News

The long-awaited 8th edition of the Ogden Tables has now been published by the Government's Actuary Department, almost a decade after the 7th edition in 2011 (although supplementary tables were published following the Discount Rate changes on 20 March 2017).

The Ogden Tables are designed to assist those concerned with calculating lump sum damages for future losses in personal injury and fatal accident cases in the UK.

The methodology is long-established: multipliers are applied to the present-day value of a future annual loss (net of tax in the case of a loss of earnings and pension) with the aim of producing a lump sum equivalent to the capitalised value of the future losses. In essence, the multiplier is the figure by which an annual loss is multiplied in order to calculate a capitalised sum, taking into account accelerated receipt, mortality risks and, in relation to claims for loss of earnings and pension, discounts for contingencies other than mortality. Multipliers are calculated by reference to an annual assumed interest rate after tax and inflation, known as the discount rate.

The applicable discount rates range from -0.75% in Scotland to -0.25% in England and Wales, and +2.5% in Northern Ireland. However, On 28 February 2020, Northern Ireland’s Justice Minister announced that she had asked officials to undertake a statutory consultation to consider the discount rate in Northern Ireland.  The consultation, which is required under the Damages Act 1996, is being conducted with the Government Actuary’s Department and the Department of Finance.  They will consider a proposed change from +2.5% to -1.75%.  No timescale is indicated in relation to how long the statutory consultation will take. 

Key Updates in Ogden 8

The main updates and changes in the 8th edition of the Ogden Tables are as follows:

• The tables have been revised to use updated mortality assumptions; the multipliers in this edition are based on mortality rates from 2018 based projections. This has resulted in a reduction in the lifetime multipliers for men and more so women.
• There are 8 new tables which cover a wider range of retirement ages to 68 and 80.  
• Section B has been extensively revised and there is new guidance on when and how to depart from the suggested Table A to D reduction factors in appropriate cases.
• The specific Ogden definition of disability is clarified – this requires both the claimant to be disabled under the more restrictive Disability Discrimination Act 1995 (rather than the Equality Act 2010) and for the disability to affect either the type or amount of work that the claimant can do.
• The previous academic achievement categories of D, GE-A and O have been replaced with Level 3, 2 and 1 respectively and reflect the much wider range of qualifications now available.
• There is a new Section C regarding the application of the Tables to pension loss claims together with examples.
• Following the Supreme Court’s decision in Knauer v Ministry of Justice [2016], Section D regarding the application of the Tables to Fatal Accident Act claims has been re-written and simplified, with a number of new examples.
• A new Section E deals with the indexation of loss of earnings periodical payment orders, the application of the suggested Table A to D reduction factors and how to update for different earnings-based measures of inflation.
• Finally, there are also new additional tables published separately in Microsoft Excel formal to allow the calculation of multipliers from any age at trial to any future age up to 125.

If you have any questions or would like to discuss anything further, please contact Claire Daly or any member of the Forensic Accounting Team.