England and Wales Court of Appeal (Civil Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
SHEFFIELD DISTRICT REGISTRY
ON APPEAL FROM DISTRICT JUDGE YOUNG

		Sheffield Law Courts 50 West Bar, Sheffield S3 8PH
		21st November 2003

Mr Justice Nelson:

1. This is an appeal against an order of District Judge Young made at the Sheffield District Registry on 12 August 2003 when she gave general directions in the case. The only part of the order which was in contention between the parties, and hence the only part of the order which is the subject of an appeal is the order that the expert evidence of an actuary, dealing with the calculation of multipliers, should be given by the report of a single joint expert instructed by the parties jointly. The District Judge gave permission to appeal against this part of her order.

The background.

2. This is a Fatal Accident Act claim arising out of a road traffic accident on the 10^th October 1999 when Mrs Prigmore sustained injuries from which she died later that day. She left a husband, four adult children and a dependant daughter aged 14. At the date of her death Mrs Prigmore was 56 years of age, and her husband, the Claimant, 59 years of age. The case is unusual in that Claire, the dependant daughter, is disabled and will require care throughout her life. She has learning difficulties, is partially sighted and will never be capable of looking after herself independently. She is a patient and her affairs fall to be dealt with by the Court of Protection.
3. There is a substantial issue between the parties as to the amount of the multiplicand representing Mrs Prigmore's care for her daughter Claire. The Claimants put forward a figure of £30,000 - £40,000 p.a. whereas the Defendants contend that the dependency is of the order of £10,000 p.a.. In addition to this substantial dispute as to what services would have been provided and at what cost, there is another substantial factual issue relating to the number of years over which the services would have been provided by the deceased for her dependant daughter had the accident not occurred. The Claimant's multiplier is based upon the premise that the deceased would have continued to provide all these services for her dependants until the age of 82. The Defendant contends that the multiplier should end at the date when the deceased would have reached 70, upon the basis that some of the tasks which she undertook, such as decorating, heavier gardening and heavy housework, would have been likely to have ceased before that age, but others, such as watching over Claire, might have continued beyond that age. The overall multiplier from the date of death is 20.65 on the Claimant's case with a total claim of £763,948 and 11.05 on the Defendant's case, with a total claim of £94,235 .
4. Neither of these issues, relating to the amount of the multiplicand and the period over which the services would have been provided are issues which can be determined by the expert evidence of an actuary. Indeed they are purely issues of fact.
5. On 8 July 2003 the Claimant's solicitors, Messrs Irwin Mitchell, wrote to the Defendant's insurers, Norwich Union and General Insurance, pointing out that in their copy Allocation Questionnaire that they had made provision for evidence to be obtained from an actuary. They proposed to ask the actuary to calculate the multiplier on two different bases, firstly on the Cookson v Knowles approach, as from the date of death, and secondly, as from the date of trial, as recommended by the Government Actuary in the explanatory notes to the Ogden Tables (4^th Edition). 'It would then be for the parties to argue at trial the approach to be taken.' The Defendant's insurers responded by stating that actuarial evidence was not necessary as the calculations were to be made in accordance with Cookson v Knowles. The Claimant's solicitors then sent them relevant data, options 1 to 3 for the calculation of the multiplier for future loss of dependency, and a summary table.
6. Option 1 calculated the dependency in accordance with the Ogden Tables from the date of death and produced a post trial life multiplier of 15.92; option 2 calculated the multiplier from the date of trial in accordance with the Ogden Tables and produced a post trial life multiplier of 18.22 having adjusted the figure for the possibility that the deceased might have died in any event before the date of trial; option 3 calculated the multiplier upon the basis of the proposed compromise calculation suggested by David Kemp QC, which produced a post trial life multiplier of 17.94.
7. In their case summary prepared for the CMC on 12 August 2003 the Claimant's solicitor stated that the calculation of the multiplier for future loss of dependency was critical to the case and pointed out that the different approaches produced a multiplier varying from 15.92 to 18.22, a difference of 2.3 which would potentially impact upon the value of the claim 'in the order of £60,000 - £70,000.' They contended that the traditional method of calculating the multiplier as from the date of the deceased's death led to an erroneous result which was addressed by the Ogden Working Party when they prepared the Ogden Tables (4th Edition). The Claimant's solicitors quoted from the explanatory note of the Ogden Tables (4th Edition) dealing with the calculation of the present value at the date of trial of the dependency during the expected future joint lifetime of the deceased and the dependant. The passage quoted is as follows:-

