Lost years compensation for children: What you need to know

“Lost years” are the time between a claimant’s shortened life expectancy due to medical negligence, and their life expectancy pre-injury.

Compensation for lost working years has been attainable for adult claimants since the case of Pickett v British Rail Engineering (1980). The House of Lords reasoned that these were recoverable as the claimant was deprived of their right to distribute their income as they wanted. This was further refined in Gammell v Wilson (1981).

The same was not applicable for claims involving children. Croke v Wiseman (1981) found that proving future financial loss for children due to medical negligence was too speculative, and that they may only claim for loss of earnings up until their estimated life expectancy.

CCC v Sheffield Teaching Hospitals NHS Foundation Trust

In CCC v Sheffield Teaching Hospitals NHS Foundation Trust, the claimant (referred to as CCC) sustained a hypoxic brain injury at birth due to oversights from the midwife overseeing her mother’s labour.

Consequently, CCC was born with severe Cerebral Palsy. She cannot eat, talk or walk, and is expected to live until she is 29.

Initially, her family was awarded a £6.8m lump sum and £350,000 annual payments for her long-term care. However, they could not pursue compensation for future loss of earnings, despite both parties agreeing that, had CCC not suffered this injury, she would have had a “typical” life expectancy and worked until retirement.

CCC’s parents appealed this to the Supreme Court, which upheld their appeal by a majority of four to one. Lord Reed, in his leading judgment on the case, stated:

“That general principle applies just as much where the claimant was injured as a young child as where the claimant was injured as an adult. The court cannot properly exclude the recovery of compensatory damages, as a matter of principle, on the ground of the claimant’s age.”

For many, the ruling corrects many years of injustice, entitling children and their families to the same “future loss of earnings” that an adult may claim. Because, fundamentally, the legal rights for children injured by medical negligence should be the same as those of an adult.

However, it has attracted controversy. Lady Rose, the sole dissenting voice in the Supreme Court’s decision, maintained that it is still too speculative to predict the future earnings of young children.

In the UK, “lost years” compensation is usually calculated using the multiplier-multiplicand method used in personal injury law. This estimates the income someone would have earned during the years they will no longer live, adjusted to reflect real-life factors.

1. Estimate the claimant’s lost years

First, the courts will determine how many lost years the claimant will have by subtracting their post-injury life expectancy from “normal” life expectancy.

For example, if a child is expected to live until 35 post-injury, and was previously expected to live until 80, they would have 45 “lost years”.

2. Calculate the claimant’s likely net earnings in the lost years

Next, the courts will calculate what the claimant would likely earn during their lost years (usually after tax). For adults, this takes into account:

• Current salary
• Career trajectory
• Employment patterns
• Retirement age
• Tax and national insurance deductions
• Evidence from expert economists

For child claimants, this calculation is more complex, as they have no prior salary or earnings history. Instead, evidence used to calculate their earning potential will include:

• Their parents’ education and occupations
• Academic ability and school performance (if applicable)
• Expert educational or labour-market evidence
• Average national earnings and similar statistics

3. Deduct living expenses

When the net earnings are determined, the courts will then deduct a percentage that would have likely been needed for their personal living expenses (food, clothing, accommodation, etc.).

There is no one-size-fits-all value for this, but for claims involving children, this deduction may be as high as 50%.

4. Apply the “Ogden multiplier”

The remaining annual loss is then multiplied by the appropriate Ogden multiplier, taken from the latest Ogden Tables.

The multiplier converts the annual loss into a lump sum reflecting:

• Early receipt of damages (discount rate)
• Mortality risk
• Contingencies such as unemployment or illness.

Using the earlier example, 45 lost years may correspond to an Ogden multiplier of around 33.

Please be aware that the formula above is only a top-line example of how lost years' compensation is calculated. Compensation in a medical negligence claim is determined on a case-by-case basis, with multiple factors influencing the final amount.

It may also be further adjusted using Ogden's “reduction factors”. These account for the probability that the claimant would be working during those years, based on factors such as:

• Disability status
• Education level
• Employment status at the time of injury

Of course, the Supreme Court ruling on lost years damages for children remains very recent. It may take time to determine a new approach to calculate compensation, something we are paying close attention to.

Now that you understand lost years damages and how they are calculated, you may be wondering how you can make a birth injury claim on your child’s behalf.

Anyone under the age of 18 cannot bring a claim forward themselves. Instead, they must be represented by a “litigation friend”.

A litigation friend can be anyone who will act in the claimant’s best interests – often a parent, guardian or close relative.

The litigation friend assumes the role of the claimant during the claim, working with their solicitors to answer questions and provide evidence. From there, the process is virtually the same as claiming as an adult, except compensation is awarded to the child.

The law requires that a litigation friend:

• Conducts all proceedings both fairly and competently
• Takes all decisions and actions for the benefit of the claimant
• Has no personal interest or stake in the claim

For more information about claiming on someone’s behalf, please watch this episode of the Medical Negligence Matters podcast.

Is there a time limit for a child’s clinical negligence claim?

The limitation period for most medical negligence claims in the UK is three years from your date of injury, or from the date you should have become aware of the injury (Date of Knowledge).

However, if the claimant is under the age of 18, they have until their 21st birthday to make a claim (three years from when they legally become an adult).

Furthermore, if the claimant lacks mental capacity, such as in a Cerebral Palsy negligence claim, then there is no time limit to bring a claim.

In all circumstances, we recommend pursuing a claim as soon as possible. This helps ensure that evidence and people’s memories of events stay fresh, offering the best support to your child’s claim.