LOSS OF EARNINGS AFTER LEAVING THE MILITARY: MURPHY -v- MINISTRY OF DEFENCE

In Murphy -v- Ministry of Defence [2016] EWHC 3 (QB) HH Judge Coe QC (sitting as a judge of the High Court) considered damages for loss of earnings in the case of a 21 year old soldier who suffered injuries that caused him to leave the army.

KEY POINTS

  • The sum of £10,000 was awarded for loss of congenial employment for a 21 year old soldier who left the army as a result of an injury.
  • Damages were awarded (largely) on the basis of the difference between the claimant’s earnings had he stayed in the army and his earnings (less some expenses) as a result of now working in civilian life.
  • There was no further award for loss of earnings for the time after the claimant would have retired from the army in any event.
  • The court rejected the argument that there should be an automatic deduction of 14.5% to reflect the “X-factor” – the disadvantages of military life and pay.
  • Although the claimant came within the definition of “disabled” this was not an appropriate case for an Ogden Table award for disadvantage in the labour market. The most appropriate award was on a Smith -v- Manchester basis.

THE CASE

The claimant was a 21 year old Sapper in the Parachute Squadron, his trade was an electrician.  He was injured whilst on service. There was a dispute in relation to causation of CWP.  However the judge found that the accident had caused CWP and some mental health disturbance.
  1. There is not a great deal between the employment experts. On the basis of Miss Ahern’s evidence about the small (5%) percentage of soldiers who seek early release within the 12 month notice period, I conclude that her percentage figure of 54% is the accurate one. In the event I do not think that Mr Cameron challenged that particularly strongly. I have to factor in, in any event, the individual circumstances of the Claimant. I accept the features of the Claimant which Miss Ahern refers to and which would indicate that he was more likely than the average to stay the full term in the Army. Again, Mr Cameron does not consider that such a view would be unreasonable. I therefore find that the Claimant had at least a 54% prospect of remaining in the Army for 24 years in total (until April 2030) and therefore on the balance of probability I find that he would have done so.
  2. Similarly, whilst I accept Mr Cameron’s very measured view about lack of experience/evidence of the Claimant’s performance as a non-commissioned officer there is nothing in the evidence which suggests that the Claimant would not have performed at least as well as an average soldier and in the circumstances I find that he would have reached the various promotion stages as set out by Miss Ahern.
  3. I am satisfied, therefore, that but for the accident, the Claimant would have remained in the Army for a total period of 24 years. The accident caused the physical injuries referred to the orthopaedic reports and went on to cause the Claimant to develop CWP and a mixed depressive and anxiety disorder.
  4. In so far as any part of the Claimant’s ongoing symptomatology whether in terms of psychiatric problems or the maintenance of the CWP are attributable to his harmful use of alcohol or to his frustration at the loss of his Army career, I find that those symptoms are attributable to the accident. For the reasons identified in the evidence which I have cited I am satisfied that such harmful use of alcohol was directly attributable to the symptoms caused by the accident in that the Claimant resorted to excessive drinking in order to “top up” his medication. Similarly, since I find that his Army career was ended by reason of the consequences of this accident, any symptoms caused by that are also attributable to the accident and the Claimant falls to be compensated for the same.
  5. I was addressed on some specific matters in relation to quantum here. I was specifically invited to consider the matter in broad terms on the premise that the parties having considered my findings would probably be able to agree precise quantum figures. I am grateful to both Counsel for that indication. As I have set out above, the question of any pension loss is “put over”.
  6. In dealing with the issues of quantum, therefore, I make the following findings.
  7. In terms of general damages on the basis of my findings and by reference to the Judicial College Guidelines to which I have been referred and taking into account both the initial physical symptoms, the chronic pain syndrome and the overlapping psychiatric difficulties, I have reached a conclusion that the appropriate award general damages for pain, suffering and loss of amenity is £30,000. Although there are two separate diagnoses here, there is a considerable degree of overlap in terms of the resulting pain, suffering and loss of amenity. The overall consequence to the Claimant fall toward the upper end of the lower bracket of “Other pain disorders” with minor injuries which would have resolved within three months.
