buying in that care and then reduces this sum by about 25±33% to take account of
the fact that no tax or National Insurance has been paid, as it would have been had
the care been bought.
In practice, special damages are often agreed. Judges rightly shout at barristers
who ask them to decide whether the travelling expenses were £250 or £275.
Future loss
Because this involves speculation about future events, it is much more difficult to
calculate. The basic system used is the multiplier±multiplicand system. The mul-
tiplier relates to the number of years over which the particular loss runs. The
multiplicand represents the annual loss under that head.
Obviously the multiplier cannot simply be the number of years over which the
loss runs. If a claimant will lose £1,000 per year for 10 years, he would be over-
compensated if the court were to award him £10,000, because it has to be
presumed that he will invest the award of damages. The amount of investment
income has to be taken into account if the award is to represent the actual loss. The
court in fact presumes that the award will be invested in index-linked government
securities Wellsv.Wells 1998)). Exactly what the discount to take account of this
presumption should be is controversial. Defendants said that it should be 3% per
annum; claimants pointed out that the rate of return on these securities has fallen
over the last couple of years, and often contended for a rate of around 2%. There is
astatutory power to fix the discount rate [22]. Since 28 June 2001 it has been fixed
at 2.5%.
The multiplier also needs to take into account future contingencies such as the
possibility that the claimant would in any event have died, or in the case of a
future loss of earnings claim), have been unable to work in any event. The
calculation of multipliers is becoming a sophisticated science in its own right ± a
science led by actuaries.
Significant heads of future loss often include future loss of earnings, future care,
future accommodation requirements and the cost of equipment. Obviously in
relation to equipment costs there needs to be expert evidence about the lifetime of
each item of equipment. In the case of accommodation costs, claimants are given
the costs of any necessary conversion and the costs associated with moving to the
required accommodation, plus the court's valuation of the financial disadvantage
resulting from the additional money tied up in the new property being unavailable.
This is calculated, very roughly, by relation to the income which would have been
earned had that sum been available for investment Robertsv.Johnstone 1988)).
Sometimes it will be impossible to use the multiplier±multiplicand system to
calculate future loss. It may be, for instance, that because of an injury a claimant
would be at a disadvantage on the labour market were he to be made unemployed,
but at the time of trial he is employed and that employment is expected to con-
tinue. Here, the court may make a rather arbitrary) award to represent the dis-
advantage, and will assess in doing so the prospects of that claimant finding
himself adrift on the labour market as well as the level of disadvantage once he is
adrift Smithv.Manchester Corporation 1974).
Negligence 85