England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
(HIS HONOUR JUDGE MEDAWAR QC)

		Royal Courts of Justice Strand London, WC2
		6th July 2006

1. LORD JUSTICE HUGHES: This is a defendnat's appeal upon the quantum of damages in a personal injury case. It is not suggested that any point of general principle arises, but it is contended that in two significant areas the judge's conclusions were wrong on the evidence and incorrectly reasoned. Those two areas are past and future losses of earnings. The claimant suffered an accident in December 1999, when he was a student and working part time in one of the defendant's stores. He was then 19. He broke his left femur and had a nasty series of deep cuts, lower down the left leg. There were two operations in the first few days and the femur was repaired with screws and a long intramedullary nail. Initially his recovery followed a more or less conventional course, not, it should be noted, without a good deal of determination and effort at rehabilitation on his part and despite the onset of a degree of posttraumatic stress.
2. However, in August 2001, 20 months after the accident, the conventional further operation designed to remove the screws and the long nail succeeded as to the screws, but failed as to the nail. The long nail is still there. After that later operation, although again the claimant tackled his rehabilitation with effort and energy, he suffered considerably more trouble. His problems included frequent breakdown of the wound and, apparently secondary to the antibiotics prescribed, prolonged irritable bowel problems with recurrent diarrhoea and pain. That meant a colonoscopy, and the symptoms persisted into 2002. He was still using one crutch well over a year after this further operation. As a result of the various continuing problems he became depressed, and he was still taking antidepressant drugs into the summer of 2004. Before the accident he was the kind of young man who had been an enthusiastic, though he would accept entirely amateur, recreational sportsman, playing rugby and football.
3. As for his career, at the time of the accident he was in the course of a one-year foundation study at art college with a view to going on to a university degree in the art field, such as graphic design. That course finished in the summer of 2000, about six months after the accident. The claimant decided over that summer not to go on to university as originally contemplated, and instead he went to work for the Abbey National Bank as a branch customer manager. He started there on 21 August 2000. It was not suggested that that change of direction was attributable in any manner to the accident, and in any event, no loss was suggested to have flowed from it. Like plenty of people in their late teens, he changed direction after testing out the water in the foundation course.
4. A year after that, after the follow up operation in August 2001, the claimant went back to work at the Abbey National after only four to six weeks, still on crutches and, as it turned out, probably sooner than was really wise. Despite his best efforts he was unable to cope, and by November 2001 he had to take sick leave after all. There then ensued the complications of the bowel troubles and the depression, on top of the purely physical leg problems. He remained employed by the Abbey National but eventually, in the summer of 2002, after nine months or thereabouts in which he had been unable to work, he decided not to try to go to go back, but rather to enrol at the Middlesex University to read sports rehabilitation and injury prevention. At the end of the first year of the three-year degree he modified that to sports science.
5. By the time of the trial in September 2005, he had just completed his degree. It was by then nearly six years from the time of the accident and he had settled on a plan to teach. He hoped to teach physical education, but he would have a second string to his bow in special needs education and perhaps a third in performance art teaching. He had a job as a learning support assistant which he was just about to start, and he proposed to follow it with a one-year post graduate certificate of education course to qualify as a teacher.
6. Because he had spent the academic years 2002/03, 2003/04 and 2004/05 taking his degree, it came about that he claimed past loss of earnings for those three years. The defendants contended that his absence from paid employment during those three years was the result of a voluntary career change, which they said had nothing to do with the accident. Hence there was a dispute as to whether the loss of earnings during those three years was recoverable or not. The judge held that it was. The first part of the defendant's challenge to his decision is directed at that finding. In relation to past loss of earnings, there are two subsidiary challenges to the judge's award. The first is to the inclusion of lost casual income from stewarding at premier league football matches at Arsenal's ground, and the second is to the failure to deduct what is said to have been a small overpayment of wages made by the defendant to the claimant in error.
7. The claimant's potential earnings as a teacher were, as at the date of trial, likely to be less than his potential earnings had he stayed in retail banking. Thus it came about that he claimed future loss of earnings. On his behalf, the case was put as calling for what was described as a combination award. First there was a claim for a lump sum, not based upon multiplier and multiplicand, but assessed upon the basis adopted in Blamire v South Cumbria Health Authority [1993] PIQR Q1. Secondly, there was a claim for an award for handicap on the labour market, universally known as a Smith v Manchester award, after the decision of that name reported on [1974] 17 KIR 1.
8. The defendant's case was, and is, that the claimant is and has been for some time now perfectly able to resume his career in retail banking if he chooses, and that if he now chooses to pursue a different course that is not something which is the result of the accident, or which can sound in damages for future loss of earnings. It is the defendant's case that the most that should have been awarded in respect of future loss of earnings is a modest Smith v Manchester award. That is the second principal area of challenge to the judge's decision. There is no challenge to the judge's various awards for pain and suffering and loss of amenity, special damages, past care and the like, although there were some disputes about those areas at the trial.