". A set of actuarial tables to make such calculations accurately would require tables similar to tables 1 – 36 but for each combination of ages at the date of trial of the deceased and the dependent to whom compensation is to be paid. The working party concluded that this would not meet the criterion of simplicity of application which was a central objective of these tables and recommends that, in complex cases, or cases where the accuracy of the multiplier is thought by the parties to be of critical importance and material to the resulting amount of compensation (for example in cases potentially involving very large claims where the level of the multiplicand is unambiguously established), the advice of a professionally qualified actuary should be sought. However for the majority of cases, a certain amount of approximation will be appropriate, bearing in the mind the need for a simple and streamlined process, and taking into consideration the other uncertainties in determination of an appropriate level of compensation. The following paragraphs describe a methodology using tables 1 – 36 which can be expected to yield satisfactory answers."

8. Relying upon this passage the Claimant's solicitors contended that as the case involved a disabled child who would have remained dependant upon her mother for the remainder of her mother's life, with a substantial multiplicand in the region of £30,000 to £40,000, this was precisely the sort of case where the advice of an actuary should be sought. As the potential impact of the varying multipliers was of the order of £60,000 to £70,000, actuarial evidence was warranted. It was envisaged that the actuary would prepare calculations of the multiplier based upon the 'differing approaches' and that the Court would ultimately decide the correct approach to be taken.

The District Judge's decision.

9. The District Judge found that this was a complicated matter which might be difficult for a trial judge to decide without the assistance of actuarial evidence. It was a major claim with a potential value of £750,000 with a significant amount at stake even on the Defendant's contentions. The difference in multipliers made a difference to the figures and the costs of an actuary were proportionate to the amount in issue in the case. It appears from the District Judge's reasons for giving permission to appeal that she considered that the amounts involved, or in issue were £60,000 - £70,000 'for fairly small differences in multiplier'. As the Court of Protection was involved the Court would want to be 'doubly sure' that the figures were right.
10. The District Judge therefore ordered that an actuary appointed as a single joint expert would be of assistance to the Court.

The parties' contentions.

