England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BRISTOL DISTRICT REGISTRY
(His Honour Judge Dyer)

		Royal Courts of Justice Wednesday, 6th June 2001

1. LORD JUSTICE LATHAM: This is an appeal from His Honour Judge Dyer given on 15th June 2000, in which he awarded the appellant a total of £242,907 damages and interest against the two respondents who were defendants to two separate personal injury actions brought by the appellant in respect of two separate road traffic accidents in which she had suffered injuries. The first accident took place on 11th September 1993 and resulted in a whiplash injury, together with hyperacusis (that is pain on hearing certain loud noise). The second accident occurred on 12th October 1996 in which she sustained injuries to her lower back, which exacerbated her existing condition. The judge dealt with the attribution of injuries by dividing responsibility for the overall award as to 60 per cent against the first respondent and 40 per cent against the second respondent. Of the award, £101,196 represented lost earning capacity, and it is in respect of that part of the award that this appeal is brought.
2. At the time of the trial the appellant was 27 years of age, having been born on 12th September 1972, and was married with no children. Before the first accident she had been training to be a civil engineer. She was working for Devon County Council. She continued to do so thereafter for a time after the first accident until she was medically retired in 1996, not long before her marriage. Her employment record was chequered with periods of ill health, quite apart from the injuries received in the accidents, as a result, it would appear, of a psychiatric condition manifesting itself as physical complaints. However, it is clear that her retirement was the result of her cervical injury and its sequelae which she received in the first accident. Evidence from the principal engineer of the County Council was that, apart from her health, she was progressing satisfactorily towards qualification as a civil engineer, and would have retained employment in the County Council subject to her health and any other ambitions she might have had. There was evidence that she was progressing after the first accident and could have been expected to resume work, at least office work, but for the second accident. The result of the second accident was that she could never do more than a part time job, such as the one she had at a local chemists working 15 hours a day. The judge concluded that that would increase to 20 hours a day after the trial was over. The judge expressly rejected the respondents' argument that she was capable of further work and that, in essence, her case that her career had been terminated by the injuries was false, or at least exaggerated.
3. On that basis the figures for future lost and residual earning capacity were agreed. Past loss forms no part of the present dispute and need not concern us. As to her future lost earning capacity, a figure of £75,125 was taken as the basic lost earnings figure as an engineer from the date of trial to mid-2007. Thereafter, the gross lost earnings figure was agreed at £14,700 per annum. Against that had to be set her residual earning capacity which, in the judge's findings that she would work 20 hours a week, was agreed at £4,000 per annum. The judge further found that she would have been the main breadwinner but for the accident, as her husband was not a high earner, and she would not have taken early retirement; her lost earning capacity had therefore to be calculated on the basis that she would have kept on working, if she possibly could, until she was 60.
4. On behalf of the appellant it was submitted that the appropriate multiplier from trial to the age of 60, which was the age at which she would probably have retired, based on the actuarial tables using a 3 per cent discount rate, would be 20.8, although he accepted that a reduction of one or two multipliers might be necessary to reflect the uncertainties of the appellant's future employment pattern. On behalf of the respondents, it was submitted that the appropriate multiplier to reflect these would be 13. The factors which were urged on the judge on behalf of the respondents were that the actuarial multiplier only reflected mortality and early receipt, whereas there were a number of factors in the present case which meant that a substantial reduction was required. The respondents referred to the risks of unemployment which might arise were she to move from the County Council into the private sector. There were the risks of ill health. There had been ill health in the past which had affected her employment pattern. That could well have been replicated in the future. There was the risk created by her somatization disorder to which I have referred. There was the possibility of her improving her actual earning capacity for the future. There were the uncertainties which might surround the birth of any children that she and her husband might have and the need for their upbringing. There was the question of whether any credit ought to be given for domestic assistance to help in the home to look after the children were she to continue to work, and there was the possibility that she might have retired early.
5. The judge in his judgment dealt with this aspect of the case as follows:

"I agree with Mr. May [the appellant's counsel] that the claimant is doing her best. I do not consider there is any evidence that she would have taken early retirement. If she had become a civil engineer she would have taken some breaks for having up to two children, but I consider she was going to be the major breadwinner, she would not have retired early. She would of course have been entitled to some maternity leave, as I have said.

