ASSESSING THE LOSS OF A CAREER
1. Until the recent Court of Appeal decision in Herring -v- MOD (2004) 1 All ER 44 assessing the value of a loss of career was expressed in terms of the loss of a percentage chance. The Claimant who had yet to start his or her career would clearly encounter many evidential uncertainties and imponderables if claiming that a particular accident had cut short or extinguished the possibility of the ideal career. The Court of Appeal in the case of Herring moved away from the loss of a chance approach in favour of adopting a more realistic career model method for assessing damages.
The earlier approach
2. Prior to the case of Herring the classic percentage loss of a chance approach is found in the case of Doyle -v- Wallace (1998) PIQR Q146. In that case the Claimant was aged 19 at the time of the accident and had suffered a brain injury. Her case was that she would have qualified as and been employed as a drama teacher. If she had no so qualified she would have been employed in more mundane clerical work. Her case was put on the basis that she had a 50% chance of qualifying as a drama teacher and that her future loss of earnings should be assessed on the basis of a middle point between her notional earnings in clerical employment and her earnings as a drama teacher so as to reflect that 50% chance. In the Court of Appeal the Defendant attacked that approach on the basis that it could not be said that it was probable that she would have qualified as a drama teacher. Accordingly no allowance should be made for lost earnings as a drama teacher. This attack was rejected and the percentage chance approach endorsed as the appropriate method to apply in this situation. In so doing the Court of Appeal approved the approach of the trial Judge in Anderson -v- Davis (1993) PIQR Q187 where an issue had been whether the Claimant would have secured promotion to the post of Principal Lecturer from his existing post as a lecturer. The Judge in that case held that there was a two-thirds chance of securing such a promotion. Accordingly he went on to state:-
"Where the question for the Judge is one of past facts, then mere balance of probability wins the day. Where the question is one of what might have been in the situation in a hypothetical state of facts, then, to the extent that a chance of the event necessary for an award of damages falls significantly below 100% the award should be discounted in my view."
Accordingly he went on to award the Claimant in that case two-thirds of his projected loss of earnings as a Principal Lecturer.
3. In Langford -v- Hebran (2001) PIQR Q13 the percentage chance approach was adopted with some sophistication. The Claimant in this case had been a hod carrier for some ten years at the time of the accident during which time he had also pursued an interest in kick boxing. At the time of the accident he had become World Light Middleweight Amateur Kick Boxing Champion, after which he turned professional and won his only professional contest. His second contest was apparently abandoned after his opponent got cold feet. The accident then intervened and his case was presented on the basis that four alternative scenarios had to be considered depending upon the extent to which the Claimant succeeded in his professional career. An award of damages should then be made which reflected the chance of each of those scenarios materialising. The Judge accepted that this was the appropriate way to proceed, following the guidance given by the Court of Appeal in Doyle -v- Wallace and went on to attempt to evaluate the percentage chances of each of the four scenarios taking place.
4. The Court of Appeal agreed that this was the appropriate approach and proceeded to improve upon the Judge's methodology while following the same approach themselves. The consequence was, as appears from the reported decision, that the loss of earnings claim was set out in an appendix which was divided into the following categories (i) chance of whether the Claimant would win one national or European title, (ii) whether upon an assumed move to the US he would win state or other titles, (iii) whether he would then become World Champion for a year and (iv) whether he would become World Champion for two years and then remain in the US working as a professional instructor. A figure based upon the percentage chance of each of these scenarios occurring was then selected.
Herring -v- Ministry of Defence
5. In Herring -v- MOD the Court of Appeal was invited by the Defendant to adopt the percentage chance approach to the calculation of loss in respect of a young man who had been contemplating a career in the police but had not actually embarked upon such a career. He had not got as far as an application to join the police but had worked as a qualified sports coach and lifeguard in a leisure centre and was an SAS standard physical training instructor. He was pursuing an HND course in law with a view to applying to join the police. Competition to join the police was fierce but he was thought to be a very strong candidate. The Court of Appeal declined the Defendant's invitation to reduce the claim for loss of earnings and pension by a factor of 25% to reflect the chance that the Claimant would not have become or remained a policeman. In refusing to adopt this approach Lord Justice Potter said:-
"In any claim for injury to earning capacity based on long term disability, the task of the Court in assessing a fair figure for future earnings loss can only be effected by forming a view as to the most likely future working career (the reasonable career model) of the Claimant had he not been injured. Where, at the time of the accident, a Claimant is in an established job or field of work in which he was likely to have remained but for the accident, the working assumption is that he would have done so and the conventional multiplier/multiplicand method of calculation is adopted, the Court taking into account any reasonable prospects of promotion and/or movement to a higher salary scale or into a better remunerated field of work, but adjusting the multiplicand at an appropriate point along the scale of the multiplier. However, if a move of job or change of career at some stage is probable, they need only be allowed for so far as it is likely to increase or decrease the level of the Claimant's earnings at the stage of his career at which it is regarded as likely to happen. If such a move or change is unlikely significantly to affect the future level of earnings, it may be ignored in the multiplier/multiplicand exercise, save that it will generally be appropriate to make a (moderate) discount in the multiplier in respect of contingencies or "the vicissitudes of life".
6. Lord Justice Potter went on to state that in the situation of the young Claimant who has not yet been in employment at the time of injury but is still in education or has otherwise not embarked on his career it may or may not be appropriate to select a "specific career model". In assessing whether a "reasonable career model" was appropriate the Court would investigate the Claimant's previous performance, expressed intentions and ambitions, opportunities reasonably open to him and any steps that had already been taken to pursue a particular career path.
