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Cite as: [2003] EWCA Civ 994

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Neutral Citation Number: [2003] EWCA Civ 994
Case No: B3/2002/1266

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
(LEVESON J)

Royal Courts of Justice
Strand,
London, WC2A 2LL
11 July 2003

B e f o r e :

LORD JUSTICE POTTER
LADY JUSTICE ARDEN
and
LORD JUSTICE KEENE

____________________

Between:
WILLEMSE
Appellant
- and -

HESP
Respondent

____________________

(Transcript of the Handed Down Judgment of
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)

____________________

Ms Jacqueline Perry and Mr David Cook (instructed by Follett Stock) for the appellant
Mr Robert Glancy QC and Mr John Tonna (instructed by Lorenzo Zurbrugg) for the respondent

____________________

HTML VERSION OF JUDGMENT
AS APPROVED BY THE COURT
CROWN COPYRIGHT
____________________

Crown Copyright ©

    Lord Justice Potter:

    Introduction

  1. This is an appeal by the defendant against the judgment of Leveson J on 31 May 2002 whereby he awarded the claimant, a talented 33-year old blacksmith and boat builder, a total sum of 212,620 by way of special and general damages for substantial injuries (including head injury) sustained in a road traffic accident on 2 December 1995 in which there was a head-on collision between the claimant's van and the car of the defendant, a Dutch National, who was at the time driving on his incorrect side of the road. The two aspects of the judge's award in respect of which complaint is made in the appeal are, first his award of 53,000 as special damages for loss of earnings and, second, his award of 110,000 in respect of future loss of earnings.
  2. The task of the judge in assessing the appropriate level of award was made difficult for two particular reasons. First, while it was agreed that the claimant had suffered some degree of brain damage in the accident, there was a dispute as to the level of its seriousness and the psychological effects attributable to it. It was the claimant's case that his personality had been substantially altered and his creative talent and powers of application, previously demonstrated in the quality of his work as an ornamental blacksmith and as a boat builder, had effectively been destroyed. The defendant contended that the complaints were exaggerated and that, to such extent as the claimant's pre-accident state had been altered, it was not caused by the accident but resulted from his having convinced himself of his own ill-health. Second, the assessment of the claimant's earning capacity prior to the accident was complicated by the way in which he had worked. He had at that time a lifestyle which involved working when he had to but not at other times and, in the four years preceding the accident, he had been preoccupied with building what was recognised to be a magnificent craft, namely a 36ft auxiliary centre-plate gaff cutter in the style of a Bristol Channel Pilot Cutter. It was built to a fine design (largely that of the claimant's brother) and the claimant planned to sail it to Australia or the Canary Islands with a view to proving and promoting its design. The vessel was approaching completion at the time of the accident but has never been completed.
  3. The judge's findings

  4. The judge found in respect of the brain damage and the psychological effects of the accident that the claimant was left with a "modest deficit and serious psychological reaction" which reduced his ability to work. By way of elaboration the judge compared the condition of the claimant with that of a person with "minor brain damage" as described in 2(a)(d) of the Judicial Studies Board Guidelines for the Assessment of Damages in Personal Injury Cases which refer to a position where there has been a good recovery and ability to take part in normal social life and return to work, albeit not a restoration of all normal functions, with persistent problems such as poor concentration and memory or disinhibition of mood, which may interfere with lifestyle, leisure activities and future work prospects. He classified the claimant as in a category in which
  5. "although the brain injury might be modest, causing subtle differences affecting concentration, memory and ability to work at the highest levels, the psychological condition is such as very much more dramatically to affect the quality of life than the organic damage might suggest."

    He went on to say that he believed the interference would be "above the level indicated for minor brain damage" albeit that the claimant's ability to work would not be so badly affected as in the case of Botana v De La Cruz cited in Kemp & Kemp at C2-051, a case of irreversible brain damage impairing the plaintiff's cognitive ability and memory and limiting her ability to work in the future to stress-free part-time work.

