Recent example of Blamire and Smith v. Manchester awards in the Court of Appeal

Ronan v. Sainsbury’s Supermarkets Ltd & Anor [2006] EWCA Civ 1074 (unreported) is a recent decision by the Court of Appeal (Lord Justice Hooper and Lord Justice Hughes) on 6 July 2006 which does not raise any great principle of law but is worth considering as a useful example as to how Blamire awards and Smith v. Manchester awards should and should not be applied in practice.

The Claimant suffered an accident on the Defendant’s premises in December 1999. His recovery was protracted and the ongoing physical problems led to post-traumatic stress and depression. His confidence was much reduced. Six months after the accident the Claimant decided not to go to university as he had planned, but to work for Abbey National as a branch customer manager. This was not said to have been a necessary consequence of the accident. However the Claimant was unable to cope with this work due to physical problems and he therefore enrolled at university and undertook a 3 year degree before embarking on a teaching career which had just begun at the time of trial.

The Claimant’s career as a teacher would earn him less per year than retail banking. However the Claimant’s claim was not put on the basis of the traditional multiplicand/multiplier, but rather that the Claimant should receive a lump sum combining a Blamire type award for loss of earnings and an award for handicap on the labour market. The trial judge accepted this and found that an overall award of £50,000 for future loss was appropriate, with no distinction between the two types of award.

The Court of Appeal made it clear in its judgment on the appeal that whilst there is nothing wrong in principle with the two types of award being combined, they are two quite distinct types of award: “The former is appropriate where the evidence shows that there is a continuing loss of earnings, but there are too many uncertainties to adopt the conventional multiplier and multiplicand approach to its quantification. The latter is nothing to do with a continuing loss. It is an award for a contingent future loss, in the event of the Claimant losing his current job, where, as a result of the accident, he would then be at a handicap on the labour market…”

One of the criticisms of the trial judge was that he had not applied his mind to the question of whether the future shortfall in earnings was as a matter of fact attributable to the accident. The Court of Appeal found that it was not – the Claimant’s own evidence suggested it was his own free choice. The court emphasised that a Blamire award is not to be used where effectively the Claimant has difficulties proving his case - or where as in this case it never really was the Claimant’s case that the future loss was attributable to the accident. It is not a substitute for showing a continuing loss of earnings attributable to the accident. It is merely a practical means of quantifying the loss where numerous contingencies make it difficult to quantify the loss scientifically.

The Smith v. Manchester award was based on two risks – that the Claimant would be out of work for any reason, and that he would be less able to obtain employment at all or at equivalent pay. Whilst teaching was considered to be a relatively secure profession, the Claimant was intending to teach physical education, which might be more difficult bearing in mind his own physical limitations. Whilst there was a good chance of him obtaining a replacement job, it would be rendered more difficult by his history of depression and physical problems. Furthermore the Claimant was only in his twenties and therefore had most of his working life in front of him, increasing the risk.

The Court of Appeal awarded £13,800 for loss of earnings and pension on the basis that the accident meant it would have taken the Claimant longer to achieve a position as a financial adviser at Abbey National, and £15,000 for handicap on the labour market. In the event therefore the saving to the Defendant as a result of the Court of Appeal’s more analytical approach to future loss resulted in only a modest saving.

Sacha Ackland