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Calculating Damages

Calculating Damages. Patrick Mullarkey, Campbell Fitzpatrick Solicitors. General Principles. Restitutio in Integrum Not possible where injury is severe Intention of special damages to compensate for extra costs and losses Minimise effect of injury, maximise quality of life

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Calculating Damages

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  1. Calculating Damages Patrick Mullarkey, Campbell Fitzpatrick Solicitors

  2. General Principles • Restitutio in Integrum • Not possible where injury is severe • Intention of special damages to compensate for extra costs and losses • Minimise effect of injury, maximise quality of life • Reasonable expenditure, not desirable Calculating damages

  3. General Principles • Levels of Damages have increased - 3 factors influence value • 1 Severity of injury • 2 Life expectancy • 3 Quality of legal representation Calculating damages

  4. Heads of Damage - Generals • Physical pain and suffering • Awareness of accelerated death • Sexual dysfunction • Loss of joy in work • Loss of holiday • Loss of sporting activity • Impairment of housekeeping abilities • Psychological problems Calculating damages

  5. Calculating Generals • “Green book” • Kemp and Kemp • Butterworth’s Personal Injury Litigation Service • Precedent • Halsbury’s • Bulletin of Northern Ireland Law Calculating damages

  6. Special losses - Past Losses • Reasonably easy to ascertain • Extra expenditure already incurred • Loss of wages • Cost of care , therapies etc • Gratuitous care given by family - Assess? • Cost care and apply discount or… • Cost loss of wages incurred by carer Calculating damages

  7. General Principles - Future Loss • Probabilities, possibilities and chances • Impossible task • Multiplier/multiplicand approach • Multiplicand - annual cost or loss • Multiplier - duration of loss Calculating damages

  8. Choice of Multiplier • Two principal controversies in recent years • Use of actuarial evidence • Appropriate discount rate Calculating damages

  9. Actuarial Evidence • The “Ogden Tables”. • Formally admissible in 1995 • Importance of tables can be overstated • Tables take account of ordinary mortality risks in general population • Tables only commence at 16yrs old • No place for actuarial evidence where expert evidence gives life expectancy Calculating damages

  10. The Discount Rate • Court assumes net rate of return on investment - the discount for accelerated receipt • lower rate = higher multiplier • Wells v Wells 1998 • HL held when assessing future loss ct should assume damages invested in ILGS • “No room for judicial scaling down” Calculating damages

  11. The Discount Rate • £10k loss per annum for 20 years • If £200k awarded today pl. over-compensated • £10k for 20th year earns interest from day 1 • Discount eliminates over-compensation • Annuity approach • 5% return on capital = £124.6K • 3% return on capital = £148.8K Calculating damages

  12. The Discount Rate • ILGS guarantees rate of return therefore risk-free • HL set rate @ 3% • Since reduced to 2.5% • Where agreed life expectancy no further reduction Calculating damages

  13. Future Losses and Expenditure • Future Care • Therapies • Equipment • Transport • Education • Housing • Loss of earnings • Miscellaneous Calculating damages

  14. Future Care • Often single most substantial head of claim • Annual costs can exceed £50k • Choice of expert in care is essential • Regime must be internally and externally consistent • Tailored to pl.’s needs • Extent of gratuitous care reduces with time Calculating damages

  15. Future care • Sowden v Lodge 2004 CA - damges awarded for reasonable needs • Per Curiam - if def. asserts local authority care is adequate then must prove same • Good authority that pl. entitled to seek private domilicilary arrangement • More likely to succeed if pl. has retained cognitive function • See also A v B Hospitals and Freeman v Lockett Calculating damages

  16. Therapies • Physiotherapy - expert evidence required • Select expert relevant to client’s needs • Speech Therapy - speech, eating needs • Occupational therapy • Music and art therapy Calculating damages

  17. Equipment • Tailor report to pl.’s needs • More than standard regime • Broad spectrum of kit. • From Computers to cutlery • Provide for replacement Calculating damages

  18. Transport • Specially adapted vehicle may be required • Additional mileage • Only extra costs recoverable • Consider Mobility element of DLA • OT normally advises Calculating damages

  19. Education • Legal obligation to educate up to 16 yrs old • Can claim cost of Education assistant • Costs of education may be adjourned Calculating damages

  20. Housing and Accommodation • Consider where serious and permanent mobility problems • if injury serious level site, additional storage and covered access required • Adaptation of existing home possible • Alternatively purchase or build • Pl. is compensated not for extra cost but for loss of use of capital - Roberts v Johnston • Generals can finance purchase • Claim for sundry expenditure Calculating damages

  21. Loss of Earnings • 1 Where pl. will never work • Ascertain parental and sibling employment • If life expectancy unimpaired then multiplier to retirement age • Discount not only for accelerated receipt but also for vicissitudes of life • e.g. ill health, unemployment, failure to achieve career • If life expectancy curtailed then claim lost years but discount Calculating damages

  22. Loss of Earnings • 2 If Unemployed at time of Injury • Seek details of work history, qualifications • Merits of claim depend on length of period out of work, reasons for same, what steps pl. took to secure work before injury occurred etc • Must determine when pl. would have returned to work • Depends on local market conditions • Difficult where pl. is long term Calculating damages

  23. Loss of Earnings • 3 Illegal Employment • No tax, NIC • Careful consideration to be given to this type of claim • Pl. can be prosecuted • Ct. may deny claim for policy reasons • See Numan v Folkes and Dunlop Tyres Calculating damages

  24. Handicap in Labour Market • Smyth v Manchester type payment • See also Moelicker v Rayrolle • Evidence must showdifficulties in seeking or retaining employment • Risk of future unemployment to be assessed • Unrealistic to have gross multiplier of more than 5 years - Barstow v A.Roberts Calculating damages

  25. Residual Earnings capacity • Is the pl. capable of work notwithstanding present unemployment? • Hunter v MOD • Reference to Ogden tables • Medical evidence crucial - pl. deemed capable of work • 40% reduction re Residuals Multiplier Calculating damages

  26. Miscellaneous • Credits to be given to Def. • Lost Years - Phipps v Brooks Dry Cleaning Services • Interest – 8% as per S33A Judicature Act (NI) 1978 • Costs of Managing awards Calculating damages

  27. Managing Quantum Cases • Time consuming and difficult • Get a good forensic accountant to draw together various elements of loss • Expert reports must be consistent • Avoid double claims • Early and detailed quantum consultation • Develop a detailed knowledge of the source materials including case law , Ogden tables etc Calculating damages

  28. Calculating Damages Patrick Mullarkey, Campbell Fitzpatrick Solicitors

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