7. In relation to the previously orthodox approach with regard to assessing damages on the basis of the loss of a chance Lord Justice Potter went on to state:-
"… It is a truism that the assessment of future loss in this field is in a broad sense the assessment of a chance or, more accurately, a series of chances as to the likely future progress of the Claimant in obtaining, retaining or changing his employment, obtaining promotion or otherwise increasing his remuneration. Nonetheless, such assessment has not traditionally been regarded as necessitating the application of the technique of percentage assessment for "loss of a chance" based on the likely actions of third parties, as articulated by Stuart-Smith L.J. in Allied Maples Group Limited -v- Simmons & Simmons (A Firm) (1995) 4 All ER 907. In cases such as Doyle -v- Wallace (1998) PIQR Q146 and Langford -v- Hebran (2001) PIQR Q160 the Court has in special circumstances felt obliged to adopt such a method in order to calculate particular aspects of the Claimant's future loss claim. However, those decisions have not purported generally to replace the traditional method of adjusting the multiplier or multiplicand within the career model appropriate to the particular Claimant so as to reflect (a) the likelihood of an increase in earnings at some point in the Claimant's career and (b) those contingencies/vicissitudes in respect of which a discount appears to be appropriate."
The effect of Herring
8. The effect of the decision in Herring still has to be fully appreciated by personal injury practitioners. The decision has led to a decisive shift from the "loss of a chance" approach in relation to assessing future career loss to re-establishing the conventional multiplier/multiplicand approach to career loss claims even in those situations where the individual has yet to embark upon the chosen career. Assessing damages on a loss of a chance approach is still appropriate but has been marginalised to cases where the career of the Claimant in question will "take a particular course leading to significantly higher overall earnings than those which it is otherwise reasonable to take as a baseline for calculations. Thus it was appropriate in Doyle's case to assess on a percentage basis the chance that the Claimant might have a remunerative career as a drama teacher rather than the more prosaic baseline activity of clerical or administrative work. Similarly in Langford's case the same technique was applied to the chance that the Appellant might become a highly successful full time kick boxing champion, rather than a bricklayer with five fights a year at what might be called "journeyman level" (see Potter L.J. at paras. 23-26).
9. The Court of Appeal in Herring left open the alternative possibility to assess more speculative career advancements on a loss of a chance basis. However the Court of Appeal's attempt at distinguishing both Doyle and Hebran's cases from that of Herring is less than satisfactory.
Post-Herring cases
10. Herring now represents the orthodox approach in assessing future career loss. The Claimant must therefore advance a "reasonable career model" and the Defendant attempt to challenge this model. In Rashid -v- Iqbal (2004) EWHC 1148 LTL (21/05/04) Andrew Smith J. expressly adopted the career model approach as established in Herring. In that case the Claimant was a 30 year old with some 10 years experience in the City who worked in the field of asset management. He had joined his employers three years before the material accident. This accident had a significant effect on his career advancement. At the time of the trial the market for employees of this type was relatively depressed but he had been successful and the Judge found that he had "good reason to hope for further advancement". The Judge expressly adopted the career model approach described in Herring and found that the Claimant would have been promoted to director by 2002 and to senior director by 2006 with a 50% chance thereafter of promotion to chief investment officer. Damages were awarded on this basis without the need for the involved percentage calculations such as had been carried out in Langford -v- Hebran. Interestingly a percentage chance approach was applied to the last promotion only within the reasonable career model with the relevant multiplicand being taken at a midway point between the salaries of a senior director and chief investment officer.
11. In Dixon -v- Were Gross J. was concerned with a University student who was claiming a lost career in the City. He had been injured whilst at Newcastle University where in his first year he had failed all of his exams and in his second year had occupied himself with re-sits following which he changed his course. He was expected to graduate with a 2:2. The Judge found that he would have made a living in the financial services sector where his personality and possible contacts would have been an advantage and made specific findings as to the level of earnings which he would have obtained. For example £45,000 gross by the time of trial, £50,000 from October 2005, £55,000 from October 2011 and £65,000 from October 2021. The Judge described the correct approach to this type of claim as "recently and authoritatively summarised by Potter L.J. in Herring -v- MOD" and described his task as being to do his "best with the available evidence, proceeding with caution so as to steer a course between, on the one hand, any undue expectations on the part of claimants and, on the other, any unwillingness on the part of defendants to recognise the true financial consequences of the injury for which they are responsible."
The future?
12. Where does all this leave the present position? It can be said that for young claimants the career model is now the first step in valuing the loss. This gives a baseline model. The second step is to evaluate the chance that the career model may need to be adjusted to allow for the chance of unusually high earnings. What appears to have been discarded is the kind of automatic discounting in respect of the uncertainties associated with future events that was a feature of the approach adopted by the Courts prior to the Herring case.
13. From a tactical point of view the Herring approach makes it crucially important to carry out the following:-
(i) From the Claimant's perspective to assess at an early stage the nature of the likely future career path. This could involve school reports, psychological assessments, references to the abilities of siblings, witness statements from contemporaries within employment.
(ii) From the Defendant's perspective an early anticipation of the reasonable career model should be appreciated in order to challenge its principal contentions.
(iii) To obtain permission from the Court to rely upon an appropriate employment consultant to map out the likely "reasonable career model". The Herring case will see a resurrection in the use of employment consultants.
14. The full implications of the Herring case still have to be mapped out. However it is clear that the post-Herring jurisprudence indicates that Herring is the authoritative and definitive approach and, to the benefit of claimants, the orthodoxy now rests with the concept of the "reasonable career model" assessed on a conventional multiplier/multiplicand basis.
PAUL KILCOYNE
1 Temple Gardens
Temple
London EC4Y 9BB
|
