1069 - 1605

Chance and Future Pension Loss

Jennifer Anne Brown v Ministry of Defence

Jennifer Brown joined the army in February 1998. Eight weeks? Into her basic training she suffered a serious fracture of her left ankle. She did her best to regain fitness but was unable to complete training and was discharged on 16 October 1999.After a period of convalescence and a number of temporary jobs she began training as a physiotherapist in September 2003. She raised proceedings against MOD for damages for personal injury resulting from the negligent failure to properly manage and supervise her training. Liability was admitted but quantum was disputed. Herring v MOD of future earnings without making any reduction for the chances of her failing to complete a full term of service. The chances of promotion to Staff Sergeant could be adequately reflected by an adjustment to the multiplicand. In fact, Miss Brown was able to obtain a comparable income as a physiotherapist, so loss of future earnings did not represent a large part of her claim.

Miss Brown came from an army family. Her father served for a full term of 22 years, leaving as a Staff Sergeant. Her sister had also enlisted. She had joined at the age of 24 having decided to commit to a life in the forces. She claimed compensation for loss of pension rights calculated on the assumption that she would have remained in the army for the full service term of 22 years. She also claimed for compensation for disadvantage in the labour market and loss of congenial employment.

The Trial Judge was impressed by Miss Brown. He was confident that she would have remained in service for the full 22 years and would have reached the rank of Staff Sergeant at the very least. He also concluded that there was a 30% chance that she would have reached a higher rank of Warrant Officer - First Class.

A first appeal to a Deputy Circuit Judge dealt with the rank at which the Pursuer would have left the army. At appeal it was held that it was likely and probable that she would have reached the rank of Staff Sergeant. There was no evidence which would have enabled the Judge to assess in any realistic way her prospects of promotion beyond the rank of Staff Sergeant. In those circumstances, for the purposes of assessing her claim for loss of pension rights, the chance of her doing so should be ignored.

A second appeal was taken to the Court of Appeal, which was invited to assess damages. It decided that because Miss Brown had chosen a career in the army that could properly be taken to provide a clear reflection of her earning capacity. Based upon Court of Appeal, 10 May 2006

The Court of Appeal indicated that it was necessary to look at the evidence in relation to the chance that Miss Brown would have completed a full 22 year term. It accepted that Miss Brown would probably not have left the army after only 6 years service, but might have left the army after 12 years service, being the two common points of departure. They came to the view that there was a 100% chance that Miss Brown would have stayed in the army for six years, a further 50% chance that she would have stayed in the army for 12 years, and a further 30% chance that she would have continued in the army for a full 22 year period of service.

 

The resultant value of her lost pension rights was the aggregate of 100% of the value of her pension rights as at the end of 6 years service, 50% of the additional value of the rights had she retired at the end of 12 years service and 30% of the additional value of the rights had she retired at the end of 22 years service. The Court of Appeal also held that there was a 15% chance that had she completed 22 years service she would have been entitled to the rank of Warrant Officer - First Class, which required to be factored into the figures.

The Court of Appeal held that there was sufficient material to find that there was a more than insignificant risk that Miss Brown would develop osteoarthritis in her injured ankle of sufficient severity to force her to give up practice as an active physiotherapist and accept more sedentary employment. The District Judge had awarded Miss Brown £18,383, which was one full years pay at current army rates. The Court of Appeal held that something approaching four months earnings was all that was appropriate where the degree of disadvantage was unlikely to be very great. The award, which had been rejected at the first appeal, was restored, but reduced to £5,000.

This is an interesting case in indicating the approach of the courts to hypothetical future losses, particularly pension loss. The approach of the courts will be to assess the percentage chance of each hypothetical scenario, value the losses arising from each scenario, and then add the resulting figures.

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