Data on ‘healthy life expectancy’ warrants a review of how we quantify high value injury claims

On 15 January 2021, the House of Lords Science and Technology Committee published the outcome of its inquiry into the issue of healthy ageing. The inquiry was first commissioned following recognition that, whilst lifespans in the UK have increased in recent times, the period for which people remain healthy has not kept pace. The result is an increased duration of ill health in later life, which then places an increased burden on public health services, not to mention the effect on individuals’ wellbeing.

The Committee have now recommended that the Government look to reduce current health inequalities between the generations over the coming years in an effort to tackle the problem. It remains to be seen how the Government responds, but those practitioners dealing with compensation claims involving lifelong injuries should consider the extent to which some of the findings from this inquiry might be relevant to the quantification of a claim, and whether further recognition of this by groups like the Ogden Working Party is required.

The report’s key findings 

The report in question can be accessed here

The findings essentially conclude that the Government is not on track to meet its own aim to improve the period of what we might refer to as ‘healthy life expectancy’ (an estimate of the number of years spent in “Good” or “Very Good” health). As things currently stand, the report finds that it will likely take 75 years to achieve the five year improvement target that the Government previously set. Tackling these problems will require the UK to play a leading role in researching the process of ageing and to develop treatments that address the causes of older age illness, allied to improved co-ordination of health services and wider deployment of technology. How likely is that, in the near future in a post-COVID world of economic recession?

The House of Lords report includes evidence as to the extent of the average periods of ill health, which is typically around 20% of overall life expectancy. The graph below shows how the period of healthy life expectancy is lower than that of overall life expectancy (though note that the period of unhealthy life expectancy need not fall in the latter years as the graph might be interpreted, rather it is an average over a full life term).

Source: Office for National Statistics (2019) Health state life expectancies, UK: 2016 to 2018: https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/bulletins/healthstatelifeexpectanciesuk/2016to2018 [accessed 28 September 2020]

The report acknowledges that healthy life expectancy is not only age related. It is particularly affected by socio-economic status, with the proportion of healthy life expectancy lowest for those who are from the most deprived backgrounds (healthy life expectancy being as much as 18 years longer for those in the least deprived areas). The effects of the pandemic are only expected to increase that gap.

The relevance to assessing quantum in high value claims

Life expectancy is a key measure for determining the value of claims involving lifelong losses. Life expectancy data forms the foundation for the Ogden tables, from which multipliers are generated to assist with calculating future losses. Last year’s publication of the eighth edition of the Ogden tables recognised that, whilst life expectancy continues to increase, the extent of anticipated improvement in life expectancy has been less than previously expected, hence producing slightly lower multipliers than the seventh edition of the Ogden tables. What the Ogden tables do not do, and what the Explanatory Notes fail to acknowledge, is that a significant part of that predicted life expectancy will likely be spent in ill health regardless of any accident, with all of the associated limitations on function and needs for things like care, treatment and equipment that arise from that ill health being required.

Practitioners dealing with claims involving future losses should always have issues around life expectancy in mind. It is a major determiner of claim valuation and it is important to ensuring compliance with the 100% principle, namely that a claimant should recover a sum equivalent to their losses over their lifetime which results from the accident, no more and no less. The data on healthy life expectancy raises questions as to whether this should be factored in to considering the 100% principle and the extent to which, with lengthy periods of unhealthy life expectancy even absent the accident, and the needs likely to arise from that, there should be a reduction to account for needs regardless of the accident.

The case of Reaney v University Hospital of North Staffordshire NHS Trust & Anr [2015] EWCA Civ 1119 already establishes that there can be a reduction in a care claim where the claimant would have required care of a similar qualitative nature, regardless of the accident, to that which they require now, but proving the likelihood of care needs arising, and that it will be care of the same type now required, is often a challenge. These are factual issues for a court to grapple with on a case by case basis. There is currently no general recognition within the approach to the calculation itself that health needs are likely to arise regardless of an accident and that costs would likely have been incurred to meet those needs which should be factored in.

Questions and answers?

The data only takes us so far, and in many ways it currently raises more questions than answers:

  • How unhealthy is the typical period of unhealthy life expectancy?
  • How does the level of unhealthiness typically deteriorate over time?
  • What does this increasing level of unhealthiness mean for a person’s needs in terms of care, equipment, treatment, transportation etc.?
  • What further improvements are anticipated, over what timeframe, and what practical effect will they have?

There may often be some basis for raising the issue when assessing the situation but for the accident and incorporating at least the chance of such age related needs having arisen regardless of the accident. These are issues that practitioners should have in mind for the right case. It remains to be seen how keen the court would be to grapple with such issues, likely to require detailed statistical evidence at significant expense, on a case by case basis.

This appears to be an area ripe for consideration by the Ogden Working Party. The Ogden tables already factor in reductions to loss of earnings multipliers to account for the speculative risk that somebody might at times be out of work, so why not factor in similar imponderables to life multipliers to reflect the speculative risk of needs arising during periods of unhealthy life expectancy? Should there be a further reduction factor to be applied to life multipliers depending on variables around issues like socio-economic status? These are issues that one would hope the Ogden Working Party will have in mind when formulating the ninth edition of the Ogden tables.

Andrew Williamson, Partner, BLM
andrew.williamson@blmlaw.com

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