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COUNTER-SCHEDULES:
EARNINGS, OGDEN AND SMITH v MANCHESTER
Anthony Reddiford, Guildhall Chambers
PAST LOSS OF EARNINGS
(a) The dishonest Claimant: a reminder of an unsatisfactory rule
1. When the Claimant has been earning “cash in hand” prior to the accident, can he rely on
those earnings to bring a claim for lost earnings? It depends on whether he has also falsely
been claiming state benefits. If he has, then the claim is barred on public policy grounds
(Kanu v Kashif [2002] EWCA Civ 1620).
2. If he has not been falsely claiming benefits, then there is no absolute bar on the claim
(Newman v Folkes [2002] EWCA Civ 591). In a Newman case, the problem, of course, may
be as much one of proof as of principle.
(b) The oft-forgotten credits/deductions
3. In addition to earnings actually received and income from state benefits deductible under the
CRU scheme, a Defendant is generally entitled to deduct sums received in consequence of
the accident (Hodgson v Trapp [1989] 1 AC 807). The two main exceptions to this are the
fruits of an insurance policy paid for by the Claimant and receipts due to the benevolence of
third parties. The following are common examples of sums the Defendant is entitled to deduct
from the Claimant’s past loss of earnings claim:
(a) State benefits paid in foreign countries (where there is no equivalent CRU scheme);
(b) State benefits paid in this country falling outside the CRU scheme, for example
housing benefit1, council tax benefit2 (reduction due either due to unemployment or
disability).
(c) Tax credits, namely working tax credit (paid to low earners) and the disability element
of working tax credit (an additional payment to the disabled).
(d) Child benefit: as from 7/1/2013 higher rate taxpayers earning £50,000 to £60,000 will
have to pay a “charge” in order to receive child benefit. Those earning over £60,000
are, in effect, unable to claim child benefit. Thus, an injured Claimant with children
who loses higher rate earnings accrues a benefit.
(e) Ex gratia payments made by the tortfeasor (Gaca v Pirelli General PLC [2004] EWCA
Civ 373).
(f) Payments by an insurance policy held by an employer for which the Claimant did not
pay. There has to be some evidence of payment for such benefits not to be deductible
by the Defendant (Gaca v Pirelli).
(g) Employment Tribunal compensatory (but not basic) awards, where the loss overlaps.
(h) Redundancy payments, where it can be proved that the redundancy was caused by
the injury (Wilson v National Coal Board 1981 SLT 67 and Colledge v Bass Mitchells
& Butlers Ltd [1988] 1 All ER 536).
(i) Saved expenses such as travel, child care etc (Eagle v Chambers [2004] 1 WLR
3081).
1 Clenshaw v Tanner [2002] EWCA Civ 1848
2 Smith v Rod Jenkins [2003] EWHC 1356
