Guidance Given On Calculating ‘Lost Years'

In a judgment favourable for defendants the High Court sets out the issues to be considered when determining the 'lost years' entitlement, with the most important point being that the real distinction to be drawn is not between earned income and income from capital, but from income which is lost on death and income which survives death.

A claimant is entitled to recover any financial losses they will suffer after their death if the accident / incident has reduced their life expectancy. Claims for 'lost years' commonly cover loss of earnings and loss of pension, although claims can be brought for all forms of lost pecuniary benefits. When assessing the claim, the court will attempt to put the claimant back into the position he would have been but for the accident and will therefore make appropriate deductions for living expenses.

Background

The Claimant was diagnosed with mesothelioma in March 2018, which was contracted in the course of his employment with the Defendant. Heads of damages were agreed save for general damages and loss of income in the 'lost years'. At trial the judge, HHJ Clarke, assessed general damages at £95,000 leaving the value for the 'lost years' to be determined.

The Claimant valued his claim for loss of earnings in the 'lost years' at £4,421,683 whereas the Defendant's valuation was nil.

When this case reached trial the Claimant was 60 years and 8 months old and managing director of his company Essex Mechanical Services Limited (EMSL), in which he, his wife and their three adult children were joint shareholders.

The Claimant's wife and two sons were employed by EMSL. Prior to his diagnosis, the Claimant had decided to reduce his involvement, with his sons' responsibilities increasing, and his eldest son to eventually take over as managing director. It was agreed by the parties' forensic accountants that EMSL would continue to be successful after the Claimant reduced his involvement and the profitability of the company would likely not diminish.

The issue

HHJ Clarke stated that the main issue to be determined was whether it is relevant that: "in arriving at the 'lost years' calculation a significant part of the Claimant's earnings, namely his dividend income from EMSL shares, is likely to survive his death".

The Defendant relied upon the case of Adsett v West [1983] QB 826. In Adsett the judge stated that by way of a 'lost years' claim a claimant could recover income arising from their incapacity to work but could not...