FUTURE LOSS OF EARNINGS AT £1,446.431: A HIGH COURT CASE EXAMINED

Continuing with the practice of looking at judicial decisions in relation to loss of earnings we look at  Siegel -v- Pummell [2014] EWHC 4309 (QB)  where Mr Justice Wilkie considered a claim for loss of earnings where a high achieving IT Consultant.

THE CASE

The claimant was an IT Consultant and suffered injuries in his accident. There was a major dispute as to the extent of the injuries. The claimant put his loss of earnings claim in excess of £2 million.

“viii) My assessment of the employment experts

    1. There is a significant degree of agreement between Mr Evans and Mr Burden. Both agree that the Claimant demonstrated disinhibited behaviour throughout their respective meetings and that this is highly likely to inhibit his ability to perform the role of a senior manager in the UK. However, both agree that he has strong communication skills for the technology sector which set him apart from most individuals at his level. They agree that it is highly probable that these skills had a very positive influence in helping him rise to a senior management position within that industry. Those communication skills are sought after and provide excellent employment prospects, with quick progress to prominent positions.
    2. Both agree that a prolonged career break for convalescence would be likely to make it more difficult for the Claimant to return to a position in senior management. Any future employer is likely to want to understand the details behind a career break and would be concerned about employing someone who had suffered the prolonged symptoms experienced by the Claimant.
    3. Both agree that the income the Claimant received in his employment with T-Systems and HomeServe represent realistic figures of the minimum earning expectations for the period during which Mr Siegel would have remained in full time employment. They also agree that, at the age of 38, he was unlikely to have already reached his peak earning potential. That is likely to have been achieved between the age of 45 and 50. They both agree that he is a very capable practitioner in his chosen field and, if his career were uninterrupted, could have risen to a senior management position within a large and prominent organisation, though not destined to rise to the most senior post in the largest of organisations.
    4. The most significant areas of disagreement are as follows:

1. Mr Evans saw no evidence at the interview that the Claimant should not be able to work at his current level, or that which he enjoyed prior to the accident.

Mr Burden considered the evidence overwhelmingly supports the conclusion that the Claimant is currently not able to sustain a career at the level he had reached prior to the accident. Mr Burden relies on his employment record with T-Systems and HomeServe, in which he was unable successfully to fulfil his duties. He also relies on evidence of his behaviour at interview. Furthermore, the failures with T-Systems and HomeServe have damaged his future employment prospects as they would be likely referees.

2. They disagree on future earnings potential.

Mr Burden’s report was based on a career unaffected by the accident. He accepted that the Claimant may have made choices which would have reduced his total earnings in future, for example, becoming a part-time consultant working on a day rate which many professionals do.

Mr Evans offered a wide range of potential earning levels from £65,000 – £140,000 basic salary plus benefits, due to the unknown level of role the Claimant would be able to secure in the future.

3. On employment longevity, Mr Evans thought it unlikely the Claimant would have remained in a post of real seniority beyond 55 and may then have chosen to pursue a career, such as consultant or contractor.

Mr Burden contends that, in the future, it will be reasonable to expect a person to have a full time career in IT through to statutory retirement age. Most organisations of any size now employ IT professionals and almost every employer relies on technology. Employment prospects, even for older employees, will be good. There is a significant market place for IT consultancy which would allow the Claimant to prolong his career for many years beyond fulltime employment should he wish to do so.

    1. Mr Evans was subjected to criticisms in respect of his methodology and the contents of his report. It is apparent, comparing his report with a covert recording of the interview that, in certain detailed respects, the statements in the report are inaccurate as a reflection of the interview. It was further suggested that Mr Evans’ approach was unstructured and lacking in professional rigour, as compared with that of Mr Burden.
    2. In my judgment, as witnesses, Mr Burden was the more impressive of the two. However, in considering which of them is more likely to be correct in the conclusions they have drawn, where they differ, I am more influenced by the content of their arguments rather than the way in which they gave evidence or particular passages in lengthy reports.
    3. I have no reason to doubt that each of them was giving an honest appraisal of the Claimant and his prospects had the accident not occurred and, to a limited extent, his employment prospects given that the accident had occurred.