  6. So far as loss of earnings consequent upon the accident was concerned, the judge set the position out in this way. In the year ending 31 October 1989 the claimant had substantial earnings of 22,208. However, his accounts for the four years ending 31 October 1990 to 1994 when work was in progress showed greatly reduced figures for net pre-tax profit of 4,297, 100, 1,137, 4,396 and 1,226 respectively. As the judge observed, those sums were insufficient to support the lifestyle the claimant described himself as having, his wife (who was in full-time employment) keeping her finances separately from his. However, from early 1992 onwards, there was an explanation for the low level of receipts and profit, namely that work on the claimant's boat had started. The claimant financed the venture and supported himself from the proceeds of sale of his house, on the basis that it was his lifelong ambition to construct such a yacht and sail it on a long voyage. The claimant estimated that he had invested approximately 8,000 hours in work upon the cutter. This was supported by the evidence of a yacht surveyor who said it represented 7000-8000 hours of work. The judge observed that if the claimant had done all the work personally (which he had not, he had some help from his brother), it meant that he would have spent 40 hours a week for each of those 4 years on construction of the vessel.
  7. The claim was advanced by Mr Glancy QC, who appeared for the claimant below, on the basis that the vessel could have been sold, realising a very considerable profit (the figure advanced was 114,000, being 150,000 less 36,000 cost of materials) which could be apportioned to represent the claimant's earnings over the 4 years prior to the accident, thus giving a more accurate picture of his earning capacity which was put at 28,500 per annum. The judge rejected that approach as too crude, because it failed both to take account of any labour for which the claimant had to pay and because it ignored the fact that the sale price of the vessel was not merely a function of materials and work. He said that, making the assumption that a willing buyer could be found for the vessel at the price, (which he was prepared to accept, given the highly favourable professional evidence as to the quality of the boat which he had heard), the purchase price would also represent in part the aesthetic value of the vessel, which was principally the design of the claimant's brother who still held the plans and was proposing to market them. The judge settled upon an approach based on rates of remuneration in boat building.
  8. Because of the attack which has been made in this appeal upon the judge's method of arriving at an annual sum for post-accident loss of earnings despite the uncertainties, I propose to set out the relevant passage of his judgment in extenso.
  9. "72. Mr John Herd, who was prepared to finish the vessel charging 10 an hour, which he told me was less than the going rate, provides some window upon how I should value it. Assuming that 10 was the prevailing rate at the time the work was done, 8,000 hours represents 80,000 over 4 years, and that figure must be discounted for the other labour involved, including some 3,000 which Mr John Herd told me he was owed based upon records which he has kept, and other labouring work. It should also be discounted because 8,000 represents the very maximum period of time likely to have been taken.
    73. Miss Perry submits that this approach to assessment of loss is speculative and that I should proceed on the premise that Mr Hesp has simply not satisfied the burden of proof that he has lost money which he would, but for the accident, otherwise have earned. I have had real concern assessing the force of this submission. After all I do not know precisely how much work the Claimant has put into the vessel and neither do I know that had he not been working on the vessel he would otherwise have been in remunerative employment. It is abundantly clear that he has adopted a lifestyle which involves working when he has to, but not working at other times. On the other hand, he has created what I have seen is a magnificent craft and it cannot be gainsaid that it must have taken him as the predominant craftsman very substantial time and deprived him of the opportunity, which I am prepared to accept he would have taken at least to a large extent, of undertaking other work. In the light of all the evidence, I accept that the claimant worked on his boat in lieu of undertaking remunerative employment, that he would have completed it and then, having sailed it, either sold it (to realise capital, if only to build another boat) or retained it as a valuable asset. On any showing, he would have used his skill and ability, at least some of the time, either to earn money, or again to build an asset which could be converted into money at some stage in the future. To refuse to recognise these facts would be demonstrably unfair to the Claimant and would be grossly to undercompensate him.
