Billett v. Ministry of Defence  EWCA Civ 773
This recent decision is the first occasion on which the Court of Appeal has considered the application of Tables A to D of the Ogden Tables. The judgment clarifies the appropriate approach to quantification of damages for loss of future earning capacity in cases of minor disability.
The case involved a claim for personal injury by an ex-member of the army. In 2009 the Claimant had suffered a non-freezing cold injury to his feet and less severe damage to his hands whilst engaging in military exercises in cold weather. The result was that his feet became permanently sensitised to the cold and would become painful in cold conditions. Despite this, in 2010 the Claimant was deemed medically fit for deployment anywhere in the world. The Claimant left the army in late 2011 for reasons which the judge determined were unconnected with his injuries.
The evidence established that the Claimant was earning as much in his current job as a lorry driver as he would have done had he been uninjured. His claim was therefore for future loss of earning capacity on the basis that he would be at a disadvantage on the open labour market should he lose his current job. The Claimant had invited the judge to assess this by reference to Tables A to D of the Ogden Tables; the Defendant had requested a Smith v Manchester award. The latter approach would have the effect of drastically decreasing the value of the claim.
High Court Decision
The judge had accepted that the Claimant’s ability to carry out normal day to day activities was limited because he could not work or do anything else outside in cold conditions for any appreciable period of time. He therefore satisfied the definition of disability under the Equality Act 2010. However, given that he had still been deemed by the Army to be medically fully deployable despite his condition, his disability was minor. It qualified under the Table A to D test, ‘but only just’. The judge therefore opted to account for the limited nature of the claimant’s disability by taking a mid-point between the ‘non-disabled’ discount factor of 0.92 and the ‘disabled’ discount factor of 0.54 to give a final discount factor of 0.73, noting in the meantime that ‘there is little logic in this approach’.
Applying the discount factor of 0.73 on earnings up to a retirement age of 68, the award for loss of future earning capacity was assessed at just under £100,000.
The Defendant appealed on two grounds:
1) The level of general damages was too high.
2) The approach to assessment of damages for future loss of earning capacity was incorrect.
Court of Appeal Decision
Jackson LJ, with whose judgment Patten and McFarlane LJJ agreed, dealt with the first ground of appeal shortly. The judge had not moved beyond a permissible bracket of awards for general damages and his valuation would not be disturbed.
Loss of Earning Capacity
The first challenge to the judge’s decision on loss of future earning capacity was to his finding that the Claimant was ‘disabled’ for the purpose of Tables A to D. The Explanatory Notes to Tables A to D draw on the definition of disability in s. 6 of the Equality Act 2010, which states that this is a condition which has a ‘substantial’ adverse effect on a person’s ability to carry out day-to-day activities. The argument here centred on whether the adverse effect on the Claimant’s ability to conduct his everyday life was indeed ‘substantial’. The Defendant pointed out that the Claimant was considered medically fully deployable by the army and had reported no difficulty in working full time as a lorry driver; he also confirmed that he was still capable of indulging in his hobbies of fishing and clay pigeon shooting.
Jackson LJ acknowledged these submissions but rejected the Defendant’s argument. He quoted with approval the judgment of Langstaff J in Aderemi v London and South Eastern Railway Ltd  ICR 591, where the latter had stated that a ‘substantial adverse effect’ encompassed any effect which was not ‘trivial’: triviality was a threshold and there was no ‘sliding scale’ between a trivial effect and a substantial one. In determining whether a Claimant was disabled or not, it was therefore not necessary to focus on what the Claimant could do, but rather on what the Claimant could not do. The evidence had established that he was restricted in carrying out gardening and DIY work in cold weather, playing ruby and swimming, and playing with his children outside when it was cold: ongoing effects which were enough to satisfy the ‘substantial’ adverse effect test.
Ogden Tables or Smith v Manchester Award?
The second challenge to the judge’s decision was that a Smith v Manchester approach was more appropriate in this case. Jackson LJ noted first that the bands used in Tables A to D are of necessity extremely wide, with disability covering ‘a very broad spectrum’. He pointed out that the Health and Disability Survey 1996 employed a 1-10 scale measuring the severity of a person’s disablement: there was no evidence as to where the Claimant may have fallen on that scale, but it would apparently have been at the very bottom. Jackson LJ noted that the Claimant was experiencing virtually no hindrance in his career as a lorry driver, which he had secured within a week of leaving the army. He had strong qualifications and an excellent CV for lorry driving. He was hard working and likely to be sought after by employers. The realities of the situation therefore demanded that a ‘swingeing increase’ be made to the Table B disability reduction factor – but determining the level of such an increase was a matter of broad-brush judgement no more scientific than a Smith v Manchester award. It was therefore not an appropriate case for the strict mathematical approach demanded by Tables A to D.
Jackson LJ found three factors to be determinative in taking the case outside the scope of Tables A to D:
i) Disability covers a broad spectrum. The claimant is at the outer fringe of that spectrum.
ii) The claimant’s disability affects his ability to pursue his chosen career much less than it affects his activities outside work.
iii) Because of (i) and (ii) in this case there is no rational basis for determining how the reduction factor should be adjusted.
The appropriate approach to assessing the Claimant’s loss of future earning capacity was therefore to make a Smith v Manchester award valued at two years’loss of earnings, which equated to approximately £45,000.
The Reduction Factor
A third challenge had been made to the judge’s decision on the basis that a reduction factor of 0.73, falling directly between the ‘disabled’and ‘non-disabled’reduction factors, was too low in the circumstances. Given his decision on the second argument, Jackson LJ did not need to address this. However, he proceeded to consider it in any event. Noting that the Claimant ‘only just scrapes into Table B’, he agreed that 0.73 was ‘certainly’ too low. A reduction factor much closer to the non-disabled discount factor of 0.92 ought to have been adopted, which would have given an award in the region of two years’loss of earnings in any event.
While the Court of Appeal’s decision is to be applauded for bringing some clarity (and, it is hoped, consistency) to an area which has posed considerable difficulties for judges in recent years – see, for example, Sharma v Noon Products Ltd (Unreported, 7 April 2011, Queen’s Bench Division) where the judge also opted for a reduction factor between the two extremes where the claimant had lost the end of his right index finger in an accident– the decision does also represent a step backwards from the increasingpreferencefor reliance on actuarial data to the more impressionistic broad-brush inquires of the past. Jackson LJ is surely right to suggest that this case draws to light a significant weakness in Tables A to D: whetherthis defect will be remedied in future editions of the Ogden Tables remains to be seen. In the meantime Defendants will reap the rewards of a considerable victory in this area. The conclusion in the case itself that the Claimant’s award for loss of earning capacity was to be reduced by close to £50,000 –approximately half of the total awarded by the judge under the reduction factor method – neatly illustrates the significant potential value of a switch from Tables A to D back to Smith v Manchester.