COURT OF APPEAL UPHOLDS FINDING OF NO RESIDUAL EARNING CAPACITY

It is rare for the Court of Appeal to consider matters relating to loss of earnings. In the judgment today in  Ali -v- Caton and the MIB [2014] EWCA Civ 1313 the Court of Appeal upheld a finding of the trial judge that the claimant had no residual earning capacity.

THE FACTS

The claimant was injured in a road traffic accident. The trial judge awarded damages which, if they had been a global award, would have totalled £2.3 million. The defendant appealed on a large number of grounds, the claimant cross-appealed. Both the appeal and cross-appeal were rejected.  Here we look at the arguments in relation to earning capacity.  A large part of the argument centred on the fact that the claimant had passed the UKTC test.

THE JUDGMENT ON EARNING CAPACITY

Residual Earning Capacity

    1. One could deal shortly with the Defendant’s argument on this aspect of the appeal simply by saying that no ground of appeal on the point is to be found in the Appellant’s Notice. However, Mr Leighton-Williams did not take that approach and neither will I.
    2. The judge found that the Claimant had no residual earning capacity, but this is challenged by the Defendant: first in paragraph 13(iv) of the skeleton argument; secondly, in a note submitted at the hearing entitled “Outline Effect of D’s Appeal on Quantum”; and thirdly, in oral submissions.
    3. The short point for the Defendant is that the judge should have found a residual earning capacity of £7,054 p.a., based upon the minimum wage for 25 hours per week with a reduced multiplier of 50% at 10.94. Thus, it is argued, the award for loss of earnings should have been £542,547, instead of the £620,000 awarded by the judge – a reduction of £77,453.
    4. Mr Leighton-Williams submits that this is an artificial calculation, having as its only merit, from the Defendant’s point of view, that it reduces a head of damage. Mr Worthington argues, however, that the Claimant was thought capable of some profitable activity even before the successful UKCT was factored in; the position must, therefore, be better than that having regard to that success; the consensus is that it is in the Claimant’s best interests to fill his time; and although he will face difficulties in securing employment, it is wrong to “write off” the capabilities of a young man of only 24 years old.
    5. The judge referred to Professor Collin’s agreement in evidence that the Claimant would be “at a “monstrous disadvantage” in the open labour market”: [266]. He went on to find this:

“267. In my judgment, the pre-trial assessments by Banstead and the experts, to which I have referred above, were realistic and Professor Collin’s view was correct. Even if the conclusion of the litigation provides a measure of incentive for Jubair to get out and about, I consider it exceptionally unlikely that Jubair will ever obtain or hold down remunerative employment. There are numerous factors which contribute to this conclusion. The first is the evidence to which I have referred, particularly that of Banstead and Professor Collin. Second, in the highly competitive labour market which is likely to continue for the foreseeable future, the prospects for a person who started out with low average IQ, has suffered the serious cognitive and behavioural effects of the accident to which I have referred elsewhere in this judgment, and who cannot undertake any heavy or repetitive manual occupation or any occupation which does not enable him to move around from time to time, are bleak, if not non-existent. Third, and superimposed on the first two reasons, is the fact that Jubair is now entrenched in the sick role.”

He went on to consider less orthodox possibilities for gainful employment, but concluded at [270],

“Viewed overall, this evidence does not lead to the conclusion that [the Claimant] has any measurable residual earning capacity based upon his prospects of achieving a vocational placement.”

  1. In attack on the judge’s findings, Mr Worthington argues that when Professor Collin gave her answer (at the judge’s suggestion) that the Claimant was at a “monstrous disadvantage”, she was not being asked about the position in the light of the UKCT pass. When asked about the position in the light of the pass, she would have said the prejudice was less. It is argued that the judge was too pessimistic about the labour market in the long term and the “sick role” is belied by the test result itself.
  2. Turning to the individual strands of evidence on this subject, Mr Worthington refers to the Claimant’s father’s view that his son would be able to perform a useful role in a family business with somebody watching him: TB2/513; and to the view of Salek Ali that he might do basic jobs such as greeting people or in-putting data onto a computer, subject to allowance for his back injury: TB3/989-9. Ms Phillips thought that the Claimant would be capable of some part-time employment in due course: TB4/1445. Dr Williams thought that he might be capable of work in a supermarket, subject again to his back injury: TB4/1266. On the basis of the UKCT test having been passed, Professor Collin gave some tentative answers as to possible employment: TB4/1304Qqqq.
  3. In the face of this generally optimistic assessment of future possibilities, the Defendant argues that the judge’s finding was too pessimistic to be sustained. Thus, the modest residual earning capacity is proposed.
  4. For the Claimant, Mr Leighton-Williams says that the judge’s findings were fully justified. There was clear evidence of a struggle to cope with a modest vocational activity while at Banstead. Professor Collin’s acceptance of “monstrous disadvantage” was fully justified. There is the ongoing effect of the spinal injury, preventing any form of heavy or repetitive manual work. The Claimant had a low IQ before the accident. He had an entrenched “sick role” as a consequence of the accident. Paid employment prospects were in practice minimal and other employment opportunities were speculative. There was no feasibility of employment within the immediate family.
  5. These Mr Leighton-Williams notes were the findings of the judge to which one could add psychiatric vulnerability, epilepsy, fatigue, slurred speech and an inability to drive motor vehicles. The evidence also indicated that any employment would itself require supervision and support.
  6. For my part, faced with these varying features of the evidence, I do not believe that we can “second guess” the trial judge’s assessment of the true likelihood of gainful employment. The single observation of actual quasi-employment activity at Banstead was negative and the observations of Mr Brown and of others as to the difficulties the Claimant really faces in his day-to-day life only confirm the judge’s finding. Certainly, I can see nothing on this evidence to justify the sort of speculative calculation (even if modest) of potential future earnings encouraged by the Defendant, which seems to me to have no evidential foundation whatsoever.
  7. I would, therefore, uphold the judge’s findings as to future loss of earnings and would reject the Defendant’s argument to the contrary.

COMMENT

Clearly this is an upholding of what was essentially a finding of fact. It it interesting to note however that a “speculative calculation”, that is an assertion by the defendant that there is residual earning capacity, has to have an “evidential foundation”.

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