WILLEMSE V HESP [2003] EWCA Civ 994
FACTS:-
The Claimant was involved in a road traffic accident on the 2nd December 1995, and sustained a head injury. Prior to the accident, he had been in the process of constructing a boat. This had been built to a fine design and the Claimant planned to sail it to Australia and the Canary Islands with a view to proving and promoting its design.
In the year ending 31st October 1989, the Claimant had earnings of £22,208. However his earnings for the four years ending 31st October 1990 to 1994 showed only £4,297, £100, £1137, £4396 and £1226. From early 1992 onwards, he had begun work on his boat and had supported himself from the proceeds of the sale of his house. He estimated that he had invested about 8000 hours in the boat. Evidence was advanced to show that the Claimant would have made around £114,000 profit on the boat, which would put his loss of earnings capacity at around £28,500 per annum.
The Claimant had in fact continued to work after the accident and his earnings after that time had been higher. although the trial judge found that he was left with a modest deficit and a serious psychological reaction. Whereas before the accident he could work on his own, now he needed to work with his brother.
The trial judge had made an award for past loss in the sum of £53,000, just below £10,000 a year, after applying a series of discounts and the money actually earned by the Claimant. In relation to future loss, he had made an assessment of £10,000 for the first two years whilst the Claimant underwent treatment and £7500 for a balance of 12 years, which would have been a multiplier of 15.53 to reflect in small measure the greater uncertainty that the Claimant’s lifestyle would in any event have meant as he got older that he did less rather than more.
The Defendant appealed from this decision.
HELD:-
Lord Justice Potter went over the findings of the judge. The Defendant’s counsel had made a submission to the effect that the Claimant had exaggerated his symptoms and therefore the trial judge’s conclusion was flawed. Potter LJ rejected that submission. The other submissions related to the judge’s decision on past and future loss. It was said that in the light of the Claimant’s irregular employment history and the unreliability of his Schedule of Loss, the judge simply should have concluded that he could not be satisfied that the Claimant had discharged the burden of proving past loss at all. So far as future loss of earnings was concerned, again because of the Claimant’s lifestyle and irregular working habits prior to the accident, the state and reliability of the evidence as it stood by the end of the trial was so uncertain that the claim for future earnings loss was also not susceptible of the multiplier/multiplicand approach which the judge adopted. At best the judge should have made a Smith v Manchester award of modest proportions based simply on the value of the Claimant’s lost top slice of artistic ability.
Past loss
Potter LJ looked first at the calculation of past loss. This had been a difficult task for the judge, to assess the claim for loss of earnings in the period of 6 years 5 months between accident and trial. The judge had rejected the approach whereby the loss should be calculated on an orthodox basis less post accident receipts, since the Claimant had earned very little in the four years leading up to the accident. Had the Claimant not been so engaged in building a boat, he would have been engaged in other remunerative work. It would be unfair (according to the trial judge) not to recognise those facts.
Potter LJ said that in his view this was a legitimate approach. It had been the Claimant’s case that he had put in 8000 hours on the boat over four years. The trial judge reduced that figure to 1500 hours per year over the four years because of the uncertainty of the calculation and the amount of work done by other people. He then applied a rate of £10 an hour and added on the actual average earnings of the Claimant. That was then netted down to allow for tax. There was then a reduction in the multiplier from 6 ½ to 5 ½ to allow for the fact that the Claimant would have sailed the boat around in order to promote it.
Potter LJ would uphold the approach of the judge. The Defendant’s counsel had submitted that the Claimant’s evidence was too unreliable, but that was a matter for the judge.
Counsel for the Defendant submitted that the trial judge should have applied the approach taken in the case of Blamire v South Cumbria Health Authority [1993] PIQR Q1. There should have been a broad assessment. In Blamire a global sum was awarded to represent the present value of the risk of future financial loss. Potter LJ accepted that it represented an example of the court having to make a global and somewhat impressionistic award out of necessity, in the light of uncertain circumstances. If the trial judge had decided to make a Blamire type award, the Court of Appeal would not have interfered with it. However likewise the Court of Appeal would not interfere with the way in which the trial judge had dealt with this cas
Future loss
In relation to the trial judge’s assessment of future loss, Potter LJ was critical. The judge’s method of award on the basis of a fixed multiplicand was in all the circumstances, inappropriate. He was making a broad assessment of future developments, which involved the uncertain intentions of the Claimant as to the nature and direction of his employment in the future. The evidence showed that his physical skills had not been reduced but his creative edge had gone and he was unable to do work unsupervised. He had also lost the chance of developing a previously promising career. This was a classic case of a Smith v Manchester award. These circumstances called for a broad lump sum assessment. Potter LJ would substitute a figure of £50,000 in the place of the trial judge’s award of £110, 000 for future loss of earnings.
