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Herring v Ministry of Defence, Court of Appeal

14 April 2003
The issues

Future Loss of Earnings – future chance – discount.

The facts

The Claimant was a member of the Territorial Army Special Air Service. He had been injured in a parachute accident on the 2nd September 1994. He suffered serious injuries and whereas he had previously been physically very fit (working as a qualified Sports Coach and Lifeguard in a Leisure Centre) he was as a result of the accident unable to walk more than 500 metres with the aid of a stick and frequent rests. The Trial Judge awarded him, amongst other heads of damage, a net figure of £131,532.34 future loss of earnings. The Judge had accepted there was a strong likelihood that the Claimant would have been accepted by the age of 30 into the Police Force and that he would have reached the rank of Sergeant within 7 years. He calculated the future loss of earnings on a conventional basis and applied to the multiplicand of the notional Police salary a multiplier of 15.4. He reduced that multiplier to 11.7 for “uncertainty” and then calculated a residual earning capacity in a clerical role (adopting a multiplier of 12 reduced from 15.54). Applying the resultant figure of £138,000.00 to the notional £269,532.34, produced a net award for future earnings loss of £131,532.34.

He made no award for loss of earnings beyond Police retirement age of 55. The Claimant appealed.

The decision

1. The Defendants had argued that the Judge should have applied a calculation to future loss on the basis of a “loss of a chance”, probably in the region of a 75% award. He had been referred to Doyle -v- Wallace, Allied Maple Group -v- Simmons and Simmons and Langford -v- Hebran. The Judge dealt with this argument, finding that there was not a certainty that the Claimant would become a Police Officer, but nonetheless more than a chance, indeed a strong likelihood. Taking into account the possibility that he might not have stayed in the Police Force, the fairest way of dealing with the situation was to make an award on the basis of his earnings as a Sergeant after 7 years and then discount to reflect uncertainties.

2. In the case of a young Claimant not yet in employment or as in this case, one who had taken time out of employment to obtain further qualification for a desired change of direction, it might or might not be appropriate to select a specific career model in the Claimant’s chosen field as the basis of the future loss award. The Court would have regard to the Claimant’s previous performance, his expressed intentions and ambitions, the opportunities reasonably open to him, and any steps he had already taken to pursue a particular path. In some cases it would not be possible to identify a specific career model and it would be necessary to resort to national average earnings figures for persons of the Claimant’s ability and qualifications. In either case, the purpose was to select an appropriate baseline.

3. It was a truism that all assessments of future loss to some extent amounted to the assessment of a chance. However, it had not generally been thought necessary to apply the “loss of a chance” calculation as used in the Allied Maples case (which in any event was intended to take into account the likely action of third parties). In some cases such as Doyle -v- Wallace, the Court had in special circumstances felt obliged to adopt such a method to calculate particular aspects of the Claimant’s future loss claim. These were not cases that displaced the general rule however.

4. The loss of a chance approach had been used in cases where the chance to be assessed has been the chance that the career of the Claimant would take a particular course leading to significantly higher overall earnings than those which it was otherwise reasonable to take as the base line for calculation – so in Langford -v- Hebran, the technique was applied to the chance that the Appellant might become a highly successful full-time kick boxing champion rather than a bricklayer with 5 fights a year at “journeyman level”.

5. It was inappropriate to discount the multiplier in the way the Judge had done – by 25%. Taking the Ogden Tables as a guide and treating the Police as a “more risky” occupation, the appropriate discount would be in the order of 3%. As to the promotion to Sergeant, no further discount was appropriate on the basis that the Judge had found that promotion would have been obtained and not merely that there was a chance of it being obtained.

6. The contingencies over and above illness and unemployment were not based on any particular feature of the Claimant’s character or a higher drop out rate from the Police Force than any other occupation. Applying a broad-brush basis, a figure of no more than 10% would have been appropriate and the multiplier would be reduced from 15.54 to 14 rather than 11.7.

7. As to residual loss after the age of 55, a modest award in respect of risk of handicap on the labour market on the basis of Smith -v- Manchester should have been made and an award of £5,000.00 would be allowed.

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