In the recent case of ZSY (a protected party by EZY, his Litigation Friend) v AAA [2023] EWHC 2977 (KB), the court considered the most suitable indexation and data set to be used when calculating the adjustment to the annual sum specified in a Periodical Payment Order (“PPO”).

Those familiar with settling claims on a periodical payment basis, will often turn to the appropriate tables within the Annual Survey of Hours and Earnings (“ASHE”) to work out the amount of any future payments, usually for care and case management fees. This is to ensure that there is fairness to both parties by taking into consideration any market fluctuations. 

However, the ASHE data is based on information collated and prepared by the Office of National Statistics and is based on UK data, representing fluctuations across the UK labour market – the care sector in particular. So what do you do when a claimant moves abroad during the lifetime of the claim? Is ASHE still the most appropriate indexation for future payments under the PPO? 

At Clyde & Co we have advised on a number of claims of this nature, often when claimants decide to return to their home country to be closer to family after an accident has taken place.

This recent reported case is another example of the issues the court will consider when determining the appropriate data set to be used in these circumstances. The judgment sets out the things to be considered when looking at indexation, as approved in the earlier case of Thompstone v Tameside ([2008] EWCA Civ 5, at 56):

  1. accuracy of match of the particular data series to the loss or expenditure being compensated
  2. authority of the collector of the data
  3. statistical reliability
  4. accessibility
  5. consistency over time
  6. reproducibility in the future
  7. simplicity and consistency in application.

Expert evidence will almost always be required to satisfy the court that the issues above have been fully considered and that any proposed indexation is suitable.

In this case, the claimant had returned to Latvia and it was proposed that the Latvian Monthly Wage Index should be utilised for future periodical payments. Expert evidence was produced by both parties and concluded that this indexation would insulate the claimant against fluctuations and volatility in the currency markets and the growth of the Latvian economy. The judge therefore approved the PPO and the use of the Latvia indexation. 

The decision serves as a reminder to practitioners to consider suitable indexation in cases where the claimant is living abroad and to address the issues identified above to ensure that the most suitable data is used.