    74. Mr Hesp's average receipts in earnings in the years ending 31 October 1992, 1993 and 1994 are about 2,250. Trying to do the best I can, by reflecting the work done on the boat, I will increase the sum to 17,500 equivalent earnings i.e. reflecting just over 1500 hours per annum on the boat. That does not mean it is appropriate to assume that from the date of the accident to date the Claimant would have earned 17,500 each year. I do not believe he would have. Having completed the vessel, it is inconceivable that he would not have taken a substantial period of time to sail it, even assuming he sold it thereafter. On the other hand, it is quite clear that he has been able to earn a far higher rate of remuneration even in his present condition. In particular, I point to the rate of 25 an hour to Mr Horrobin on the project to which I have referred. It is not unrealistic to suppose that he would have adopted the practice as hitherto, working when he needed to and not when he did not, and I am prepared to balance these two features i.e. time off when not working against greater earning potential when working. Whatever might be the position as to the boat however, earnings subsequently, whether in building another boat at about the same sort of rate or working as an ornamental blacksmith, would have attracted tax, so even if I were to allow 17,500 gross, the net loss would be rather less. Without real help, I have to make an assessment, and I put that annual loss at 14,500. Given the assumption that I have made, it would be spurious to calculate this precisely to the week. I allow 14,500 per annum over the period since the accident which in the round I assess in the sum of 80,000 "
  10. I note at this point that the evidence of Mr Horrobin to which the judge made reference was the evidence of a well known, successful and prize-winning blacksmith who spoke highly of the claimant's work prior to the accident, having worked with him on several projects, finding his work to be of the highest calibre, inventive and problem-solving. He had employed him in 2002 after the accident for a 7-week period on an urgent job requiring expert completion against a deadline. He stated that, whereas the claimant could previously work on his own with high creative ability, he had now had to be employed with his brother in the lead position, giving him guidance and reassurance. He had both lost his creative edge and required repeated explanation as to what he was to do. However, his physical work was still good and, because of Mr Horrobin's high profit level on the particular contract, he had employed the claimant at a rate of 25 per hour i.e. 1,000 per week.
  11. Having valued the pre-trial loss at 80,000 as set out above, after deduction of 27,000 representing post-accident receipts, the judge made a special damages award of 53,000.
  12. Turning to the question of future earnings loss, the judge observed that, "if calculating past losses required careful thought, future loss is even more problematic". He looked at the claimant's current level of earnings and treated them as likely to be maintained. (The judge did not make clear what he took the 'current level' to be and I shall turn to that below). He said:
  13. "75. I repeat Mr Horrobin's evidence, that when engaging the Claimant in connection with his recent work, he needed loyalty and commitment above and over everything else and, furthermore, "that is what I got". He went on "He has lost his inspiration, but he remains a skilled blacksmith capable of working on important work, albeit under supervision" Robert Herd spoke of the Claimant bringing in 12,000 worth of work which was "a reasonable reflection of what he was capable of", albeit that the large job has gone on ice. I accept, as Mr James has told me, that at the moment he has lost the enormous versatility that he previously had, but Brian Hobbs also confirmed that he was "Still capable of working. He was just slower and lost concentration". The fact is that he was able to settle down to Mr Horrobin's work in the early part of this year, notwithstanding the forthcoming litigation "
  14. The judge went on to state that there was nonetheless a remaining loss accepted by the neurologists concerning the claimant's artistic ability. He also referred to Mr Horrobin's having spoken of the claimant's development as less than he would have expected at this stage of his life. The judge observed that that was tangible loss which had to be reflected in damages. He said:
  15. "76. I am afraid I have not found the reports of the employment specialists of value, because the loss is not, as I have found, an ability to work, but rather potentially to go to levels at or above that which he previously attained. It is not without interest that, in awarding 53,000 for past loss I am compensating the claimant at a level just below 10,000 a year. That sum, which of course covers the years immediately following the accident when little work was done and more recent times, would be too much to reflect the difference between what the claimant was capable of achieving and that which he can now achieve, because if he wished to work in this way I believe he would be capable of remunerative employment, albeit periodic in nature, broadly at the annual rate at which he is now being paid.
    77. Doing the best I can, bearing in mind my view that the claimant has indeed suffered a real loss at the higher level of what he would otherwise have been capable of doing (which reflects the neurological evidence), I assess a fair reflection of the loss at 7,500 per annum. On the basis that he will undergo psychotherapy, and notwithstanding his higher recent earnings, it could take a period to maximise his motivation and improvement to his psychological state. I will allow 10,000 for two years. I then award 7,500 for a balance of 12 years on a slightly reduced multiplier, which would have been 15.53, to reflect in small measure the greater uncertainty that the claimant's lifestyle would in any event have meant as he got older that he did less rather than more, if only so that he could pursue his other activities. This discount is not large, because I have not proceeded on the necessary premise that he would have been working all the time or seeking to maximise his earnings in employment in any event. Thus, future loss amounts to 10,000 for two years and 7,500 for 12 years, i.e. 110,000."

