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PI Practitioner, October 2014

16/10/14. Each issue a particular topic is highlighted, citing some of the useful cases and other materials in that area. You can also receive these for free by registering for our PI Brief Update newsletter. Just select "Free Newsletter" from the menu at the top of this page and fill in your email address.

Ogden Tables A to D: The Use of Adjusted Reduction Factors

The High Court's recent decision in Billett v MOD [2014] EWHC 3060 (QB) provides practitioners with salutary guidance on the adjustment of reductions factors (RF) from Ogden Tables A to D when assessing an award of damages for future loss of earnings.

Since their first appearance in Ogden Table 6 published in 2007, the RFs from Tables A to D have been applied to the multipliers used in future loss of earnings calculations to reflect contingencies other than mortality. 

In Billet, the Claimant sustained a non-freezing cold injury whilst on military exercise with the Royal Logistics Corps which left his feet with permanent sensitivity to the effects of cold weather. The Claimant subsequently left the Army and started civilian employment as an HGV driver. His personal injury claim against the MOD included a substantial future loss of earnings claim.

Andrew Edis QC (as he then was; now Edis J) sitting as a High Court Judge, held that while the Claimant would have left the Army in any case in the absence of his injury, he was entitled to an award of damages to reflect the potential difficulties as a result of his physical impairment in finding alternative work in the event of future unemployment. He considered that such an award should be assessed using the RFs from Ogden Table A (for a non-disabled man) and Table B (for a disabled man), the Claimant meeting the definition of disability under the explanatory notes to Ogden 7, but that a substantial reduction should be applied to the RF to reflect the very minor extent of his impairment.

In arriving at this conclusion, the Judge broadly considered the explanatory notes to Ogden 7 and the analysis of the use of RFs provided by Dr Victoria Wass, an actuary and member of the Ogden 7 Working Party.

He highlighted a number of important points relevant to the application of RFs in future loss of earnings claims which can be summarized as follows:

i. First, there is no statutory obligation to apply the actuarial tables and explanatory notes from Ogden 7 in a particular way, though a strict application of RFs to future loss of earnings claim should be the default position.

ii. Second, the Court is permitted to depart from a mechanistic application of the Tables in appropriate cases. Discretion is justified where the claimant is idiosyncratic in some way: the adjustment can be to increase the RF, for example, where the claimant's impairment is unusually mild, or to reduce the RF, where the claimant has sustained a particularly severe impairment or suffers from multiple impairments.

iii. Third, though the RFs provide the best available measure of the employment prospects for a typical member of each group, and are accurate as a measure of the group average, they are not likely to be accurate for any individual. If the Tables are applied without adjustment, the right overall figures of damages across all tables will be awarded but no claimant will receive the correct sum in damages and no defendant will pay the correct sum. The Court is required to fix a figure for compensation in the individual case before it, and is unlikely to apply unadjusted RFs without evaluating the result and adjusting it if it appears necessary to do so.

iv. Fourth, the Court should make an adjustment to the RF where the circumstances of the case indicate that it is appropriate to depart from the strict application of the Tables.

v. Fifth, where the application of the Tables produces a result which is manifestly inaccurate, it is preferable for an arbitrary adjustment to be applied to that result than for the Court to decline to use the statistical material at all. 

Piers Taylor & Matthew Waszak
Temple Garden Chambers

Image ©iStockphoto.com/EmiliaU

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