More Judicial Tinkering?

January 20, 2017

by David Knifton

David Knifton examines the latest High Court decision concerning the application of the Ogden tables, and in particular the adjustment factors in Tables A-D, to claims for loss of earnings in Diane Jennifer Kennedy v London Ambulance Service NHS Trust [2016] EWHC 3145 (QB).

C (aged 44 at trial) was employed as an ambulance solo responder, earning £24,660 per year.  In 2011, she suffered PTSD as a result of carbon monoxide poisoning from a defective vehicle exhaust.  After a period of absence from work, she returned on restricted duties, but was unable to resume her solo responder role, and was dismissed on capability grounds in 2015, since when she had not found alternative work.  The judge found that, but for the accident, she would have continued to work until age 60.  Although there was a lot of uncertainty as to what earnings she might now achieve, he held that, with successful CBT treatment, she was likely to resume work in a less stressful environment within 2 years, with probable annual earnings of £16,000, compared with her pre-accident earnings of £24,660.  He rejected D’s submission that the imponderables were such that there should be a large Smith v Manchester award (£100,000), distinguishing Billett v MOD on the basis that C was currently unfit for work and the prognosis for a psychological injury was less easy to predict than most physical disabilities.  However, despite apparently accepting that C was disabled, he concluded that applying the Table D reduction factor of 0.42 would be “too pessimistic”, and instead adopted a figure of 0.62, midway between the non-disabled and disabled reduction factors.  He calculated loss of earnings as follows:

  • For the first 2 years: 1.95 x £24,660 = £48,087
  • Thereafter, ‘but for’ earnings to age 60: 11.31 x 0.8 x £24,660 = £223,123.68
  • Less, residual earnings: 11.31 x 0.62 x £16,000 = £112,195.20
  • Total: £159,015.48

He also made an award of £2,500 for loss of congenial employment.

Comment

A number of interesting points arise from the judgment:

  1. The judge warned of the danger that, in the drive for mathematical precision (“an unattainable goal”) using the Ogden tables, we lose sight of the fact that the object of the exercise is to provide fair compensation for an uncertain future.  He quoted WH Auden’s aphorism “thou shall not sit with statisticians”!
  2. He nevertheless rejected the Smith v Manchester approach urged upon him by the Defendant, distinguishing Billett v MOD [2015] EWCA Civ 773: “In my view the Court should not depart from the multiplier/multiplicand approach unless, as in Billett, it throws up an obviously unreal result”.  In this regard, he echoed similar observations made by the CA in Ward v Allies & Morrison [2012] EWCA Civ 128 that the Court should normally apply the Ogden approach “unless the judge really has no alternative”.
  3. Although the medical evidence suggested that the Claimant would be fit enough to return to work on a gradual basis over a period of up to 18 months, the judge allowed a full loss of earnings claim for 2 years, perhaps reflecting (although this is not expressly stated) an inevitable job search period.
  4. In determining residual earnings, the judge adopted a multiplicand of £16,000 to reflect the fact that she would need to work in a less stressful environment, a reduction of £8,660 from her pre-accident earnings.
  5. As to multipliers, he also worked on the basis that, but for the accident, she would only have worked to age 60, reflecting her pre-disposition to stress.  Since he had already made an award for 2 years’ loss of earnings, he appears to have accepted that the appropriate multiplier was that for a female aged 2 years’ older than the Claimant’s current age (she seems to have been age 44 at the date of trial), presumably discounted by 2 years (the net undiscounted figure was 11.31).  He discounted this by the Table C reduction factor of 0.8 (using her current age).
  6. He adopted the same raw multiplier for residual earnings, even though it might have been argued that, in a less stressful job, the Claimant might be capable of working for longer.
  7. It appears to have been agreed between counsel that the appropriate reduction factor from Table D should be that for someone who is employed, even though the Claimant had yet to find a job, presumably due to the judge’s finding that she would be fit enough to resume work after 2 years.  Paragraph 39 of the Explanatory Notes to the Ogden tables states, however, that the “employed” columns of Tables A-D “will apply in respect of claimants actually in employment at date of settlement or trial” [emphasis added], whilst the remaining columns will apply in respect of those “who remain non-employed at that point in time”.
  8. Moreover, it is unclear why the judge adopted as his starting point an RF of 0.42, which would be the figure for someone aged 46 years, when he had adopted an RF for someone aged 44 years in his calculation of uninjured earnings
  9. As in many other cases (beginning with Conner v Bradman [2007] EWHC 2789) , the judge then decided to adjust the reduction factor, upon the basis that an RF of 0.42 was “too pessimistic”.  On what evidential basis he reached that conclusion is not set out in the judgment, but perhaps it is a reflection of the fact that he had already allowed a reduction in annual earnings of £8,660.  In the event, he adopted the mid-point between the non-disabled RF (which he now appears to have regarded as 0.81, rather than 0.8, although the difference is immaterial) and the disabled RF of 0.42, leading to a figure of 0.62.

Whilst it is encouraging to see further judicial support for using a multiplier/multiplicand approach, rather than adopting a lump sum, even in a case of uncertainty, the approach to the application of Tables A-D in this case again demonstrates a degree of confusion as to how they should be used.  Moreover, the case provides little guidance as to the factors which should lead the court to adjust the RF for residual earnings, and why it was appropriate to adopt the mid-point, as opposed to any other point, on the scale between the disabled and non-disabled factors.  I firmly believe that the CA in Billett missed a valuable opportunity to provide guidance to practitioners in this area.  Unfortunately, so does this case.  Perhaps the impending discount rate review decision will lead to the publication of the long-awaited 8th Edition of the Ogden Tables?

David Knifton is a Personal Injury Specialist at Exchange Chambers.

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