I take the figure for the multiplicand of £14,700 from mid 2000 to retirement at 60. The agreed figure of £75,125 is from the period to mid 2007, that is seven years. That proposed figure of £75,125 gives no credit for immediate payment. There are all sorts of problems that would have beset this family. Nor have I overlooked what I find to be the very small risk of somatoform disorder. I have to consider the evidence in the light of seeing Mrs Leete in the witness box. So far as the way in which, after all these troubles, and they have been considerable, she stood up, she gave her evidence clearly and, as I find, truthfully, there has not been any sign of it up until now. In my view it is a very small risk indeed, certainly no more than 5 per cent.

As to the period until 2007, it seems to me the right figure that I should award is £55,000, that is to be paid 60 per cent by the first defendant and 40 per cent by the second defendant....

Returning to Mr Featherby's [the first respondent's counsel] figures, I take his multiplicand of £14,700. I consider Mr Featherby is right in saying the figure for the multiplier should be 13. I have borne in mind Mr May's arguments but that is the multiplier I award. The multiplier takes into account the figures overall, including the period up to 2007. Mr Featherby argued that the full actual multiplier is agreed at 14.48 for the period after 2000 but this should be heavily discounted for the following reasons. Unemployment: the claimant contemplated private work up country, Severn crossing. Ill health: she had a poor health attendance record even before the accident. A pre-existing insurgent somatization disorder: in accordance with the agreed psychiatric statement, we cannot know if she would have developed other symptoms of her somatization disorder in response to any further stresses on her lifestyle. Maternity: the chances are that the claimant, like many women, particularly those with transferable skills, would have a career break. One can only speculate how long it would have been. The claimant claimed that she would be interested in two or three children: 10 years? I do not agree that she would have taken the career break for that time but she may well have had to take time off. Her reduced income during child minding, house husbanding etc. As I have said, so far as household assistance is concerned I do not find they will need paid housekeeping; that is very different from saying that from time to time the husband should not have to stay at home to mind the children, practically everybody does that, from the top of this country to the bottom, do they not, with a new baby?I do not agree that the claimant's and the husband's evidence about his staying at home was wholly convincing. I think he will buckle to and do what is required.

I do not agree that she would have to take an early retirement. She was going to be the principal breadwinner here and if she could possibly have done so she would have kept on working, even if he had to take more time at home, because he would be earning a great deal less than she would.

Reverting to Mr Featherby's figures, I take the agreed multiplicand at £14,700 but I consider Mr Featherby is right in saying that the figure for the multiplier should be 13. I have borne in mind Mr May's argument, but that is the multiplier I award. This takes into account the figures overall, including the period up to 2007. I have discounted the after 2007 figure in the manner suggested by Mr Featherby when he said in argument that heavy discounting he considers it right to make from 14.5 to 7.5 but adding in the figures up to 2007 gives an overall multiplier of 13 or 14, and I have awarded 13. The sum will have to be done in relation to that."

