Loss of earnings claims: what a child ‘could have been’

Posted: 19/08/2015

Whilst no-one can predict with any certainty what an infant or child ‘could have been’ but for their disability, assessing a loss of earnings claim for a young person with a partial or total disability remains an important issue and one we frequently grapple with. A child with a long life-expectancy can have a significant loss of earnings claim often running into the hundreds of thousands of pounds in compensation.

Determining pre and post-injury earnings capacity for an infant or child is of course extremely difficult, given the lack of earnings history to base it upon. There is inevitably huge speculation involved. Looking at this for a child with a birth injury makes this even trickier when there is no evidence whatsoever of how the child would have developed and the cognitive ability he or she would have expressed but for the injury at birth. There is however a strong correlation between earnings and the level of potential educational attainment and therefore looking at the child’s general level of learning ability is the usual starting point. Statistics can then be used to look at average net lifetime earnings for graduates or non-graduates, depending on whether it is asserted that the child would have gone to university or not.

However, this in itself can also be very contentious. We often look at the achievements of the child’s family for an indication of what the child is likely to have achieved in a non-injured scenario. If there are siblings already doing well at school, even attending university themselves, this can be compelling evidence that the injured child is likely, on the balance of probabilities, to have done likewise. We take detailed witness statements from family members of their earnings and achievements. Again this is far from an exact science as arguably earlier generations were less likely to go to university than is the case now. It is not uncommon for children of non-graduate parents to attend university and to be the first in their respective families to have done so.

Graduation itself is no guarantee of future earnings, as defendants will usually argue. One eminent leading counsel we work with once commented that her brother, an Oxbridge graduate, was arguably far more academic than her and whilst she struggled at university in comparison to him, she has become a high-earning Queen’s Counsel, whilst her brother has chosen a much lower-profile and lower-earning career as a vicar. They both had the same parents, same upbringing and same opportunities but of course made their own personal choices.

If it is believed that the child still has the ability to undertake remunerative employment of some kind, even if this is very low paid and possibly part-time only, then looking at school records to assess learning ability and likely future earnings is possible, if only on a broad brush basis. The claimant can then give credit for the earnings capacity he or she has retained.

Alison Johnson, senior associate at Penningtons Manches LLP, comments: “Statistical data on life expectancy, work-life expectancy and average earnings is now far more sophisticated than it used to be. When this is considered together with evidence of the achievements of close family, with an eye on the nature of the upbringing the child is likely to have had and the support and opportunities the parents would have tried to give, it should be possible to form a view on loss of earnings capacity and bring this issue of the claim to a favourable outcome. It can be a substantial head of loss so is well worth taking the time to investigate evidence fully.”

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