Newman v Folkes

In assessing damages for loss of earnings, a claimant who has proved an underlying earning capacity may recover despite having failed to pay tax or National Insurance, subject to deduction of the sums properly payable. The court must assess the evidence as a whole. A claimant’s dishonesty in presenting part of the claim does not automatically invalidate a separate, supported basis of calculation. A Smith v Manchester Corporation award is inappropriate where the evidence permits a conventional assessment of actual past and future earnings. For gratuitous care provided by a family member, there is no conventional discount. The assessment is global and fact-sensitive.

The claimant was injured in a road accident and brought a claim for personal injury damages. Liability was admitted, with contributory negligence agreed at 25 per cent. Garland J. assessed damages at approximately £815,000, including past and future loss of earnings and gratuitous care.

The defendants appealed against those awards. The claimant cross-appealed against the reduction of the future loss multiplier. The central issues concerned proof of earnings, the effect of unpaid tax and National Insurance, the appropriateness of a Smith v Manchester Corporation award, the assessment of gratuitous care, and the multiplier.

1. Appeal and cross-appeal dismissed. The judge was entitled to rely on evidence from three motor traders and the invoices to find that the claimant continued trading until the accident. That evidence supported the calculation of actual earnings, despite dishonesty in other parts of the claim.
2. Failure to pay tax or National Insurance did not bar recovery of lost earnings. Appropriate deductions had to be made.
3. A Smith v Manchester Corporation award was inappropriate because the accepted evidence permitted an ordinary assessment of actual loss.
4. The finding that the claimant was unemployable was a factual finding based on the medical evidence and was not plainly wrong.
5. There was no conventional discount for gratuitous care provided by a family member. Applying Evans v Poltypridd Roofing Ltd [2001] EWCA Civ 1657, the assessment was global and fact-sensitive.
6. The reduction of the future loss multiplier was justified by the uncertainties of the claimant’s future working prospects.

• Court of Appeal (Civil Division): Garland J.’s assessment was upheld; the appeal and cross-appeal were dismissed.
• Queen’s Bench Division: Garland J. assessed damages after trial on quantum.