  8. The Claimant claims damages for loss of congenial employment and puts forward a figure of £15,000 in this respect. Various previous awards were cited in closing submissions. As I have found, he would have had a full career in the Army. He was from a military family and defined himself by reference to his role. I do not accept the Defendant’s argument that the Claimant had become frustrated or was dissatisfied with his career for reasons unrelated to the accident. I accept the evidence of the Claimant and his witnesses on this issue. I accept that the figure should be greater than would be appropriate for some jobs. The Claimant has suffered a loss of his chosen lifestyle and the impact of the loss of status and personal identity is significant, however, I consider that the Claimant’s figure is too high. I award £10,000 for loss of congenial employment. There are pros and cons to Army life which have to be taken into account. I have also considered the award made in Hanks v Ministry of Defence [2007] EWHC 966 (QB).
  9. …..
  10. The Claimant claims £7,590 past loss of earnings. But for the accident the Claimant calculates his Army pay would have been £47,992.81. In addition he would have received £4,084.08 parachute pay. In his civilian employment he has earned more than that, a total of £63,948.47. However, the Claimant claims that from that sum should be deducted commuting costs, work clothing expenses and a daily food allowance which produces a net loss overall in the sum identified.
  11. On behalf of the Defendant it is suggested that the Claimant has failed to mitigate his loss by choosing to live further away from his employment or not finding a job closer to where he lives. In addition they say that the purchase of a travel card entitles him to travel for purposes other than work so that a degree of betterment. Nonetheless an allowance is made of £250 per month. The Defendant suggests that the Claimant would in any event have had to purchase civilian clothing and so says that the claim is inflated and allows £500 in respect of clothing. This is for the whole period. The Defendant also suggests that there is an additional cost based only on the additional cost of the family grocery bill by reason of the Claimant not being in the Army and so they put forward £30 per week.
  12. I agree that the Claimant’s figures in respect of work clothing expenses and food costs are probably overstated. I do not accept that the commuting costs are inappropriate in circumstances where living in London would be a great deal more expensive in any event and/or one would not be able to earn the same amount of money outside of London. I heard no evidence on this, but it seems to me I can properly take judicial notice of those details. Considering that the Claimant would have to buy civilian clothes even if he were in the Army and that there should be some discount from the figure claimed to reflect the fact that the Claimant now represents an increased cost on the overall grocery bill, it seems to me that an appropriate figure the clothing deduction would be £700 and for the food an appropriate figure would be based on £5 per day which would be £3,805.
  13. I reject the Defendant’s argument as to betterment in respect of the travel card. He has to commute and the purchase of the card is more economical. It does not seem to me that the principle would apply here in the circumstances. Moreover, I heard no evidence to suggest the Claimant does use the card for other purposes.
  14. In respect of the potential Army earnings the Defendant refers to a discount to reflect the “X factor” component recognising the disadvantage of conditions of service experienced by members of the Armed Forces compared with the civilian sector. This is referred to in the employment reports in both paragraph 92 of Mr Cameron’s report and the percentage of 14.5% is included in paragraph 5.2 of Miss Ahern’s report (TB4/1489). The reduction of 14.5% from the Claimant’s calculation produces a figure of £40,553.92 plus parachute pay giving a total of £44,638.
  15. Thus the Defendant argues that since the deductions from the civilian earnings therefore total £14,916.50, giving the Claimant an earnings figure for the past of £48,991.97 which is greater than the amount he would have earned in the Army, there is no past loss.
