Civil Jurisdiction 2012 No 6

• Jurisdiction: Bermuda
• Judgment Date: 17 July 2015
• Date: 17 July 2015
• Docket Number: Civil Jurisdiction 2012 No 6
• Court: Supreme Court (Bermuda)

[2015] Bda LR 69

In The Supreme Court of Bermuda

Civil Jurisdiction 2012 No 6

Between:

Kate Thomson

Plaintiff

and

James Thomson and Colonial Insurance Company Limited

Defendants

Mr P Harshaw and Ms A Wilson for the Plaintiff

Mr C Rothwell for the Second Defendant

The following cases were referred to in the judgment:

Warren v HarveyBDLR [2015] Bda LR 59

Warren v HarveyBDLR [2015] Bda LR 1

Blamire v South Cumbria Health Authority [1992] EWCA Civ 22

Sreco and Sreco v DejewskiBDLR [1997] Bda LR 23

Bullock v Atlas Ward Structures LtdUNK [2008] EWCA Civ 194

Dews v National Coal BoardELR [1988] AC 1

HS v Lancashire Teaching Hospitals NHS Trust [2015] EWHC 1376

Woodrup v NicolUNK [1993] PIQR Q104

Hunt v SeversUNK [1994] 2 All ER 385

Mills v British Rail Engineering LtdUNK [1992] PIQR Q130

Personal injury — Quantum — Loss of earnings — Future loss — Discount rate

JUDGMENT (ASSESSMENT OF DAMAGES) of Kawaley CJ

Background

1. On June 14, 2013, following the liability phase of a split trial, the 2nd Defendant was found liable for the 1st Defendant's negligence in causing the Plaintiff (his wife) serious injuries in a road traffic accident which occurred on January 15, 2006. The Plaintiff was found to have been contributorily negligent in that she was not wearing a seat-belt at the time of the accident1.

2. The trial on quantum raised the following principal issues:

• i. how much was recoverable in respect of past loss (in particular loss of earnings);

• ii. how much was recoverable in respect of future loss (in particular loss of earnings, other employment-related loss and medical expenses); and

• iii. what “discount rate” should be applied when calculating the lump-sum awarded in respect of future loss?

3. The discount rate issue was argued on a joint basis in relation to the present action and two other unrelated proceedings on the basis of expert actuarial and economic evidence. My conclusory findings in relation to that issue were recorded in the following paragraphs of my Ruling dated June 22, 2015 in Warren v Harvey et alBDLR[2015] Bda LR 59:

‘105. I accept the evidence of Mr Daykin (based on the uncontradicted inflation/earnings projections of Dr Llewellyn) that the appropriate discount

rate for Bermuda a regards Mrs Thomson (44.5 years old at the date of the Report) should be:

(i) -0.25% for heads of damage likely to be affected by price inflation; and

(ii) -1.85% for heads of damage likely to be affected by real earnings increases.

106. The extent to which, if any, a separate UK rate falls to be computed because the claimant Thomson now resides in the UK will be determined in a separate judgment however, I accept the further evidence of Mr Daykin again (based on the uncontradicted inflation/earnings projections of Dr Llewellyn) that the appropriate discount rate for the UK should be:

(i) -0.5% for heads of damage likely to be affected by price inflation; and

(ii) -2.5% for heads of damage likely to be affected by real earnings increases (i.e. future loss of earnings).’

4. The most financially significant single dispute centred on the Plaintiff's contention that her loss of earnings awards should be based entirely on a Bermuda measure and the 2nd Defendant's contention that UK wages provided the appropriate measure as she would likely, in any event, have returned to her original home of Wales. However, there was also controversy as to whether the multiplier/multiplicand approach should be followed at all.

Findings: can the Court adopt the multiplier/multiplicand approach at all or are the imponderables too great to justify more than a broad-brush assessment?

5. Mr Rothwell invited the Court to conclude that the uncertainties surrounding the Plaintiff's future earnings were so uncertain that the conventional multiplier/multiplicand approach ought not to be adopted. A similar argument was advanced with greater justification in Warren v HarveyBDLR[2015] Bda LR 1 (see paragraphs 18–20, 23), but rejected. A broad-brush assessment was, exceptionally, made in relation to a loss of earnings claim in Blamire v South Cumbria Health Authority[1992] EWCA Civ 22 in very different circumstances where it was unclear to what extent the claimant would have chosen to work at all as opposed to deciding to be a home-maker. This argument must be decisively rejected here.

