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The Bluffer’s Guide to Billett v MOD [2015] EWCA Civ 773

In July 2015 a decision was published that took PI practitioners back over 40 years; to a time before some of us were born and Smith v Manchester awards.

In case you missed it, here are the key aspects which emerge from the decision, which you need to know:

  • Billett v MOD was a case about loss of future earning capacity, not future loss of earnings.
  • Mr Billett was working in a stable job and not earning any less, but was a young man (30 years old) with some minor permanent disability.
  • The Court of Appeal said that this was the first time the Court of Appeal had considered the application of Tables A to D of the Ogden Tables.
  • When considering what constitutes a substantial adverse effect on a person’s ability to carry out normal day to day activities the focus should be on what the person cannot do, as opposed to what he can do.
  • Unless a restriction can be classified as trivial or insubstantial or minor, it must be treated as substantial – Aderemi v London and South Eastern Railway Ltd [2013] ICR 591 Langstaff J approved.
  • In some instances the approach  used in Smith v Manchester [1974] 17 KIR 1 and further described in Moeliker v A Reyrolle & Co Ltd  [1977] 1 WLR 132 remains appropriate, as it did in this case.
  • The Court of Appeal replaced Mr Justice Edis QC’s £99,000 award for future loss of earning capacity (using the Ogden Tables with the reduction factors adjusted) with a Smith v Manchester award of £45,000.
  • Although the Court of Appeal concluded that application of the Ogden Tables was not appropriate to assess future loss of earning capacity in this case, it did set out an alternative method which involved adjusting the reduction factors in Tables A to D to reflect the extent of Mr Billett’s disability.
  • The Smith v Manchester award of just over two years’ net earnings could be viewed as generous for a man who was viewed as disabled “… but only just” and whose minor disability affected him more at home than at work.