  16. Before addressing this argument and identifying the Claimant’s past and future losses, I need to deal with some of the evidence in respect of the Claimant’s past and future earnings had he remained in the Army. He would have been promoted as Miss Ahern identifies. I accept the conclusions of Miss Ahern in relation to the additional payments which the Claimant would have received. They were not the subject of any real challenge. He would have received parachute pay. Miss Ahern says at paragraph 3.3 that the Claimant would probably have spent 6 years out of every 10 in a RRP(Para) qualifying post. The figure for parachute pay needs to be calculated on this basis. He would have received the additional pay and benefits referred to at paragraph 8.12 (he would probably have done one more tour of Afghanistan). He would not have received the items at paragraphs 8.13 and 8.14.
  17. Considering future losses and applying the same figures in respect of the past losses the Defendant makes the same submission: the Claimant’s current take home pay is £23,427.80. His Army pay would have been £25,110.30, but less the “X factor” figure of 14.5% on his basic pay gives a figure of £21,753.28 and so again there is no loss.
  18. The Defendant refers me to the case of Hanks (cited above). In that case no award was made for the loss of additional bonuses/payments. At paragraph 80 the learned judge set out that he had no evidence on the point. That is not the case here. He also said that those who “go and serve in areas of substantial danger are at greater risk of having their service careers cut short through death or injury”. At paragraph he said that he did not consider an award should be made for loss of the payment which would have been made for the fact of being longer at sea.
  19. On this basis the Defendant urges me to discount the Claimant’s past and potential earnings by the 14.5% “X” factor. The Defendant suggests this is “uncontroversial”. I do not agree. Firstly the decision in Hanks only refers to additional payments. Secondly, whilst it is a decision of the High Court and I have given it proper consideration, it is a first instance decision. As I have found in this case, the Claimant was committed to and would have stayed in the Army. The Army way of life was what he wanted. He would have fulfilled that ambition but for this accident. He would have done his duty and he would have received the income and the payments/bonuses referred to. As in any such claim, in assess the financial loss, I have to compare the hypothetical uninjured Claimant with the injured Claimant. The hypothetical uninjured Claimant would willingly have endured the less attractive aspects of Army life and he would have been paid accordingly. It does not seem to me to be logical to discount any of those payments. If a claimant were paid a greater hourly rate to work unsocial hours, I do not believe it would be suggested that they should not be compensated at that rate for the hours they would have worked, if they could no longer do that work by reason of a defendant’s negligence.
  20. I reject that argument and the multiplicands for loss (past and future) should be calculated on the full pay and additional sums the Claimant would have received.
  21. Although the evidence I heard/read was very limited on the point, it seems to me and I find on a balance of probability, that on leaving the Army, the Claimant would have found civilian employment and would have worked to a conventional retirement age of 65. I find that he annual income from 2030 to retirement age would have been the same as it will be now. Mr Cameron in his report refers to the factors which have to be balanced when looking at this issue. The Claimant as a former soldier with lengthy service would have commanded a reasonable income. The Claimant now when he reaches that age will have some restrictions on his abilities but he will have had many years in which to build his civilian career.
  22. In respect of the calculation of future loss of earnings, the Claimant puts forward a claim on two bases. The first is, given his ongoing CWP and mental health difficulties, he qualifies as disabled for the purposes of the Equality Act 2010 (previously Disability Discrimination Act 1995) and applying the Ogden tables, therefore his future earnings multiplier post-accident is significantly reduced since his future loss of earnings should be calculated by reference to the multiplier as a disabled person compared to that as an able-bodied person. Alternatively, the Claimant claims a “Blamire” type of award based on the current shortfall in take-home pay and the time he would have served in the Army. The Claimant puts forward a figure in the sum of £80,000.
  23. The Defendant argues that it is incorrect to categorise the Claimant as disabled because his limitations are minor. Even if the future earnings multiplier on a disabled basis is appropriate then there should be some considerable adjustment towards the non-disabled multiplier. The Defendant argues that this should be substantial and refers to some authorities. The Defendant disputes the appropriateness of a Blamire-type award.
  24. I have read Herring v Ministry of Defence [2004] 1 All ER 44. I have set out above my findings as to the uninjured Claimant’s likely hypothetical career path. He has obtained and maintained employment to date and subject to certain restrictions he will endeavour, as I find to pursue his new career until retirement age. In light of these findings, I do not consider that a Blamire-type award is appropriate here. There are not so many imponderables that such an approach is the only sensible option.