Past Loss

9. The issue on the three years' loss of earnings during the degree course at university was whether the lost earnings were attributable to the accident, or to an independent decision by the claimant to change careers. The judge found that it was the former. He said, at paragraph 11 of his judgment:

"I have come to the conclusion that it was perfectly reasonable for this young man to decide in the circumstances in which he perceived himself to be, and with the ongoing problems he had, he did not feel fit or confident enough to return to Abbey National. I find that was reasonable."

10. The defendants complain about that finding. First they say that it was not justified on the evidence, particularly the medical evidence. Secondly, they say that it was inadequately reasoned by the judge.
11. There was no doubt that the Abbey National job would have been available to the claimant during the three years that he spent at university. His senior at the bank gave evidence to that effect. She plainly thought highly of him, because he had done very well when there. The evidence of the various doctors instructed, in their respective disciplines of vascular surgery, gastrointestinal and bowel medicine, orthopaedic surgery and psychiatry, were that from a purely medical point of view the various injuries which they had independently looked at did not any of them, on their own, render the claimant disabled from returning to the Abbey National job sometime around the end of 2002. To some extent, and particularly in the case of the orthopaedic surgeons, the evidence said no more than that the ordinary patient would be fit at such and such a point. But it is correct that, applying themselves separately to the component parts of his condition which each of them examined, their evidence was that, taken on their own, those conditions would not have disabled him from the Abbey National work.
12. Against that background the judge also had two areas of evidence. First, from a number of sources, including the claimant's manager at the Abbey National and also the orthopaedic surgeon, that this was a claimant who was entirely genuine in his approach, and who had made efforts well beyond the ordinary to rehabilitate himself after the initial accident and after the partially failed operation in August 2001. Secondly, and importantly, the judge had the evidence of the claimant himself as to his condition when, in the summer of 2002, he made the decision to enrol for the degree course. It needs to be borne in mind that at that point about a year had passed from the partially failed operation in the summer of 2001, and the claimant had been unable to work, despite trying to do so. He had had a thoroughly unpleasant time with a combination of physical difficulties and depression, and at the age of 21/22 it would hardly be surprising if he had not thought it necessary to reassess his position carefully.
13. The evidence that he gave, at a number of points, was that he was extremely disappointed not to be able to continue at the Abbey National with a job that he had enjoyed and that he had been good at. In both of those assertions he was supported by his manager. He gave evidence that he was feeling extremely depressed and his confidence was very low; he was having problems talking to people; communicating was hard. That, although he initially gave it as a description of his condition in 2001, he said continued into 2002. He felt that he had missed his opportunity at the Abbey National, and he felt that he definitely did not have the confidence that he would have needed to do that job. His confidence to talk to people, he said, was completely shattered: "I just could not see myself doing that job any longer."
14. The defendants had available to them a statement which had been made by the claimant's mother in which she had expressed the view that, in her opinion, her son had always wanted to go to university, and that that was the reason for his decision in the summer of 2002. That was put squarely to the claimant, as one would expect, by Mr Shapiro on behalf of the defendants. The claimant said, in effect, "Well, that may be my mother's opinion, but it isn't the fact". Mr Shapiro also put to him distinctly that it had been a free choice, independently of the accident, to take up the degree course, and he put to him that if he had felt confident enough to start a sports rehabilitation course, his confidence would have been sufficient to do the Abbey National job. The claimant politely demurred. He said:

"I was feeling pretty down. I think at the time I was trying my best to get back to fitness and to a career. I knew at that time I couldn't get back to the Abbey National. I definitely didn't have the confidence to speak to people. My communication skills got so much worse and I felt a real lack of confidence."

