The Gazette 1991

g a z e t t e

april 1991

the support she got from her husband which would have continued for as long as both were alive. If we are con- sidering the death of a son or -daughter who was contri- buting at home then any loss sustained by the parents might have continued for as long as one of the parents was alive and the son or daughter was not married. Unless indicated otherwise an actuary must assume that an individual's life expectancy is normal. If there is any question of a reduced life expectancy the extent of that reduction must be quantified by a medical expert. An actuary is " . . . an actuary must assume that an individual's life expectancy is normal." neither qualified nor in a position to indicate the extent of any reduction of life expectancy. It could be argued that it would be appropriate to use population statistics or more specifically a life table derived from Irish Census Returns. In my opinion we are more often than not dealing with mortality that is more likely to be active service than population. Population mortality includes persons of all states of health and, in particular, permanently disabled and permanently unemployed people. Full active service mortality would not be appropriate either in that not all the people involved would be actively employed. In practice we use the A49-52 mortality table, rated down for females. We are currently looking at the appropriateness of this table compared to population statistics. The life table derived from the 1986 Irish Census Returns is not yet available. In the life table derived from the 1981 Census male mortality is approxi- mately in line with the A49-52

but there is some evidence that the rating down currently used for females is in- su f f i c i en t. Further con- sideration of this is being deferred until the life table based on the 1986 Census is available. Marriage rates for use in our calculations have been derived from successive Irish Census Returns. The current rates come from the 1986 Census and represent the proportion of the population who do not remain single. In a case involving the death of an independent son or daughter contributing to his or her parents there is considered to be loss to the parents if the contribution is more than the cost of maintaining the son/ daughter. In turn, such loss is assumed to continue while at least one parent is alive and the deceased not married. Hence the need for marriage rates. When I first became involved in court work in the early 1960s I remember using a rate of interest of 6% which moved out to 6 1 / 2 %. The practice at that time was to take the long term yield on Government Stock and deduct a y 2 %. Inflation then was of very small amounts. I can remem- ber interest rates escalating up to the very large amount of 8% and inflation ceasing to be insignificant. Capital values would be given based on 8% and also on 5% being 8% less inflation at a rate of 3% as an example. Let me quote again from the Chief Justice's judgment in the appeal of Donnelly -v- Brown: "As to the choice between the 5% and 8% tables it should be noted that this court has on a number of occasions - and most recently in Long -v- O'Brien & Another (unreported, Supreme Court, 24th March 1972) stated that the accepted annual allowance

5. THE ACTUARIAL MULTIPLIER 5.1 What is required

In very simple terms what an actuary is called upon to do is indicate the capital value of each £1 per week or month or year that has been lost. Clearly, in order to do this, we need to know: - the age and sex of the person - for how long the loss would have continued - the state of health of the person In order to calculate the "capital value" or as it is more often referred to in court, the "multiplier", the actuary in addition must decide on: - the mortality table - marriage rates - discounting factor - tax to use in his calculations. Very often we might be given the age of a Plaintiff or of a dependant only to find out at a later stage perhaps even just as one is about to go into court, that the age originally supplied is incorrect. A doctor might have prepared a report in 1985 say in which he states the age of the Plaintiff. In 1987 the solicitor writes to the actuary quoting the age from the doctor's report. Clearly this is incorrect. It is essential therefore, in my opinion, that one be supplied with dates of birth and not ages. In an injury case perhaps it is over-simplifying matters to say that wages loss would con- tinue to retirement and that expenses would continue for a lifetime. There can be varia- tions on this in that loss might commence in 5 or 10 years time or alternatively medical evidence might be that the Plaintiff will recover in 5 years time after which there might be no loss. If we are contemplating a fatal claim then the loss suffered by a widow would be

5.6 Marriage rates

5.4 State of health

5.2 Age

5.7 Discount rate

5.5 Mortality

5.3 Duration of loss

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