11. The Defendant contends that the District Judge fell into error by failing to understand the purpose for which an actuary was to be called. The actuary could not give evidence on the question of principle, namely whether the multiplier should be calculated as from the date of death or as from the date of trial as this issue had already been decided by Cookson v Knowles [1979] AC 556 (see also White v ESAB [2002] PIQR Q76), but only on the question of calculation, that is, once the principle had been established what should the multiplier be. Although in some cases the issue of joint lives in a fatal accident case could give rise to complications it did not do so here as the dependant child's life expectancy was considerably greater than that of her deceased mother. Only a small part of the Claimant's maximum difference of £60,000 - £70,000 could be the subject of actuarial calculation of the right number. By far the greater part of the difference was attributable simply to the question of principle, as could be seen from the Claimant's case summary. The difference of 2.3 in the multiplier was represented by the difference between the date of death calculation of the multiplier and the date of trial calculation of the multiplier both based on the Ogden Tables.
12. The fact that no actuarial evidence could be admissible on the issue of principle, to which much of the £60,000 - £70,000 difference could be attributed, does not appear to have been understood by the District Judge on the basis of the submissions made to her. Her judgment contains no reference to this, nor to the fact that the issue of principle had already been decided by the Courts. She appears, the Defendant submits, to have conflated the question of principle and the question of calculation.
13. The Defendant accepted that the case was complicated but submitted that the addition of actuarial evidence would simply make it more complicated. The only area of complexity arose out of ascertaining the multiplicand and the factual issue relating to the period over which the services would continue.
14. The fact that there was a patient and the Court of Protection was involved was irrelevant and if the District Judge was influenced by that, which she appears to have been, she took into account a matter she should not have done.
15. One of the main purposes of the Ogden Tables is to provide a simple and certain source from which parties in personal injury litigation can make the appropriate calculations. Actuarial evidence is only necessary in exceptional cases and this is not one of them. The case of Cooke v United Bristol Health Care [2003] EWCA Civ 1370 demonstrates that the Courts are reluctant to permit expert evidence save where it is absolutely necessary as, on the whole, it would simply increase costs unnecessarily in personal injury claims. If the Claimant's submissions are correct, actuarial evidence will be needed in all cases where one of the dependants is a patient and in any event in many Fatal Accident Act cases.
16. The Claimant submitted to me that this was a case management decision by an experienced District Judge. It was a complex and unusual Fatal Accident Act claim and the difference in figures was of significance. It was accepted by the Claimant that the major difference between the parties was the multiplicand and that the Court would have to decide over what period the multiplier should extend. Thus for example in relation to D-I-Y the Court would have to determine how long the deceased would have been able to have carried it out.
17. Nevertheless an actuary can and indeed has assisted the Court as a joint report has already been prepared by Dr Pollock, dated 27 October 2003.
18. The involvement of the Court of Protection was a relevant issue for the District Judge to have taken into account. If for example the approval of a settlement is required in an infant's case and the Court of Protection has refused it, a Court would probably need actuarial evidence to assist resolving the dispute. Although the difference between the Claimant and the Defendant is mostly due to other issues, the difference attributable to multipliers of about £30,000 was a material difference and one upon which it was perfectly proper to conclude on the facts that actuarial evidence would be of assistance. The decision of Cooke was no more than a blatant attempt to defeat what the Lord Chancellor had already decided as to the discount rate and was irrelevant to the present case.
19. The District Judge had made a case management decision and in doing so had exercised her discretion properly. There was no error which was appealable.
20. At the invitation of both parties I considered Dr Pollock's report and his letter of instruction. I did so after the Defendant had concluded his submissions. The report expresses a preference for option 2, the date of trial calculation of the multiplier as opposed to the date of death calculation. In other words it expresses a view upon the issue of principle, which is not amenable to actuarial evidence on the authorities as they stand. Dr Pollock also recognises that the current method of using the Ogden Tables, although not perfect, is the only feasible method if actuarial advice is not to be required in every Fatal Accident Act case. He calculates the theoretically correct multiplier as 17.35 as from 30^th June 2003 i.e. notional date of trial. This represents 0.87 less than the Claimant's figure of 18.22. It is to be noted that this calculation is made on the basis of option 2, the date of trial, and not on option 1, the date of death, as established in Cookson v Knowles. This calculation produces some £26,000 less than the Claimant's own calculation under option 2 (£30,000 x (18.22 – 17.35) 0.87 = £26,100) c.p. the Claimant's calculation of the £60,000 - £70,000 which must also have been calculated on the lower end of the multiplicand of £30,000 - £40,000 (£30,000 x 2.3 = £69,000).

Conclusions.

