Chan Wai Tong v Li Ping Sum (Hong Kong) [1984] UKPC 49

A passenger injured in a Hong Kong road accident appealed against damages awarded. The Privy Council considered whether courts should compare awards across jurisdictions and whether future loss of earning capacity required specific pleading and evidence. The appeal succeeded in part, deleting the unpleaded and unproven future earning capacity award.

Facts

The respondent, a 25-year-old female accountant, was injured as a passenger in a minibus involved in a road traffic accident on 30th January 1981 in Hong Kong. She sustained compression fractures of three vertebrae, resulting in permanent disability assessed by different doctors at between 15% and 25%. Liability was admitted by consent judgment, with the first and second appellants (driver and owner of the minibus) liable for 75% and a third defendant liable for 25%.

Damages were initially assessed by Master Hansen at HK$31,395.00 total. On appeal, the Court of Appeal of Hong Kong substantially increased this to HK$205,995.00, including an award of HK$108,000.00 for future loss of earning capacity which had not been pleaded or argued before the Master.

Issues

1. Cross-Jurisdictional Comparison of Awards

Whether the Court of Appeal erred in having regard to the level of personal injury awards in England and other jurisdictions when assessing damages in Hong Kong.

2. Quantum of General Damages

Whether the Court of Appeal’s award of HK$90,000.00 for pain, suffering and loss of amenity was excessive.

3. Future Loss of Earning Capacity

Whether the Court of Appeal was entitled to make an award for future loss of earning capacity when this was not pleaded, not argued before the Master, and unsupported by evidence.

Judgment

Cross-Jurisdictional Comparisons

Lord Fraser of Tullybelton, delivering the judgment, affirmed the established principle that courts should generally only compare awards within the same jurisdiction or similar localities:

“In the light of that body of authority their Lordships consider, with respect, that the dictum of Cons J. in Lee Ting-lam was well founded and that it ought to be followed, unless and until the courts in Hong Kong are satisfied that social and economic conditions, including especially the rate of earnings, in Hong Kong are similar to those in England, or in such other jurisdiction as they wish to use for comparison.”

Use of Guidelines

The Board endorsed the use of judicial guidelines for consistency in awards:

“Their Lordships consider that reference to guidelines is proper and useful and is to be encouraged. It tends to produce consistency in awards, and it assists practitioners to negotiate settlements of the many claims which are settled either in the early stages of proceedings before going to trial, or which never reach the courts at all.”

Future Loss of Earning Capacity

The Board held that the award for future loss of earning capacity must be deleted. Evidence is required to establish both the risk of future job loss and the impact of disability on earning capacity:

“A claim for loss of future earning capacity usually arises where the claimant is in employment at the time when the claim falls to be evaluated. The claim is to cover the risk that, at some future date during the claimant’s working life, he will lose his employment and will then suffer financial loss because of his disadvantage in the labour market.”

The Board also criticised the Court of Appeal’s methodology:

“They also made a more serious error of principle by assuming that a 20 per cent disability necessarily implied a 20 per cent loss of future earning capacity. For the reasons which their Lordships have already explained, that is not so.”

Implications

This case establishes important principles for personal injury damages assessment: (1) courts should primarily compare awards within their own jurisdiction unless social and economic conditions are demonstrably similar elsewhere; (2) while judicial guidelines are useful for consistency, they must be applied with reference to actual decided cases; (3) claims for future loss of earning capacity require specific evidence of both the risk of future employment loss and the actual impact of disability on earning potential; and (4) percentage disability does not automatically translate to an equivalent percentage loss of earning capacity.

Verdict: Appeal allowed in part. The Court of Appeal’s award of HK$108,000.00 for future loss of earning capacity was deleted. The awards for pain, suffering and loss of amenity (HK$90,000.00) and special damages (HK$7,995.00) were upheld. No order for costs before the Board.

Source: Chan Wai Tong v Li Ping Sum (Hong Kong) [1984] UKPC 49