Pressed, he made the remark to which I have already referred:

"You know, I was really good at that job [meaning the Abbey National]. I was looking forward to going back to it."

15. On that evidence the judge had to assess the claimant. He saw him. He saw what he said and he saw the way that he said it. He had to put it in the context, certainly, of the medical evidence, but it was for him to decide whether the claimant's decision in the summer of 2002 was the consequence of the accident, and if it was, a reasonable consequence of the accident or not. The judge was, notwithstanding the medical evidence, I am quite satisfied, fully entitled to conclude, as he did, that the claimant's evidence was truthful and accurate, that the cause of his decision was the accident and that the decision was a reasonable one. The fact that the judge did not specifically refer to mother's evidence, or for that matter to the medical evidence, does not by any means carry the implication the he had forgotten it. This was an extempore judgment delivered after a trial which had taken something around a day and a half, no doubt in a busy list.
16. The supplemental submission is made that, having thus decided, the judge should have addressed the question whether during the three years at university the claimant's confidence had sufficiently returned for him to return to the Abbey National and turn his back on the degree course that he had started. It is suggested that, as at the beginning of his second academic year, that is to say, in or about September 2003, at the point at which he modified his course, he was in that position. It is not entirely clear how far that particular proposition was advanced to the judge; to an extent, submissions were at the judge's instigation taken comparatively briefly. But even if it was, I for my part am quite satisfied that that is a contention which was doomed to failure. If it was once a reasonable decision, attributable to the consequences of the persisting effects of the accident, for the claimant to make himself qualified for an alternative career, it must have been attributable likewise, and likewise reasonable, for him to complete the course. He would have been justly criticised if he had not completed it. To put it another way, a decision not to abandon a qualification upon which he was embarked cannot, as it seems to me, be characterised as an unreasonable failure to mitigate his loss.
17. The criticisms of the judge's reasoning have their foundation in the fact that the judge introduced his finding as to the attributability of the move to the university degree, with a reference to the issue of whether there should be a Blamire or Smith v Manchester award. The move to the university degree was a matter of past loss; any question of a Blamire or a Smith v Manchester award were related to possible future loss. The judge does appear to have gone straight from his assessment of general damages for pain, suffering and loss of amenity, to future loss and at that stage, temporarily to have forgotten past loss altogether, for he made no award for past loss until he was reminded of the omission. It seems to have been a reference that he made to the claimant's life having been thrown into the melting pot which caused the judge to be reminded that he had not yet made a finding on the issue which had been argued before him as to the reason for the switch to the university course. That is how, as it seems to me, he came then to address that question.
18. It does follow from that that there is some justice in the criticism of the form and construction of the judgment. This was, however, an extempore judgment, delivered after a short trial. Extempore judgments are desirable as well as necessary. They save litigants money and they free courts to deal with other cases. This judgment may not have been ideally formed (indeed it was not), but its finding on the critical question of the attributability of the move to the university in September 2002 is perfectly clear, is intelligible and is fully supported by the evidence.
19. As to stewarding at Arsenal, the issue raised before the judge was whether the claimant would have continued in that part-time occupation once he was working full time at the Abbey National. As for that, he said that he was an Arsenal fan and that stewarding was an engaging way in which he got paid to watch. The judge did not deal separately with this issue. He accepted, however, the total claim made by the claimant for past loss, although he did so without further analysis; and although I, for my part, take the view that he ought to have dealt with this issue, it is perfectly clear to me that his finding on the evidence was, and really could only have been, that the claimant was accurate and truthful and that the stewarding would have continued.
20. The point relating to suggested overpayment involved a sum of £690.78. The judge did not deal with that aspect of the case separately in his judgment. He accepted, as I have already said, the claimant's claim to past loss as a whole. Once again, he ought to have dealt with it, but on analysis here it turns out that, whilst it was contended that there had been an overpayment, the evidence did not really show one way or the other whether there had or there had not. In those circumstances there is no basis for criticising the inclusion of the whole of the claim for lost past earnings without deduction for any supposed overpayment.

