Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2011] CSOH 57
PD1143/09	OPINION OF LORD McEWAN in the cause MARTIN JOHN ALEXANDER BRAND Pursuer; against TRANSOCEAN NORTH SEA LIMITED (formerly GlobalSantafe North Sea Limited) and TRANSOCEAN DRILLING (UK) LIMITED (formerly GlobalSantafe Drilling UK Ltd) Defenders: ­­­­­­­­­­­­­­­­­________________

Pursuer: Smith, Q.C., McCrossan, Solicitor; Lefevre Litigation

Defenders: Armstrong, Q.C., Middleton; Mackinnons

24 March 2011

[1] On 28 May 2006 when he was aged 22 the pursuer was working offshore with the first defenders on an oil rig. When he was cleaning a pipe section, hydraulic slips moved and crushed his right hand. His right index and long fingers were partially amputated. In spite of various operations he has been left with only 60% of normal function in his right hand. The injuries and prognosis are conveniently described in No 6/10 of Process and there was no dispute about them.

[2] Liability was eventually admitted and certain heads of damages were agreed viz. Solatium at £35,000 and £5,000 for services. These have in fact been paid to the pursuer under an interim award of £40,000 made in his favour in August 2010.

[3] What was disputed was the issue of future loss of wages and pension. Although a number of matters were agreed the parties' positions were far apart on quantum ranging from a submission for a very substantial award by the pursuer's counsel, to one for a nil award by defenders' counsel. Late in the day the pursuer's counsel had to amend to increase the sum sued for to £815,722. I allowed that amendment. Both parties also lodged, and adhered to extensive written submissions. There is a Joint Minute of Agreement (No 27 of Process). One matter, much canvassed, and which I must mention at the outset, is the use of the Ogden Tables (referred to as Ogden 6). The pursuer urged me to apply them and indeed said they should always be the default position. The defenders said the present case was unsuitable for their application.

[4] I was referred to a number of authorities which I list viz. Blamire v South Cumbria Health Authority 1993 PIQR Q1; Palmer v Kitley [2008] EWHC 2819; Connor v Bradman [2007] EWHC 2789; McGhee v Diagio [2008] CSOH 74; Van Wees v Karkour [2007] EWHC 165. Other authorities and text books were merely mentioned in passing but not canvassed.

[5] Let me begin by looking at the pleadings. The matters argued before me appear in Article 6.2 of the Condescendence which I can summarise as follows. From the accident in May 2006 he was absent from work until October. In August he passed an exam to allow him an offshore role. He went offshore in March 2007 working as a trainee driller but due to his injury came back onshore and after February 2008 worked in Human Resources for the first defenders later progressing to a promoted position and presently to Workforce Planning Manager for West South Africa based in Angola. The contract there is for a limited period and has a 60% salary uplift to take account of living expenses in that country (the "geographical co-efficient" - which varies from country to country). He goes on to aver that he has no qualifications in Human Resources and that financially and politically the defenders group of companies may be under stress, and threat of expensive litigation. His job may thus be at risk.

[6] The critical averments he makes concern what he expected his job to have been had he not been injured. Under reference to his own skills and to two other employees he avers that he would have been a Rig Manager in his early 30's. Because that is not now possible he has lost a significant sum of future wages. As the case progressed it was clear that the pursuer's whole case on future wages loss and pension loss depended upon proof of that kind of promotion. It was also central to the figures produced by the actuaries.

[7] In the defences (Answer 6.2) the defenders deny that the pursuer would have been rapidly promoted to Rig Manager. They compare and contrast the other employees mentioned by the pursuer (Johnston and Clare). They then aver, under reference to the promoted posts, that it would have taken a number of years to make the job of Rig Manager. The various stages to the post of Rig Manager are agreed in the Joint Minute para 9. The defenders then say the pursuer has earned and continues to earn more than he would have done had he not been injured and that potential continues with him working onshore. They say his present pension position is the same as that for offshore.

