Jennifer Brown v Ministry of Defence - Calculating your chances: the percentages game in assessing damages
Jennifer Brown v Ministry of Defence - Calculating your chances: the percentages game in assessing damages
Jennifer Brown v Ministry of Defence [2006] EWCA Civ 546
C applied to join the Army when she was 24. Unfortunately, C badly fractured her ankle just 8 weeks into her service during basic training. She did not regain full fitness and was discharged. C alleged that, but for the accident, she would have stayed in the Army for the full 22 years and that she would have been promoted to Staff Sergeant, or higher, in due course. Her father had served for 22 years, reaching Staff Sergeant. There was a significant loss of pension claim because if she served for 22 years, she would be entitled to a pension immediately rather than having to wait until she was 60.
Whilst the MOD admitted liability, it denied the “22 years” claim, noting that female recruits averaged about 6 years. The District Judge was impressed by C’s commitment and determination and accepted C’s approach, even deciding that there was a 30% chance that C would have been promoted beyond Staff Sergeant. The loss of pension claim was thus worth about £145,000. On appeal, the Circuit Judge said that it was “probable” that C would have served for 22 years and that there was “certainly a likelihood” that she would have reached Staff Sergeant (but not beyond, which reduced the award to an extent). He also said that no-one could be certain of something like this but he did not need to be certain when awarding damages.
D appealed, saying that the CJ should therefore have made a deduction from the award to reflect the chance that C would not have served as long as 22 years. C argued that the CJ had effectively decided that the prospects of failing to make 22 years were so small that they need not be considered. The Court of Appeal disagreed with this interpretation of the judgment and said that that both judges had failed to approach the matter properly. They had both erroneously decided that if it was more likely than not that C would stay in for 22 years, there was no need to assess the actual chance that she would do so. The Court of Appeal therefore considered the matter afresh, coming to the following conclusions (which reduced C’s award considerably):
(a) Given her enthusiasm and ability, C would have served beyond the average period of 6 years.
(b) However, the chances of her completing 12 years’ service (another common departure point) were no more than 50%. During that time (age 30 to 36) there could be significant changes in her personal and family life affecting her approach to a full-time military career.
(c) If she got that far, the likelihood that C would complete the last 10 years (especially with the pension incentive) was high – 60%. Overall, therefore, the chance of C obtaining the additional benefit of a right to an immediate pension by completing 22 years’ service was 30% (i.e. 50% x 60%).
(d) C would have reached Staff Sergeant in average time (14.5 years). Her chance of promotion beyond that was “more than negligible” but not as high as 30% - the Court of Appeal selected 15%.
Therefore the Court of Appeal said that C should receive:
(a) 100% of the pension rights she would have had if retiring after 6 years;
(b) 50% of the additional pension rights achieved for 12 years’ service;
(c) 30% of the additional pension rights, including “accelerated” pension, achieved for 22 years’ service, on the basis of promotion to Staff Sergeant; and
(d) 15% of the additional pension benefits she would have had if promoted to Warrant Officer First Class.
Given that C’s earnings as a physiotherapist were comparable to her prospective Army income, there was no real future loss of earnings claim. It was accepted that if she had left the Army before 22 years were up, she would have been able to earn similar wages in civilian life. The “22 years issue” affected only the pension claim.
Comment
Brown is not a new approach to this issue, but it is a good example of applying principle to facts. The general principle (that you assess future chances and award damages based on those chances) is well-established, but (as happened in this case) the principle is sometimes neglected. As Moore-Bick LJ said,
“Provided a fair career model is chosen as the basis for the assessment of loss of future earnings and pension entitlement, the prospects of enhanced or reduced earnings resulting from the ordinary chances of life can be allowed for by adjustments to the multiplicand and multiplier as appropriate. It is only when the court has to consider the possible effects of an unusual turn of events that would have a significant effect on earnings or pension rights that it is necessary to assess the chances of such events occurring and to assess their financial consequences.”
In other words, where the claim is that C would have continued earning the same wages until retirement (either in the pre-accident employment or in another field), then the Ogden Table multipliers can be used with small adjustments for non-mortality contingencies as appropriate (see e.g. Herring v MOD [2003] EWCA Civ 528, [2004] 1 All ER 44). That is not a “loss of chance” claim. If promotion is a certainty, then the multiplicand can be adjusted upwards at appropriate points in the calculations. However, where C’s claim goes beyond an uncontroversial career plan (e.g. change of careers to earn more, or non-automatic promotions) then it is a loss of chance claim: the court has to decide what the chances of promotion etc are and give the appropriate proportion of the additional lost earnings.