    The appellant's contentions

  16. In this case, Miss Perry for the defendant/appellant has attacked the judge's award for past and future earnings loss, conducting a detailed analysis of the evidence for both purposes.
  17. The lines of Miss Perry's attack have been threefold. First, she submits that the claimant was shown to have exaggerated both his own disability and earnings loss prior to trial. The judge should therefore have been wary of his credibility and cautious in assessing both past and future earnings loss.
  18. In this connection, she points out that by trial, the figures in the claimant's Schedule of Loss were shown to be exaggerated in at least two respects. (a) The Schedule claimed pre-tax profits (which roughly equated to sales) of 4385 for the year ended 31 October 2001, whereas the invoices belatedly disclosed on discovery showed pre-tax sales of 12,545. (b) In fact for several years the claimant's accounts for the Inland Revenue had been prepared up to end February in each year. The accounts for year ending 28 February 2002 showed net profits (which again roughly equated to sales) as 4467, whereas the disclosed invoices for that` period totalled 10,200 (not 14,200 as the judge appears to have thought in a passage at the end of paragraph 74 of his judgment where he dealt with the necessary deductions). Further, the receipt of 7,000 from Mr Horrobin did not appear. Thus there was a true income of 17,200-odd for year ending 28 February 2002. Miss Perry submits that, in the light of the claimant's irregular employment history and the unreliability of his Schedule of Loss, the judge should simply have concluded that he could not be satisfied that the claimant had discharged the burden of proving past loss at all. I shall return to the question of past loss below.
  19. Secondly, Miss Perry submits that, on the evidence before him from other sources, the judge took an unduly pessimistic view of the practical effects of brain injury on the claimant's pre-accident abilities as a blacksmith or in the boat-building industry.
  20. I can say at once on that aspect that I do not consider that Miss Perry has so demonstrated. While the claimant was (as the judge found) himself an unreliable witness in this respect, there was ample evidence to support the judge's conclusions. I have already set out the passage in his judgment (see paragraph 3 above) where, having reviewed the medical evidence, the judge dealt with the general level of impairment by way of broad assessment for the purposes of the general damages claim for pain, suffering and loss of amenity. There is no appeal against that finding.
  21. At paragraph 25 of his judgment the judge set out a list of the claimant's own complaints and in particular that "he had cognitive difficulties, which reduced his ability to organise and plan, affected his memory and decision-making, and significantly reduced his ability for three-dimensional imaging and creative thought". The judge largely accepted those aspects of the claimant's evidence on the basis that, as stated at paragraph 26 of his judgment, the claimant's account "was broadly supported by a large number of his relatives and friends". He was described by those he had worked with - James Horrobin, Robert Herd, Brian Hobbs and his brother John Hesp - as much reduced in competence, although he still remained capable. The judge continued:
  22. "Mr Horrobin said that he would have let him run a complex job prior to the accident, but that now his most common fault was that he forgot something told him 5 minutes previously. Robert Herd said that the Claimant had shown no interest in work which he was to undertake with him, and that he was struggling. Brian Hobbs said that he was still capable of working, but that he was slower and lost concentration. In his statement his brother put the matter this way:
