Wilson v Ebanks

• Jurisdiction: Cayman Islands
• Judge: (Smellie, C.J.)
• Judgment Date: 14 June 2011
• Court: Grand Court (Cayman Islands)
• Date: 14 June 2011

Grand Court, Civil Division

(Smellie, C.J.)

K. WILSON and K. WILSON

and

C. EBANKS and J.J. EBANKS

C.H. Allen for the plaintiffs;

K. Cox for the defendants.

Cases cited:

(1) Archer v. UBS (C.I.) Ltd., 2009 CILR 531, considered.

(2) Bodden v. Solomon, 2008 CILR 385, referred to.

(3) Burden v. Foster, [2001] 3 Q.R. 10, followed.

(4) Carter v. Dawson, 1998 CILR 204, considered.

(5) Cookson v. Knowles, [1979] A.C. 556; [1978] 2 All E.R. 604, referred to.

(6) Eaton v. Johnston, 2004–05 CILR 580, referred to.

(7) Finnis v. Caulfield, [2002] EWHC 3223 (QB), applied.

(8) Heil v. Rankin, [2001] Q.B. 272; [2000] 2 W.L.R. 1173; [2000] 3 All E.R. 138, referred to.

(9) Houltby v. Personal Representatives of Archer, Lincoln County Court, November 27th–28th, 2002, unreported, followed.

(10) Hydes v. Ebanks, 2002 CILR 242, referred to.

(11) Wells v. Wells, [1999] 1 A.C. 345; [1998] 3 W.L.R. 329; [1998] 3 All E.R. 481, applied.

Tort-personal injuries-damages-Judicial Studies Board”s Guidelines for assessment of general damages in personal injury cases essential for assessing damages-court to examine each case”s individual circumstances

Tort-personal injuries-damages-loss of future earnings-notional future earnings to be discounted to reflect life risks and that award paid as lump sum-need to identify fair notional rate of investment return based on conservative risk-free approach reasonable investor in plaintiff”s position would take-once fair rate identified, Ogden Tables useful tool for providing appropriate multiplier

The plaintiffs sought damages for personal injuries caused by the second defendant”s negligent driving.

In August 2001, the plaintiffs-Mr. Wilson, a 42 year-old computer systems hardware analyst earning US$43,680 per year, and his wife Mrs. Wilson-were struck by a car, owned and insured by the first defendant and driven by the second defendant. The collision was caused by the second defendant”s negligence. Mr. Wilson sustained serious head and knee injuries, as a result of which he had not returned to steady employment. Experts agreed that he would not be able to return to employment that would pay him more than that which his social disability benefit and unemployment insurance-the latter of which he had paid for himself over the course of his life-provided. Having attained maximum medical improvement, it was clear that Mr. Wilson had suffered a permanent brain injury, although experts disagreed as to whether this included a risk of epilepsy. Further, his memory and concentration were poor, meaning that he was easily distracted and confused and found it difficult to complete tasks; he suffered from anxiety, frustration and depression for which he needed to take medication. He had low self-esteem, and his personality and relationships had been affected. He was, however, able to function on his own (or with some prompting from his wife) at a basic level, including driving. He had suffered from impotence since the collision, although there was a possibility that it could in time become resolved. He also suffered from chronic knee pain, with a long-term risk of arthritic

degeneration. Both plaintiffs sought damages for their injuries. Mrs. Wilson”s claim was subsequently settled by agreement.

Mr. Wilson, who was 51 at the time of the present proceedings, submitted that (a) he should be awarded general damages in respect of his brain injury, which should be characterized as ‘moderate’; (b) the award should take into account the risk of epilepsy; (c) he should be made an award of general damages in respect of his impotence, which was likely to be permanent; (d) he should be made an award of general damages in respect of his knee injury; (e) there should be no reduction on the basis that his injuries were interrelated, as they were distinct and each had worsened the effects of the others; (f) he should be made an award in respect of his quantified past medical expenses; (g) he should be made an award in respect of his loss of earnings to the date of trial, allowing for an increase in salary of US$3,000 per year; (h) there should be no reduction on the basis that he was being paid unemployment insurance, as he had paid for it himself; (i) he should be made an award in respect of his future loss of earnings up to his 65th birthday; (j) there should be no reduction based on Table A of the Ogden Tables, as it was not necessarily appropriate in the Cayman Islands, and would not take account of his previous high degree of employability in the United States; and (k) he should be made an award in respect of his future medical expenses, including an allowance for the risk that Mrs. Wilson might become unable or unwilling to care for him.