[8] I note and accept the working history set out in the Joint Minute para 3.

[9] I now look briefly at the evidence. The pursuer gave evidence and led Mr Carter, Mr Sutherland, Paul Johnson and Raymond Berry (by TV Video Link). The defenders led Messrs Rutherford, Clow, McEwan & Walls and Vivienne Broughton.

[10] The pursuer presented well. He was a smartly dressed young man of good appearance who made light of the very severe and disfiguring injury to his right-hand. The hand tends to claw and the nerves in the fingers are sensitive to blows and even when typing. He spoke to his six years in the army his postings and promotion. His army discharge report (no 6/22 of Process) is exemplary. When he left the army at 22 he was fit for many active sports most of which are now not possible. Army resettlement led him to work for the defenders and he began offshore as a roustabout. It was his ambition to become a rig manager at a Grade 24 salary. He was promoted to roughneck but was then injured. Early in 2007 he was allowed back offshore as a trainee driller but the injury put an end to his work offshore. The defenders re-employed him as a recruiter in the Human Resources department. He went to train in Canada and is now in Angola on a three year contract. He spoke to his (agreed) earnings and what is described as the Geographical Coefficient. That is an extra money payment to cover the high cost of living. In Angola it is 60%. In Canada for example it is nil.

[11] The pursuer expressed some concern about working in Luanda since the Angolan state wanted more of its own nationals to do jobs in Human Resources. He was also aware of the recent problems of the defenders in the Gulf of Mexico. He was quite clear in his evidence that he would have expected to become a rig manager "in his early 30's" (his own words) ie after nine years with the defenders. He believed he had the necessary transferable skills from his former military life. He pointed to the careers of two others Johnston and Clare. He was not sure if he could settle for a career in Human Resources for the rest of his life. When asked about retiral he was rather vague saying mid to late 50's early 60's. That is no criticism since he is a young man and may not have a clear idea of what may happen in the future. In cross he accepted that the defenders paid his accommodation and some bills in Africa where he was a workforce planning manager on a Grade 22 salary. Reverting to his accident he said that he had passed a drillers exam when recovering and then was "fast tracked" to assistant driller. He saw no reason why he could not be a rig manager in the same time-frame as Johnson and Clare. He said he would be happy to do further training and told the court about the video he made about his accident ("Martin's Story") (No 7/3 of Process). He said he had asked Vivienne Broughton about training but nothing came of it. Importantly he also agreed that within each grade there is a wide salary range.

[12] None of this evidence was seriously challenged except in two areas viz whether and when he might have become a rig manager and whether he was truly "fast tracked" on merit.

[13] Mr Carter was the next witness. He is an expert well known to the court, in all matters of employment. He spoke to his report (no 6/11 of process). He supported the pursuer's claim to be a "rig manager" as he put it 'crossing 30'. He said his experience of the oil industry was paper based and he had no knowledge of the defenders' promotion processes. An objection was taken in chief to his evidence about retiral age. I allowed it under reservation, and at the hearing Mr Armstrong again argued the point. What Mr Carter said about retiral was that the answer given depended upon the age at which you asked the question. He said the pursuer would retire at 70 with a default age of 68. I am now prepared to sustain the objection and disregard this. It is not the best evidence which was what the pursuer said and meant. For the purposes of the proof it is about the pursuer's intention only.

[14] The next witness was Mr Sutherland who spoke to his report no 6/10 of process. I adopt that and in particular his opinion and prognosis on page 9.

[15] Mr Berry gave evidence over the TV link. He had known the pursuer for four years. His own career had taken him from roustabout to rig manager via "a lot of bridges" (as he put it). Promotions depended upon what happened in the oil industry and the abilities of the individual. At the time of his evidence, he was 53 and it had taken him 20 years to become a rig manager. He said the range could be 10 to 14 years. He said that there were times he had to accept demotion due to slumps in the industry.

