PROVING THINGS 168: PROVING LOSS OF EARNINGS: COURT OF APPEAL DECISION:STATEMENTS OF OPINION OR BELIEF CARRY NO WEIGHT

November 6, 2019 · by · in Appeals, Civil evidence, Damages, Personal Injury

The Court of Appeal judgment today  in  Irani v Duchon [2019] EWCA Civ 1846 adds to the Proving Things series in relation to a failure to establish key matters at trial (it also gives me an opportunity to promote the forthcoming book Munkman and Exall on Damages 14th ed , to be published next month). The Court of Appeal upheld a decision not to award damages for loss of earnings on a multiplier-multiplicand basis on the grounds of the paucity of evidence that was before the judge.

 “This was a statement of his opinion or belief. It was not a statement of fact relating to residual earnings.”

THE CASE

The claimant was injured in a road traffic accident, liability was admitted.  He claimed damages for loss of earnings.   The trial judge held that damages for loss of earnings could not be assessed on a multiplier/multiplicand basis. The award for loss for future loss of earnings was made up of £30,000 for disability in the labour market and  £150,000 as a “Blamire” award.  The claimant appealed, arguing that the judge should have assessed damages on the basis of an ongoing annual loss. (These figures are not apparent for the judgment but were helpfully provided by Pankaj Madan, counsel for the defendant in the case).

WHAT MY BOOK SAYS ABOUT LOSS OF EARNINGS…

There are two chapters on loss of earnings.  Chapter seven looks in detail at the various approaches that the court can take in relation to future losses and the factors the judge will consider when which is determining the appropriate damages in any particular case.  There is a particular emphasis on the need for evidence.

“One essential point is that, no matter what approach the court prefers, evidence is needed. The court will not award damages (on whatever basis) unless there is evidence. A ‘Blamire’ award, for instance, is not a substitute award made because of the absence of evidence. The court still has to be satisfied that a claimant would have been working but for the injury.”

THE COURT OF APPEAL VIEW IN IRANI

The Court of Appeal resolutely upheld the view taken by the trial judge that this was a case for a Blamire and Smith award.  The quality of the evidence on this issue was not great.

    1. Faced with an evidential case in relation to residual earnings based on a letter from a friend, a snapshot of unsuitable jobs presently available from one Indian website and various assertions made by the Claimant, a number of which were specifically rejected, it is not surprising that the judge should conclude, as he did, that there was no proper evidential basis for making a finding as to the level of residual earnings which would be made in India. As the judge found at [46]:

“While Mr Swoboda submits that the evidence before me provides a proper basis to find the level at which he will be earning in India, I have concluded that it does not do so.”

    1. The assessment of the evidence and the weight to be given to it was a matter for the judge. He was entitled to find that the evidence provided “no proper basis” for determining a residual earnings figure and therefore the multiplicand. On any view, this was a factual conclusion which was open to him and cannot be said to be one which no reasonable judge could have reached.
    2. Whilst the insufficiency of the evidence was the primary reason for the judge’s conclusion that he had no real alternative to making a Blamire award, the judge further found that there was in any event uncertainty about whether the Claimant would return to India, stating at [45] that:

“While I have accepted that Mr Irani will probably return to India, it is by no means certain. He is a highly educated young man with specialist qualifications. He may choose to make his future in any number of Commonwealth or other countries, however difficult that may prove to be.”

    1. Central to Mr Swoboda’s argument on the appeal is his submission that, notwithstanding the detailed reasoning and conclusions of the judge set out above, he in fact held that he could adopt a multiplier/multiplicand approach, but with a substantial discount for uncertainty. He relies on [47] in which the judge stated:

“If I had adopted a multiplier/multiplicand approach, I would have had to discount the final figure substantially to reflect the chance that Mr Irani may be able to obtain better paid employment in India or elsewhere. The deduction I would have made would have been 50 percent.”