The first defendant”s insurer, subrogated to the position of the defendants, submitted that (a) Mr. Wilson”s brain injury should be characterized as ‘mild/moderate,’ and damages awarded accordingly; (b) the award should reflect that he was not at risk of epilepsy; (c) the award for his impotence should reflect that it was not certain to be permanent; (d) there should be a reduction for interrelated injuries; (e) his awards for loss of earnings should only allow for an increase in salary of 3% per year, and should include a reduction for taxes and social disability benefit; (f) his award for future loss of earnings should include a reduction based on a notional interest rate of 2.5%; and (g) there should be a further reduction from the award for future loss of earnings based on Table A of the Ogden Tables.

The court considered (a) whether and how to use the Judicial Studies Board”s Guidelines for the assessment of general damages in personal injury cases in assessing general damages; (b) the rate of interest on which to base the discount from the award for future loss of earnings; and (c) whether and how to use the Ogden Tables in calculating the multiplier in respect of future loss of earnings.

Held, awarding damages to Mr. Wilson:

(1) The court would award Mr. Wilson general damages of US$160,000 in respect of his brain injury. In assessing the quantum of general damages, it would use the Judicial Studies Board”s Guidelines for the assessment of general damages in personal injury cases. Although there were dissimilarities between England and Wales (for which the Guidelines

had been produced) and the Cayman Islands, the Guidelines were an essential tool in assessing general damages, although the court would need to examine the individual circumstances in each case. Here, the court would accept that Mr. Wilson had suffered a diminution of cognitive abilities, and that this included a moderate risk of epilepsy. His brain damage would therefore be characterized as ‘moderate’ within the definition given by the Guidelines. In the circumstances, it would be appropriate to award general damages of US$160,000 (paras. 17–18; para. 30; para. 35).

(2) Further, and also in accordance with the Guidelines, the court would award Mr. Wilson general damages of US$64,000 in respect of his impotence, which was likely to be permanent, and US$35,000 in respect of his knee injury. It would not be appropriate to make a discount for a series of interrelated injuries, as the injuries were distinct and each had in fact worsened the effects of the others. The total award for general damages would therefore be US$259,000 (paras. 36–39).

(3) The court would award damages for past medical expenses of US$228,361. It would also award damages for past loss of earnings of US$264,278, which allowed for (a) an annual 3% increase in salary between the injury and the trial; (b) a reduction to reflect social disability payments he would not otherwise have received; and (c) a reduction to reflect the tax that would have been payable. No reduction would be made to reflect the unemployment insurance, for which he had himself paid (para. 11; paras. 40–42).

(4) Further, in attempting to put Mr. Wilson into the same financial position as if he had not been injured, the court would award him US$550,373 for future loss of earnings. The starting figure would be his notional earnings (including a yearly 3% increase in salary) up to his 65th birthday, when he would become eligible for a pension. A discount would be applied to this sum to reflect life risks other than mortality which could affect his ability to earn, and that the money would be paid in advance as a lump sum, rather than periodically over a number of years. When calculating the discount, it was necessary to use a notional rate of investment return that was appropriate to current economic conditions. The defendants had proposed such a rate of 2.5%, which the court would accept as generous and just, reflecting a risk-free conservative approach of the sort a reasonable investor in Mr. Wilson”s position would adopt. Having identified a just notional rate of investment return, the Ogden Tables could be a useful tool for providing an appropriate multiplier. Applying the 2.5% rate to Table 9 of the Ogden Tables yielded a multiplier of 11.4 years to apply to Mr. Wilson”s average notional yearly earnings. Deductions would be made in respect of taxes and benefit payments, but no reduction would be made by reference to Table A of the Ogden Tables, since that would be based on risks of the vicissitudes of life relevant to the employability of a plaintiff in the United Kingdom. This would be of doubtful relevance in non-UK jurisdictions, and such a discount would fail

to take account of Mr. Wilson”s previous high degree of employability in the United States. The award for future loss of earnings would be US$550,373 (paras. 43–59).

(5) The court would further award damages for future medical expenses of US$249,212. The court”s calculation of future medical expenses included, inter alia, (a) heads of loss that would recur annually for Mr. Wilson”s lifetime, to which a multiplier of 21.44-based on a 2.5% annual rate of...