“Where it is necessary to determine the degree of a person’s disablement it shall be determined by reference to the degree to which his earning capacity has been affected as a result of an injury received without his own default in the execution of his duty as a police officer” – Regulation 7(5) The Police (Injury Benefit) Regulations 2006
We often trust experts blindly, because we’re programmed to do so practically from birth. Call it the “Wizard of Oz” effect: first with our parents, then our teachers, and then on to the authoritative voices in our textbooks and on TV news, we’re brought up to believe there are always people whose knowledge and judgement should be taken over our own.
Even when you are swimming in treacle during the ill-health retirement process and the police service’s inability to deal with your situation means your view of them has crumbled further into a disillusioned, sometimes lazy, ineffective, unrespected and undisciplined organisation, you still remember when you were at training school and you were taught that with authority came responsibility and accountability.
Doctors have a special power over our brains’ decision-making capabilities. We get discombobulated and our rationality put on hold when we’re presented with what an expert with a stethoscope thinks they should be doing, regardless of how bad the thing is.
When a Selected Medical Practitioner (SMP) demands of a Human Resources minion to supply them with job profiles what is actually happening is a measurable assessment of loss. The bad news for the occupational health doctor and Human Resources is that measurable future (or potential) earnings has no place in the Regulations.
One of the most complex concepts within the Regulations is the notion of ‘degree of
disablement’. Earnings do not dictate earning capacity.
The doctors employed as SMPs find this concept exceptionally hard to grasp.
David Scoffield QC succinctly lays down this confusion as the main reason why he was commissioned to perform the PSNI “Review of the present arrangements for the payment of ill health pensions and injury on duty awards to former police officers”
Put shortly, however, the degree of disablement relates to the consequences of the duty
injury for the officer’s capacity to earn money. It is the calculation of this element which has given rise to many of the difficulties which have led to the need for the present review.
The law is quite exact in determining Earning Capacity. Courts use something called heads of loss or heads of claim to pinpoint how much damage has been done which influences the amount of compensation a claimant will receive. In civil claims the head of damage of ‘earning capacity’ cannot be awarded if ‘loss of future earnings’ is awarded as, if a claimant is not working by the time of trial or is already in a lower paid employment, he will be compensated under the loss of earnings head of damage.
Where the evidence that the former police officer is not able to earn as much as he or she would have done BUT for the injury then the compensation is loss of earning capacity. The injury award compensates, in the here and now, for the injury and the affect that this has had on earning capacity.
The test for earning capacity is that there must not be a measurable loss. If there is a measurable loss then this is loss of future earnings. Billett v (MOD)  EWCA Civ 773 (23 July 2015) was a case about loss of future earning capacity, not future loss of earnings.
In Fairley v John Thompson (Design and Contracting Division) Ltd  2 Lloyd’s Rep 40 Lord Denning MR explained the difference between loss of earnings and loss of earning capacity in this way:
“It is important to realize that there is a difference between an award for loss of earnings as distinct from compensation for loss of earning capacity. Compensation for loss of future earnings is awarded for real assessable loss proved by evidence. Compensation for diminution in earning capacity is awarded as part of general damages.
The courts can see the distinction but SMPs and HR directors are blind to it. The Regulations provide a minimum income guarantee in the form of the award that is in effect ‘damages’ for the injury causing ‘diminution in earning capacity’.
Interestingly the appeal court in Billet v MoD found that when considering what constitutes a substantial adverse effect on a person’s ability to carry out normal day to day activities the focus should be on what the person cannot do, as opposed to what he can do.
Paragraph 89 Billet V MoD
Those statements are all true. But, as Mr Poole points out, those submissions fall into the trap which Langstaff J identified in Aderemi. They are directed to what the claimant can do. The focus of the inquiry should be upon what he cannot do as a result of the injury to his feet.
This is the total opposite to the standard approach of a SMP who, more often than not, brazenly proclaims that if you are able to dress yourself and make a cup of tea, in their view, you should be able to work full time as an Intelligence Analyst at Force Headquarters. (One of the mysteries of the universe is why are there so many vacancies of Intelligence Analysts given HR minions always provide them to SMPs as one of the three job profiles that they think a disabled former police officer can do! )
Loss of future earnings is quantifiable. It is measurable with some precision. David Scoffield QC clarifies that the earning capacity in relation to the Regulations has no provision for exactness:
there is nothing in the Regulations which specifically requires an SMP to give a percentage figure in any individual case. Their obligation under regulation 29(2) is to give a decision on “the degree of the person’s disablement”, which could just as easily mean a decision as to whether the disablement is slight, minor, major or very severe. Regulation 29 could have been drafted to indicate that the medical authority had to specify a precise percentage disablement; but it is not.
If the Regulations meant for an injury award to be compensation for loss of future earnings then the injury award would be calculated using the Ogden tables, paid at the start and as a one-off lump sum. It doesn’t and so it isn’t.
The major difference is that earning capacity is not usually affected by voluntary, non-binding, choices made by the worker. The ability remains whether the individual chooses to exercise that ability or not. In other words, any earning capacity remains whether or not the person chooses to exercise it or not.
So, to consider the earning capacity of an doctor who earned tens of thousands of pounds in a fruitful year being a gun-for-hire SMP for a particular police service with a mass review program and has built up such a massive nest-egg that they’ve now chosen to stay home with pre-school children (or even sail a yacht around the Caribbean given the humongous amounts paid out) rather than enter or remain in the labour market, we need not investigate the process by which such a decision is made, nor attempt to estimate the year-by-year probability of returning to the labour market. A focus upon future or expected earnings would lead directly to such questions. It is irrelevant to earning capacity.
Winning the lottery or becoming the beneficiary to the estate of a recently deceased long lost Aunt are both factors that can voluntarily affect the decisions and choices of the worker. Both are irrelevant to earning capacity.
How can we measure the immeasurable, we hear SMPs ask?
The good news is SMPs don’t have to.
Let David Scoffield have the last words:
Indeed, the fact that the degree of a person’s disablement is a “medical
question” under regulation 29 of the 2006 Regulations may also suggest that (what I have referred to as) the mathematical approach is not the correct way of determining degree of disablement under the Regulations; but that, rather, it is a broad judgment to be made by a clinician about the effect of the injury or condition he has examined in contrast to a much more detailed calculation based on earnings data. This approach seems to me to draw support from the Crocker judgment, particularly at paragraph  where Ouseley J noted that the approach he was suggesting (in relation to an issue of apportionment in that case):
“… reflects the statutory question which has to be answered. It is a straightforward
approach which fits with the process for making the assessment, which is comparatively informal, and one in which doctors, and not lawyers or philosophers, make the decisions.”
[underlined emphasis added]