In all substantial personal injury and clinical negligence claims where the client has a significant future loss claim, the calculation of that loss is produced by reference to what are known as the Ogden Tables. These tables are produced by reference to statistics collected by the Government Actuary.
The majority of substantial future loss claims involve losses that will continue for the rest of the client’s life. In order to make the calculation, the Ogden Tables have to be consulted in order to consider the age of the client at the time of likely settlement and the length of time over which they are likely to live.
Prior to October 2011, the previous edition of the Ogden Tables produced figures for life expectation based on 2004 population projections for the United Kingdom, which had been published in October 2005.
The latest edition of the Ogden Tables, the 7th edition, produces figures based on mortality rates from 2008 based projections and is therefore much more accurate.
This latest revision of the Ogden Tables has very significant consequences for the calculation of further loss claims.
To give a practical example, if in September 2011 a calculation had been done in relation to a 25 year old female who was claiming financial loss for life with an annual loss of £100,000 per annum, the future loss claim would be calculated as being £3,142,000.
If exactly the same calculation were being undertaken in October 2011 by reference to the latest Ogden Tables, the calculation would produce a figure of £3,189,000. The difference is therefore £47,000 as a result of utilising the latest population projections.
Further changes in relation to the approach to these calculations is expected over the next few months as a result of a pending consultation by the Ministry of Justice. Claimant’s lawyers have been arguing for some years that the current method of calculation for substantial future loss claims is flawed and has the effect of substantially undercompensating Claimants, many of whom who have been catastrophically injured as a result of the negligence of others.