PROVING THINGS 253: PROVING FUTURE LOSS OF EARNINGS WHEN SOMEONE HAS NOT YET ENTERED THE LABOUR MARKET
In Amadu-Abdullah v The Commissioner of Police of the Metropolis [2024] EWHC 3162 (KB) Mr Justice Ritchie considered the correct way of assessing damages for future loss of earnings when the claimant has not yet entered the labour market. He decided that the most appropriate method, on the facts of this case, was to award damages on the “traditional” Smith -v- Manchester basis. The award was based on loss of earnings for one year, netted down to take account of tax and national insurance.
“In my judgment the Claimant has provided the necessary evidence for a Smith claim. The medical evidence supports the claim. The Claimant’s and his mother’s evidence support the claim and, although there is no evidence from teachers or employment consultants, I can take judicial notice of the adverse effects of his eye disability on his employability in physical work roles”
THE CASE
The claimant succeeded in an action against the police to recover damages when he was tasered. He suffered injuries to his shoulder which were permanent. One of the issues the court had to decide was the appropriate sum for future loss of earnings/disability in the labour market. The claimant was a keen footballer and harboured plans for a professional career.
THE JUDGMENT ON LOSS OF EARNINGS
The judge considered the options open to the court. The approach set out in the “Ogden” Tables was considered, but was not an option open to the court because the case was not pleaded on that basis. The case was pleaded on the basis that the claimant was at a disability in the labour market and the judge awarded damages on that basis.
Loss of earning capacity
56. Where the injured Claimant is too young to have started earning, or to have established an earning capacity, the Courts are obliged to estimate the future earning capacity, the but for earning capacity and then to estimate the loss of income or earning capacity caused by the injuries by estimating the residual earning capacity. This is more straightforward for a man in his mid-30s with a track record in work, than for an 18 year old. The staring point is for this Court to determine the Claimant’s but for earning capacity. In this case I will take into account all the circumstances but in particular the way the Claimant has pleaded his claim, his educational achievements and his skills and talents. I place no weight on his mother being a part time cleaner. She was not educated in England and cannot read or write. The claim could have been put on the basis of a lost career as a professional soccer player, but it was not. In the schedule of loss the Claimant pleads that the Claimant has not decided on his career but postulates that it will be in a sports related role, not a desk job. A basket of jobs is postulated at footnote 17 in the schedule, 7 roles in the sports industry were analysed: sports teacher; physiotherapist; hospitality; nutrition; agent; media and reporter. The average salary figures were taken from a website called “Glassdoor.co.uk”. The figures were not put in evidence. An average of £31,000 gpa was pleaded without evidential backup. The Defendant denies some of the jobs put into the Claimant’s basket and asserts that there is no adequate evidence to support any loss of earning capacity. In his evidence it was clear that the Claimant was quite unsure about the work he will go into as he becomes older and still harbours a keen desire to be a professional soccer player.
Multiplicand
57. In my judgment the Claimant’s general approach is the correct way of assessing the Claimant’s but for earning capacity, but it fails to use the best evidence available of which the Courts take judicial notice in assessing damages. I refer to: S v Distillers Co [1970] 1 WLR 114 (thalidomide claims); Croke v Wiseman [1982] 1 WLR 71, per Shaw and Griffiths LLJ at para. 83; Whiten v St George’s NHS Trust [2011] EWHC 2066, per Swift J at 113. I will use the Government’s ASHE figures for all earnings in England and Wales published annually and set out in “Facts and Figures” and signposted in Kemp & Kemp on Quantum. These are properly used to evidence many claimants’ future earnings capacities. These used to be printed in full in Volume 2 of Kemp but are now merely signposted to the Government website at para. 53-006. The mean weekly earnings for men in ASHE in 2023 were £44,611 gpa. The median was £37,700 gpa. Loosely, using the categories proposed by the Claimant, some of which the Defendant accepted, I set out various related categories from ASHE. I discount media and being a reporter on the basis that the Claimant did not suggest to me in evidence that he was minded to do those jobs.
Job ASHE category mean income
Sports and leisure assistants 6211 25,397
Leasure and sports managers 1224 32,978
Physiotherapists 2221 42,999
Health associate professionals 321 27,836
Sports and fitness occupations 343 26,634
Sports players – –
Sports coaches, instructors, officials 3432 26,635
Fitness and wellbeing instructors 3433 23,353
I shall consider that the Claimant’s lifetime earning capacity, in so far as I am able to predict it from his keen sporting interest, his talents and his low educational achievements, in a range between £27,000 and £37,000 gpa. Mid-point £32,000 gpa.
