LOSS OF EARNINGS: SERIOUS INJURY AND THE “LOST YEARS”: HIGH COURT CASE CONSIDERED

The question of whether a child claimant can receive earnings for the “lost years” when their life expectancy is reduced is a difficult one. It was considered by Mrs Justice Elizabeth Laing DBE in Totham -v- King’s College NHS Foundation Trust [2015] EWHC 97 (QB). At the moment the law on this issue is highly unsatisfactory, with the Court of Appeal agreeing that its own decisions are inconsistent with the House of Lords.

THE CASE

The claimant suffered serious brain injuries during her delivery in 2007. Liability was admitted. Some heads of damages were agreed. There was a three day hearing to consider the issues in dispute. One of the issues in dispute was earnings and, in particular, whether earnings could be paid for the “lost years”. That is the years the claimant would have worked, but because of reduced life expectancy, will not live through.

KEY POINTS

• A court cannot award damages for the loss of earnings in the “lost years”  in a case involving a young child.
• This matter requires consideration by the Supreme Court.
• An award was made for loss of earnings whilst the claimant would have been a student.
• A deduction was made for the cost of travel and other associated expenses relating to attending work.

THE JUDGMENT ON THIS ISSUE

(6) Future loss of earnings and benefits and lost years

1. The Claimant also claims a lump sum in respect of lost earnings between the ages of 16 and 21, and periodical payments in respect of lost earnings between the ages of 21 and 47. She also makes a claim for the “lost years”. I deal with that first.
2. Eva claims damages for her loss of earnings and pension between the ages of 47 and 93.6 years. She accepts that such a claim is prevented by the decision of the Court of Appeal in Croke v Wiseman [1982] 1 WLR 71. In Croke the plaintiff was injured at the age of 21 months. His life expectancy was reduced to 40 years. The Court of Appeal held that he could make a claim for loss of earnings during the period for which he was then expected to live, but not in respect of the “lost years”.
3. Griffiths LJ (as he then was) explained the social policy on which this approach was based. First, compensation for the “lost years” was intended to form a fund which would be available to support a plaintiff’s actual or likely dependants. In the case of a catastrophically injured child, “…the court should refuse to speculate as to whether in future there might have been dependants for the purpose of providing a fund of money for persons who will in fact never exist“. Second, if the gravely injured child was going to live for many years into adult life, “very different considerations apply. There are compelling social reasons why a sum of money should be awarded for his future loss of earnings. The money will be required to care for him.”
4. In Iqbal v Whipps Cross University Hospital NHS Trust [2007] EWCA Civ 1190 the Court of Appeal held that the first instance judge in that case had been bound, and that it was bound, by Croke, but that Croke (and, in particular the reasoning I have just referred to) was inconsistent with two decisions of the House of Lords, Pickett v BREL [1980] AC 136 and Gammell v Wilson [1982] AC 227. The Court of Appeal granted permission to appeal to the House of Lords but the appeal was then settled.
5. I must follow Croke. In the light of the views of the Court of Appeal in Iqbal, I make two points only. First, I consider that the decision in Croke is inconsistent with the principle of full compensation which I have already mentioned. Second, I respectfully agree with Rimer LJ in Iqbal that the policy justifications referred to in Croke (see above) are inconsistent with Pickett and Gammell.
6. In short, the Trust’s negligence means that Eva will live for a shorter time than she would have lived had the Trust not negligently injured her. It also means that she will not earn the salary and pension, which, had she not been injured she would, on the balance of probabilities, have earned. The Trust’s negligence has deprived her of those earnings (net of living expenses) during the “lost years”. She should in principle be compensated for that loss. There is no rational basis for allowing such claims by adults, but refusing to allow them when made by children. Consistently with my approach below, I assess those losses as £32,694.51 a year until the age 70, when, on current trends, I consider it likely that Eva would have retired, and at £12,000 a year after that. I do not consider it likely that Eva would have benefitted from a final salary pension scheme, as those are becoming increasingly rare.
7. Other things being equal, this is a point which should be resolved by the Supreme Court. It would save the parties time and costs if Eva were able to appeal directly to the Supreme Court, rather than having to appeal first to the Court of Appeal, which would again be bound to dismiss the appeal, as it did in Iqbal. No such appeal is possible in this case as the Trust will not consent to it. If those advising Eva wish to pursue it, they will have to appeal to the Court of Appeal first.
8. The Claimant also claims a lump sum for loss of earnings between the ages of 16 and 21 based on assumed earnings of £3,000 a year. It is argued that her parents live in an area of London in which it is relatively easy for young people to get holiday and weekend jobs, and where such jobs are likely to be paid above the appropriate minimum wage, and that her parents would very much have encouraged her to do that. Mrs Totham described in her evidence the variety of holiday and weekend jobs which she had done as a teenager and while at university. The Trust contends that £2,000 would be a reasonable amount. I accept that Eva’s parents would have encouraged her to get holiday and weekend jobs, that she would be likely to have got such jobs, paid above the minimum wage, and that her living expenses, and expenses in getting to work would have been likely to be low, if not non-existent during this period, as she would have been living at home. Doing the best I can, I consider that the Claimant should recover £3,000 a year under this head.
9. The Claimant claims a periodical payment in respect of loss of earnings after the age of 21. The parties agree that Eva would have gone to university and have become professionally qualified. They therefore agree that the calculation should be based on the average salary for professional women of £36,735.40 net. If a 0.89 discount factor for contingencies is applied to this amount, it becomes £32,694.51. In his skeleton argument, Mr Hutton QC contended that a deduction for expenses related to work should be made from this amount, and a discount to reflect the likelihood that Eva’s earning capacity would have been affected by having children.
10. On the former point, I was referred to a passage in Eagle v Chambers [2004] EWCA Civ 1033 [2004] 1 WLR 3081 (at paragraphs 66-68) in which Waller LJ said that there was no rule of law about this. A broad assessment should be made; inordinate time should not be spent on it. In my judgment the likelihood is that, perhaps in her mid-twenties, Eva would have left home, and, given the cost of accommodation in central London, would have moved further from the centre than East Dulwich, and would be incurring significant travel costs. In my judgment the earnings figure should be discounted by to reflect this. The current cost of an annual travel card for zones 1-9 is about £2,000. If current trends continue, that is likely to have increased by the time Eva is in her mid-twenties. Doing the best I can, I consider that the appropriate discount is £2,000. However, I accept Mr Latimer-Sayer’s submission that the likelihood is that she would have received some benefits in kind on top of her salary, and that it would be reasonable to offset the one against the other. I think it unlikely that these would have included membership of a final salary pension scheme.
11. On the latter point, Mr Latimer-Sayer’s riposte (skeleton argument paragraph 69) was that paragraph 40 of the Ogden Tables (Table B of which is the source of the discount factor) makes it clear that the factors allow for just this possibility. Mr Hutton QC accepted this in his oral argument.

Tags: Damages, Loss of earnings, Lost years, Reduced life expectancy