JUDGE ADOPTS “OGDEN 7” APPROACH TO FUTURE LOSS OF EARNINGS: AN IMPORTANT ISSUE

In Middleton -v- Ipswich Hospital NHS Trust [2015] EWHC 775(QB) HH Judge McKenna (sitting as a High Court Judge) adopted the “Ogden 7” approach to future loss of earnings in the case of a 13 year old child.

THE CASE

The case was an action for clinical negligence at birth giving rise to “Erbs Palsy”. The judge found for the claimant in relation to liability and causation and had to then consider damages. The claimant had a right arm that was significantly smaller and shorter than his left arm with reduced ranges of motion and very little movement in the right shoulder. He was now one of the top six paralympic swimmers in the country. It was agreed that he was likely to get average GCSEs and then progress to some kind of vocational study.

CONSIDERATION OF THE CLAIM FOR LOSS OF EARNINGS

The judge rejected the argument that there should be a “Blamires” type award and used the “Ogden 7” approach.

1. Again, with a thirteen year old, quantification of future earnings is particularly difficult and perhaps not surprisingly, therefore, there is a fundamental disagreement between the parties as to the appropriate approach with Finlay arguing for a multiplier multiplicand approach and the Defendant arguing for a lump sum on the basis of the well-known decision in Blamire v South Cumbria Health Authority ( 1993) PIQR Q1. What is said on behalf of Finlay is that he will plainly be compromised on the labour market, both in terms of his ability to achieve a career in a wide range of fields and in terms of obtaining and retaining employment. Further, whilst it is accepted that Finlay’s academic limitations would themselves limit his options in any event, such that he would have been looking at practical and/or vocational occupations, his range of choice within that practical/vocational range of options has been further limited as a result of his injury. I accept the force of those submissions.
2. It was further submitted that there was a clear differential in earnings between the sorts of practical/vocational occupations which are closed to Finlay because of his injury and those which remain open to him and that that differential should be reflected in an award and that the correct way to approach quantification is to consider what career Finlay would be likely to have pursued uninjured. Given Mr Reid’s assessment, these are likely to have been practical careers following the obtaining of vocational qualifications. However, with his disability, Finlay cannot enter fields of work such as engineering draughtsman, IT technician or electrical trades and is more likely to be restricted to working in capacities such as a disabilities sports coach, or in sales and customer service or other administrative occupations, the earnings for which are, it is said, substantially lower.
3. Equally it is submitted on the basis of the orthopaedic and other evidence to which I have referred that Finlay has a significant disability for the purposes of Ogden 7 and that the full multiplier adjustment set out in Table B is warranted.
4. On the Defendant’s behalf it was submitted that given all the uncertainties, the Court cannot make an accurate assessment given Finlay’s youth, personality and the optimistic predictions for his future and all the other circumstances of the case such that the appropriate approach is to award a lump sum and adopting a broad-brush approach the relevant figure is £50,000.
5. For my part I do not accept that submission made on the Defendant’s behalf. In my judgment this is just the sort of case where it is appropriate to adopt the approach advocated on Finlay’s behalf. The question is whether and to what extent there is in fact an earnings deficiency. On this question I am satisfied that there is a deficiency as a result of the inevitable limitations on the type of practical and vocational occupations now open to Finlay which attract lower salaries than some of the practical/vocational occupations closed to him as a result of his injury. However, as it seems to me, the figure quoted on Finlay’s behalf as to likely earnings uninjured is overly optimistic as a result of the inclusion of some particularly high earning categories, such as design and development engineer and teaching and educational professional, in arriving at an average. Absent these particular occupations, the average uninjured earnings become £29,040 gross (rather than £32,500) with a consequential reduction to arrive at the net figure. I would adopt the average injured prospects figure of £17,304, giving a figure of £14,721 net referred to by Finlay’s counsel in his closing argument in order to arrive at the multiplicand.
6. Thereafter adopting Ogden 6, the multiplier from 21 to 68 (Finlay’s stated retirement age) is 27.14 which must be reduced by 0.8229 to reflect accelerated receipt for 7.89 years, giving a multiplier of 22.33 and allowing for the fact that Finlay will pursue Higher Education, the appropriate Table B discount is 0.61. The difference in multiplier is therefore 0.92 – 0.61 namely 0.31 giving a multiplier for loss of 6.92.
7. There is a claim for loss of pension. To my mind this is wholly speculative and I am not persuaded that there is any attributable loss under this heading.

Tags: Actuarial Tables, Age, Earnings