LOSS OF EARNINGS, LOSS OF “PERKS” AND CHANCES OF PROMOTION: A HIGH COURT EXAMPLE

The case of Downing -v- Peterborough & Stamford Hospitals NHS Foundation Trust [2014] EWHC 4216 (QB) provides an interesting example of the court assessing damages in a case where liability was agreed.  Here we look at the judge’s approach to the claim for loss of earnings.

THE CLAIMANT

The claimant was 43 years old and left unable to work as a result of an operation.

THE CLAIMANT’S EMPLOYMENT POSITION

  1. Prior to the operation, the Claimant had been a warrant officer (class 2) in the Army Air Corps and had very good prospects of further promotion and indeed, in due course, of being commissioned. The likelihood is that he would have retired from the army at the age of 50 or, possibly, at 55 if he progressed to the rank of major and obtained a regular (as opposed to intermediate) late entry commission. There would, in either event, then have been a good chance that he would have obtained a responsible and reasonably well paid post in civilian life. He had been classified as an “outstanding” warrant officer and was spoken of in glowing terms in the evidence of the military witnesses, whose evidence was admitted without challenge.
  2. Unfortunately, following that surgery he suffered an infection which led to reactive arthritis and eventually to a disabling pain disorder. He was unable to return to his duties and he was, ultimately, discharged on medical grounds on 9 August 2010. It is said, and the evidence appears to confirm, that he is unlikely ever to work again. He has been described as having been for long periods effectively a “prisoner” in his home and has been for the last eight years unable to participate in everyday household and family activities. The scope for any social life has also been severely restricted.

CLAIM FOR SCHOOL FEES

Part of the claim for loss of earnings included a claim for school fees.

Continuity of Education Allowance

  1. I am afraid that I must disallow the claim for a continuity of education allowance (CEA). The Claimant and Mrs Downing had an aspiration to send their boys to an independent boarding school and, if he had been able to continue his career in the army, the CEA would have given the opportunity to do so. There is little direct authority on this matter, although I was referred to the decision of Mr Andrew Collender QC, in Morgan v Ministry of Defence [2002] EWHC 2072 (QB), at [67]-[69]. He referred (as did counsel) to the CEA scheme as a “perk”. It is tempting to regard the loss of this opportunity simply as something attributable to the ex hypothesi tortious conduct and which thus falls to be compensated. I believe, however, that the proper analysis is to regard it as a benefit available to guard against a particular contingency; namely, the disruption to a child’s education arising from the parent’s military postings. Since that contingency cannot now arise, compensation is not called for.

THE JUDGE’S APPROACH TO PROMOTION PROSPECTS AND LOSS OF EARNINGS

This is brief, but worth reading, since there are few judgments where loss of earnings and future career prospects are considered.

Loss of earnings

  1. The Claimant relied upon the evidence of Mr Nicholas Rynn and the Defendant on that of Mrs Jan Walters. Both were impressive and reliable witnesses. It would be inappropriate to make all assumptions about his promotion prospects in the Claimant’s favour, especially in view of cost cutting in the armed services in recent years, which has meant for example that there have been fewer opportunities for commissioning from the ranks, as the figures produced clearly demonstrate. It is quite possible that he would have ultimately proceeded to the rank of major, and been able to retire at the age of 55, but the court must allow for risks by making a suitable discount: see Herring v Ministry of Defence [2003] EWCA Civ 528, at [23]-[26]. I think that the likelihood is that the Claimant would have been promoted to the rank of warrant officer (class 1) in about 2009, and achieved an intermediate late entry commission (in April 2012 according to Mr Rynn). I believe the evidence also points towards his retiring at the age of 50 with the rank of captain (as predicted by Colonel Turner in his witness statement on which the Claimant also relied). I recognise that in addition to salary the Claimant would have received operational allowances (as broadly agreed) and longer separation allowances. These are addressed in Mr Rynn’s report also.
  2. Thereafter, I believe, in the light of the very positive assessments of his qualities and experience by all relevant witnesses, that the Claimant would have obtained a responsible post in the private sector starting at a salary of £40,000 to £45,000 and, in due course (say by the age of 55), have achieved an income in the range of £57,000 to £60,000 before tax. These figures are not in themselves controversial. I think it reasonable to assume that he would have worked to the age of 68 (rather than 70).

ALSO ON THIS POINT

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