The judge had erred in calculating damages for future loss of earnings using a fixed multiplicand where the claimant had not been engaged in remunerative employment for four years prior to the road accident in which he sustained a brain injury, and his future employment intentions were uncertain.Appeal by the defendant ('W') from the quantum of damages awarded by Leveson J on 31 May 2002 to the claimant ('H'), for injuries sustained in a road traffic accident. H was a talented blacksmith and boat-builder. In 1995 he was injured in a head-on collision between his van and W's car. The judge found the accident had left H with modest brain damage and a serious psychological reaction. Calculation of H's loss of earnings was complicated by the fact that from 1992 H was not in paid employment but had been building a boat. He had supported himself and financed the project from the proceeds of the sale of his house. The judge settled on ?14,500 as H's annual loss of earnings between the accident and the trial and ultimately awarded H £53,000 in special damages. In doing so, the judge: (i) found it was inappropriate to calculate H's pre-accident earnings loss on the basis of loss of actual earnings less post-accident receipts given that H had spent most of the four years prior to the accident working on his boat; (ii) determined the value of H's estimated hours of work on the boat based on rates of remuneration in the boat-building industry; and (iii) accepted that H would have completed the boat and either retained it as a valuable asset or sold it. As to future loss of earnings, the judge: (a) found that H was likely to maintain his present level of earnings as a blacksmith; and (b) took into account H's loss of artistic ability as a result of the accident, because he found it had affected his career development potential. Consequently H was awarded £110,000 for future loss of earnings. W appealed against both the special damages and future loss of earnings, contending that: (i) H had exaggerated both his disability and his earnings loss prior to trial; (ii) the judge had taken an unduly pessimistic view of the practical effects of H's brain injury on his abilities as a blacksmith and boat-builder; and (iii) because the evidence about H's lifestyle and irregular working habits was so uncertain, the claim for future earnings loss was not susceptible of the multiplier/multiplicand approach adopted by the judge.HELD: (1) The judge's findings on the level of H's impairment were unimpeachable, and there was ample evidence to support his conclusions about the practical effects of H's brain damage on his working abilities. (2) The basis on which the judge had calculated the past loss of earnings was legitimate since H's earnings in the four years prior to the accident were not a fair reflection of his earning capacity and were not, therefore, an appropriate basis for calculating his post-accident loss of earnings. The judge's approach was also appropriate in circumstances where the accident had prevented completion of the boat. There was no reason to interfere with the sum awarded, although it would have been legitimate for the judge to award a global sum instead of taking a multiplier/multiplicand approach. (3) The judge had erred in making the award for future loss of earnings on the basis of a fixed multiplicand. In light of H's uncertain intentions as to his future employment a lump sum assessment in the nature of a Smith v Manchester award (per Smith v Manchester Corporation (1974) 17 KIR 1) was warranted. Accordingly, the judge's award for future loss of earnings was reduced to £50,000.Appeal allowed in part.For the Quantum Report in this matter, see Cornelius Willemse v Dominic Paul Hesp (2003) LTLPI 2/9/2003.

[2003] EWCA Civ 994

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