The Gazette 1991

april 1991

g a z e t t e

stances of that case it made no difference. Tax, in my opinion, cannot be ignored. Section 5 of the Finance Act, 1990, provided that in the case of a person who is permanently and totally incapacitated by reason of mental or physical injury from maintaining himself, any income arising from the investment of damages is exempt from tax.

In thd introduction to their paper, Owen and Shier refer to the concern expressed by Stewart Lyon, at the Institute of Actuaries' Annual General Meeting in June 1984, with the judgment in the same case given by Lord Justice Waller who erroneously stated that the expectation of life was an average and assumed that everybody lived to that age and then died. Those of us who are used to giving evidence in Court, no doubt, have met, many a time, the incomprehension expressed when giving different values for £1 per week to age 65 and life for a 30 year old plaintiff whose life expectancy is reduced to 25 years. The belief is that that person will be dead at age 55. The value of £1 per week for life is often taken to mean the value of £1 per week for a

Cooke -v- Walsh appeal that in his judgment Mr Justice Griffin said: " . . . the learned trial Judge multiplied the entire of the rate of wages (£115) by the full multiplier Used by him. In my view this is not correct, as it is the "take home pay" and not the gross pay that should be used as the multiplicand" /11984] ILRM 208, 217). Mr Justice McCarthy in his judgment in the same case in relation to the deduction of tax from gross wages said: " . . . there was no reference, whatever, to this aspect of the case in the evidence, the submissions, the relevant portion of the judgment, nor, indeed, in the grounds of appeal. . ." /11984] ILRM 208, 221). My own recollection is that in the particular circum-

6. OTHER CONSIDERATIONS

6.1 Life expectancy

A popular misconception is that an actuary bases his ca l cu l a t i ons on the life expectancy of a person. This manifested itself in the Auty -v- National Coal Board case ([1985] 1 All ER 930, CA) to which I have already referred.

[ X Z j L / LEGAL

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