XYZ v Portsmouth Hospitals NHS Trust

In assessing damages for uncertain future earnings, the court may value substantial chances of hypothetical events even where their probability is below 50%; a merely speculative possibility is ignored. Where several stages or scenarios affect the calculation, each chance must be assessed on the evidence, against an identified baseline level of earnings. An additional overall discount may be appropriate for contingencies not otherwise reflected, including uncertainties over business development, profit margins, ownership shares and long-term market conditions. For future private medical expenses, the availability of National Health Service treatment is disregarded. The essential question is whether the claimant is likely in fact to incur the private expenses.

Liability for negligent clinical treatment was admitted. The claimant suffered catastrophic renal, physical and psychological injuries after donating a kidney and sought damages for outstanding heads of loss.

The principal issues concerned future private nephrology treatment, residual earning capacity, the earnings and eventual sale value of a hypothetical market-research business which the claimant said he would have established, and his post-retirement earnings. The court had to assess a series of uncertain future events and apply the resulting findings to the agreed calculations.

1. Future medical expenses. Section 2(4) of the Law Reform (Personal Injuries) Act 1948 required the possibility of using National Health Service facilities to be disregarded when determining the reasonableness of expenses. Following Woodrup v Nichol [1991] PIQR 104, the material question was whether the claimant would in fact choose and use private treatment. The claimant’s evidence established that he would do so. The court awarded £167,757 for private monitoring, medication and surgery.
2. Chances and future earnings. The court applied the approach in Davies v Taylor [1974] AC 207: a substantial chance must be evaluated, whereas a speculative possibility is ignored. A chance below 50% can support an award. Multiple stages of a career or business may be assessed separately, with differential earnings calculated against a properly identified baseline, as explained in Langford v Hebran [2001] PIQR Q13 and supported by Collett v Smith [2008] EWHC 1962 and [2009] EWCA Civ 583.
3. The claimant would have launched the business, reached £2 million annual turnover by November 2010, had a 50% chance of reaching £5 million by November 2013 and a 20% chance of reaching £10 million by November 2018. The court assessed intermediate turnover stages sequentially rather than assuming a sudden increase or applying a single midpoint throughout.
4. An overall discount was justified where identifiable contingencies remained outside the staged chance assessments. The court applied a further 15% discount to future business earnings, in addition to the reduction already reflected in the agreed multiplier. It applied a 25% discount to the hypothetical capital value on sale.
5. The court assessed residual earning capacity by reference to the claimant’s injured condition, likely working pattern, expenses and the expected onset of disabling renal deterioration. The parties’ accountants were directed to calculate the award from those findings. The total award, including agreed and calculated losses, was £6,740,646.