Updated May 2018:
Your income can often be affected when you have suffered a personal injury. Many different kinds of injury can force you to take time off work, reducing your earnings or even cutting them off altogether. This kind of loss is usually referred to as ‘loss of earnings’.
However, this direct loss of earnings is not the only way in which your income could be affected by an accident. Just one of the many other ways is covered by ‘Smith and Manchester’ compensation.
What is ‘Smith and Manchester’ compensation?
Rather than looking at the earnings you have lost from your accident, ‘Smith and Manchester’ compensation depends on whether your future ability, or capacity, to earn has been compromised by your injuries.
If your injuries are likely to put you at a disadvantage in future, when seeking work on the open labour market, then your future capacity to earn has been reduced. You may be entitled to ‘Smith and Manchester’ compensation to make good this loss.
Why is it called ‘Smith and Manchester’?
The name comes from a key case: Smith v Manchester Corpn, in which an award was made for a loss of future earning capacity.
Could I include ‘Smith and Manchester’ compensation in my claim?
Working out whether you can claim ‘Smith and Manchester’ compensation is a two-step process:
Firstly, ask if there is a real risk that, at some time in the future, you will be out of work before you reach retirement age, as a result of your injury?
Secondly, if this were to happen, would your injuries put you at a disadvantage when trying to find a new job? Would you have to take a lower-paying job? Would you be able to find a new job at all?
If both of these steps are satisfied, it then remains to assess what the value of this potential financial detriment would be if it occurred.
When trying to assess whether a ‘Smith and Manchester’ award is likely, the following factors are relevant:
- Your work history.
- The likely length of your working life (and this is likely to be increasing as people work longer).
- The type of work that you are doing.
- The type of employer that you have been working for.
- Your length of service with your employer.
- The severity of the disability caused by your injuries and its impact upon your work.
Actually including ‘Smith and Manchester’ compensation in your claim involves adding it to your Schedule of Loss. This should detail all of the losses which you are claiming for. An example of a Schedule of Loss can be found in our free Legal Library here.
Your solicitor should also indicate that you are claiming ‘Smith and Manchester’ compensation by stating it in the Particulars of Claim. Below, we look at what you can do if you believe your legal representatives have overlooked a potential ‘Smith and Manchester’ award.
How much is ‘Smith and Manchester’ compensation worth?
Frustratingly, for injured people and solicitors alike, ‘Smith and Manchester’ compensation is difficult to value. A claimant solicitor is likely to argue that the compensation should be considerable. Unsurprisingly, a solicitor defending the claim on behalf of an insurance company will probably argue that Smith and Manchester compensation doesn’t apply or, if it does, then it should be only be worth a small amount of money.
A number of factors are taken into account when making a valuation. These include:
- Your age
- Your skill set
- The effect your injuries have, or will have, on your work
- Whether you are likely to be able to work in other sectors.
In general, the value of ‘Smith and Manchester’ compensation tends to be equivalent to between 6 months and 3 years of your net earnings (i.e. your earnings after tax and other usual deductions).
Proving a claim for ‘Smith and Manchester’ compensation
To successfully claim ‘Smith and Manchester’ compensation, you must establish that your injuries will affect your future earning capacity. Naturally, this means medical evidence is critical. If medical evidence in your case does not indicate you are likely to experience difficulties at work in future, it is very unlikely you will be able to claim a ‘Smith and Manchester’ award.
If your medical evidence does not address this point, then your solicitor should consider asking questions of the medical expert to ascertain their opinion.
Other evidence which can help to support a claim for ‘Smith and Manchester’ compensation includes:
- Witness statements from you and other people about how you are coping at work and what is likely to happen to your employment in the future.
- Evidence relating to the prospects of your employer and their industry. For example, news reports.
- Your work history provided by HMRC. This will indicate how frequently you have changed work in the past.
Smith and Manchester compensation can be considerable. It is therefore particularly important for your solicitor to gather as much supporting evidence as possible in order to prove this key element of the claim. As you might expect, the more valuable a loss you are claiming, the more resistance you are likely to encounter from the party you are claiming from. Stronger evidence helps to overcome these objections.
Has your potential claim for ‘Smith and Manchester’ compensation been overlooked?
A personal injury or clinical negligence solicitor should we well-versed in claiming ‘Smith and Manchester’ compensation. Experienced solicitors will consider all kinds of potential losses when dealing with their client’s claim. And when compiling their client’s Schedule of Loss, they should always consider whether their client is likely to suffer any financial losses in the future.
However, if your case is being handled by an inexperienced case-handler or unqualified paralegal, they may not realise you could include this in your claim.
Failing to include ‘Smith and Manchester’ compensation, or any other kind of loss, in your claim could lead to your claim being under-settled, meaning you receive less compensation than you deserve. You can arm yourself with knowledge about this, and other kinds of loss which can be included in a claim, by downloading our free ebook: The Ultimate Personal Injury Compensation Guide.
If you think a ‘Smith and Manchester’ award should be included in your personal injury or medical negligence claim, but your legal representatives have not done so, then you should seek a second opinion on your claim.
You may wish to switch solicitors, transferring your case to a firm of specialist solicitors, who understand how to claim Smith and Manchester compensation.
If your claim has already been settled, you will not be able to transfer it to another firm of solicitors. However, if your case has been under-settled, or losses have been overlooked, you may have a professional negligence claim against your legal representatives.
At Truth Legal, we specialise in taking over claims where other solicitors (or the unqualified people handling claims) have failed to accurately value injuries and/or other losses.
We offer free consultations, with no obligation upon you to proceed further. Also, we will not contact your current solicitors unless we have obtained your signed authority. Switching solicitors is usually fairly straight-forward. Contact us today to find out more.