Damages

Personal injuries - damages for future pecuniary loss - no uplift in multiplier to counteract effect of higher foreign tax rateVan Oudenhoven v Griffin Inns Ltd: CA (Stuart-Smith, Mummery and Tuckey LJJ): 4 April 2000The Dutch claimant was injured on a visit to the United Kingdom as a result of the defendant's negligence.

On her claim for damages, the judge would have awarded 716,163 for future loss of earnings, but he accepted evidence that the award would be subject to higher rate tax than that levied upon United Kingdom residents.

He accordingly increased the multiplier and awarded 969,335.

The defendant appealed.Richard Methuen QC and Susan Rodway (instructed by Badhams Thompson, Croydon) for the defendant.

Dan Brennan QC and Sydney Chawatama (instructed by Irwin Mitchell, Sheffield) for the claimant.Held, allowing the appeal, that the fact that the claimant would have to pay higher rate foreign tax did not of itself make the case a very exceptional one so as to justify reducing the discount rate or increasing the multiplier; that in determining whether a case was exceptional, the court had to consider all the circumstances, including any higher rate of return from the equivalent of index-linked government savings, the level of indirect taxation and the cost of living; that applying the 3% discount rate and United Kingdom tax, the fund would be exhausted three years before the claimant's assumed retirement age, whereas applying Dutch income tax the fund would be exhausted about three years earlier, requiring an additional fund of 50,500; and that, in those circumstances, the impact of tax did not so reduce the rate of return as to justify taking a lower discount rate and thus increasing the multiplier.