    "Prior to his head injury Dominic's fluency in the skills [of mentally visual three-dimensional structures] was demonstrated by the first class work he produced. Projects carried out after Dominic's car crash made it clear that he had an almost complete lack of these skills Dominic's inability to visualise only became apparent to me in design and planning sessions at work. More apparent, both in the working environment and in private, is Dominic's poor short-term memory. At work this at best slows him/us down, at worst wastes a great deal of time, materials and other resources."
  23. The judge then went on to review at length the evidence as to psychological disturbance and the effect on the claimant's social and family life including his ability to drive and to be responsible for the children when he took them out. He found the claimant's complaints in these respects to be exaggerated. He carefully examined the performance of the claimant in the witness box and came to the following conclusion in paragraph 38 of his judgment:
  24. "On occasions, albeit by no means at all times, he appeared relaxed in some of his answers and did not suffer from an inability to concentrate or pay attention to detail. That is not to say that he is now recovered. I accept that he does not perform as well as he did before the accident and I equally accept, as I have said, that he does on occasions experience each of the symptoms about which he complains, albeit that these are not as gross, as intrusive, or as debilitating as described by Miss Levett. It may be right that Ms Francis is correct to describe him now as a 'standard Mr Average', although that should not be taken as implying that occasionally his reactions and his behaviour were less than might be expected of an average person, and certainly not what would have been expected having regard to his pre-accident personality."
  25. The judge then went on to deal in detail with the medical evidence which centred principally upon the question of the extent to which the claimant's complaints and disabilities were the result of brain damage or were psychological in origin, all doctors being in agreement that the complaints were genuine and the claimant was not exaggerating his symptoms. The judge concluded that the claimant's condition was mainly psychological in nature but that it caused a real measure of suffering and loss of amenity. At paragraph 59 of his judgment he states that:
  26. "On the basis of the neurologists' views, some loss of artistic ability may remain, but I do believe that the claimant will be measurably better and that his earning capacity although affected, will not be affected by anything like the extent claimed."
  27. Nonetheless, the judge's conclusion on the degree of long-term injury was that stated in paragraph 67 of his judgment from which I have already quoted above at paragraph 3 above. The judge's findings as to the level of disability/impairment, reached after careful analysis of the evidence, are in my view unimpeachable.
  28. Miss Perry's third line of attack is as follows. She submits that, so far as future earnings loss is concerned, because of the claimant's lifestyle and irregular working habits prior to the accident, the state and reliability of the evidence as it stood by the end of the trial was so uncertain that the claim for future earnings loss was also not susceptible of the multiplier/multiplicand approach which the judge adopted. Even if the blunting of the claimant's faculties, initiative and artistic edge had been established, so that his earning capacity was damaged, it had not been proved that he would in fact have sustained any loss of earnings. At best, she submits, the judge should have made a Smith v Manchester award of modest proportions based simply on the value of the claimant's lost top slice of artistic ability. I shall turn in detail to that submission having first considered the judge's calculation of past loss.
  29. Calculation of Past Loss