  1. In my judgment, all that the judge is here stating is that, if he had been able to find what the multiplicand was and therefore to adopt a multiplier/multiplicand approach, he would have discounted it by a very substantial amount. In other words, if the only issue had been one of uncertainty rather than the wholescale insufficiency of evidence, he would have been able to address it in this way. This does not detract from his clear and reasoned prior conclusion that on the evidence there was no “proper basis” for finding what the residual earnings would be. He had just addressed in detail why that was so. The idea that the judge, having held that there was no “proper basis” for a finding as to the multiplicand, was in the very next paragraph of the judgment accepting that he could in fact adopt a multiplier/multiplicand approach, is unreal. It involves a selective reading of the judgment, fails to consider the judgment as a whole, supposes that the judge was contradicting himself, ignores the damages awards which the judge actually made and should be rejected.
  2. Subject to the arguments raised under ground 2, I accordingly conclude that the judge was entitled to find that this was one of those cases in which it was not appropriate to adopt a multiplier/multiplicand approach and that there was no real alternative to making a Blamire award. If so, as Mr Swoboda accepts, he was also entitled to make a Smith v Manchester award.

AN ARGUMENT THAT PART OF THE EVIDENCE WAS UNCHALLENGED

The claimant’s supplementary argument was that the defendant had not cross-examined the claimant on his evidence that he would earn £10,000 a year if he returned to India.  The losses that arose from this should have been awarded.

THE COURT OF APPEAL’S VIEW

The Court of Appeal rejected the claimant’s argument.  The claimant’s “evidence” as to his likely earnings was not evidence of fact, but speculative opinion,

    1. In support of this ground Mr Swoboda submits that the judge erred in rejecting the Claimant’s evidence on his residual earning capacity, that he was bound to accept that evidence as it was unchallenged and untested in cross examination, and that as a result the Claimant was deprived of the opportunity of explaining why the Defendant’s criticisms of his residual earning capacity were unfounded. Further, had that evidence been accepted, the judge would have found that there was a proper evidential basis for making a finding as to residual earnings and therefore the multiplicand.
    2. Reliance is placed on the general principle summarised in Phipson on Evidence 19th Ed at 12-12 (Cross-examination; requirement to challenge evidence) as follows:

“In general a party is required to challenge in cross-examination the evidence of any witness of the opposing party if he wishes to submit to the court that the evidence should not be accepted on that point”.

    1. The footnote to that passage refers to Browne v Dunn (1894) 6 R 67, Markem Corp & anor v Zipher Ltd & ors [2005] EWCA Civ 267 (at para 50-61) and Allied Pastoral Holdings v Federal Commissioner of Taxation (1983) 44 ALR 607, to all of which we have been taken.
      1. It is important, however, to analyse the nature of the evidence which it is said should have been challenged. The Claimant’s evidence was that he believed that he would earn £10,000 per annum if he returned to work in India. This was a statement of his opinion or belief. It was not a statement of fact relating to residual earnings. The Defendant was not suggesting that the Claimant may not have had that opinion or belief. His case was that the Claimant’s opinion or belief as to his future earning capacity was not probative evidence.
    2. The Defendant’s position in relation to the claim for future loss of earnings was clearly set out in his pleaded Counter Schedule as follows:

“i. There is inadequate evidence of any loss of earnings.

ii. There is no expert evidence.”

In relation to earnings in India it was specifically stated that:

“There is no proper or reliable evidence of the Claimant’s earnings in India before the Court”.

  1. This remained the Defendant’s position at trial. Against that background the Defendant was entitled to adopt the stance that there was no need to cross examine the Claimant as to his opinion or belief as to his earnings in India. There was no material evidence of fact which the Claimant had given on that issue, nor was he in a position to do so. There was not, for example, any evidence that he had made job applications or enquiries himself in India. Nor could the Claimant speak to the material sought to be relied upon from other sources, such as the letter of Mr Shinde or the internet job advertisements. Indeed, the main examples given by Mr Swoboda at the oral hearing of answers that might have been given by the Claimant in cross-examination only served to highlight the lack of probative value of any such evidence.
    1. The judge noted in his judgment at [42] that Mr Swoboda submitted that there was no reason why the Claimant’s evidence should not be accepted in the absence of challenge. It is apparent from the criticisms he made of that evidence, and of various of the Claimant’s assertions, that he rejected that submission. In my judgment he was entitled to do so.
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