John-Paul Swoboda KC assesses the state of play after the Supreme Court allowed a lost years claim in the case of a child.

CCC v Sheffield Teaching Hospitals NHS Foundation Trust: What was decided and what further issues arise?

When the Claimant was born, she suffered severe brain injury caused by hypoxia, as a result of clinical negligence. Following a trial before Ritchie J, she was awarded a lump sum of £6,866,615 plus periodical payments of £394,940 pa. Included in that sum was £160,000 for the Claimant’s loss of earnings to age 29 which was agreed to be her life expectancy. It was also agreed between the parties the Claimant would have gained GCSEs and some form of higher qualifications leading to paid employment. However, Ritchie J made no award for loss of earnings in the lost years on the basis that the Claimant suffered injury at birth and was a young child; Croke v Wiseman [1982] 1 WLR 71 (CA) was binding authority to the effect that the lost years loss of earnings claims could not be made for infants or young children.

The Supreme Court, hearing the case by way of leapfrog appeal, was asked by the parties to determine whether Croke was correctly decided. By a 4:1 majority (Lord Reed, Lord Briggs, Lord Burrows, Lord Stephens in favour and Lady Rose dissenting) it was decided that Croke should be overruled so that the Claimant could (despite having suffered injury at birth), in principle, recover for loss of earnings in the lost years. As to how much the Claimant should recover, that issue was to be remitted to Ritchie J to decide.

The essential reasoning of the majority

The reasoning for the majority was set out in three separate judgments (Lord Reed, Lord Burrows and Lord Stephens). The essential reasoning in these three judgments was similar, albeit on certain issues (as discussed below) there were modest differences in the framing and emphasis. Those differences may be of relevance going forward. Two examples are in relation to the juridical basis of lost years claims or the discount to be applied for living expenses.

A summary of the essential reasoning is as follows:

1. Quality of evidence, not the age of the Claimant, determines whether a lost years loss of earnings claim should be allowed. In principle, therefore it is irrelevant whether a Claimant is an infant or a young child.

2. If an infant can sustain a loss of earnings claim in the survival period (as was agreed in this case), it is illogical to suggest that no loss of earnings can be sustained in the lost years period.

3. The House of Lords decisions in Pickett v British Rail Engineering Ltd [1980] AC 136 and Gammell v Wilson [1982] AC 27 confirm pecuniary losses (specifically loss of earnings) are recoverable in the lost years. As these House of Lords decisions were not challenged, these decisions provide the essential legal framework.

4. Difficulty assessing damages is not a reason for awarding no or nominal damages; doing so would contradict the 100% or compensatory principle. Further evidential difficulties which arise from the defendant’s negligence cannot justify denying compensation. At a high level of generality, courts do not apply a balance of probabilities approach to proof of issues of loss (quantum) but the loss is assessed proportionately to the chances. There is a de minimis cut-off for entirely fanciful or entirely speculative claims.

5. The justification for the decision in Croke that an infant or young child would never have dependants (“the social policy justification”) was inconsistent with Pickett which explicitly stated recovery was not dependent on the victim having dependants and was contrary to the 100% principle; therefore, Croke was wrongly decided.

6. Evidential difficulties had lessened with development and increased sophistication in the assessment of damages (i.e. the use of the Ogden tables for multipliers and the use of statistical evidence from the Annual Survey of Hours and Earnings which provide a guide as to average earnings).

7. Arguments that living expenses make the exercise too speculative were unpersuasive; a conventional deduction can be applied as is generally done with adults.

The dissenting judgment

The dissenting judgment came from Lady Rose who stated:

1. Recovery of earnings in the lost years should not be permitted where there was no evidence relating to the individual’s earning capacity, characteristics or abilities.

2. There was not, and could not be, such evidence for an infant or young child.

3. Evidence that an individual was a member of a cohort and that that segment of society could be used as a proxy for what s/he would have been likely to earn was insufficient as it did not relate to the individual.

4. It was for policy reasons that the law should allow recovery of lost earnings during the ‘survival period’ (e.g. in the remaining life expectancy) but not during the lost years. 5. A line had to be drawn as to where recovery should end and the line drawn by Croke was justified.

Comment

I discuss two major considerations arising out of the CCC decision; firstly, the percentage deduction to be made for living expenses and, secondly, whether we can expect further litigation on the issues raised by lost years claims for children.

A. What deduction should be made for living expenses?

In adult claims, a conventional percentage of 50% is adopted – but can be displaced. In a recent case (still to be reported), HHJ Dunne sitting as a High Court judge, displaced the standard deduction, having found that an analysis of financial statements supported a deduction of 37%. However, where there is no evidence as to the spending habits of an individual because they are an infant or young child, only a conventional deduction is likely to be applied, albeit it would be an issue of fact in each case, meaning (in theory, at least) different figures could be adopted in different cases.

