Eric Hoffer once said: “We used to think that revolutions are the cause of change. Actually it is the other way around: change prepares the ground for revolution” (A Times of Juveniles, 1967).
The world of personal injury claims has indeed seen something new and different, some might even say revolutionary, in recent years. Right up to the 1970s, damages for future pecuniary losses tended to be assessed without regard to annuity tables. The possibility of the injured person's early death or prolonged life would only be taken into account in a rough and ready way. But change in this respect was given impetus in 1984 with the appearance of official “whole life” actuarial tables, based on English mortality data and making allowance for mortality year by year.
These tables, prepared by the government actuary's department and published along with explanatory notes prepared by an inter-disciplinary working party of actuaries, lawyers, accountants and other interested parties under the chairmanship of Sir Michael Ogden QC, are widely known as the “Ogden Tables”.
The Ogden Tables were not exactly an instant hit. However, led by the Scottish appeal court in the case of O'Brien's Curator Bonis v British Steel (1991), their use gradually became established and their application in personal injury cases is now standard practice both north and south of the border.
Last September a new, fourth edition of the tables was published. As with the previous edition, two alternative sets of tables have been provided:
It is these latter tables, dismissed by the Association of British Insurers as “speculative assessments of future changes”, which invite comment.
The projected mortality tables give effect to “current and reasonable projected future improvements in mortality rates”, according to the Ogden working party. They state: “On the balance of probabilities, the mortality rates which will actually be experienced in future by those who are alive today will be significantly lower than in ELT 15…” The use of “historical mortality” (not recommended) is contrasted with the use of “a realistic estimate of actual mortality” (recommended).
But the working party seems to have fallen into legal error by applying the balance of probabilities test to future prediction. As the great Lord Reid said: “You can prove that a past event happened, but you cannot prove that a future event will happen and I do not think that the law is so foolish as to suppose that you can. All that you can do is to evaluate the chance. Sometimes it is virtually 100%, sometimes virtually nil. But often it is somewhere in between. And if it is somewhere in between I do not see much difference between a probability of 51% and a probability of 49%… so I reject the balance of probability test in this case.” (Davies v Taylor, 1974).
More problematically, placing the emphasis on seeking ever greater precision in this most inexact of sciences carries its own dangers. Basic assumptions that the passage of time may have rendered unsafe risk going unquestioned.
In particular, the working party's approach seems to proceed on the hypothesis that the future is going to be like the past, only better. No doubt “the happy ending is our national belief” (Mary McCarthy, On the Contrary, 1947), but is it right to hold that things can only get better? Is it justifiable any more even to suppose that the future is going to be like the past at all?
Doom and gloom?
Far from looking more and more promising, the future is looking more and more bleak. Global warming stands to wreak dramatic changes not just in our climate but also in our economy. Some projections have it that climate change will bankrupt the world economy in not much more than 50 years from now. And the indications are that climate change is accelerating.
How all this will impact on mortality rates is not at present clear, but the possibility of higher death rates in the future resulting directly or indirectly from global warming does not seem fanciful. And if that is so, do the projected mortality tables require to be accepted as “realistic”?
The implications go deeper that that though. The law concerning damages for future pecuniary losses in personal injury cases is that relative rarity, a law that requires a court to peer into the future to try to guess what is likely to happen.
But in carrying out this exercise certain basic assumptions have always been made, and one is that the environment is going to be more or less the same in the future years as it is now and that therefore the past can be some sort of guide to the future.
It is this most fundamental of assumptions which is now in question, a point that the Ogden working party's scientific approach has laid bare. And it is the overturning of the assumption that is the true revolution in prospect.
