Stefanovic v Carter

Future loss of earnings may properly be assessed using a multiplier and multiplicand where the evidence establishes a continuing loss, even though the precise figures are necessarily speculative. The court should use the best objective evidence available, including reliable earnings data and the claimant’s demonstrated pre-accident potential. An appellate court should not interfere merely because different assumptions could produce a different result. Intervention requires an award that is plainly excessive or so out of line with the evidence that it cannot reasonably stand.

The claimant suffered severe facial disfigurement as a passenger in a car driven by the defendant. Liability was admitted. The Kingston upon Hull County Court assessed damages, including awards for loss of amenity and future loss of earnings. Future earnings loss was assessed at £220,000 by applying an agreed multiplier of 22 to a £10,000 annual net loss.

The defendant renewed an application for permission to appeal. He argued that the claimant’s future loss was too speculative for a multiplier-and-multiplicand calculation and should instead attract a single Smith v Manchester handicap award. The central issue was whether the judge had been entitled to quantify the continuing earnings disadvantage on the evidence available.

1. Application dismissed. Permission to appeal was refused. The order assessing damages therefore remained in force.
2. Lady Justice Hale held that the trial judge was entitled to find that the claimant’s decision to leave accountancy was reasonable. The judge had heard the claimant’s evidence and observed the effect of his serious facial disfigurement. That factual assessment was virtually impossible to challenge on appeal and was supported by the psychologist’s evidence that the claimant would remain negatively affected.
3. The multiplier-and-multiplicand approach was permissible. There was clear evidence of an actual and continuing loss of earnings, although quantification was difficult and necessarily speculative. The judge had to do the best possible on the available evidence.
4. The judge was entitled to compare the claimant’s likely earnings as a successful and ambitious accountant with his reduced prospects in a less secure building business. The Professional Negligence Bar Association’s survey supplied objective comparative earnings data. The evidence did not support the suggested earnings of £35,000 per year, but it supported a substantial difference between the two career paths.
5. The resulting £10,000 annual net loss was not so out of line with the evidence, or plainly excessive, as to justify appellate intervention. Lord Justice Henry agreed, noting the limited evidence but considering the figure reasonable in light of the claimant’s pre-accident potential.

• Kingston upon Hull County Court: His Honour Judge Moore assessed damages on 16 November 2000, including £220,000 for future loss of earnings.
• Court of Appeal (Civil Division): The defendant’s renewed application for permission to appeal was dismissed on 20 March 2001.