The financial aspects of substantial personal injury and fatal accident cases require expert critical appraisal. This newsletter highlights issues arising from recent cases on which we have been involved which solicitors acting for both claimants and defendants may need to consider when addressing quantum.
Issues Arising from Recent Cases
Issues Relating to how Claims are Constructed
- A claimant may be able to mitigate a loss of earnings by employing an assistant to carry out more physically demanding and/or routine tasks, in which case the loss of earnings is limited to the employment costs.
- If a new business is started by a claimant post-accident/incident, possibly requiring at least as much effort as the business which was given up or curtailed, the question arises as to whether the claimant would have pursued this course of action irrespective of the accident/incident.
- It may be necessary to assess the financial effects of alternative career paths for a claimant; in one case, we compared the potential income arising from work in the procurement function as a senior employee with potential income from work as a freelance contractor in that field.
- The projections of profit derived from property refurbishment in one case related to profits from the past sale of the claimant’s homes and it was therefore necessary for the claimant to prove that there was a business of property refurbishment as opposed to mere “home improvements”.
- A claim may include the loss of pension rights and/or the loss of benefits in kind.
- The dependency factor used is important in fatal accident cases; in one case, the expert accountant instructed by the claimant’s solicitors had not assumed any factor, thus overstating the claim.
Issues Relating to a Claimant’s Potential Income
- Projections of a self-employed claimant’s potential income had the accident or negligence not occurred will need to take account of developments in the relevant business sector.
- It is important to review factors specific to a claimant’s business such as the level of local competition or the contribution made by key employees.
- Projections of a claimant’s potential income should generally avoid giving excessive weight to the income achieved in the immediate pre-accident/incident period.
- The loss attributable to a claimant who was in partnership prior to an accident/incident will generally be limited to his or her share of the business’ profits.
Issues Relating to Information Requirements
- Adequate financial information is vital to an understanding of a case; a claimant who cannot produce basic information such as income tax returns or financial statements will have great difficulty in sustaining a claim for loss of earnings.
- A claimant will need to provide documentation to support contentions made and adequate explanations of variations in turnover or expenses.
- Evidence of post-accident/incident business activity such as, for example, bank and credit card statements in a case involving property refurbishment, may be relevant to the appraisal of a claim or an element of it.
The circumstances of personal injury and fatal accident claims differ widely. Claims which appear straightforward may have financial aspects which are more complex than expected and/or potentially significant in terms of quantum.
The information contained in our Newsletters is provided as general information only. It does not constitute professional advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances. In addition, since the Newsletters were published in recent years, the information contained in them may not be applicable at the current time.