The life expectancy of the claimant, a child, was reduced as a result of a negligent act. The claimant claimed for loss of income and pension during the ‘lost years’ contrary to the decision in Croke v Wiseman (1982 CA).
Although the High Court found itself bound by the Court of Appeal decision in Croke, it positively encouraged the claimant to appeal directly to the Supreme Court to have Croke overturned, citing the unfairness of that decision. We understand that permission to appeal to the Court of Appeal has now been granted.
The key points
The House of Lords in Pickett v. British Rail Engineering [1980] made it clear that such losses are recoverable in adult claims because that person is deprived by the shortening of life and the opportunity to use their income in the way they wished had they lived.
The main social reason for allowing recovery of such claims was the unfairness to dependants. The House of Lords qualified the decision in Pickett, by providing that the "loss is not too remote to be measurable".
In Gammell v. Wilson (1982) it considered the issue again in relation to ‘lost years’ claims by children. The House of Lords set out that in the case of a young child, the ‘lost years’ of earning capacity will ordinarily be so distant that assessment is mere speculation. However the House of Lords did not rule out an award completely as there may be some exceptional cases where it may be appropriate to provide an award.
The Court of Appeal however firmly closed the doors to such claims later the same year in the case of Croke v Wiseman (1982). In the light of Pickett and Gammell the Court of Appeal found that there were social policy grounds why there could never be a claim for lost years by a young child:
(1) "There are no dependants, and if a child is dead, there can never be any dependants, and, if the injuries are catastrophic, equally there will never be any dependants. It is the child who will be dependent…the court should refuse to speculate whether in the future there might be dependants for the purpose of providing a fund of money for persons who will never in fact exist."
(2) If a child was going to live for many years in to adult life “very different considerations apply. There are compelling social reasons why a sum of money should be awarded for his future loss of earnings. The money will be required to care for him.”
In 2007 in the case of Iqbal v Whipps Cross University Hospital NHS Trust a ‘lost years’ claim was awarded by the judge at first instance in the case of a nine year old claimant with a life expectancy of 41.
The court’s reasoning was that the assessment of damages had moved on and there was a far more scientific basis (with the use of actuarial tables, forensic accountancy evidence etc) for assessing damages in the future even in the case of young children.
On appeal, the Court of Appeal reversed the decision citing Croke. However, although the Court of Appeal was bound by their earlier decision in Croke, they stated that the policy considerations set out above on which Croke was based were inconsistent with Pickett and Gammell. Permission was granted to appeal in Iqbal but the matter settled before it reached the House of Lords leaving the Croke decision untouched.
Permission to appeal has now been granted to the claimant in this case which may open the door to ‘lost years’ claims by children with a short or reduced life expectancy.
This was a claim for damages for serious brain injuries, resulting in cerebral palsy, which the claimant sustained during her birth in October 2007. As a result of the injuries the claimant’s life expectancy was limited to 47 years.
Liability was admitted by the defendant NHS Trust. There was a dispute in respect of damages and the case came before the Honourable Mrs Justice Laing in the High Court on 4, 5 and 12 December 2014.
The claimant made a claim for ‘lost years’. This was on the basis of loss of earnings and pension between the ages of 47 and 93.6. The claimant accepted that such a claim was prevented by the Court of Appeal decision of Croke.
The court also followed Croke but set out that the decision was inconsistent with the principle of full compensation set out in Wells v Wells (1999) and there was “no rational basis for allowing such claims made by adults but refusing to allow them when made by children”.
The court gave a very strong direction that this issue should be decided by a ‘leapfrog’ appeal direct to the Supreme Court - given that the Court of Appeal would be duty bound to follow Croke.
The claimant has now been given permission to appeal to the Court of Appeal. As far as we are aware there is no ‘leapfrog’ order to the Supreme Court.
Claims by children with short life expectancy often present the claimant’s legal team with difficulties when assessing accommodation claims due to the Roberts v Johnstone calculation.
In the case of a child with a shortened life expectancy, the Roberts v. Johnstone calculation will inevitably leave a shortfall such that, in order to buy the accommodation required, money has to be taken from other heads of loss such as general damages, loss of earnings and care claims. In these claims an allowance for ‘lost years’ could be used to bridge the gap.
In Totham had the court not been bound to reject the ‘lost years’ claim, then an award of £32,694.51 per year (adjusted for normal living expenses etc in the ‘lost years’) until the age of 70 would have been made - with a claim for loss of pension from age 70 at £12,000 (subject to adjustment) a year. The implications in respect of increased awards in these already expensive claims are significant, Eva Rose Totham having been awarded in excess of £10 million.
The focus for insurers will perhaps be to concentrate on what is an appropriate deduction for life’s expenditure and deductions etc and to focus forensically on this area.
In Pickett, Lord Scarman used the phrase “loss of financial expectations” and on this basis loss of years claims would not just be limited to loss of earnings and pension, provided the loss was not too remote.
An example of an award for a less common pecuniary benefit is provided by the first instance decision of Kent v Wakefield Metal Traders (1990) in which the claimant recovered £10,000 for the loss of a company car during the 'lost years'.
This is potentially a significant development and one hopes that the defendant decides to compromise the claim. However it is clear that the Judiciary may have the appetite to reopen Croke.
Whilst there is obvious unfairness between the way adult claims are treated and those of a child, a child’s potential losses are fundamentally more speculative than an adult’s.
The issue is how those losses should be calculated. Is there actually a loss at all?
Today’s children are reportedly more likely to be dependent on their parents for longer and there will be less disposable income. Many start their working life with student debt etc.
There are arguments that the conventional discount in such cases for ‘living’ expenses is just too low.
If the Court of Appeal (Supreme Court) does take the opportunity to address this disparity, a fruitful line of attack for insurers could be to attack the level of ‘net’ loss in today’s world.
This is an issue we suggest Keoghs and our insurance clients discuss over the coming months as this case unfolds.
Andrew Underwood
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