F v Gordon Chalmers & Others [2025] 2 WLUK 561: Court has no interest in interest

This is the most recent Scottish case dealing with quantum in non-recent abuse cases following the Limitation (Childhood Abuse) (Scotland) Act 2017. One of the key arguments was whether interest should run on the past solatium award and, if so, to what extent. In Scotland, interest runs on a damages award from the date of abuse. That means that interest in cases involving abuse in the 1970s and 1980s can double the award of damages.

When F was a pupil at primary school in the late 1970s he was subjected to serious sexual abuse by a priest. He also sustained physical and sexual abuse in the 1980s when he was boarding pupil at a secondary school. The action was initially raised against five separate defenders including those responsible for the second period of abuse. However, the case only proceeded against the Diocese responsible for the priest. The defender accepted the abuse by the priest and that they were vicariously liable for that. Accordingly, the proof was confined to questions of causation and quantum only.

An Interesting Argument 

There was a significant causation dispute between the medical experts regarding the pursuer’s psychiatric and employment outcome attributable to the priest’s abuse. This article focuses on quantum and particularly the challenge to the judicial interest rate applied to solatium.

The leading authority in this area is JM v Fife Council 2009 SC 163. The approach in JM was that interest on the element of solatium comprising the pain, affront and humiliation experienced by the pursuer at the time of the abuse should be one-half of the judicial rate and the element for the emotional and social consequences experienced thereafter should be one-quarter of the judicial rate. However, the court explicitly stated that this was a rough and ready calculation and a different conclusion may be reached if actuarial evidence was presented.

The defenders sought to challenge the approach in JM. They argued interest should only be awarded for two distinct periods: (i) the period between the abuse and the pursuer’s 19th birthday; and (ii) the period from the commencement of the Limitation (Childhood Abuse) (Scotland) Act 2017 to the start of the proof date. They argued the claim could not have been made until the 2017 Act due to limitation. There was no actionable delict prior to commencement of the 2017 Act, so no loss was accruing interest. Secondly, if interest should be awarded prior to the commencement of the 2017 Act, it should be at the simple rate of 1.31% p.a. from the date the abuse ceased. 

The defender’s actuary calculated that, if the pursuer had invested his solatium award in one-year GILTS, then the interest rate set out in JM v Fife Council would be excessive. The rate of interest using GILTS would amount to 1.31% p.a.. The actuary’s assumption mirrors the assumption made when calculating future wage loss using the Ogden tables.

The pursuer argued interest should be awarded in accordance with the guidance provided by the Inner House in JM. The pursuer’s actuary disagreed with the approach from the defender’s expert on grounds that if the solatium award had been invested in equities or property then the interest rate would have been in excess of the rate applied in JM. In cross examination the defender’s expert accepted that one-year GILTS was the lowest returning investment of all the options available. 

The court rejected the defender’s argument relating to the 2017 Act on grounds this would radically reduce the interest awarded in historical abuse cases interfering with a wide discretion of the court. Inordinate delay in prosecuting the action should not of itself result in a pursuer being deprived of interest to which he was otherwise entitled. The approach in JM was considered more pragmatic and rational. 

In respect of the secondary argument, the court, did not consider the defender’s expert had made an assessment as to what proportion of the judicial interest rates over the previous decades could be said to have been attributable to the inflationary element as was suggested by the Inner House in JM. The assumption of an investment in one-year GILTS was criticised on the grounds there were other options for investment. The sensible approach was to look at straightforward forms of investment or price increases, as the pursuer’s expert did, and consider whether these would undermine the court figures used for interest. They did not.

The solatium award was £135,000, with £80,000 to the past. Interest is still to be finalised between parties due to interim payments but it is likely the interest award will amount to around £125,000. 

Despite the invitation from the court in the case of JM for parties to present actuarial evidence, this case is an indication that the courts would prefer not to interfere with the established approach to interest in non-recent abuse cases. The judgment does not explain why it is standard practice for courts to assume an investment in GILTS for the purposes of future wage loss, but not when considering interest over a significant period. In order to depart from established principles, a challenge will require to be made to a higher court or the  actuarial evidence presented will require to consider the return on other comparatively low risk investments. It remains to be seen if the decision will be appealed.