The Ogden Tables are prepared by the Government Actuary’s Department and assist personal injury lawyers and the Courts with calculating lump sum compensation for future loss and expenses.
These actuarial tables include “multipliers” which are calculated on the basis of a number of assumptions and which are intended to allow for the effects of various factors including life expectancy and interest rates.
If, for example, a Claimant has an annual net loss of earnings of £20,000 which they wish to claim for, this figure is then multiplied by the “multiplier” for the period of loss.
As the various assumptions and factors tend to change over time, the information in these tables can become out of date and the eight edition of the tables has come some 9 years after the publication of the seventh edition.
The main changes in this edition of the tables relate to life expectancy. The seventh edition was based on 2008-based projections whereas the latest edition is based on projections from 2018. The effect has been a reduction in life expectancy for both men and women (particularly the latter).
There have been a number of further changes in the latest edition which personal injury lawyers will find quite helpful including additional tables covering a wider range of retirement ages. This reflects the modern world in which traditional retirement ages have become less relevant.
Another notable change has been to the definition of “disability” which was previously based on the Equality Act 2010 and which is now based on the Disability Discrimination Act 1995.
Future loss usually forms the biggest part of any claim where a Claimant is seriously or catastrophically injured as a result of the negligence of another party. Whilst the Ogden Tables are not the only method by which future loss can be calculated, they are inevitably used as a starting point by all personal injury lawyers and judges.
At Bell Lax, we often find that the issue of life expectancy becomes a major area of dispute in such litigation for obvious reasons.
Accordingly, our specialist serious injury lawyers are keen to advise our clients on other options which might mitigate against the uncertainty of settling a claim on a lump sum basis utilising the Ogden Tables.
These include Periodical Payment Orders pursuant to which the Defendant’s insurers pay a certain amount each year of the remainder of the Claimant’s life rather than paying a lump sum based upon predicted life expectancy to last the Claimant for the whole of their life.
This can ensure that a Claimant has adequate provision, in particular for future care, without the parties having to reach an agreement on how long the Claimant will live for based on expert medical evidence.
In addition, the periodical payment varies from year to year with changes in the retail price index. This usually means that payments stay in line with the costs of living.
It is also possible to agree or obtain an Order from the Court for variable periodical payments which might take into account increased need at a point in the Claimant’s future.
Periodical payments are not taxable whereas if a Claimant invests all or part of a lump sum settlement, the investment income is. Also, periodical payments remove the responsibility of investing a lump sum to generate income from the Claimant.
There are some disadvantages to periodical payments including the fact that the Claimant may feel that they have not achieved “closure” as far as the litigation process is concerned.
Either way, Claimants who are going to need to grapple with such issues require specialist advice from experienced solicitors such as the Catastrophic and Serious Injury Team at Bell Lax.
If you or someone you care about has sustained injury as a result of an accident or clinical negligence, please feel free to contact one of our specialist lawyers for a free no obligation discussion on 0121 355 0011.