Herring v Ministry of Defence

Factual and Procedural Background

This appeal arises from a judgment dated 12 August 2002 by Judge Masterman, acting as a Deputy High Court Judge, concerning damages payable by the Defendant, the Ministry of Defence, to the Plaintiff for serious spinal and other injuries sustained in a parachuting accident in September 1994. The Plaintiff was a fit young man in the Territorial Army Special Air Service with ambitions to join the police force but was left severely disabled, able to walk only limited distances with aid.

The damages award included agreed general damages and a contested assessment of loss of future earnings and pension entitlements based on the Plaintiff’s prospective police career and residual earning capacity post-injury. The appeal challenges the judge’s calculation methods and the extent of discounts applied for uncertainties and contingencies.

Legal Issues Presented

1. Whether the Plaintiff’s future earnings loss should be calculated on the basis of a conventional multiplier applied to a police career model, or on a percentage 'loss of a chance' basis reflecting uncertainty of entering and progressing in that career.
2. The appropriateness and extent of any discount applied to the multiplier for contingencies including the risk that the Plaintiff would not have become a police officer, would not have been promoted, or might have left the police force early.
3. The correct assessment of the Plaintiff’s residual earning capacity post-injury and whether the multiplier applied to this was adequate.
4. Whether there should be an award for loss of earnings after the police retirement age of 55, reflecting the Plaintiff’s likely post-retirement earning capacity.
5. The proper quantification of loss of pension benefits and whether any discount should apply to the pension loss award.

Arguments of the Parties

Appellant's Arguments

• The police career model was a reasonable and appropriate baseline for calculating future loss of earnings, reflecting the Plaintiff’s ambitions, abilities, and likely outcomes.
• The Plaintiff was more likely than not to have joined the police and to have achieved promotion to sergeant within seven years, making a 'loss of a chance' approach inappropriate.
• The judge erred in applying a 25% discount to the multiplier for contingencies, which was excessive given the Plaintiff’s earning potential and alternative employment prospects.
• The multiplier for residual earning capacity was insufficiently discounted considering the Plaintiff’s physical and psychological difficulties.
• There should be an additional award for loss of earnings after age 55 on Smith v Manchester principles due to the Plaintiff’s disability and consequent labour market disadvantage.

Defendant's Arguments

• The future loss of earnings should be assessed on a 'loss of a chance' basis because of the uncertainty in the Plaintiff’s selection and promotion prospects within the police force.
• A 75% chance of pursuing a police career was suggested as appropriate, justifying a proportional reduction in the award.
• The pension loss award should be reduced in line with the probability of the Plaintiff having achieved the police career.
• The multiplier applied to residual earning capacity was appropriate given the judge’s direct assessment of the Plaintiff’s evidence and circumstances.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Mallett v McMonagle [1970] AC 166	Compensation for loss of a chance where chance is substantial but not certain.	Referred to in assessing whether the Plaintiff’s future earnings loss should be calculated on a 'loss of a chance' basis or conventional probability basis.
Allied Maple Group v Simmons & Simmons [1995] 1 WLR 1602	Framework for assessing damages for loss of a chance.	Considered in arguments about the appropriate method for calculating future loss of earnings.
Doyle v Wallace (1998) PIQR Q 146	Use of percentage assessment for loss of a chance in career progression.	Applied to illustrate when percentage chance approach is appropriate, contrasted with the present case.
Langford v Hebran [2001] EWCA Civ 361; [2001] PIQR Q 160	Use of percentage chance approach for unusual career prospects.	Used to demonstrate that percentage chance method is reserved for cases where career model is not the baseline but a speculative higher earning prospect.
Bresatz v Przibilla (1962) 36 ALJR 212	Considerations in applying discounts for contingencies and vicissitudes of life.	Quoted to caution against arbitrary large discounts without case-specific justification.
Smith v Manchester	Compensation for future loss of earnings due to disability and labour market disadvantage.	Referenced in relation to the residual loss of earnings post-retirement and the possibility of an additional award.

Court's Reasoning and Analysis

The court carefully examined the nature of the Plaintiff’s injury, his pre-accident career trajectory, and the evidence of his likely future employment, particularly his ambition and suitability for a police career. The judge’s original approach adopted a police career model as the baseline for calculating future loss of earnings, applying a multiplier from the Ogden tables but discounted by 25% for uncertainties including the risk that the Plaintiff might not have entered or progressed in the police force.

On appeal, the court emphasized that the police career model was not speculative but a reasonable baseline reflecting the Plaintiff’s abilities, ambitions, and alternative employment prospects at a similar earning level. The court distinguished this from cases where the 'loss of a chance' approach is appropriate, which typically involve assessing a chance of achieving a significantly better career than the baseline.

Applying actuarial data from the Ogden tables and relevant case law, the court found the 25% discount excessive and unjustified by the evidence. The court reasoned that the Plaintiff’s alternative earning capacity, including potential security work, was comparable to the police career, thus the risk of not entering the police should not reduce the award. The court also found insufficient basis for a substantial discount based on non-promotion or early exit due to disenchantment or family life, as these were speculative and unsupported by evidence.

Regarding residual earning capacity, the court accepted the judge’s medical and employment evidence that the Plaintiff could achieve sedentary or semi-sedentary work but acknowledged the Plaintiff’s vulnerabilities. The court upheld the judge’s multiplier discount here, considering it a matter within the judge’s discretion based on his assessment of the Plaintiff’s testimony.

On the question of loss of earnings after police retirement age, the court agreed with the appellant that the judge erred in treating this as too speculative for an award. The court allowed a modest additional award under Smith v Manchester principles to reflect the Plaintiff’s labour market disadvantage post-retirement.

Finally, the court addressed the pension loss award. The defendant’s submission to discount the pension loss by 25% based on the chance of pursuing a police career was not pressed further, as the judge’s original figure already reflected such a discount. The court thus left the pension award intact.

Holding and Implications

The court ALLOWED THE APPEAL and increased the award for future earnings loss by £59,300, reflecting a reduced discount for contingencies from 25% to approximately 10% and an additional modest award for loss of earnings after police retirement age.

The direct effect is an increased damages award to the Plaintiff for loss of future earnings and post-retirement loss. The court reaffirmed the conventional approach to calculating future loss of earnings based on a reasonable career model and cautioned against excessive arbitrary discounts for contingencies unsupported by evidence. This decision underscores that when a career model is a reasonable baseline and alternative earning capacities are comparable, a 'loss of a chance' percentage approach is inappropriate.