The Ogden Tables are a set of government-issued tables used to calculate future financial losses in personal injury claims. They help courts, solicitors and insurers work out fair compensation for people who’ve suffered serious injuries.
Understanding how the Ogden Tables work can help you get a clearer idea of what your claim might be worth and what kind of financial support you may be entitled to in the future. Below, we explain what the tables are, how they’re used, and how they help calculate personal injury compensation.
What are Ogden Tables and why are they used?
Ogden Tables are actuarial tables (actuaries are employed by insurance companies to estimate risks and payouts) used to calculate the future losses of someone seeking compensation, such as compensation for an injury. Compensation can account for the immediate financial losses and pain and suffering caused by an injury. And with the help of Ogden Tables, future losses can be estimated too, allowing for future loss compensation claims.
Ogden Tables help ensure claimants receive appropriate financial support to cover lost earnings, medical expenses, and future care costs. They also ensure that this financial support is awarded with transparency. The tables are updated periodically to reflect changes in life expectancy and economic factors, making them a reliable resource for calculating long-term financial losses.
How do Ogden Tables work in personal injury claims?
Ogden Tables are used in personal injury claims to calculate future financial losses. They help determine how much compensation someone should receive for things like lost earnings or long-term care.
There are two key parts to this calculation:
- Multiplicand: This represents the claimant’s annual financial loss, which can include lost earnings from being unable to work, medical expenses, rehabilitation, and other care costs.
- Multiplier: Taken from the Ogden Tables, this figure is based on factors like age, life expectancy, and the discount rate.
The compensation amount is calculated by multiplying the multiplicand by the multiplier.
For example, if a 35-year-old construction worker can no longer work due to a serious injury, and their annual loss of earnings is £30,000, with an appropriate multiplier of 15 from the Ogden Tables, their compensation for lost future earnings would be:
£30,000 x 15 = £450,000
This figure might be adjusted further to account for things like pension loss or extra medical needs, helping ensure the final amount reflects the person’s full financial losses over time.
What factors influence compensation calculations?
A range of factors influence the final compensation amount awarded in a personal injury claim, including:
- The age of the claimant: Life expectancy plays a big role in calculating future losses. Younger claimants usually receive more compensation, as they’re likely to face a longer period of lost income and care needs. This typically results in a higher multiplier being used from the Ogden Tables.
- Severity of the injury: The more serious the injury, the greater the impact on the claimant’s life. Higher compensation is awarded to cover medical treatment, long-term care, home adaptations, and general pain and suffering.
- Employment status and future earnings potential: A claimant’s career path is taken into account. Someone with strong prospects for promotion or increased earnings could receive more compensation to reflect that potential income loss.
- Discount rate on compensation: This adjusts the final compensation amount based on expected investment returns. If compensation is paid as a lump sum, the assumption is that some of it could be invested to earn interest. A lower discount rate leads to higher compensation, while a higher rate can reduce the payout.
Lump sum vs. periodical payments – which is better?
When compensation is awarded, it can be paid either as a lump sum or in periodical payments. Both offer advantages and drawbacks:
- Lump sum compensation: This is paid as a single amount. It gives the claimant the financial flexibility to invest the funds however they would like, but a lump sum must be managed carefully to ensure it lasts and covers future financial needs.
- Periodical compensation payments: These are regular payments made over time, providing a steady stream of income, While easier to manage day-to-day, they don’t offer the same financial freedom as a single lump sum.
If you are given the choice of either lump sum or periodical compensation payments, you’ll need to consider your options carefully. Speaking to an independent financial advisor is a sensible step to take in making the best decision for your circumstances.
How does the discount rate impact compensation?
The personal injury discount rate adjusts compensation calculations to account for the interest a claimant might earn by investing a lump sum payment. A lower discount rate leads to a higher compensation amount, while a higher discount rate reduces the final figure.
Currently, the UK personal injury discount rate stands at +0.5% (half of one percent), meaning claimants would receive a slightly lower amount of compensation if paid as a lump sum today than they would if paid over time (0.5% less).
For instance, a discount rate of 0.5% on a payout of £500,000 would reduce it by £2,500 to £497,500.
If the discount rate was increased to 0.75% (three quarters of one percent), it would reduce a payout of £500,000 by £3,750 to £496,250.
If the discount rate was reduced to 0.25% (one quarter of one percent), it would reduce a payout of £500,000 by only £1,250 to £498,750.
How legal expertise can help maximise your compensation
Because the Ogden Tables are complex, it’s best to seek expert legal advice rather than trying to calculate your compensation on your own. Mistakes can lead to unrealistic expectations, or worse, a much lower payout than you deserve.
At Injury Lawyers 4u, our solicitors are highly experienced in serious injury claims, including workplace accidents, road traffic accidents, and medical negligence cases. We know how to apply the Ogden Tables correctly, so you receive the maximum compensation you’re entitled to.
You can use our compensation calculator to estimate payout amounts for different personal injuries. But for a more accurate, personalised assessment, it’s always best to speak to our team directly.
Ready to make a claim? Here’s what to do next
If you or a loved one has suffered an injury or illness and need expert guidance on securing fair compensation, Injury Lawyers 4U is here to help.
We’ll assess your case and advise you on the best steps to take. Our experienced and approachable legal team will support you through every stage of the claims process, fighting to secure the maximum compensation you’re entitled to.
We work on a no-win, no-fee basis, meaning you’ll only pay us if you win, so there’s no financial risk to making a claim with us.
If you’d like a free, no-obligation consultation, call us on 0333 400 4445 or fill in a contact form and we’ll get back to you right away.