THE ROLE OF AN ACTUARY
In a High Court case where calculations of monetary expenditure and monetary loss are necessary, an Actuary will be required to give evidence to the Court, both as to what those expenses, losses or costs are annualised and increased for the duration of the injury are, or alternatively what the loss of wages will be over the duration of the working life of the individual claimant.
The principal calculations carried out by an Actuary are as follows:
1. Loss of past earnings in Personal Injuries cases
2. Loss of future earnings in Personal Injuries cases
3. Loss of Pension and Gratuity in Personal Injuries cases
4. Future medical and care expenses
5. Loss of financial dependency in fatal accident cases
6. Financial calculations in Garda compensation and Criminal Injury cases
7. Family Law cases, normally valuing assets and pensions
In catastrophic cases, the Actuary will calculate the present day value of future loss of earnings, lost years’ future earnings, cost of future care, cost of future aids and appliances and assistive technology and any financial dependency if there has been a fatality for the family members.
The Actuary must calculate the capital value of these future losses, so that a Judge today can award a fixed sum in compensation for those losses. These are generally calculated by working out the present capital value of future loss as the net loss/cost per week times the actuarial multiplier. The actuarial multiplier is a multiplication of the term of the loss, the frequency of the loss, the life expectancy of the Plaintiff, the mortality table (a standard actuarial table), the real rate of return less any expected tax payable on future investment income.
There is quite a body of case law governing the work of an Actuary and also the liability which a Defendant has to the Plaintiff Claimant which is limited under certain Acts, including the Civil Liability Act, 1961 and the Social Welfare Consolidation Act, 2005.
Social Welfare benefits may be deducted for five years after the date of the accident, and in particular arising from a road traffic accident, a claimant may lose Illness Benefit, Disablement Benefit, Invalidity Benefit or Injury Benefit, all of which have to be taken into account by the Judge at the hearing of the case. For accidents in work, the Judge must also consider the Disablement Benefit and the Occupational Injury Benefit.
In fatal injury cases, the Actuary must calculate the net contribution the deceased would have made to the family unit. This is calculated by him by working out the expected changes in contribution, which varies as his income increases and the children cease to be dependent, and also post retirement. He must also consider the expected investment Return and future inflation, the expected Tax on Future Investment income, the term of the Loss and Life expectation of the Deceased and Dependents and the interest on losses since Date of Death.
For personal injuries matters, the Actuary will normally require the following information:
1. The Plaintiff’s date of birth and marital status
2. The date and time of accident
3. Copies of the Plaintiff’s P60 for three years prior to the accident
4. Details of the likely gross and net earnings had the Plaintiff not been injured.
5. Details of Pension and Gratuity he would have received if he had remained in service
6. Normal retirement age
7. Details of the Pension and Gratuity he would have received if he had retired for reasons of ill health
8. If the Plaintiff had been able to work in the future, details of the likely earnings
9. Details of the Pension contributions
10. Details of any additional benefits, such as company car, expense allowance, meal allowance, etc.
11. A copy of the Vocational Assessor’s Report, if one is available
As can be seen from the above, the work of an Actuary is complex and requires considerable care, skill and expertise and it is important to pick a suitably qualified Actuary to assist in any claim that needs to be made before the High Court.