Future Loss

21. The judge said this:

"Well, looked at in the round, I have got to make some allowance in monetary terms for the upheaval in his life, whether dealt with by Smith v Manchester, or some calculation as to future loss, and I have come to the conclusion that approaching it in an all round way in a Blamire sense, and I do not propose to set it out in more detail than that, that the sum of £50,000 would be a reasonable and appropriate".

He went on to indicate that that included some pension loss.

22. A Blamire award and a Smith v Manchester award may be combined but they are quite distinct. The former is appropriate where the evidence shows that there is a continuing loss of earnings, but there are too many uncertainties to adopt the conventional multiplier and multiplicand approach to its quantification. The latter is nothing to do with a continuing loss. It is an award for a contingent future loss, in the event of the claimant losing his current job, where, as a result of the accident, he would then be at a handicap on the labour market at which he would not have been but for the accident. That the judge took the two together is probably in no small part due to the fact that that is how he had been asked to do it by the claimant. Having seen the transcript of the evidence and argument, it appears that at least at that stage, the judge had indicated that he was aware of this distinction. It is nevertheless the case that his judgment lumps the two together without any kind of analysis and indeed, in the passage which we have just cited, appears to treat them as alternatives.
23. Importantly, the judge nowhere addressed the question of whether any continuing reduction in the claimant's earnings – that is to say, shortfall between what he would have earned if still at the Abbey National, and what he will in future earn as a teacher – was attributable to the accident or the result of a free choice made independently of the accident by the claimant. On this critical question the evidence before the judge was this. First, his superior from the Abbey National said that she would have him back at any time and that he would be fast tracked to the higher earning position of financial adviser. Second, there was no suggestion that the claimant was in any sense now unfit to do that work, whether for reasons of lost confidence or otherwise. Teachers arguably need more confidence than retail bankers do. Thirdly, the claimant's own evidence was that as a result of his degree course and his own personal development he had decided that a career in teaching would be more rewarding than a career in banking. He said this:

"I have gone through university. I have worked hard at that, and it is a different career that I am after now. That is why I want to go into teaching. I do not want to sound cheesy, but I do want to make a difference in some way in my employment".

He added that he was a different person now.