Lady Justice Arden and Lord Keene agreed.
FACTS:-
The Claimant was involved in a road traffic accident on the 2nd December 1995, and sustained a head injury. Prior to the accident, he had been in the process of constructing a boat. This had been built to a fine design and the Claimant planned to sail it to Australia and the Canary Islands with a view to proving and promoting its design.
In the year ending 31st October 1989, the Claimant had earnings of £22,208. However his earnings for the four years ending 31st October 1990 to 1994 showed only £4,297, £100, £1137, £4396 and £1226. From early 1992 onwards, he had begun work on his boat and had supported himself from the proceeds of the sale of his house. He estimated that he had invested about 8000 hours in the boat. Evidence was advanced to show that the Claimant would have made around £114,000 profit on the boat, which would put his loss of earnings capacity at around £28,500 per annum.
The Claimant had in fact continued to work after the accident and his earnings after that time had been higher. although the trial judge found that he was left with a modest deficit and a serious psychological reaction. Whereas before the accident he could work on his own, now he needed to work with his brother.
The trial judge had made an award for past loss in the sum of £53,000, just below £10,000 a year, after applying a series of discounts and the money actually earned by the Claimant. In relation to future loss, he had made an assessment of £10,000 for the first two years whilst the Claimant underwent treatment and £7500 for a balance of 12 years, which would have been a multiplier of 15.53 to reflect in small measure the greater uncertainty that the Claimant’s lifestyle would in any event have meant as he got older that he did less rather than more.
The Defendant appealed from this decision.
HELD:-
Lord Justice Potter went over the findings of the judge. The Defendant’s counsel had made a submission to the effect that the Claimant had exaggerated his symptoms and therefore the trial judge’s conclusion was flawed. Potter LJ rejected that submission. The other submissions related to the judge’s decision on past and future loss. It was said that in the light of the Claimant’s irregular employment history and the unreliability of his Schedule of Loss, the judge simply should have concluded that he could not be satisfied that the Claimant had discharged the burden of proving past loss at all. So far as future loss of earnings was concerned, again because of the Claimant’s lifestyle and irregular working habits prior to the accident, the state and reliability of the evidence as it stood by the end of the trial was so uncertain that the claim for future earnings loss was also not susceptible of the multiplier/multiplicand approach which the judge adopted. At best the judge should have made a Smith v Manchester award of modest proportions based simply on the value of the Claimant’s lost top slice of artistic ability.
Past loss
Potter LJ looked first at the calculation of past loss. This had been a difficult task for the judge, to assess the claim for loss of earnings in the period of 6 years 5 months between accident and trial. The judge had rejected the approach whereby the loss should be calculated on an orthodox basis less post accident receipts, since the Claimant had earned very little in the four years leading up to the accident. Had the Claimant not been so engaged in building a boat, he would have been engaged in other remunerative work. It would be unfair (according to the trial judge) not to recognise those facts.
Potter LJ said that in his view this was a legitimate approach. It had been the Claimant’s case that he had put in 8000 hours on the boat over four years. The trial judge reduced that figure to 1500 hours per year over the four years because of the uncertainty of the calculation and the amount of work done by other people. He then applied a rate of £10 an hour and added on the actual average earnings of the Claimant. That was then netted down to allow for tax. There was then a reduction in the multiplier from 6 ½ to 5 ½ to allow for the fact that the Claimant would have sailed the boat around in order to promote it.
Potter LJ would uphold the approach of the judge. The Defendant’s counsel had submitted that the Claimant’s evidence was too unreliable, but that was a matter for the judge.
Counsel for the Defendant submitted that the trial judge should have applied the approach taken in the case of Blamire v South Cumbria Health Authority [1993] PIQR Q1. There should have been a broad assessment. In Blamire a global sum was awarded to represent the present value of the risk of future financial loss. Potter LJ accepted that it represented an example of the court having to make a global and somewhat impressionistic award out of necessity, in the light of uncertain circumstances. If the trial judge had decided to make a Blamire type award, the Court of Appeal would not have interfered with it. However likewise the Court of Appeal would not interfere with the way in which the trial judge had dealt with this cas
Future loss
In relation to the trial judge’s assessment of future loss, Potter LJ was critical. The judge’s method of award on the basis of a fixed multiplicand was in all the circumstances, inappropriate. He was making a broad assessment of future developments, which involved the uncertain intentions of the Claimant as to the nature and direction of his employment in the future. The evidence showed that his physical skills had not been reduced but his creative edge had gone and he was unable to do work unsupervised. He had also lost the chance of developing a previously promising career. This was a classic case of a Smith v Manchester award. These circumstances called for a broad lump sum assessment. Potter LJ would substitute a figure of £50,000 in the place of the trial judge’s award of £110, 000 for future loss of earnings.
Lady Justice Arden and Lord Keene agreed.