58. Since the publication of the Ogden Tables 6th Edition the usual way of calculating loss of earnings or earning capacity is by reference to the reduced multipliers set out in the Ogden Tables. These produce a lower multiplier for a claimant’s residual earning capacity and a higher one for his but for earning capacity. Then a multiplier v multiplicand calculation is provided. A claimant who is disabled within the definition in the Equality Act 2010 and the Disability Discrimination Act 1995 gets a lower residual earnings multiplier. The definition is as follows:
“d) Ogden Definition of Disability
- It is important to note that the definition of disability used in the Ogden Tables is not the same as that used in the Equality Act 2010. The Ogden definition of disability is based upon the definition of disability set out in the Disability Discrimination Act (DDA) 1995 (supported by the accompanying guidance notes). This is because this is the definition that applied at the time of the underlying LFS research which underpins the suggested Table A to D reduction factors. In addition to meeting the DDA 1995 definition of disability, the impairment must also be work-affecting by either limiting the kind or amount of work the claimant is able to do. The Ogden definition of disability is defined as follows.
“Disabled person”: A person is classified as being disabled if all three of the following conditions in relation to ill-health or disability are met:
(i) The person has an illness or a disability which has or is expected to last for over a year or is a progressive illness; and
(ii) The DDA1995 definition is satisfied in that the impact of the disability has a substantial adverse effect on the person’s ability to carry out normal day-to-day activities; and
(iii) The effects of impairment limit either the kind or the amount of paid work he/she can do.
“Not disabled”: All others
- Disability is therefore defined as an impairment that has a substantial adverse effect on a respondent’s ability to carry out normal day-to-day activities. Both ‘normal’ and ‘substantial’ require interpretation. Normal day-to-day activities are those which are carried out by most people on a daily basis and which include those carried out at work. The meaning of the word ‘substantial’ has changed over time in both law and common understanding such that the threshold whereby an activity-limitation qualifies as ‘substantial’ (and therefore amounts to a disability) was lower in 2019 than it was when the data were collected.”
A claim for loss of future earnings on a multiplier and multiplicand (M/M) basis has not been pleaded. M/M calculations cover claims where it is reasonable for the claimant to assert, for instance, that he would have earned £100 pw but for the injury and can now only earn say £90 pw and for less years. However, that method would be very difficult for this Claimant to put forwards, he not having determined how he would have earned his wage or what he will earn, save that in reality he wanted to be professional football player. I take into account the Law Commission Report No 56 which summarised that Smith awards arise where mathematical assessment is precluded on the evidence.
59. I am bound to determine the claim on the pleadings. The claim is based on Smith v Manchester [1974] 17 KIR 1 (Smith). Since the Odgen Tables 6th edition, Smith claims have been used to cover the adverse financial effects caused by a claimant’s disability restricting the range of jobs and work he can do, so causing (inter alia): (1) longer gaps which the Claimant may suffer when looking for work in future, and (2) the increased likelihood of being “thrown” out of work, or choosing to leave, earlier than he would have but for the injuries.
60. In this case, on the medical evidence, it is clear that the Claimant’s eye disability will adversely affect the range of jobs the Claimant can do and the actual work he can do in the remaining jobs which he can do. I consider that this will lead to longer job searches and so will lead to a financial loss each time he is looking for work. This is mainly because he wishes to work in a physical field, not in a desk job.
61. My next task is to assess the size of the award. As set out in Kemp at paragraphs 10-030 to 10-036.1, the Courts assess:
61.1 The risk that the Claimant will be out of work;
61.2 The scope and seriousness of the effect of the disability on his earning capacity, covering the range of jobs he will be unable to do and the range of activities he will be unable to perform or be restricted in performing whilst at work;
61.3 The length of time over which his working life will endure.
In my judgment the Claimant has provided the necessary evidence for a Smith claim. The medical evidence supports the claim. The Claimant’s and his mother’s evidence support the claim and, although there is no evidence from teachers or employment consultants, I can take judicial notice of the adverse effects of his eye disability on his employability in physical work roles. I also take notice that the Claimant’s educational qualifications and his love of football and sport make it unlikely that he would have sought or will seek a desk based job in the first 20 – 30 years of his working life.
62. I consider that the guidance given in paras. 10-035.1 to 10-036.1 in Kemp is a helpful distillation of the range of award made by Courts in the past. I discern 3 categories for Smith awards. The lower category justifies awards up to 1 years net earnings and is exemplified by: Moeliker v Reyrole [1977] 1 WLR 137; Robson v Liverpool [1993] PIQR Q78; Hale v London Underground [1992] PIQR Q30 and Chatfield v Kohler, reported in Kemp at para. E1-013. Then there is the middle category for awards, between 1 and 2 years of net annual income, exemplified by Smith and Underwood v Forman [1996] reported in Kemp at I3-001. The higher category leads to awards of 2-5 years, but I am unsure as to whether the old cases, which justified that category before, survived the Ogden 6th Edition changes. I make no decision on that here because I have heard no submissions on that category. In this case the Claimant seeks an award of 1 years gross earnings and I consider that because the Claimant has 50 working years ahead of him that level is reasonable, however my award will be net of tax and NI, because that is what all claimants receive in damages when the M/M approach is used. In my judgment, he will initially be more affected by the disability than in later life, when he will have adapted to the work field and environment he has chosen, and the effects of the disability will be better managed. Thus, I award £32,000 gross which, net of tax and NI, results in an award of £26,560 (see Facts and Figures on combined tax and NI for employed persons).
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