6. The present case is very different from Blamire, most notably because at the date of the accident (a) the Plaintiff was a qualified public sector professional in a largely recession-proof occupation with a clear earnings path, (b) she was her household's primary breadwinner, and (c) there is no basis for doubting that, but for the accident, she would have worked until she retired. The position in Sreco and Sreco v DejewskiBDLR[1997] Bda LR 23 was also quite different, with no reliable evidence about what the Slovenian claimant's current or future earnings in Slovenia were or were likely to be.

7. I am again guided by the following dictum of Keene LJ in Bullock v Atlas Ward Structures LtdUNK[2008] EWCA Civ 194:

‘19…All assessments of future loss of earnings in personal injury cases be necessarily involve some degree of uncertainty. As far as possible, the task of the court is to seek to arrive at the best forecast it can make of the scale of such loss, normally on the well-established basis of multiplying an anticipated annual loss by an appropriate multiplier.

20. Merely because there are uncertainties about the future does not of itself justify a departure from that well-established method. Judges therefore should be slow to resort to the broad-brush Blamire approach, unless they really have no alternative…’

Findings: but for the accident, how long would the Plaintiff have continued to work in Bermuda?

8. The Court is bound to grasp the nettle and do its best to determine how long the Plaintiff would likely have continued to work in Bermuda had her accident not taken place. Mr Rothwell offered up the tempting escape route of assessing her loss of earnings based on her actual residence in Bermuda immediately after the accident and then in the UK after July 23, 2007. He sought to light the way by reference to the approach adopted by Ground J (as he then was) in Sreco and Srecov DejewskiBDLR[1997] Bda LR 23. But that case was wholly distinguishable because the plaintiffs there admitted that they intended to return to their place of origin within a specific time-frame, as Mr Harshaw pointed out.

9. The 2nd Defendant's counsel also argued, without reference to authority, that awarding damages for loss of earnings on the Bermuda scale for a period when the Plaintiff was actually in the UK would give her a ‘windfall’. This argument must be rejected. The Court's proper function is to assess how to fully compensate the Plaintiff by a loss of earnings award for what she would have earned had the accident not occurred. What the Plaintiff's living expenses were or would have been is a wholly irrelevant consideration for the purposes of this task.

10. Mr Rothwell rightly reminded the Court of the need to treat the controversial aspects of the Plaintiff's evidence with care because of her obvious financial interest on the outcome of the present proceedings. I found her to be a credible witness in general terms; she did her best while in the witness box to testify in a straightforward way. The crucial assessment of how long she would likely have stayed is in any event primarily a matter of objective judgment; it could never be enough to simply “believe” what the Plaintiff now says would have occurred, in isolation from the broader picture and surrounding facts which can more clearly be discerned. The background facts, established by largely uncontroversial evidence, which I find to be particularly relevant are the following:

• i. the Plaintiff was a nurse specially qualified to work in two areas, wound care and paediatrics. She could also have done general nursing. At the time of the accident she was employed subject to a three-year work permit which would have expired on March 5 2008. Her first contract was from 2001 to 2003, her second from 2003 to 2005. However, the profession of nursing as late as 2012 was still an area recognised by the Immigration Department as exempt from work permit term limits because of a shortage of sufficient local human resources;

• ii. although her former supervisor Mrs. Virgil would have liked to retain her services, it was unclear whether there would have been a job for the Plaintiff in her two preferred areas when her contract expired in March 2008 because Bermudians might have been eligible for appointment;

• iii. nurse numbers declined somewhat from 2010 due to a cash crisis at the Hospital, as did the opportunity to earn overtime;

• iv. the Plaintiff would have reached her basic salary cap in October 2011;

• v. Hospital pay was frozen in 2012;

• vi. the Plaintiff, rather than her husband, was the primary breadwinner. Although the Plaintiff was reluctant to concede that this was the case, I find that the family would have been stretched to live on her income alone;

• vii. the Plaintiff's husband was employed on yearly work permits in the marine construction industry and his long-term employment status was even more uncertain than the Plaintiff's, especially taking into account the notorious now longstanding downturn in the Bermuda construction industry and the absence of any or any convincing evidence that he possessed relevant special qualifications or skills;

• viii. the Plaintiff's husband is currently working in a family scaffolding business which he might have wanted to return home to, even if the accident had not occurred;

• ix. before they left Bermuda in 2007, the Plaintiff and her husband gave their friends (such as Mrs Cheryl Alves and Ms Kimberley Morbey) no reason to doubt that they intended to remain in Bermuda as long...