In my previous blog on Seriously Injured Business Claimants, I explored how to keep an eye out for lost business opportunities and the use of career modelling for injury claims. By modelling different scenarios to present lost profit quantum in such circumstances.
This follow-up blog shifts the focus to employed claimants. We will specifically look at modelling earnings and pensions flowing from lost careers. Exploring two distinct groups of claimants. Firstly seriously injured adults and then children.
Also, with the future loss discount rate now under review, our models can also helpfully present loss quantum using a range of FLDRs.
Career Modelling For Injury Claims: Adults
We are often asked to model the financial flows of lost careers in respect of severely injured or deceased adults.
As forensic accountants, our role in career modelling involves carefully assessing the evidence and modelling the claimant’s gross and net earnings. This is across various career steps, spanning from injury to retirement years. We base these models on a range of scenarios. Depending on the case, the output can be a White Label Schedule or a Part 35 Expert Witness Report.
In our schedules and reports, we provide detailed projections, cross-referenced to clearly stated assumptions and key evidence. These relate to past earnings, work history, and job plans. This information is supplemented by carefully researched data on relevant stepping stones for their career.
We usually present multiple scenario outcomes. This gives the parties involved, and ultimately the Court, a flexible resource for basing financial claims or settlements related to the claimant’s lost career.
I have found that the most successful outcomes with career modelling for injury claims arise where:
-
- The evidence has been carefully gathered,
-
- Realistic scenarios (based on research and the available evidence) are used,
-
- Financial projections are detailed, supported by clear assumptions, presented in a clear, ‘user-friendly’ format.
The forensic accountant’s role with Career Modelling is to set out clear alternative financial outcomes. These should span the claimant’s career and pension years. It is important to note that the forensic accountant does not attempt to determine what are matters of fact.
Building on Employment Reports
In some cases, solicitors may already have a report from an employment adviser. Now they need the earnings, pensions, and other employment benefits from various career paths translated into clear schedules. These schedules should outline past and future earnings and pensions loss quantum (life-span finances).
The output summary from the model provides the net value of earnings and pensions as at the Trial Date for different scenarios, to which probability factors can be applied.
Quantifying Losses In Respect Of Injured Children
For children who have suffer catastrophic injuries, there are significant evidential hurdles when quantifying future losses. The challenge lies in whether the child claimant can provide coherent, realistic evidence about their future years. That will enable the Court to form a realistic view of their working life and financial flow, or if it is all too speculative.
Evidence concerning the careers and achievements of parents, siblings, and close relatives can be immensely helpful.
Lost career claims for children are inherently fact-specific. Most of the claims we have handled involve late teen claimants who were injured at birth or in their early years.
Career Modelling Approach
Here is an illustration of our approach to career modelling for a claimant who was injured as a teenager and subsequently lost out on a career working within the NHS:
Each of those job options was supported by detailed calculations, assumptions and supporting notes and evidence regarding earnings and pensions.
Lost Years – Adults
With some of the more complex serious injury claims we are instructed to act in, the claimant’s lifespan has been impacted by the injury.
Adult claimants can claim for their earnings and pensions income relating to their now foreshortened lifespan – this gives rise to a ‘lost years’ claim.
The claim for income lost is based on the lost earnings/pension income less an estimate of what they would have spent on themselves. Living costs are typically assumed at 50% of net income. This follows the case of Pickett v British Rail Engineering [1980] AC 136.
The career model schedules & reports we prepare are ideally suited to supporting ‘lost years’ loss quantum calculations. The projections can be designed to set out the whole ‘But For’ vs ‘Now Probable’ career/pension years. So that the impact of career progression and of lost years are crystal clear.
Lost Years – Children
Where the injury to a child has resulted in a foreshortened life, whether they can bring a ‘lost years’ claim depends on their age – both when injured and when the claim is being assessed.
Our understanding is that currently a ‘lost years’ claim cannot be brought for a young child. This follows the case of Croke v Wiseman [1982] WLR 71
However, all of that may be about to change, as the Supreme Court is looking at the anomaly between a child’s and an adult’s rights in such a situation. This is in the appeal of CCC v Sheffield Teaching Hospitals NHS Foundation Trust [2023] EWHC 1770 KB. So, watch this space!
It has always seemed curious to me that 3 siblings injured in the same way, by the same event. Let’s say, for example, a youngster (aged 6), older brother (aged 17) travelling in a car taking their big sister (aged 18) to university, are treated differently.
The ‘tipping point’ is where a child is old enough for there to be sufficient evidence about, for instance, their abilities, aspirations, preferences regarding work, and hence career paths and success.
Teenage Claimants – Career Paths
We have been instructed multiple times on cases involving teenage claimants who were injured several years prior. These injuries have prevented them from pursuing their educational potential. And/or have left them too unfit to follow their desired career paths. In each of these cases, enough time had passed since the injury to gather critical evidence about their aspirations, hopes and dreams for the future. To assess their intellect, and in some cases, observe the career advancements of their siblings and close relatives.
This has led us to model (to date) careers from school, through university, and forward. For example as a teacher, vet, doctor, nurse, pharmacist, radiographer, physiotherapist, solicitor, police officer.
In Summary – Career Modelling For Injury Claims
To sum up, whether our output is a White Label Schedule or a Part 35 Expert Witness Report, the central theme is providing precise and fully explained projections of earnings, pensions, and other employment benefits.
Given the nature of such cases, it is important that career scenarios cover different paths and varying degrees of advancement along each path, realistically based on the evidence in the case. Avoiding ‘flight of fancy’ or ‘pipe dream’ projections.
While the financial outcomes are, of course, fact-specific, each case I can recall has resulted in settlements exceeding £1M. With lost earnings and pensions forming major components. The key to a good outcome in such claims has been the careful gathering and analysis of evidence. Where are then presented through detailed and comprehensive earnings/pensions projections. Offering a balanced range of loss quantum.
Richard Formby FCA MAE is the driving force behind Formby Forensic Services and a ICAEW Chartered Accountant with over 30 years experience in forensic accounting An Expert Witness and member of the Academy of Experts.
Richard is passionate about providing top-notch advice and expert witness reports. Rejecting the impersonal “one-size-fits-all” mentality. From financial disputes to personal injury claims, he immerses himself into the unique complexities of each case. Providing thorough and valuable input each step of the way.
Weaving a creative approach, with a meticulous eye for detail, Richard consistently delivers exceptional outcomes. His engaging sense of humour and steadfast commitment to excellence make working with him a uniquely enjoyable and profoundly professional experience.
Get in Touch
If you have a case where you feel that Career Modelling may be the right way to approach Loss Quantum, then do get in touch to discuss your client’s case we’re always happy to help – contact Richard or Harriet
