When Smith v Manchester Applies
Smith v Manchester awards apply where a claimant with an established career faces risk on the open labour market following injury, but conventional future loss of earnings cannot be precisely calculated using the multiplier/multiplicand method. Common scenarios include uncertain medical prognosis, fluctuating earning capacity, or claimants approaching retirement.
How the Award Is Assessed
The tribunal or court awards a lump sum, typically up to 2 years' net earnings, assessed by reference to the degree of handicap on the open labour market. The employment expert provides evidence on pre-injury career, residual capacity, labour market risk, and comparable awards in similar cases.
Smith v Manchester vs Multiplier Method
Where reliable earnings data and a stable residual capacity assessment exist, the multiplier method is preferred as it provides actuarially precise capitalisation. Smith v Manchester is a fallback where precision is impossible. Experts must explain why the multiplier method is inappropriate before recommending a Smith v Manchester approach.
Common Disputes
Defendants often argue that the multiplier method should apply to reduce the award. Claimants argue for Smith v Manchester where residual capacity is uncertain. Joint instruction of vocational and accounting experts early helps resolve the appropriate methodology before expert reports are exchanged.