[16] Mr Berry was quite clear that the pursuer had not been truly "fast tracked" after the injury. He had created the promotion to help the pursuer because of the accident and if there had been no accident the job would not have been created. He was asked about Johnson and Clare. Both, he said, were outstanding, one (Clare) having a degree. It had taken Johnson 14 years to become a rig manager. The pursuer, he said could not be compared with either of them. Berry was not challenged on either of these last two matters.

[17] Paul Johnson who was aged 38 was the last witness for the pursuer. He was an operations manager and had been in the oil industry for 20 years. He described his progress through the stages to become a rig manager and said his career rise was rapid and unusual. It had taken him 14 years. He said 20 years was the norm. He said the pursuer's move from roughneck to assistant driller was unusual.

[18] Paul Rutherford (aged 49) was the first of the defender's witnesses. He was the manager of the global offshore talent group and had over 30 years experience in the industry. He knew the pursuer - and said he was well suited to his present position at a grade 22 salary. He said he was a potential Divisional Manager within 5 years. That would attract a Grade 25 salary. He was doubtful if the pursuer could have become a rig manager at the age of 31. The period was too short. When he himself began in Human Resources he had no qualifications but studied for a C.I.P.D. qualification (Chartered Institute of Personnel and Development). The defenders, he said, assisted with education which could be done now "on line". In cross examination he confirmed that the pursuer was doing well at his job and his assessments were middling.

[19] Stewart Clow (aged 42) had been 22 years with the defenders through various mergers. He was an offshore workforce manager. He knew the pursuer and said his promotion to assistant driller was unusual. The pursuer, he said, had a definite future with the Company and that was why he was promoted to Angola. He spoke to his appraisal of the pursuer under reference to no 6/21 of process. That shows a line of boxes indicating "competent". His overall rating is box 3 which is midway between distinguished and unsatisfactory.

[20] David McEwan (aged 62) was the next witness. He had over 32 years experience and was the Human Resources manager for the North Sea Division. He knew the pursuer and of his progress to Angola. He said he was not special and lacked maturity. In cross he was shown the pursuer's average appraisal and was not surprised. He accepted that his view of the pursuer was a matter of impression. At present he was grade 22 in Human Resources and within 5 years he could be promoted to a grade 24 salary (£72,850). He said that it was unrealistic for the pursuer to expect promotion to rig manager in 9 years. It would take at least 20 years. Even promotion to a driller in 4 years was unrealistic. The driller looked after the crew and it was a huge responsibility. It took a special person to be a rig manager over an asset worth $800 million.

[21] McEwan gave two other important chapters of evidence, neither of which was challenged. He said that the savings plan for those abroad was the same as for home workers. Under reference to no 7/11 of process he explained how there were three ranges of salary in every grade and it could take a long time to maximise out at a grade. Promotion would not necessarily be into the same range above. This is important and is confirmed by paragraphs 10 and 11 of the Joint Minute. There is a range of £30,000.

[22] David Walls (aged 53) gave evidence about the so called "fast tracking" of the pursuer after the accident. He said the defenders wanted to provide some career path for him after his injury. The pursuer was moved up three posts to assistant driller (missing out assistant derrickman and derrickman). He said that if there had been no accident that decision would not have been made. The pursuer had had only months of experience and that was not enough to make any assessment. The pursuer was however a valued employee.

[23] Finally Vivienne Broughton (aged 40) was led for the defenders. She gave an overview of the nine world areas of Human Resources posts. She said it was never necessary to have a qualification. Worldwide only 4 managers and 3 directors have qualifications. For sometime in the past she was aware of the pursuer's work and position in Human Resources. She knew he had no qualifications and had met him to discuss C.I.P.D. She encouraged him to do it but he did not follow up the opportunity. The pursuer's evidence about this to some degree contradicts this account but the matter was not really pursued by either side. It is not necessary for me to form any view about it.