Whilst it is possible that a Defendant could argue, in a young child case, that no lost years claims was proved because it is just too speculative (entirely fanciful), it is unlikely, in my opinion that a Court would adopt such an approach given, inter alia, Lord Burrows’ comment that “… it seems extremely unlikely that a court will consider that, where there has been a reduced life expectancy, a claim for lost years by a young child cannot be proved.”

A Defendant could argue for a (very) high deduction or a broad-brush award (as in a Smith v Manchester or Blamire award). There is some support for this approach from Lord Burrows who “…anticipated that, assuming a multiplier approach is being used, there will be a high deduction from lost earnings for living expenses. I also accept that, because of the high degree of uncertainty involved, a court may be entitled to decide that it has no real alternative to taking a broad-brush approach”.

On the Claimant side, there is likely to be greater reliance on Lord Stephens’ dictum: “…uncertainty should not lead a court to making inappropriately parsimonious awards.” Further, if 50% is a suitable conventional deduction for adults, why should it be different for children? Should it be assumed a child may be more profligate than an adult? Does not any increased uncertainty when dealing with a young child simply mean anything other than ‘the average’ is more likely to be wrong? These arguments are still to be had and are likely to be played out in the coming years in trials and settlement negotiations. The next obvious chance for this issue to be tested will be at the remitted hearing before Ritchie J (assuming the parties do not settle).

B. Is the law in respect of lost years settled?

The Supreme Court’s decision does provide real clarity for practitioners that a lost years claim for an infant and young child is recoverable in principle. But Lord Reed and Lord Burrows went out of their way to remind readers of their judgments that they had not been asked to restate the law on lost years, nor to consider whether Pickett and Gammell were correctly decided; they all but invited practitioners to give them the opportunity to do so in the future. Additionally, there remains lively debate as to whether services (or losses other than loss of earnings) are recoverable in the lost years (as they are in the survival period and in a fatal claim). That issue – the scope of lost years claims – was not discussed.

CCC is unlikely in my opinion to be the final word on lost years claims, given Lord Reed’s comments that “…it would be desirable to clarify [the basis upon which lost years claims are made] when the opportunity arises, as it may have implications for the damages recoverable in some cases” and Lord Burrows’ statement: “… I am of the view that a reconsideration of Pickett and Gammell is called for. … it is to be hoped that, following on this decision, there will be an opportunity in a future case to consider Pickett afresh with a seven-person court and full submission on its merits and demerits. …”.

What is the basis for a lost years claim? As Lord Reed posited, is a lost years claim best viewed as an immediate diminution of earning power (or an ability to provide services), equivalent to the loss of a capital asset? Or is it best considered as “compensation for the non-receipt of a revenue stream which would have accrued in the future – analogous to a conventional award for loss of future earnings”? The latter approach gives rise to debate over logical cogency for a person who has passed away; a person who has died is not there to benefit from lost earnings. The approach taken may also impact on whether recovery is permissible beyond loss of earnings; in other words, if the capital asset theory is to be adopted, any loss must be capable of being characterised as a capital asset (which may affect the scope of such claims).

Lord Burrows went one step further than Lord Reed and asked whether there “is any convincing justification for treating a lost years award as compensating a pecuniary loss of the injured claim” given the normal principle that there can be no loss suffered after death. In other words, are lost years claims legitimate, was Pickett rightly decided? He also asked whether lost years claims should in fact be restricted to compensating dependants only, albeit he noted that would give rise to significant practical difficulties. Clearly if it were to be so restricted, that would significantly impact the pool of victims who could bring such a claim and would be likely to exclude young and infant Claimants.

Given Lord Reed’s and Lord Burrows’ comments, and the remaining uncertainty as to the scope of lost years claims, the law on lost years cannot yet be said to be settled and certain.

Concluding remarks

Despite many false starts, it took 44 years before the Supreme Court overruled Croke v Wiseman. The judgment of the Supreme Court was necessarily narrow given the framing of the dispute by the parties. That means issues of principle still remain, including the size of the discount for living expenses, which will determine the overall size of the award.

Further, it is possible (given Lord Burrows comments in particular), that lost years claims could be got rid of entirely or expanded significantly if the Supreme Court hears an appeal which allows them to restate the law on lost years.

Finally, the reasoning of the Supreme Court in CCC shows it should not be assumed that the method (and level of sophistication) in respect of the assessment of damages is static. It changed very significantly between Pickett (1980) and CCC (2026) with the adoption of the Ogden tables and reliance on the ONS data (particularly the ASHE tables). It will probably change again if more data becomes available and data science allows for greater insights. If it does, that may impact the arguments above.