  30. On the basis of the uncertain evidence which confronted him, the judge was faced with the difficult task of assessing the claim for loss of earnings in the period of 6 years 5 months between accident and trial. At paragraph 68 of his judgment, the judge rejected the justice or, indeed, the possibility, of calculating the pre-accident earnings loss on the orthodox basis of loss of actual earnings less post-accident receipts because the claimant had earned very little in the four years prior to the accident, being involved almost full-time in constructing his own large boat virtually single-handed. The judge accepted (at paragraph 73 of his judgment) that the claimant had the burden of proof of showing that he had suffered a loss of money which he would, but for the accident, otherwise have earned, but equally accepted that the absence of formal earnings was due to the creation of "a magnificent craft" of high capital value when completed. He further held that, had the claimant not been so engaged, he would have spent at least a large extent of the time undertaking other remunerative work. The end product would have been completion of a boat which would either have been sold to realise capital, if only to build another boat, or retained as a valuable asset. The judge concluded that not to recognise those facts would be unfair to the claimant and result in gross under-compensation.
  31. In my view that was a legitimate approach. What the claimant had done in the four years or so prior to the accident was in effect to exchange income for future capital value so that his receipts and earnings in the four years of construction were not a fair reflection of his earning capacity and could not be used as an appropriate basis in which to calculate his post-accident loss.
  32. It was the claimant's case that he had put in about 8000 hours' work on the boat over a period of about four years' actual production time. The judge's method of calculation involved a series of discounts from that starting point. First, he reduced the figure of 2000 hours per annum to 1500 (i.e. 6000 hours in total) because of the uncertainty as to the accuracy of the calculation and the amount of other labour involved. Second, he valued the 1500 hours work on the production of the boat over the 4 year period at a rate of 10 per hour which, on the evidence, was well below the "going" rate for such work. That produced a figure of roughly 15,000 per annum, to which the judge added the claimant's average receipts in earnings in the years prior to the accident namely 2,250 per annum, rounding it up to 17,500 to reflect 'just over' 1500 hours per annum on the boat. He then netted that down to a sum of 14,500 per annum to allow for the incidence of tax. Finally, he made a further discount by applying a 5 year multiplier rather than the 6 years since the accident, to reflect the fact that the claimant would have sailed the vessel for a substantial period of time after completing it, even assuming that he thereafter sold it.
  33. As I have already indicated, Miss Perry's primary submission is that the evidence as to the claimant's earnings was so unreliable that no award should have been made for past earnings loss. I would reject that submission. It was essentially a matter for the judge. Unless he was satisfied, and plainly he was not, that in the four years prior to the accident the claimant had concealed true earnings over and above the time which he spent on building his own boat, it was clear that compensation at the level of 2,250 per annum would be a gross injustice to the claimant who was well capable of sustained hard work and in respect of whom it was not suggested that, for four years prior to the accident, he was doing other than work hard upon a valuable capital project. In my view, the judge was right to consider that compensation at a realistic level was required in a situation where the accident had prevented final completion of his boat and the realisation of his plans and where, but for a year out allowed by the judge for the claimant's voyage once the boat was complete, he would have resumed working, whether on a new capital project or as the accomplished working blacksmith he was.
  34. In this last connection, Miss Perry has placed weight upon the observation of the judge at paragraph 74 of his judgment (quoted at paragraph 6 above) that his finding as to the value of the work done on the boat "does not mean that it is appropriate to assume that from the date of the accident to date the claimant would have earned 17,500 each year. I do not believe he would have". However, it is plain from the sentence which follows that that remark referred not to the claimant's ability to earn at that rate but to the fact that he would have taken substantial time out to sail his boat once completed. In that respect the judge made a discount of one year from the period for which loss of earnings to trial was calculated. He also accepted that there would be other periods when the claimant did not earn during the pre-trial period; however for the purposes of calculating the annual rate of remuneration, he set off such periods of non-earning against periods of work in respect of which he was satisfied the claimant would have earned at a rate far higher than the 10 per hour underlying his 17,500 calculation (c.f. the Horrobin employment).
  35. Miss Perry's alternative submission is that, in any event, the judge was wrong to take a multiplier/multiplicand approach even on the basis of 10 an hour for earnings loss in the light of the uncertainty as to the number of hours worked by the claimant upon the boat. She submits that the judge should simply have attempted a broad assessment on the lines approved by this court in Blamire v South Cumbria Health Authority [1993] PIQR/Q1. The approach in Blamire was of course one which related to award of a global sum to assess as at trial the present value of the risk of future financial loss. However, to the extent that it represents an example of the necessity on occasion, in the light of uncertain circumstances, for the court to award a global (and somewhat impressionistic) sum, I accept that it affords Miss Perry some assistance in principle in relation to pre-trial loss. Had the judge decided that, on the general state of the evidence and his judgment of the claimant, a Blamire (i.e. round sum) award was all that was appropriate, I cannot think that this court would have interfered. Equally, however, the judge having felt able to take the approach he did as the just way of dealing with the difficult question of past-earnings loss, I do not think that this court should interfere with the sum awarded in that respect.
  36. Future earnings loss