[24] Miss Broughton was aware of his promotion to assistant driller. She described that as unusual because you had to know the roles of the people in the grades below you. She had never encountered such a promotion before. The witness gave a lot of evidence about the nine worldwide Divisions and what qualifications the defenders encouraged. Promotion, she said, depended on what the Company was doing, what jobs were available and how many people applied. Obviously there were fewer jobs higher up the scale.

[25] I want to turn now to the submissions made by Mr Smith for the pursuer. He lodged and followed a written submission (21 pages). I can summarise that as follows. Pages 1 to 12 deal with the Tables (Ogden 6) and counsel urged me to apply them in this case. He stressed two points viz an argument for the pursuer retiring at the age of 70 and the issue of whether he was now properly described as "disabled". The latter point was conceded by the defenders (properly so in my opinion). As to retiral I propose to deal with that later. To page 16 the submission discusses three authorities and the question of what, if any, adjustment should be made to reflect a disabled pursuer working in the future. Counsel suggested 0.73 and I do not think that was challenged as a matter of theory on the Tables. The submission asks me to ignore the geographical coefficient for Angola. Also it claims his potential and value in Human Resources has been overstated. There was also little between the parties on figures for various ages on reaching rig manager. The submission ended with three scenarios and I will return to that when I consider now what was said in oral argument and which prompted the late amendment.

[26] What was added was to this effect. It was agreed in the Joint Minute that there was no past wages loss (para 8). Solatium and services were agreed and had been paid. The actuaries were broadly in agreement about figures. There were no issues of credibility or reliability and the evidence was a matter of impression. The Court should take 65 as a realistic retiral age. The Ogden Tables should always be the default position and should be applied here. There was no difficulty in applying them and on the evidence it could not be argued that he was not disabled. Counsel then spent sometime discussing a number of the cases and the text books. He urged me not to find this a complex case and to find in fact that the pursuer would have been a rig manager at the age of 34. He referred me to the remit (no 26 of Process) and the figures for future wages loss were £729,000; for pension £46,720 both to be added to the £40,000 already paid.

[27] In his reply to Mr Armstrong he distinguished the case of Van Wees and added that proper compensation could not be given by a discretionary lump sum. It was unfair to assume he would be significantly promoted in Human Resources where his reports were average.

[28] The first and second defenders also lodged a Written Submission (21 pages) and adhered to it. It can be summarised in this way. The pursuer's history and the accident are discussed, none of which is disputed. Certain damages have been agreed and paid. The defenders had looked after and reemployed the pursuer after the accident and the only issues were future wages loss and loss of pension. The defenders say that in his present job he is earning and will earn more than he would have as a rig manager. In any event he would have taken up to 20 years to become a rig manager. The submission then looked at the evidence. The real issue was when he would be doing a job which paid at Grade 24. That could be within five years in Human Resources ie by age 31. By contrast the earliest he could have expected to be a rig manager was by age 42. The defenders accepted that the pursuer was disabled and that some daily tasks were a problem to him. He seemed to cope well at his work.

[29] The court should not be a slave to the Ogden Tables and there was a clear problem of what discount should be applied to the post accident earning capacity given that there is no reduction in income and there was a clear risk of double counting. If any award was to be made the court should simply make a lump sum award to recognise loss of employability. A significant percentage of the current (60%) geographical co-efficient should form part of his earnings. This would allow for him working elsewhere for the defenders in the future.

[30] The submission then looked at the actuarial figures on which both experts largely agreed. The post accident onshore earnings cancelled out any anticipated pre accident offshore figures. There was also no pension loss. Also if the discount factor was modified for contingencies other than mortality there was still no loss on either limit of damages. There were too many imponderables in the case. No payment should be made unless by a lump sum.

[31] In his argument to me Mr Armstrong added the following points in supplement. By accepting disability and using Ogden there was an immediate problem of adjusting the discount factor. Also the true test was to ask whether the pursuer had proved it more likely than not he would have become a rig manager in his early 30's. It was also wrong and flawed to take a median and compromise approach to all the figures and apply that across the board. It was not possible here to have any certainty as to what the future held and the evidence did not allow for any concluded view.