6. Mr. May on behalf of the appellant submits that the judge, in coming to the conclusions that he did, erred in principle. First, he gave a discount on the first tranche, that is the figures up to 2007, which did not take into account the fact that an allowance had already been made for early receipt by the use of the actuarial tables. Second, the judge's conclusion that an overall multiplier of 13 was perverse on the judge's own findings of fact. The judge had expressly found in relation to maternity at an earlier stage in his judgment that, although she may have wanted more children, it was highly likely that the appellant would not have had more than two, and the judge was uncertain whether she would have more than one. She would have been likely to take only a matter of months off after the birth. As to the risk of health problems affecting the future, the only finding expressly made by the judge was as to somatization, as to which the risk was described by him as very small. There was no finding by the judge as to the level of the risk of unemployment to set against the finding that she would have kept on working if she could and had been employed in the relatively secure world of the County Council. Mr. May submits that there was no proper basis for the conclusion that the multiplier should be reduced so far from the actuarial multiplier based on 20.8, as the judge did, to 13.
7. In assessing these submissions, we accept that the judge was best placed to determine the facts and obtain an overall impression of the witnesses. We accept that this court should not interfere unless it considers that the judge clearly misdirected himself or has produced a manifestly unjust result on the evidence before him. In the present case the position is undoubtedly complicated by the way the figures were presented to the judge. On the one hand, a lump sum was agreed as the basis for assessment of the lost earning capacity for the period to the middle of 2007. On the other hand, an overall multiplier was used by both sides for the purposes of their submissions as to what should have been the total award. It may be that it was this approach which caused some difficulty for the judge. I can readily understand why the parties agreed the lump sum to 2007. It avoided complicated arithmetic based on increased earnings during that period. The judge was entitled, as he did, to use that same method for assessing what is, after all, a sum which could not be precisely calculated. He was entitled to take into account the fact that, if the appellant was to have children, this is the most likely period in which they would be born. Equally, the other uncertainties could properly be brought into play in order to determine the extent to which there should be a reduction in relation to that figure. In these circumstances a reduction from the agreed figure was appropriate, and it seems to me that the deduction was within the bounds of what was appropriate to reflect the uncertainties to which I have referred. It is unfortunate that the judge, however, expressed it as reflecting only early receipt. That had already been taken into account by the calculation being based upon the actuarial tables. But I am not persuaded that the judge was doing more, in the use of that phrase, than saying that he had to take into account, in relation to the period to 2007, all the future uncertainties to which I have referred.
8. What in my view then went wrong was that the judge failed properly to reflect the fact that he had used this lump sum approach for the first period when he went on to consider the overall award. He should have considered the multiplier appropriate for the balance of the period from 2007 to the appellant's retirement age. Clearly, he could use an overall multiplier as some sort of yardstick, but none the less he was, having used the lump sum approach to 2007, required to look at what was the appropriate multiplier for the period of 2007 onwards for the purposes of coming to his final award. Had he done so, he would have appreciated that he had already made allowance for the employment uncertainties and the uncertainties created by maternity within the period up to 2007. The multiplier using the actuarial tables for the balance of the period he correctly identified in his judgment as being 14.48. The effect of superimposing an overall multiplier at that stage of the reasoning was that he masked the true effect. The multiplier appropriate for the period from trial to 2007 was 6.32. The consequence was that a multiplier of 6.68 was being awarded by him for a period of potential employment of 25 years, albeit to be discounted for early receipt. In my judgment, that could only be justified on the basis of clear findings as to the vulnerability of the appellant in the employment market. There were no such clear findings in the judgment of the judge. On the contrary, he was impressed by the appellant as a witness. As he said, she would have been the breadwinner and accordingly would have wanted to work as long as possible. The only risk of ill health, which the judge identified, was described by him as only representing a small risk. Maternity was more appropriately reflected in the award to 2007, acknowledging the difficulty of an appellate court making findings without having heard the evidence. I am of the view that the right multiplier to reflect the uncertainties found by the judge from mid- 2007 to the date of retirement is 10.
9. The consequence seems to me that there should be a further adjustment than that which was made by the consequential working out of the figures. The figure found by the judge as appropriate for lost earning capacity to 2007 included risks in relation to interruption of employment which logically apply to her residual earning capacity as well as her potential earning capacity. It follows that it seems to me that the same proportionate approach should be made to the reduction of the credit to be given to the respondents against the sum which is awarded for the lost earning capacity. The figure awarded by the judge amounted to 73 per cent of the agreed figure. 73 per cent of the £25,280, which was the credit applied to the relevant period, being a multiplier of 6.32 applied to the multiplicand of £4,000, produces a total figure of credit for that period of £18,454. A further adjustment needs to be made to the figures awarded by the judge as a consequence of the conclusion which I have reached. The judge reduced the figure which was claimed for lost pension rights to reflect his assessment of the appellant's earning capacity and the chance of her earning a small pension in any event. The agreed base figures were £50,000 for the lost pension income and £11,000 for the lost lump sum. The judge reduced these by 33 per cent to reflect his reduction in earning capacity and a further 7 per cent to reflect the chance of her receiving a pension in future. My assessment of her lost earning capacity would therefore require a reduction in the pension claim of only 25 per cent. The additional reduction of 7 per cent remains an appropriate reduction. The total reduction is 32 per cent, making a total figure of £47,580 for the lost pension. With the adjustments that I have indicated I would allow the appeal.
10. LADY JUSTICE ARDEN: I agree that the appeal should be allowed to the extent indicated in the judgment of my Lord, Lord Justice Latham, for the reasons that he gives.
11. LORD JUSTICE TUCKEY: I also agree.
Order: Appeal allowed; agreed minute of order to be supplied to the court.