31 July 2020

Personal injury practitioners will be well versed in the use of the Ogden tables when calculating lump sum compensation in personal injury and fatal accident claims. Now, nine years after the 7th Edition was published in 2011, the 8th edition of the Ogden tables was published on 17 July 2020 which brings these in line with the Office of National Statistics (ONS) 2018 mortality projections which were published in December 2019.

The main changes in the 8th Edition 

Anticipated life expectancies have reduced as a result of the lower actual decreases of mortality between 2008 and 2018, coupled with the more pessimistic assumptions of the ONS in respect of mortality rates over the next few years. Younger claimants will see a reduction of 1 to 2%, and older claimants a reduction of between 8 and 9% and a greater reduction across the board for female claimants.

Section A has been updated and the guidance section expanded, especially for atypical cases with new examples dealing with interpolation and calculating split multipliers.

Section B provides new guidance (from paragraph 54 onwards) on when to depart from Tables A to D and how to do so. The method of calculating contingencies other than mortality has also changed with the definition of disability now in line with that of the Disability Discrimination Act 1995, rather than the Equality Act 2010, which is more restrictive. There are also changes to the reduction factors to be used and a re-labelled three-way education classification.

There is an entirely new section C to deal with pension loss claims, together with examples and helpful guidance (from paragraph 111 onwards) for practitioners quantifying those often complex heads of claim where a claimant can have different types of occupational pension and varying levels of employer contribution for individual schemes.

Another new section, E provides guidance (from paragraph 161) on how to approach periodical payments for loss of earnings.

There are now 36 tables, instead of the 28 in the 7th edition, which helpfully include earnings and pension multipliers to ages 68 and 70. They also include columns for the discount rates of -0.25% and -0.75% in England and Wales respectively. Table 27 for discounting factors for term certain is now Table 35 and Table 28 providing multipliers for pecuniary loss for term certain is now Table 36.

There are eight more tables reflecting the increase in typical retirement age with four tables for men and women for loss of earnings to retirement at age 68 (Tables 11 and 12), and pension loss from that age (Tables 27 and 28), and four further tables for loss of earnings to retirement age 80 (Tables 17 and 18) and pension loss thereafter (Tables 33 and 34.)

Additional tables are also available in Microsoft Excel format which require to be downloaded separately, which will allow calculation of multipliers from any age at date of trial, to any age of claimant up to age 125 at discount rates of 0%, -0.25% and -0.75%. Multipliers can be split and easily calculated according to the precise age of the claimant. The Ogden Working Party state that the multipliers derived from the tables are accurate, reliable and should be treated as definitive.

Impact

The 8th Edition is bigger with more detailed guidance and examples all aimed to make quantification of claims more efficient, albeit the Ogden Working Party maintain their recommendation that actuaries continue to be involved in the more complicated cases.
 
The life multipliers are all lower which will have an impact on any current offers and careful consideration should be given to those as they may no longer be appropriate, particularly if the claimant is female.

The 8th edition tables can be accessed here. 

Contact: Jennifer Stewart, Senior Associate,  jhs@bto.co.uk T: 0141 221 8012