice, but there was nothing in the section to prevent him from getting some compensation from his employer to keep him from starving while the question of damages was being litigated. The pursuer had not “recovered” compensation in the sense of the Act when he had not made his final election, and had undertaken to repay his employer out of what he might recover from the defenders. The question had been decided in England favourably to the pursuer's contention— Oliver v. Nautilus Steam Shipping Company, Limited, [1903] 2 KB 639. The case of Mulligan v. Dick & Son, November 19, 1903, 6 F. 126, 41 S.L.R. 77, relied on by the Sheriff-Substitute, was really in the pursuer's favour— see Lord M'Laren's opinion, 6 F. at 131. Huckle v. The London County Council, June 24, 1910, 26 T.L.R. 580, was also referred to.

Argued for the defenders (respondents)—The question whether a workman had recovered compensation was one of fact— Mackay v. Rosie, 1908 S.C. 174 (Lord President at 178), 45 S.L.R. 178. The pursuer had been paid full compensation for four months—until he went back to his work. He was therefore barred from suing a third party delinquent, for, as matter of fact, he had exercised his election and had received weekly sums as compensation from his employer— Oliver v. Nautilus Steam Shipping Company ( sup. cit.), [1903] 2 KB 639, Vaughan Williams (L. J.) at 645. The pursuer having in fact recovered compensation, the reservation in the receipt was ineffectual. Burton v. Chapel Coal Company, Limited, 1909 S.C. 430, 46 S.L.R 375, was also referred to.

At advising—