The Smart Tables® Methodology
Personal injury awards aim to place the injured person, as far as reasonably possible and acknowledging life’s uncertainties, in the financial position they would have been in had the wrongful act not occurred. A major component of this is “loss of future earnings,” which reflects the injured party’s reduced ability to earn income after the award date. Courts typically estimate an award that, if invested, would fairly replace the income the person was likely to earn, using either the lump-sum method or the multiplier/multiplicand approach.
Under the multiplier/multiplicand method, the Court estimates the claimant’s likely net future earnings and the period during which they would have continued working, adjusting for uncertainties. Traditionally, this multiplier involved a subjective deduction from remaining working years. The Smart Tables® help reduce this uncertainty by applying jurisdiction-specific actuarial and financial data, relying on assumptions about mortality, disability, and workforce etc. The assumptions used are detailed below.
The Interest Rate Assumption
Traditionally, the multiplier is determined by deducing the expected number of working years remaining to the injured party, which is then reduced by a largely unscientific factor to reflect the uncertainties of life and advanced payment.
This document focuses on one of the key assumptions - the interest rate.
The interest rate methodology underlying The Smart Tables® is based on the 7th and earlier editions of the UK’s Ogden Tables. The Ogden Tables were first published in 1984 and formally adopted into UK jurisprudence by the Civil Evidence Act of 1995.
The Demographic Assumptions
Historically, Trinidad & Tobago, like many CARICOM countries, has relied on mortality tables developed in Canada, the United States, or Europe due to the lack of indigenous data. However, these imported models fail to capture the unique demographic, occupational, and epidemiological characteristics of the local employed population.
To address this gap, the University of the West Indies, St. Augustine (UWISTA), in collaboration with the National Insurance Board of Trinidad & Tobago (NIBTT), developed the UWI-NIBTT2014 Mortality Tables. These tables are based on 5 years of actual mortality experience of salaried workers registered under the NIBTT, covering over 5 million person-years of exposure.
For ages under 18, local population mortality data was used.