  25. I first have to decide whether or not the Claimant is “disabled“. The Equality Act provides that a person has a disability if he (a) has a physical or mental impairment, and (b) the impairment has a substantial and long-term adverse effect on his ability to carry out normal day-to-day activities. “Substantial” means more than minor or trivial.
  26. In this case I find that most of the restrictions the Claimant has affect his home and personal life, for example, playing with his children and socialising. Some clearly do, however, impact on his work. He was not able to continue in his first two jobs because they were too hectic and/or stressful. He has some physical limitations in terms of heavy lifting etc.
  27. His disability is modest only, therefore. As he has learned to deal with his condition by not pushing himself too hard, the impact of his disability has lessened to an extent. He may improve somewhat in terms of psychiatric symptoms (which will impact favourably on the CWP) when the litigation ends and with some CBT/pain programme. I have been referred to previous decisions on this issue of “disability”. In the circumstances here and in particular given the definition of “substantial”, I do find that he is disabled.
  28. The Claimant in his Schedule of Loss sets out the multipliers for future loss of earnings to reflect the disability for the period of time he would have continued in the Army. I am not sure why the claim is advanced on that basis. The evidence is that the Claimant’s CWP will endure. Even if there is no quantifiable loss in annual income, the premise of the disabled multiplier is that a claimant will be out of work more often than an able-bodied person. The reduction factor for a non-disabled man of the Claimant’s age and education in employment is 0.89 and for a disabled man is 0.42. That is less than half, suggesting that the Claimant would only be in work half of the time. Even over 15 years the loss on that basis is calculated at £164,310.
  29. In the context of this case and the limited extent of the Claimant’s disability such a figure would be disproportionately high. The Claimant is likely as I find given his determination and given that he has been in work since leaving the Army to be in employment for far more of his working life than this multiplier reflects. On a balance of probabilities on the evidence I think he is unlikely to be out of work for more than a few relatively short periods of time.
  30. I have considered some of the previous decisions relating to adjustments to the reduction factor to reflect individual circumstances. Of course the Court must approach the assessment in each case on its specific facts. I agree with the Defendant that any adjustment in this case would have to be substantial. The reality as I find is that this Claimant’s reduction factor would have to be quite close to the non-disabled multiplier.
  31. In the circumstances I have concluded that in this case even though I find that the Claimant is disabled, a sufficient adjustment to the disable multiplier is an too contrived an exercise. The reality here is that the Claimant’s particular circumstances and the particular factual matrix of this case are not well-suited to the use of the Ogden Tables. I have found the case of Billett v Ministry of Defence [2015] EWCA Civ 773 to be the most useful guide to me here. As in that case, although I have found that the Claimant is disabled, use of the Tables without significant adjustment produces an unrealistic figure for the Claimant. He is in work and has been since he left the Army. His employment is secure. He is handicapped on the labour market, but that handicap is limited. He will be more limited in his choice of employment, but has already found an employment and an employer where he can and does earn well. The judge at first instance in Billett adjusted the reduction factor to 0.73. The Court of Appeal considered that was too low. I consider that Mr Murphy’s case is nearly on all fours with Billett. As the Court of Appeal said in Billett determining an appropriate adjustment is a matter of broad judgment and “that exercise is no more scientific than the broad brush judgment which the court makes when carrying out a Smith v Manchester assessment.
  32. I have reached the conclusion that a Smith v Manchester award here would fit the facts much better. On analysis as I find, this is a classic Smith v Manchester situation and I prefer that approach. On my findings I take the view that an appropriate award would be in the region of two years’ loss of earnings and I make an award under this head of £50,000.
  33. That award is on top of the multiplier/multiplicand based award for loss of earnings based on what the Claimant would have earned in the Army compared to what he will earn during period to when he would have left the Army in 2030 which needs to be calculated.

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