Calculating Damages

1. Calculating Damages Patrick Mullarkey, Campbell Fitzpatrick Solicitors

2. General Principles • Restitutio in Integrum • Not possible where injury is severe • Intention of special damages to compensate for extra costs and losses • Minimise effect of injury, maximise quality of life • Reasonable expenditure, not desirable Calculating damages

3. General Principles • Levels of Damages have increased - 3 factors influence value • 1 Severity of injury • 2 Life expectancy • 3 Quality of legal representation Calculating damages

4. Heads of Damage - Generals • Physical pain and suffering • Awareness of accelerated death • Sexual dysfunction • Loss of joy in work • Loss of holiday • Loss of sporting activity • Impairment of housekeeping abilities • Psychological problems Calculating damages

5. Calculating Generals • “Green book” • Kemp and Kemp • Butterworth’s Personal Injury Litigation Service • Precedent • Halsbury’s • Bulletin of Northern Ireland Law Calculating damages

6. Special losses - Past Losses • Reasonably easy to ascertain • Extra expenditure already incurred • Loss of wages • Cost of care , therapies etc • Gratuitous care given by family - Assess? • Cost care and apply discount or… • Cost loss of wages incurred by carer Calculating damages

7. General Principles - Future Loss • Probabilities, possibilities and chances • Impossible task • Multiplier/multiplicand approach • Multiplicand - annual cost or loss • Multiplier - duration of loss Calculating damages

8. Choice of Multiplier • Two principal controversies in recent years • Use of actuarial evidence • Appropriate discount rate Calculating damages

9. Actuarial Evidence • The “Ogden Tables”. • Formally admissible in 1995 • Importance of tables can be overstated • Tables take account of ordinary mortality risks in general population • Tables only commence at 16yrs old • No place for actuarial evidence where expert evidence gives life expectancy Calculating damages

10. The Discount Rate • Court assumes net rate of return on investment - the discount for accelerated receipt • lower rate = higher multiplier • Wells v Wells 1998 • HL held when assessing future loss ct should assume damages invested in ILGS • “No room for judicial scaling down” Calculating damages

11. The Discount Rate • £10k loss per annum for 20 years • If £200k awarded today pl. over-compensated • £10k for 20th year earns interest from day 1 • Discount eliminates over-compensation • Annuity approach • 5% return on capital = £124.6K • 3% return on capital = £148.8K Calculating damages

12. The Discount Rate • ILGS guarantees rate of return therefore risk-free • HL set rate @ 3% • Since reduced to 2.5% • Where agreed life expectancy no further reduction Calculating damages

13. Future Losses and Expenditure • Future Care • Therapies • Equipment • Transport • Education • Housing • Loss of earnings • Miscellaneous Calculating damages

14. Future Care • Often single most substantial head of claim • Annual costs can exceed £50k • Choice of expert in care is essential • Regime must be internally and externally consistent • Tailored to pl.’s needs • Extent of gratuitous care reduces with time Calculating damages

15. Future care • Sowden v Lodge 2004 CA - damges awarded for reasonable needs • Per Curiam - if def. asserts local authority care is adequate then must prove same • Good authority that pl. entitled to seek private domilicilary arrangement • More likely to succeed if pl. has retained cognitive function • See also A v B Hospitals and Freeman v Lockett Calculating damages

16. Therapies • Physiotherapy - expert evidence required • Select expert relevant to client’s needs • Speech Therapy - speech, eating needs • Occupational therapy • Music and art therapy Calculating damages

17. Equipment • Tailor report to pl.’s needs • More than standard regime • Broad spectrum of kit. • From Computers to cutlery • Provide for replacement Calculating damages

18. Transport • Specially adapted vehicle may be required • Additional mileage • Only extra costs recoverable • Consider Mobility element of DLA • OT normally advises Calculating damages

19. Education • Legal obligation to educate up to 16 yrs old • Can claim cost of Education assistant • Costs of education may be adjourned Calculating damages

20. Housing and Accommodation • Consider where serious and permanent mobility problems • if injury serious level site, additional storage and covered access required • Adaptation of existing home possible • Alternatively purchase or build • Pl. is compensated not for extra cost but for loss of use of capital - Roberts v Johnston • Generals can finance purchase • Claim for sundry expenditure Calculating damages

21. Loss of Earnings • 1 Where pl. will never work • Ascertain parental and sibling employment • If life expectancy unimpaired then multiplier to retirement age • Discount not only for accelerated receipt but also for vicissitudes of life • e.g. ill health, unemployment, failure to achieve career • If life expectancy curtailed then claim lost years but discount Calculating damages

22. Loss of Earnings • 2 If Unemployed at time of Injury • Seek details of work history, qualifications • Merits of claim depend on length of period out of work, reasons for same, what steps pl. took to secure work before injury occurred etc • Must determine when pl. would have returned to work • Depends on local market conditions • Difficult where pl. is long term Calculating damages

23. Loss of Earnings • 3 Illegal Employment • No tax, NIC • Careful consideration to be given to this type of claim • Pl. can be prosecuted • Ct. may deny claim for policy reasons • See Numan v Folkes and Dunlop Tyres Calculating damages

24. Handicap in Labour Market • Smyth v Manchester type payment • See also Moelicker v Rayrolle • Evidence must showdifficulties in seeking or retaining employment • Risk of future unemployment to be assessed • Unrealistic to have gross multiplier of more than 5 years - Barstow v A.Roberts Calculating damages

25. Residual Earnings capacity • Is the pl. capable of work notwithstanding present unemployment? • Hunter v MOD • Reference to Ogden tables • Medical evidence crucial - pl. deemed capable of work • 40% reduction re Residuals Multiplier Calculating damages

26. Miscellaneous • Credits to be given to Def. • Lost Years - Phipps v Brooks Dry Cleaning Services • Interest – 8% as per S33A Judicature Act (NI) 1978 • Costs of Managing awards Calculating damages

27. Managing Quantum Cases • Time consuming and difficult • Get a good forensic accountant to draw together various elements of loss • Expert reports must be consistent • Avoid double claims • Early and detailed quantum consultation • Develop a detailed knowledge of the source materials including case law , Ogden tables etc Calculating damages

28. Calculating Damages Patrick Mullarkey, Campbell Fitzpatrick Solicitors