[32] There was a problem about what his retiral age should be and the objection to Carter's evidence on the point was renewed. The pursuer meant 55 to 63 not 70. What of his promotion; there were nine stages from roughneck up to rig manager. His move up after the accident was done to help him and was not truly described as "fast track". He had jumped two stages. The court could make no legitimate projection for offshore over 20 years on the basis of a known history of three months. On the evidence it was not proved that he would ever have been a rig manager.

[33] By contrast his present job was secure and he had no reason to leave it. Also he could acquire a qualification in his present job if so motivated. There was less risk to him in a worldwide company. His own profile was elevated by the video he had made. The Company had different geographical coefficients depending upon where you worked. It left a lot of money to the discretion of the employee. It would be wrong to ignore it as part of the salary and a percentage of it should be included. The range was up to 70% and clearly this impacted on any post accident earnings in Human Resources.

[34] Counsel then examined some of the cases before renewing his motion that either no award be made or a lump sum given.

[35] From all of this evidence I am clearly of the opinion that the pursuer has not proved when, if at all, he would have been promoted to rig manager. The onus on these important matters is on the pursuer (see Palmer v Kitley para.61 which I refer to later). The whole weight of the evidence (including two of his own witnesses) is that at best it might take 20 years and be subject to the vagaries of the oil industry. To hold otherwise, on the word of the pursuer alone, would mean disregarding, for example, the experience of Berry and McEwan. There is no conceivable reason to do so. Further it is quite clear from the two named comparators that each of them was in a wholly different position.

[36] It is also not clear when and at what stage he might have been promoted within the many steps to rig manager. I find that the alleged "fast track" was wholly artificial and would not have happened if he had not been injured. I accept on this matter Berry, who was the pursuer's witness, and Walls.

[37] Accordingly the whole basis of the case for a future loss of salary and pension on definite figures disappears. It should also be noted that within the grades there is a range of salaries and that too introduces uncertainty.

[38] On the other hand what is proved is that he has a good career in his present job and is likely to advance to a grade 24 salary in 5 years time.

[39] I want now to look briefly at some of the authorities quoted to me. These were only referred to as examples of where Ogden was used or not used. They have no other value beyond that.

[40] In Van Wees v Karkour and Walsh the plaintiff had been injured in a road accident. It was said that she had lost the chance of a potentially glittering career. The sum sued for was almost ten million pounds. The case was complicated by a number of factors. The judge at trial had some difficulty in his assessment of the plaintiff. There had been a subsequent accident. There was conflicting medical evidence and her subsequent working history was unusual and unexpected. She lost a job in Japan which was better than the one she had had before. (In the case before me the pursuer has a job paying more now than he could have expected offshore). At para 100 Langstaff J, recognising the uncertainties said that the case called for a jury assessment. He had a poor opinion of the employment experts (para 113). At para 134 he appeared to reject the Ogden approach. He then appears to have used a multiplier but finally said his award was a jury award (151). I can take very little by way of guidance from this case other than the careful way the judge dealt with the witness, lay and expert, and his mention of comparators (129).

[41] Conner v Bradman again arose out of a road accident and again there were some issues of credibility (paras 26, 27). As a result of the accident he had had to take work at a lower wage as a taxi driver and thus permanently suffer loss from this change of job from being a mechanic. The judge could find no uncertainties and thus applied Ogden.