21. The District Judge was exercising her discretion when she ordered the joint report from the actuary at the Case Management Conference. In order to appeal such a decision successfully an Appellant must show that the decision was wrong, that is that the discretion was exercised wrongly as indicated by Lord Justice Brooke in Tanfern Limited v Cameron MacDonald [2000] 1 WLR 391 in which he cited Lord Fraser's dictum in G v G [1985] 1 WLR 647. Lord Frazer then said that an appellate court will only interfere with the exercise of discretion if the decision maker has 'exceeded the generous ambit within which reasonable disagreement is possible'.
22. Whilst bearing in mind the breadth of discretion which a Case Management Judge holds and the necessary reluctance of appellate courts to overturn the exercise of such discretion, I have nevertheless concluded that the decision to permit a joint report from an actuary on the question of multipliers was wrong on the facts of this case. I doubt if the District Judge was given the benefit of the detailed analysis which I received on the difference between the question of principle and the question of calculation. There is no dispute between the parties that actuarial evidence is irrelevant on the question of principle as the Law Commission and the Ogden Working Party have already analysed the need for the multiplier to be calculated as from the date of trial rather than from the date of death. The resolution of which of those dates should be determined is a matter of law which does not require any further input from an actuary. The fact that the District Judge attributed the whole of the £60,000 - £70,000 difference to 'fairly small differences in multiplier' without distinguishing between the question of principle and the question of calculation demonstrates that she was not aware of this distinction, or that in the present case a substantial part of the difference is due entirely to the issue of principle. If on the other hand the District Judge was aware of this fact she was, on the face of her decision, not aware of the fact that actuarial evidence was not needed to deal with the issue of principle nor indeed deal with any Cookson v Knowles calculation. This ground alone is sufficient to make it necessary for the discretion to be re-exercised given that the decision based upon an erroneous ground. Had the District Judge been aware of the true situation she is likely to have exercised her discretion differently.
23. There is in my view another basis for challenging her decision. The involvement of the Court of Protection cannot be a reason in itself for the instruction of an actuary. It might, as Mr Tudor-Evans submitted to me, do so in exceptional cases where for example the Court of Protection has refused to give its own approval to a proposed settlement. It might then become relevant for a Court to obtain actuarial evidence but only on the question of the calculation of the multiplier rather than the question of principle. This is not a case where the Court of Protection have disapproved any proposed settlement. Any court wishes to ensure that it has reached a correct decision on multipliers in a Fatal Accident Act case. The fact that a patient is involved cannot affect the Judge's intellectual process but it does mean that more than one body is responsible for checking the appropriateness of the proposed settlement. None of these matters are however necessarily relevant to the question of whether an actuary should be called. Actuarial evidence may be irrelevant or inadmissible in cases which cause the tribunal the utmost anxiety. In so far as the District Judge considered that the presence of the Court of Protection and the fact that the dependant was a patient was relevant to whether or not a report should be obtained from an actuary, she was in error on the facts of this case.
24. The discretion must therefore be re-exercised, and it is appropriate having heard the matter fully argued that I carry out this task. It should be noted that actuarial evidence is irrelevant to any Cookson v Knowles calculation and, on the basis of the law as it stands at present the principles in Cookson v Knowles are likely to be applied by some, if not all courts. Dr Pollock's calculation of the theoretically correct multiplier is calculated on the notional trial date 30^th June 2003 not date of death. It should also be noted that the actuarial report received from Dr Pollock reduces the date of trial multiplier sought by the Claimant from 18.22 to 17.35. It does not therefore advance the Claimant's case, save in so far as it suggests that the question of principle should be resolved in favour of a calculation from the date of trial rather than the Cookson v Knowles basis, the date of death. As indicated, on this latter basis, the question of principle, actuarial evidence is inadmissible and unnecessary.
25. The case is certainly unusual in that Claire, the dependant's daughter is disabled and will require care for the rest of her life. There is however no particular complication arising over joint lives here as the evidence clearly shows that Claire's life expectancy is greatly in excess of that which her mother's would have been had she survived. Indeed, as the Defendant submits, the complications in this case are not due to the multiplier at all but are due to the ascertainment of the multiplicand and issues of fact on the period over which the deceased's services would have continued and to what extent.
26. The passage in the explanatory notes of the Ogden Tables (4th Edition) apply to the calculation of multipliers from date of trial. If the principles set out in the notes are nevertheless applied this case still fails to fall within that category of cases where actuarial evidence is necessary. The starting point is that the criterion of simplicity requires that in the majority of cases the tables alone will suffice for the purposes of the calculation. It is only where the accuracy of the multiplier is of critical importance in for example very large claims where the level of the multiplicand is unambiguously established that the advice of a professionally qualified actuary should be sought. Whilst this is a substantial claim it does not fall within the category of very large and the multiplicand is certainly not unambiguously established. The amount of compensation will be more affected by the findings as to multiplicand and the period over which the services would have been rendered than it will be by the precise multiplier.
27. For my part I am satisfied that the circumstances of this case are such that actuarial evidence is not required. The tables provide simplicity and ease of calculation. They may not be a perfect instrument but they have been adopted, as the Lord Chancellor's discount rate has been adopted, for the public policy reasons that 'certainty was necessary in order to facilitate settlements and save costs.' (See Cooke v United Bristol Health Care [2003] EWCA Civ 1370 per Lord Justice Dyson citing Wells v Wells [1999] 1 AC 345.)
28. I am therefore satisfied that the discretion was wrongly exercised, that the order for a joint expert report should be rescinded and the appeal allowed. In the ordinary course of events the Defendant should recover his costs which I will assess when the judgment is handed down, if they are not earlier agreed, unless of course either party wishes to make submissions upon this issue to me.