  37. In relation to future earnings loss, Miss Perry has repeated her submissions as to the uncertainty of the position and the unreliability of the sub-stratum of evidence available to the judge on which to assess whether, at what intervals and at what rate the claimant would have worked, either on his own account or employed by others such as Mr Horrobin. She relies upon the finding of the judge at paragraph 76 of his judgment that the claimant, if he wished, would be capable of remunerative employment, albeit periodic in nature, broadly at the annual rate evident at trial. While, as I have already observed, the judge did not make clear what that annual rate was, it seems clear from the figures already mentioned at paragraph 13(b) above, it was some 17,200. A higher figure was advanced to us by Miss Perry. However it was higher because it included an invoice dated 28/2/01 for work which fell for inclusion in the previous year ending on that date (c.f. the error of the judge referred to at paragraph 13(b) above). Upon those figures, Miss Perry points out that by assessing future earnings loss at the rate of 7,500 per annum on a 12-year multiplier on the basis of the claimant's reduced ability to develop and work at a higher level of attainment and remuneration than formerly, the judge was in effect awarding him damages at a future earnings level of 24,700, which was higher than the multiplicand for future earnings loss advanced in the claimant's Schedule of Loss.
  38. Miss Perry further complains, as Mr Glancy QC has been obliged to concede, that the judge did not make clear the basis upon which he calculated the future earnings loss at 7,500 per annum. Mr Glancy QC advanced various possible explanations, none of which held water. It is clear that the judge was satisfied that the claimant was capable of working in the manner and to the remunerative extent that he had in fact worked before the accident and that what called for additional compensation was not the loss of physical skill as a blacksmith, but rather the ability "potentially to go to levels at or above that which he had previously attained" (paragraph 76 of judgment). There was a loss of speed and versatility and the ability to work unsupervised on an important large job; however, there was still the skill to do the blacksmith's work he had done before rebuilding his boat project and no evidence to suggest that a career as a boatbuilder would have been a more remunerative (albeit less inspiring) activity than employing his skills as a working blacksmith. In fixing "the real loss at the higher level of what he would otherwise have been capable of doing" at a figure of 7,500 per annum, the judge made no attempt to relate it to the question-mark as to the claimant's inclination or prospects in pursuing his career in the future.
  39. In my view, the judge's method of award on the basis of a fixed multiplicand was, in all the circumstances, inappropriate. He was making a broad assessment of future developments, which involved the uncertain intentions of the claimant as to the nature and direction of his employment in the future. In that respect the judge was unable to derive assistance from the evidence of the employment experts called before him and based his assessment on the evidence of Mr Horrobin and various persons who knew the claimant, whose evidence the judge was at liberty to, and did, accept. Their evidence, namely that his physical skills had not been reduced but that he had lost all his previous creative edge and was unable, as before, to do major work unsupervised, plainly indicated a major disadvantage affecting the claimant's working capacity. He also lost the chance of developing a previously promising creative career as a designer/blacksmith had he chosen to do so, rather than simply continuing in his former lifestyle. As to this, the judge was plainly of the view there was a good chance he would have progressed in skill and application, loss of which required an element of compensation.
  40. In all the circumstances I am firmly of the view that this was a classic case for a Smith v Manchester-type award, rather than the selection of a multiplicand even on an 'educated guess' basis. The claimant had undoubtedly suffered reduced earning capacity and was at a disadvantage in the future labour market and the development of his career, but the level of his actual earnings loss depended on how far he sought to decide to work full-time and/or to develop his career in a way which had not been demonstrated before the accident. These circumstances called for a broad lump sum assessment to cover the likelihood of future damage. In my view the appropriate award for future earnings loss on that basis was a lump sum award of 50,000.
  41. Conclusion

  42. I would therefore reduce the judge's award for future loss of earnings from 110,000 to 50,000 and to that extent I would allow this appeal.
  43. Lady Justice Arden:

  44. I agree.
  45. Lord Justice Keene:

  46. I also agree.
  47. Order: Appeal allowed; no order as to costs.
    (Order does not form part of the approved judgment)


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