ix) My conclusion on his employment prospects

  1. The Defendant contends that there is no continuing loss caused by the injuries sustained in the accident. It is said that there was no good reason for him to have left his employment in HP in May 2011. HP did not want to make him redundant and, according to Mr Waterfield, he was performing satisfactorily on the AON contract, producing proposals of satisfactory quality. He left, the Defendant contends, to go to an equally good job with T-Systems where he remained, performing successfully, until August 2013 when his employment was terminated in circumstances arising out of his prolonged period of absence undergoing treatment and his prevarication in providing T-Systems with evidence about his injuries. The Defendant contends that the short period spent with HomeServe, which was unsuccessful, was a reflection of his difficult personality when required to work alongside colleagues and that this had been manifested prior to the accident, in 2007 and he was required to be mentored after his disruptive behaviour at an HP course and in 2009 involving Mr McCormack.
  2. The Defendant relies on the agreed view of the employment experts that, even post-accident, he demonstrated qualities which are exceptional and single him out as attractive for employment, in his chosen field, at his previous level. The Defendant contends that, throughout his career, he has not stayed for lengthy periods of time in a single employment but has tended to get bored and move on. His talents and personal qualities are suited to him undertaking work as a contractor where he could earn well.
  3. The Defendant contends that it is common ground that, had the accident not occurred, he would, nonetheless, not have advanced to a very senior level because of his personal attributes and that it is highly likely he would, in due course, have become a contractor rather than scale the managerial heights in a company the size of HP.
  4. The Claimant invites me to accept the assessment made by Mr Burden of his likely level of earning, but for the accident, which, it is said, is appropriately structured, rigorous and realistic. The Claimant also invites me to accept Mr Burden’s assessment of longevity of career through to 67 rather than 55.
  5. On residual earning capacity, the Claimant relies on the consensus that brain injury carries significant stigma in the field of IT enterprise architecture. He invites me to accept Mr Burden’s oral evidence that recruitment consultants would have serious reservations about recommending him to a client even on a contracting basis and that his poor track record over the last 3-4 years has seriously damaged his prospects of returning to the sector.
  6. The Claimant also relies on Mr Burden’s evidence that, as a contractor, there would be less scope for delegating work, a coping strategy which he used at T-Systems, and that the work as a contractor is harder because of pressure to deliver results.
  7. The Claimant invites me to conclude that, by reason of his cluster of symptoms, which need careful managing using the cognitive rehabilitation techniques that Ms Levett has taught him, he would not be able to cope in the world of IT. I am also invited to conclude that he has few transferable skills, save that he is a competent mechanic, and that I should accept that his likely future level of earnings now is going to be limited to the profits from the business, upon which he is embarking, of refurbishing motorcycles, having failed to obtain employment as a mechanic.
  8. I accept as realistic and properly structured the conclusions of Mr Burden on the likely level of earnings the Claimant would have achieved had he not sustained the injuries in the accident. It is implicit in Mr Burden’s calculations that he is not assuming that the Claimant would have had lifelong employment with HP. There is nothing in his previous employment records to suggest that he would have remained there for the rest of his career, but I do accept as realistic the suggestion that he would have continued to advance in his career until about the age of 50 and, thereafter, would have remained in employment, or earning equivalently as a consultant, until the age of 67. Mr Burden’s assessment of the likely future prospects for employees/consultants of that age is a realistic one. The Claimant is a man who is driven by his need to work and provide for his family and so would, in my judgment, have wanted to work until the age of 67.
  9. I reject as unrealistic the Defendant’s contention that his future employment prospects since the accident have been unaffected. It is clear from the evidence that the cluster of symptoms from which he now suffers, and did suffer, adversely affected his ability to perform at the level, and with the intensity and stamina, he had previously achieved at HP. The evidence of Mr Guile and Mr Ress, as well as the Claimant’s evidence of his ability to mask his under performance from his managers at T-Systems, in my judgment, is sufficient for me to conclude that the cluster of symptoms has significantly inhibited his ability to earn, through employment or as a consultant/contractor at the pre accident level. His experience at HomeServe underlines that point.
  10. On the other hand, it is, in my judgment, unrealistic for the Claimant to contend that his future earning capacity is limited to the severe extent for which he contends. There is no dispute that the Claimant is a highly intelligent, driven and work-oriented person. Furthermore, he is capable of a level of clear communication in his area of expertise which impressed both Mr Evans and Mr Burden in their interviews with him. He is in receipt of excellent advice from Ms Levett on the strategies he might adopt to ameliorate the impact of the symptoms from which he suffers and it is clear that he has been, and would be, conscientious in carrying these management techniques into practice. Accordingly, in my judgment, there is no good reason why he should not be able, with some level of success, to apply his professional expertise in the role of a contractor/consultant in a manner and to an extent consistent with him managing his present and continuing disabilities. The evidence of his time with T-Systems is that he was able to perform at a high level, albeit, given his symptoms, it would not be realistic to assume that he would, on any long-term basis, be able to hold down full time employment at such a level.
  11. Doing the best I can, in the light of the limited assistance I have received from the parties and their witnesses on this issue, in my judgment the Claimant could reasonably be expected, if he chose to do so, to achieve some measure of success hiring out his services as a consultant/contactor over the long-term. However, the inhibitions upon him, as well as the difficulties in the marketplace for someone who is only able to offer himself on a part-time and/or short-term basis, are such that, in my judgment, he could only realistically be expected to earn at a level of, at most, one-third of that which he would but for the accident have earned as a full time employee or fulltime consultant. Accordingly, my calculation of this element of the award will be informed by that assessment.