24. That choice was one which he was wholly entitled to make. Many would think that it reflects a good deal of credit upon him. It was, however, on that evidence of his own a free choice and it was not one required by the accident. Indeed, if anything, the accident meant that he was taking a rather greater chance embarking on a career in physical education than he would have been in banking. On his behalf, Mr Latimer-Sayer understandably came close to accepting that proposition in disclaiming before us any proposition that a continuing loss of earnings for the rest of this man's working life could be claimed to be recoverable from the defendants. He contended that was why he had sought a Blamire award.
25. That, however, misses the point. A Blamire award is not a substitute for showing that there is a continuing loss of earnings attributable to the accident. It is merely a means of quantifying it when such a continuing loss is shown to exist. It was one thing to say that it was reasonable and the result of the accident for the claimant to requalify and not to abandon his degree part way through. It is quite another to say that for the rest of his life, a man in his mid twenties could properly say that the fact that he was earning less than if he had chosen to go back to retail banking, which was available to him, was something for which the defendants had to pay. The judge nowhere found that this could be said, because of the way he lumped together the Blamire and Smith v Manchester awards. If the judge had separated them, as he needed to do, notwithstanding the way in which the case was pleaded, then he would have confronted this important issue.
26. Except in one respect, I am, for my part, quite unable to see how on the evidence the judge could possibly have concluded that there existed any continuing loss of earnings attributable to the accident which fell to be approximated via the Blamire process or any other. To say that is not, I am satisfied, to be guilty of weighing the claimant's conduct in nice scales at the instance of the tortfeasor, which course of action I respectfully disapprove as much as did the court in Melia v Key Terrain [1969] noted in Kemp v Kemp at 13.007.
27. The solitary respect in which, having heard argument, it does seem to me that there was a loss of earnings projecting shortly into the future was this. Even if he had now returned to the Abbey National rather than making the free choice that he had to pursue a different career, the claimant would not immediately have been a financial adviser, as he would been but for the accident. It would have taken him, on Miss Gill's, his superior's, evidence, something between a year and 18 months to achieve that position. In the meantime there would have been, even without the career change, a shortfall in earnings. The assessment of this loss never fell to be made by the judge because the point was not addressed.
28. We have been invited, if minded in any respect to allow this appeal, to consider whether we could properly assess damages ourselves rather than put the parties to the expense of remitting the case to the judge. In this respect it seems to me that we can. The evidence is there, and it is not a matter of assessing disputed evidence or forming a judgment as to the reliability of any witness. The evidence demonstrates that the relevant shortfall is at the rate of £9,500 per annum net, and in those circumstances, for the year to 18 months period which was in question, I would for my part award the sum of £12,000.
29. The judge's global figure of £50,000 included a loss of pension. The same applies. We have been provided with the figures and invited to assess it for ourselves if necessary – and it is necessary – on the evidence. The most that could be proved was that the lost employers' contributions to the claimant's pension during the three years when he was at university, which no doubt in due course have produced an increased pension and was thus treated by everybody as being future loss. It would have run at the rate of £50 per month, that is to say £600 a year, three years is £1,800. I would myself award that figure for that loss.
30. That leaves the question of handicap on the labour market. This involves assessing two risks. The first is that the claimant will be out of work in the future for any reason and the second is, if he should be, that because of the accident he will be less able to obtain fresh employment or employment at equivalent pay. As to the first risk, teaching is a relatively secure profession, even in times when the labour market is a good deal more volatile than it used to be. The risk of losing a job in teaching is not high, except in the present case to the extent that the claimant hopes to teach physical education, and there is a real possibility that his physical limitations in running and in general athleticism might mean that he could not carry on teaching that subject. So the judge expressly found, and on the evidence including that of the orthopaedic surgeon, Mr Briggs, it clearly was a possibility. If he were to be unable to carry on as a physical education teacher, he will of course have the alternative teaching roles of special education needs teaching and perhaps performance arts teaching. I would myself not assess the risk of his not obtaining a replacement job of either kind in teaching as particularly high.
31. I bear in mind, however, that he will have to declare a past episode of depression which lasted for some little time. That is the kind of thing by which employers are likely to be affected, and it may well lower him down the shortlist in respect of any job for which he is applying whether in teaching or otherwise; more particularly perhaps were he in the future to find himself back, for any reason, in the commercial field. The risks of loss of job and of failure to obtain a replacement are accordingly relatively slight, but they are there; and this claimant is only now in his mid twenties and has virtually the whole of his working life before him. I am myself unable to accept the proposition that this should be met by an award measured by two or three years' purchase of present earnings. That would be to contemplate the proposition that, because of this accident, he is likely to be out of work for two or three years over the course of his career. I do not think that that is demonstrated. The risk, however, is there, and it will be there for a long time.
32. I would assess the proper award on a Smith v Manchester basis at £15,000. In those circumstances I would quash that part of the judge's order which awarded £50,000 for the future loss and I would replace it with an award of £28,800, that is to say the total of £15,000 to Smith v Manchester, £12,000 lost earnings whilst catching up, and £1,800 loss of pension. I would not disturb the judge's award for past loss.
33. Subject to my Lord's view. I would allow the appeal to that extent and hear from counsel as to the consequential effect, by way of interest and otherwise, on the global award.
34. LORD JUSTICE HUGHES: I agree, and therefore the appeal is allowed to that extent.

Order: Appeal allowed.