The DWP have issued a circular dated 12 July saying that a recent internal audit has highlighted that a number of insurance companies / compensators are misinterpreting the Act. They note that, when the settlement for the compensation claim is agreed between the parties involved, some compensators are informing the CRU that the claim has settled using the date of agreement as the date of settlement. This action is incorrect.

The relevant period ends on the date compensation is made in final discharge of any claim, or the date an agreement is made between the compensator and injured person under which an earlier compensation payment is treated as having been made in final discharge, or the date five years after the relevant period begins, whichever comes first.

Information about this can be found at

Damages for future loss of earnings and Smith -v- Manchester awards

In two recent cases the Court of Appeal has considered how damages should be assessed where the claimant’s future employment is very difficult to predict.

In Ronan -v- Sainsburys Supermarkets Limited (2006), heard by the Court of Appeal on 6 July 2006, the claimant suffered an accident while working for the defendant and underwent a number of operations to his injured leg. He then began a career in retail banking with another employer and progressed well.

However after a further operation, which was only partially successful, he became depressed and lost confidence and decided not to return to work at the bank. He then took a three-year degree before qualifying as a teacher.

The Judge attributed the decision to go to university to the consequences of the accident and awarded a sum for past earnings equivalent to three years earnings at the bank. In relation to future earnings, he made allowance for the upheaval in the claimant’s life and awarded £50,000 applying the “broad brush” approach set out in Blamire -v- South Cumbria Health Authority (1993) PIQRQ1.

On appeal by the defendants against both of these awards, the Court of Appeal upheld the past award on the basis that the attributability of the move to university was fully supported by the evidence. Furthermore, the claimant’s decision not to abandon his studies towards a qualification upon which he had embarked could not be characterised as an unreasonable failure to mitigate his loss.

However, in respect of future loss, the Judge had failed to make a separate analysis of any award due under Blamire principles as he was required to do. If he had done so it was not possible to see how, on the evidence, he would have concluded that a continuing loss that was attributable to the accident failed to be quantified by the Blamire process or by any other.

Instead, although the chosen profession of teaching was relatively secure, and the risk of the claimant not obtaining a replacement job should he lose that employment was not high, there remained some risk and a Smith -v- Manchester award of £15,000 was appropriate.

In May, the Court of Appeal had heard the case of Woolley -v- Essex County Council (2006) EWCA Civ 753 where they upheld the judge’s decision to make no Smith -v- Manchester award. At the time of the accident, the claimant had almost completed his training as a curtain waller, a specialised fitter of large sheets of glass in commercial buildings. He had since found employment as a joiner installing fitted bedroom furniture for a well known company.

The Court of Appeal said that to succeed in a Smith award the claimant had to establish that there was a real risk of his losing his job and being prejudiced on the labour market by his disability, which in this case was an inability to work at heights. In fact the evidence pointed the other way.

There appeared to be no shortage of work for men of the claimant’s skills and there was nothing to suggest that his current employment was at risk. The court rejected his arguments that it was unrealistic to suggest there was no risk at all of a man of 34 finding himself unemployed in the future and then having to rule out applying for certain jobs.