Loss of Earnings and Pension

Abstract

Abstract The aim of an award of compensation for a financial loss is to restore the victim to the position as if the injury had not been sustained. In a simple case the computation of the loss of earnings is not unduly complex, but may require diligent investigation of the facts. With the case of a claimant who has a steady job but who has been so badly injured that there is no realistic prospect of him working again, the task is to assess the value of his earning capacity at the date of the assessment. The loss which can be claimed is the net loss after allowing for tax and National Insurance which would have been deducted from the earnings. It is necessary to make separate calculations for past and future loss, partly because the claimant is entitled to recover interest on an award for past loss, partly because he is entitled to the benefit of pay rises that he would have received between the date of the accident and the date of assessment, and partly because future loss must be discounted for early receipt by the use of an appropriate multiplier.