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Loss of future earnings and disability

News | Fri 30th Oct, 2015

A claimant is “disabled” for the purposes of Tables A – D of the Ogden Tables when s/he has an illness or disability which has or is expected to last for a year or more (or a progressive illness); which “substantially limits” the claimant’s ability to carry out normal day-to-day activities; and which affects the kind or amount of paid work s/he can do.

In Aderemi v London and South Eastern Railway [2013] ICR 591 Langstaff J explained that considering a “substantial adverse effect” required looking at what the claimant cannot do. Once s/he establishes an adverse effect that is “more than minor or trivial”, the test is met. This test was endorsed by the Court of Appeal in the recent case of Billett v Ministry of Defence [2015] EWCA Civ 773.

This is a relatively low threshold for disability, and the spectrum of people falling within that definition is extremely wide. At one end of the scale are claimants like Mr Billett, who, though disabled, secured work as a lorry driver with virtually no hindrance. How should tables A – D be used in such a case?

The Ogden Tables make clear that the court is entitled to make an adjustment to the reduction factor in appropriate cases and there are a number of examples of courts doing so (eg Conner v Bradman, Sharma v Noon, Hindmarch v Virgin Airways). The Ogden Tables also recognise that there will still be some cases where a Smith v Manchester award – rather than a substantial award for future loss of earnings – remains appropriate.

This is exactly what the Court of Appeal did in Billett v Ministry of Defence – which Jackson LJ described as a “classic example” of a case where the Smith v Manchester approach should be followed. There were three reasons:-

  1. The claimant was at the outer edge of the spectrum of disability: the judge found he only just met the definition.

  2. The disability affected the claimant’s career much less than his activities outside of work.

  3. Because of these factors, there was no rational basis for determining how the reduction factor should be adjusted.   

The Court of Appeal substituted the judge’s loss of earnings award with a Smith v Manchester award of 2 years’ earnings.

Thus the Court of Appeal have endorsed a flexible approach to future loss of earnings for disabled people: where the claimant is firmly inside the spectrum of disabled people, and where the disability has a significant impact on the claimant’s chosen career, Tables A – D will be a “valuable aid” – and should be the subject of adjustment as appropriate. It is open to argue the adjustment should be to increase the award for future loss of earnings, rather than to decrease it. But Billett provides strong authority for retaining the Smith v Manchester approach in cases of minor disabilities with little effect on the claimant’s chosen career.

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