Monday, September 3, 2007

AWARDING DAMAGES FOR LOSS OF FUTURE EARNINGS

(This article was published in the Daily Nation (http://www.nationmedia.com/dailynation/nmgcontententry.asp?category_id=39&newsid=105740 ) on Sept. 3, 2007 at pg. 14 column 1)

Mumias Sugar Company Ltd v Francis Wanalo [2007] eKLR (www.kenyalaw.org)
Court of Appeal at Nairobi (S.E.O. Bosire, E.O. O’Kubasu & E.M. Githinji JJ A)
July 31, 2007
Reported by Michael Murungi, Asst. Editor, Kenya Law Reports

The Court of Appeal has stated that an award of damages for loss of earning capacity can be made when the claimant is employed to compensate him for the risk that the disability has exposed him of either losing his job in future or in case he loses the job, his diminution of chances of getting an alternative job in the labour market. The award can also be made at the time of the trial and even when he is not so employed to compensate him for the risk that he will not get employment or suitable employment in future.

Francis Wanalo had been engaged on a four–year apprenticeship for general fitting and mechanical engineering in a factory owned by the Mumias Sugar Company at a monthly pay of Kshs. 8,300. In July 1998, he was injured when a fellow employee prematurely operated a crane from which Francis was disembarking causing the crane to push him against a beam. Francis, who was aged 26 years at the time, sustained a traumatic amputation of the small finger of the right hand, crush injury to the fourth finger of the right hand and soft tissue contusion with bruises on the right thigh.
In his suit against the Mumias Sugar Company, Francis stated that the accident was caused by the negligent operation of the crane by the company’s servant and prayed for damages. The company merely denied negligence in its defence and put forward two alternative defences – contributory negligence and volenti fit non injuria. The High Court found the company wholly liable for negligence and awarded Francis Shs.200,000/= as general damages for pain, suffering and loss of amenities, Shs.1,500/= as special damages and Shs.2,016,000/= for loss of earning capacity. In computing the latter award, the Court applied a multiplicand of Shs.7,000/= per month and a multiplier of 24.
Mumias Sugar Company filed an appeal against the decision. It argued that the High Court had erred in awarding damages under two separate heads, one ostensibly for pain and suffering and loss of amenities; and the other for loss of earning capacity and that the award of damages for loss of earning capacity was excessive.
In a unanimous opinion, a three-judge bench of the Court of Appeal came to the conclusion that based on the evidence, the High Court had reached the correct decision on the question of liability. The Court of Appeal then went on to make the following observation regarding the award of damages.

There is a difference between an award of damages for loss of earnings and an award for loss of future earning capacity. Compensation for loss of future earnings is awarded for real assessable loss proved by evidence. Compensation for diminution in earning capacity is awarded as part of general damages. In an appropriate case, a court can give an award for loss of future earnings and for loss of earning capacity to the same plaintiff so long as the overlap of the two awards of damages is avoided.

Further, loss of earning capacity can be claimed and awarded as part of general damages for pain, suffering and loss of amenities or as a separate head of damages. The award can be a token one, modest or substantial depending on the circumstances of each case. There is no formula for assessing loss of earning capacity. Nevertheless, Court has to apply the correct principles and take the relevant factors into account in order to ascertain the real or approximate financial loss that the plaintiff has suffered as a result of disability.

The appeal was allowed and Francis’ award of damages for loss of future earning capacity was reduced to Kshs. 500,000.


Universities Established:
Legal Notices No. 159-164 of 2007
President Mwai Kibaki has by Orders published in Legal Notices established the following universities:
Kenya Polytechnic University College as a constituent college of the University of Nairobi and successor to the Kenya Polytechnic.
Mombasa Polytechnic University College as a constituent college of Jomo Kenyatta University and successor to the Mombasa Polytechnic.
Chuka University College, as a constituent college of Egerton University. The University College shall be a successor to the Eastern Campus College of Egerton University.
Kimathi University College of Technology as a constituent college of Jomo Kenyatta University of Agriculture and Technology. The University College shall be a successor to the Kimathi Institute of Technogy.
Kisii University College as a constituent college of Egerton University as a successor to the Kisii Campus of the University.
Pwani University Colleage, as a constituent college of Kenyatta University. It will be a successor to the Kilifi Agriculture Training Institute.

PROBATION AND AFTERCARE TASK FORCE APPOINTED
Gazette Notice No. 8238 of 2007
The Vice-President and Minister for Home Affairs, Hon. Moody Awori, has appointed a task force to develop an aftercare policy and to recommend the development of a legal framework for probation and aftercare services. The Chairperson of the Task Force is Florence Simbiri-Jaoko. The Task Force has been given the powers necessary for the proper execution of its mandate, which it is required to do diligence, and it is to submit its report within six months.

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