Past loss of earning capacity

  1. The Claimant claims £21,688 under this heading.
  2. In mid-April 2014 his employment with HomeServe was terminated. He was paid 6 months basic salary in lieu of notice but nothing in respect of loss of benefits. The notice period ran out on the 15th October 2014. The Claimant claims net loss of benefits for the 6 months between mid-April and mid-October 2014, which is calculated as £15,150, and loss of his remuneration package for the period between 15th October 2014 and 9thNovember 2014 which is net £6,537. Those two sums equal £21,688.
  3. The employment experts were agreed that his level of earnings at HomeServe represented the minimum he could have expected to have earned but for the accident during that period. Accordingly, I can see no good reason, nor has any been argued, why the Claimant should not be entitled to this sum under this particular head. I award £21,688 under this head

Retraining/set-up costs

    1. £25,000 is claimed under this heading to reflect the Claimant’s estimate of retraining and obtaining tools and equipment to set up his motorcycle repair business, as well as £5,000 for career counselling and financial investment advice.
    2. I have received virtually no direct evidence in respect of this head of claim. I have found that it is unrealistic to suggest that the Claimant would be able to earn a living as a full time employee working in IT at the level he was doing before the accident. I have concluded that his future could, realistically, lie in work as a part time consultant. It is, in my judgment, reasonable to expect the Claimant to have some significant expenditure in terms of set up costs and/or retraining in order to give him the best prospect of earning a living, albeit at a reduced level. In my judgment the claim for £25,000 is reasonable and should be allowed.

Future loss of earning capacity

  1. I have indicated above the approach I am taking to this head of damages.
  2. I see no reason to dissent from the calculation undertaken at paragraphs 51 to 52 of the final schedule of loss dated 9th November 2014 which reflects the Ogden tables to which I have been referred. This quantifies his future notional earning capacity, in the absence of the accident, as being £2,169,646.
  3. As I have indicated above, I do not accept the Claimant’s contention that his post-accident ability to earn would be as limited as he argues for: limited to his anticipated remuneration running his own motorcycle refurbishment business, generating a gross income in the region of £20,000 per annum.
  4. In my judgment, the Claimant can reasonably be expected to earn at a level no greater than one-third of that which he would have earned but for the accident by exercising his talent working part-time as a consultant in the IT industry. Accordingly, in my judgment, the appropriate level of award under this heading is one of £1,446,431.”
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