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Brown v Ministry of Defence, Court of Appeal, 10 May 2006

22 May 2006
The issues

Calculation of entitlement to damages and loss of pension in respect of a Claimant forced to abandon career in the Army whilst undergoing basic Military training; basis of assessment; Smith v Manchester – disadvantage on the labour market.

The facts

The Claimant, at the age of 24, took the step of entering the Armed Forces. She came from an “Army family”, her father having served 22 years, leaving with the rank of Staff Sergeant, and her sister having enlisted a few years before the Claimant’s accident. She enlisted in February 1998. On 16th October 1999 she was discharged following a serious fracture of her left ankle which was suffered in the course of basic training. She claimed damages for personal injuries. Liability was admitted. The District Judge formed the view that she would have remained in service for the full 22 years and have reached the rank of Staff Sergeant as her father before her. On this basis the Claimant was entitled to receive damages of £144,000.00 in respect of her loss of pension rights. The District Judge also awarded her £18,383.00 being one year’s earnings based on her loss of earnings in the Army in respect of disadvantage on the open labour market and a further £10,000.00 in respect of congenial employment. The Defendant Appealed from the District Judge to the Deputy Circuit Judge. The Judge upheld the District Judge’s finding as to the likelihood on the balance of probabilities of the Claimant obtaining the rank of Staff Sergeant and the £10,000.00 award in respect of the loss of congenial employment but the award in respect of disadvantage on the open labour market was set aside. The Defendant Appealed as did the Claimant in respect of the disadvantage on the open labour market issue.

The decision

The principal to be applied when dealing with events that might happen in the future or which might have happened if the accident had not intervened remained as stated in Davis v Taylor; “In determining what did happen in the past the Court decides on the balance of probabilities. Anything that is more probable than not it treats as certain. But in assessing damages which depends upon its views as to what will happen in the future or would have happened in the future if something had not happened in the past, the Court must make an estimate as to what are the chances that a particular thing will or would have happened and reflect those chances, whether they are more or less than even, in the amount of damages which it awards.”

The decision in Herring v Ministry of Defence was not inconsistent. In Herring v Ministry of Defence the Judge found “to the extent of virtual certainty” that the Claimant would have applied to join the Police Force and that there was a strong likelihood that his application would have been successful and that it was likely that he would have been promoted to the rank of Sergeant within 7 years. The Court of Appeal in Herring v Ministry of Defence had found that the Judge’s deduction of 25% from the calculation of his future earnings was inappropriate to reflect the chance of the Claimant not being accepted or of leaving before he reached the age of 55 on the grounds that in order to assess the loss of future earnings it was necessary in most cases to adopt a “career model” for the Claimant in question which fairly reflected his earning capability. In many cases that would be the job which the Claimant was currently employed doing with chances of promotion taken into account by adjusting multiplicand at appropriate points along the multiplier. But in cases where the Claimant had yet to enter employment it was necessary to adopt a career model by reference to his abilities and reasonable aspirations. That might not be easy but provided the career model selected fairly reflected the Claimant’s earning capacity, the chances of his actually obtaining the particular form of employment used as the model or of his leaving it would usually be irrelevant since it could be assumed that if he did so he would take up some alternative employment at a broadly comparable rate of pay. In this case, since the Claimant has chosen a career in the Army, that could probably be taken to provide a fair reflection of her earning capacity and for the reasons explained in Herring v Ministry of Defence was right to adopt that as the basis for assessing loss of future earnings without making any reduction for the chance of her failing to complete a full term of service. The chance of promotion to Staff Sergeant could be adequately reflected by an adjustment to the multiplicand.

The position in relation to the loss of pension rights was different however since, if she left after 22 years she would have become entitled to an immediate pension instead of having to wait until the age of 60. That was an unusual factor having a significant effect on the value of her pension rights. The chance of her keeping 22 years service therefore did call for assessment in accordance with the principal in Davies v Taylor. Both Judges had failed to apply the correct principals and it was necessary to consider the matter afresh.

In the Court’s view the chance of her completing 12 years service could not be put higher than 50%. The following 10 years were even more difficult to assess because they lay further in the future but as she began to approach the end of her 22 years service the incentive to complete them would increase. Taking everything into account the Court would asses the chance of her completing that further period of 10 years at 60%. On that basis the chance of her obtaining the additional benefit represented by the right to an immediate pension on completing 22 years would be assessed at 30%.

On the evidence it was fair to assume that the Claimant would have achieved a promotion of the rank of Staff Sergeant after the average period of service at which that rank is achieved, namely 14 years and 6 months. The chance of going beyond that to Warrant Officer 1 could be put at no higher than 15%. The effect of the assessment of the probability that the Claimant would have remained in service in respect of a) the first 6 years service, b) the next 6 years service; and c) the final 10 or more years of service was as follows:-

100% of the value of the pension rights to which she would have been entitled had she retired at the end of 6 years service;

50% of the additional value of the rights to which she would have been entitled had she retired at the end of 12 years service;

30% of the further additional value of the rights to which she would have been entitled if she had retired at the end of 22 years of service.

To take account of the prospect of her achieving the rank of Warrant Officer 1 there would be a further uplift in the calculation of the third element by increasing the value of the pension rights to which the Claimant would have been entitled if she had retired in the rank of Sergeant by an amount equal to 15% of the additional value of the rights to which she would have been entitled if she had retired in the rank of Warrant Officer 1.

As to the disadvantage on the open labour market there was a 25% chance of osteoarthritis developing to such an extent that the Claimant would be required to undertake a more sedentary type of work. In the light of the medical evidence there was sufficient material before the Judge to enable him to find that there was a more than insignificant risk that the Claimant would develop osteoarthritis sufficiently severely to force her to give up practice as an active physiotherapist and require her to accept a more sedentary type of employment. If that happened she might find herself looking for a new job in about 25 years time when she would be in her early 50’s. She would be likely then to suffer some degree of disadvantage. The award of £18,383.00 was too high. More appropriate would be something approaching 4 months earnings and the award would be restored but reduced to £5,000.00.

Appeal and cross Appeal allowed.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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