Court of Appeal decides that a lump sum approach to damages for future loss of earning capacity is appropriate in a case involving a minor disability, as opposed to a higher award based on the Ogden Tables

Implications

The Court of Appeal’s decision in favour of the Ministry of Defence (MOD) has important ramifications for personal injury claims. It will assist in limiting damages where the claimant has an ongoing injury which may impact on their future employability.

The Court of Appeal considered the application of Tables A to D of the Ogden Tables, which set out a series of reduction factors. These indicate the amount by which a multiplier for loss of earnings should be reduced in order to take into account contingencies other than mortality – including whether a claimant is disabled. It had to decide how best to make an assessment without under or over-compensating a claimant whose level of disability was not accurately reflected by the available reduction factors.

The Court of Appeal upheld the MOD’s appeal, finding that the Smith v Manchester Corporation [1974] lump sum approach remained appropriate, even though the Judge at first instance had held that the Claimant was disabled by reference to the Ogden Tables test and made an award based on a multiplier approach.

Kennedys acted for the MOD in its successful appeal in this case.

Background

The Claimant served in the British army from 2002 to 2011. He claimed that, as a result of exposure to cold weather during his military service, he sustained a minor non-freezing cold injury to his feet and less severe symptoms in his hands. Liability was agreed at 75/25 in the Claimant’s favour.

Initially following the injury the Claimant was downgraded. He was subsequently upgraded to ‘Medically Fully Deployable’ anywhere in the world, served a tour of Afghanistan and left the army in 2011. He claimed he left partly because of the injury, as he considered his career prospects had been damaged.

The Claimant commenced new employment immediately on leaving the army. He continued in that employment to the date of trial. While he suffered no financial loss, the employment experts agreed that, as a result of his injury, he was at a disadvantage on the labour market for some occupations.

First instance decision

At first instance, Mr Andrew Edis QC held that the Claimant was disabled by reference to the Ogden test “but only just”. He found that the definition was satisfied because the Claimant was prevented from working outside, which was a day-to-day activity.

The Judge held that Ogden Tables A and B were to be used to assess damages. He considered that the definition of disability was very wide, capturing people far more seriously injured than the Claimant. Therefore, applying the reduction factor without deduction would produce an award that was clearly wrong. In the circumstances, he applied a mid-point between the disabled and non-disabled multiplier. This produced a figure of just over £99,000 in respect of future loss of earnings.

Court of Appeal

Giving the leading judgment of the Court of Appeal, Lord Justice Jackson held as follows:

  • The Judge had been entitled to conclude that the Claimant was disabled. However, Jackson LJ commented that if he had been the Judge he might have looked sceptically at the Claimant’s account of his symptoms against the background of the medical evidence.
  • However, the Judge’s assessment of future loss of earning capacity, based on the Ogden Tables, was incorrect. The appropriate approach was a general assessment in accordance with Smith v Manchester. He assessed damages for future loss of earning capacity at £45,000 (effectively 2 years’ earnings).