Fairer compensation for victims of personal injury accidents
Research from Cardiff Business School highlights under-compensation for injured claimants, and points towards a fairer means of compensation for injury victims.
Each year, many thousands of people claim for damages following accidents or injuries. According to the Department for Work and Pensions' Compensation Recovery Unit, over one million claims were made during the period 2011-12. However, valuing claims for loss of future earnings in such cases is particularly challenging and has in the past often resulted in under-compensation to victims.
Influencing policy and practice
Research led by Cardiff Business School's Dr Victoria Wass has underpinned the development of a radical new methodology to achieve greater accuracy, consistency and justice in the awarding of damages to injury claimants.
The new methodology includes the explicit calculation of the adverse effects of disability on employment in the form of a disability-adjusted work life expectancy. These are estimated from employment transitions recorded during four years of the UK's largest household survey, the Labour Force Survey. Employment transitions are quite different for disabled people and result in longer periods out of work. By accounting for this negative employment impact in the value of the claim, awards achieve greater consistency, accuracy and fairness.
Working closely with a team of actuaries from Cass Business School, a methodology was developed and incorporated into the Sixth & Seventh Editions of the Ogden Tables. An additional contribution to legal practice from this research is Dr Wass' work as an expert witness and the citation of her publications in claimants' evidence in support of claims for loss of future earnings.
These Tables provide the key financial information and guidance upon which actuaries, lawyers and accountants calculate the lump sum compensation due in personal injury and fatal accident cases.
Impact in practice
As a result of her work into disability and employment and her assistance to the profession in including this research in the valuation of claims, Dr Wass was invited to join the Ogden Working Party by its Chairman, Robin de Wilde QC. It is the Ogden Working Party which prepares the Tables upon which compensation claims are valued. Dr Wass's membership of this group is providing a vital contribution to the valuation of damages for loss of future earnings and an important opportunity for her to act as an intermediary between academics and the application of their research in the practice of the law.
In addition to developing a new methodology and providing expert advice to the Ogden Working Party, Dr Wass has taken a leading role in the training of practitioners - principally solicitors, barristers, insurance claims managers and the judiciary. This has included the provision of training organised by Barristers' Chambers, for example at Hardwicke Building and St John's Chambers, and to practitioners of leading personal injury firms, such as Stewarts Law and Irwin Mitchell.
Dr Wass has also given presentations to members of professional associations at conferences including the Association of Personal Injury Lawyers, the Personal Injury Bar Association and Professional Negligence Bar Association. She continues to provide commentaries on quantum judgments in the Journal of Personal Injury Law.
- Butt, Z. et al., 2010. Work life expectancy: Calculating compensation for loss of future earnings. Measurement and Control -London- Institute of Measurement and Control- 43 (5), pp.146-151. (10.1177/002029401004300504)
- Butt, Z. et al., 2009. Estimating and using work life expectancy in the United Kingdom. In: Ward, J. O. and Thornton, R. J. eds. Personal Injury and Wrongful Death Damages Calculations: Transatlantic Dialogue. Contemporary Studies in Economic and Financial Analysis Vol. 91.Bingley: Emerald, pp.103-134.
- Lewis, R. K. et al. 2003. Loss of earnings following personal injury: do the courts adequately compensate injured parties?. The Economic Journal 113 (491), pp.F568-F584. (10.1046/j.0013-0133.2003.00169.x)