The Court of Appeal has reinforced the general principle that a claimant suffering injury should not be better off after a case is settled than they were before the injury took place.

In the landmark decision of Ballantine v Newalls Insulation, the court has ruled that a defendant paying damages can deduct special payments made before the case was settled.

In the case, a man, who later died, was awarded £39,000 by the Government after contracting an illness from years of exposure to asbestos at work.

When the company, Newalls, was sued, an earlier hearing had decided that the agreed damages of £144,000 should be paid in full – in this case to the man's widow – and the earlier award, under a workers' compensation Act of 1979, could not be deducted.

The defendants appealed and got the decision reversed.

Lord Justice Buxton said if the claimant had already received compensation for pain and suffering and loss of amenity, there was no reason in principle why the normal rule against overcompensation should not apply.