[42] In Palmer v Kitley a girl of 16 was injured in a road traffic accident. She was a schoolgirl but had hoped to go to university to become a nurse. By the time of the trial she had married and had a child. The judge carefully looked at her educational attainment and subsequent history. He discussed various possible applications of Ogden but in the end did not apply them concluding that there were too many imponderables in the evidence (36) and that it was unlikely she would ever have become a nurse. The case for future loss almost failed completely on the evidence (61) but in the end an award was made for disadvantage in the labour market (65/6). Blamine v South Cumbria Health Authority again concerned a nurse who was injured at work. She was married and the case was complicated by uncertainty as to how many children she might have and whether and when she would have worked part-time. The judge at trial rejected an Ogden approach and in a short judgment the Court of Appeal agreed that his approach could not be faulted.

[43] Finally I refer to McGhee v Diageo where again the Ogden approach was not followed. The pursuer was injured at work. The complication was that after retraining the pursuer could possibly earn more than he was getting at the date of the accident. For these reasons he made a lump sum award which seems to be some eight times his yearly wage.

[44] I am satisfied in this case that the pursuer must receive an award to recognise that if he loses his present position he will be at a great disadvantage in the labour market.

[45] In number 26 of Process there are set out various alternative sets of figures as a remit based upon different assumption as to when he would be promoted as rig manager and at different notional retirement ages. (It will be remembered that I do not accept the higher retiral age spoken to by Mr Carter). I have to observe that as each calculation follows on the matter becomes more and more complex and introduces the very complexities found in some of the cases. Also it has to be borne in mind that in a case like this the onus is on the pursuer and his case on the evidence depends upon proof of when he would become a rig manager. I have already given my view on that. The defenders remit makes for even more complication. The results of the remit are reflected and agreed as accurate in the experts Reports Nos 6/46 and 6/48 of Process. I was not asked to look at these in any detail and for this reason. Each party in their written case have extracted appropriate parts to present different scenarios of future losses to the Court. This was subject to slight amendment by the pursuer as the argument proceeded.

[46] The real question I have to ask is whether in this case it is appropriate to use a traditional multiplier, multiplicand approach ie Ogden. I am satisfied that in many cases this will be the correct approach in simple and in complex cases. I have even limited experience of Ogden being used in Jury trials. The judge should not seek to make the case complicated unless, as, I regret, has happened here, the parties have done that for him. What the judge must have are salary figures which are reasonably certain and if career changes and promotions are in issue reasonably certain time scales. The introduction of doubt and uncertainty into any of these areas would reduce the application of Ogden formulas to mere guesswork.

[47] I have to decide this case on the evidence alone and not on sympathy. Here there are a number of reasons on the evidence why the use of Ogden would not be appropriate. In the first place there is no clear evidence of when if ever he would have become a rig manager. The weight of the evidence is against early promotion. Also there is no certainty at what level of salary he would have been paid. His present ratings show "average". He was not genuinely "fast tracked". The oil industry can enjoy periods of boom and slump. The people offered as comparators to the pursuer were in a class well above him. For all these reasons, and the fact that he now earns more than before and has a comparable pension I have to disregard the Ogden approach. To use Ogden would overcompensate.

[48] There can be no doubt that someone with his disability will be at a disadvantage in the labour market and could not, with confidence, expect to secure a job at his present salary. Some of the very factors which work against the pursuer in his quest for an Ogden solution, work in his favour when I have to consider, as I now do, a jury or lump sum award. He may lose his job or be demoted. He may not always work in Africa. He may voluntarily leave the defenders. He may marry and want to work elsewhere. Also he may remain with the defenders and secure the high promotions mentioned in evidence.

[49] What I now do is to make an award to reflect this disadvantage. There is little guidance in the cases. In McGhee the pursuer does not appear to have returned to work and the award made was eight times his pre-accident salary. Here of course the pursuer has returned to work. It all has to be a matter of impression and I will award him a rounded-up sum based on twice the mid range basic gross Grade 23 Salary which I assess at £160,000. Certain sums have already been agreed and paid. There may be other deductions and questions of interest and expenses.

[50] I will issue this opinion to the parties and no doubt counsel can calculate and agree these matters. Otherwise I will hear parties thereon as to the terms of the final interlocutor.