Quantum update – February 2015

Quantum update – February 2015

CategoryArticles Author Quintin Fraser, Angela Rainey Date

Upon the publication of the 6th edition of the Ogden Tables, many practitioners were sceptical about whether the courts would be willing to apply the scientific approach suggested for the valuation of damages to compensate an injured and “disabled” party  for  a disadvantage on the labour market. Whilst the threshold for a claimant to be classified as “disabled” (currently defined by the Equality Act 2010) is low, the impact of the classification on the calculations of future loss, if the Ogden 6 methodology is applied, is significant. Potential damages far exceed those which would usually be awarded following the traditional Smith v Manchester (1974) 17 K.I.R. 1 approach, because the reductions applied to the multipliers for residual earnings are very high.

Practitioners’ scepticism proved prescient, and there have been a number of cases where judges have been reluctant to apply the reduction factors  of Tables A-D of the Ogden tables for  a disabled claimant  without  further  adjustment (see, for instance, Conner v Bradman [2007] EWHC 2789 (QB), and Clarke v Maltby [2010] EWHC 1201 (QB), where no Ogden reduction was applied at all because the reduced multiplicand for residual earnings was held to give the claimant fair compensation) and the case of Billett v MOD [2014] EWHC 3060 (QB), [2014] All E.R. (D) 181 (Sep)  provides another example of the court’s approach. The claimant suffered a non-freezing cold injury while deployed on service with the army. He subsequently left the army (not because of the injury). He suffered ongoing symptoms of pain and loss of sensation in his feet when they became cold, but the symptoms, whilst preventing him from working or doing anything else outside in cold conditions for any appreciable time, did not prevent him from working as a Heavy Goods Vehicle driver. The “disability” status of the claimant was in issue between the parties, and Andrew Edis QC, sitting as a High Court judge, found that the claimant was disabled: his ongoing symptoms  substantially limiting his ability to carry out normal day-to-day activities. The judge, however, also said that he found it “hard to conceive of very many people who could be classified as ‘disabled’ who are as able and fit as is this claimant”.

In submissions on the assessment of the claimant’s loss, the judge was referred both to the explanatory notes of the 7th edition of the Ogden Tables and to two articles from Dr Victoria Wass (an academic economist who joined the Working Party for the 7th edition of the Ogden Tables) in which she criticised previous decisions involving judicial interference with the reduction factors in cases of lesser disability. Andrew Edis QC noted the “real divergence of view between Dr Wass and the judiciary about the way in which the Tables should be used” but held that the citations to which he had been referred in Dr Wass’s 2013 article in fact demonstrated exactly why a court is unlikely to apply unadjusted reduction factors to multipliers without evaluating the result and adjusting it if necessary – he concluded that to do so might lead to a correct overall level of damages across all cases but no individual claimant would himself get the right sum.

Billett does not raise any novel issue, but the case is worthy of consideration for a number of reasons: the perhaps generous classification of the claimant as disabled; the adjustment of the reduction factor to a mid-point between the applicable factors for a disabled and non-disabled person which appears now to be the de facto adjustment; and the well-reasoned endorsement of the hitherto common judicial approach in cases where ongoing disabilities are relatively limited.

Other recent cases of note include Knauer v Ministry of Justice [2014] EWHC 2553 (QB) in which the High Court has given permission to the claimant to pursue a leapfrog appeal to the Supreme Court to enable her to  argue that  the decision in  Cookson v Knowles [1979] AC 556,  in which it was established that for Fatal Accidents Act cases multipliers should be assessed at the time of death, is wrong. Mr Justice Bean indicated that he would have departed from that approach had he not considered himself bound by the Cookson decision. Whatever the outcome of the appeal on that point, Mr Justice Bean’s actual assessment of damages also deserves some mention given that he was prepared to award to the widower, who had no dependent children, a multiplicand of £18,140 to represent the loss of services he had suffered through the death of his wife: this is high in the context of previous awards for this head of damage.

Another case of  a High Court judge voicing disagreement with binding authority is Totham v King’s College Hospital NHS Foundation Trust  [1982] 1 W.L.R. 71. Mrs Justice Laing was dealing with a case in which the minor’s life expectancy had been reduced following a serious brain injury: she considered that  the decision of Croke (A Minor) v Wiseman [1982] 1 W.L.R. 71, whereby an injured young child cannot make a claim for their earnings for the “lost years”, was inconsistent with the principle of full compensation. It is too early to know whether an appeal will be pursued.

Finally, and on a rather different note, the issue in R (on the application of) ZYN v Walsall Metropolitan Borough Council  [2014] EWHC 1918 (Admin), [2015] 1 All E.R. 165 was whether  a  local  authority,  in  assessing  whether  an injured person can be required to contribute to the cost of her care, was permitted to take into account capital derived from a personal injury settlement and managed by a deputy appointed by the Court of Protection. The claimant was severely disabled and was in receipt of a substantial  care package which was in part provided by the local authority. She had substantial assets of around £550,000 which were derived from compensation received in a claim for personal injuries. The settlement offer was accepted in March 2003 on the basis that she could expect to be cared for when the need arose without the settlement monies being touched (in line with the relevant law at the time). The Court of Protection had appointed a receiver in March 2002 to manage the claimant’s affairs. By a court order in 2008 the receiver’s functions were transferred to those of a deputy under the Mental Capacity Act 2005. The deputy was permitted to withdraw £50,000 from the fund each year, without the need to make an application to the Court of Protection.

With effect from April 2011, the authority had sought to charge the claimant for the full cost of the care package (£271.84 per week) that it provided, in line with its own policy. She contended that the policy was unlawful because it had factored in her personal injury compensation to its means assessment and that, under the relevant legislation, the council was required to disregard such capital. The legal framework surrounding charging for community  care services (see paragraphs 11- 27 of the judgment) is complex and beyond the scope of this summary. Mr Justice Leggatt held that the defendant’s policy was unlawful and that the settlement monies should not be taken into account when assessing the claimant’s care contributions. He further rejected the authority’s submission that, since the deputy could dispose of £50,000 without a court order, the deputy administered property on behalf of the claimant, rather than on behalf of the court and that £50,000 could be taken into account.

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