Navigating the global liability defence agenda
Tabled for discussion: An introduction to the Singapore actuarial tables
The Actuarial Tables with Explanatory Notes for use in Personal Injury and Death Claims (Actuarial Tables) published in March 2021 represent a sea change in the potential awards that may be arrived at via the assessment of damages in personal injury and death claims in Singapore.
The Supreme Court Practice Direction 159 and State Courts Practice Direction 145 state that all proceedings for the assessment of damages in personal injury and death claims heard on or after 1 April 2021 “will refer to the [Actuarial Tables] to determine an appropriate multiplier, unless the facts of the case and ends of justice dictate otherwise”, irrespective of when the accidents or incidents occurred or when the actions were commenced.
Both Practice Directions state that the Actuarial Tables “will serve as a guide” with the selection of multipliers and the amount of damages remaining at the discretion of the Court, meaning that the facts and circumstances of the case may lead the Courts to depart from the multipliers in the Actuarial Tables. To date, no cases have successfully argued that “adjustment factors” should apply and insurers in Singapore would do well to maintain a conservative approach, and base reserves on the Actuarial Tables without discount.
The applicability of adjustment factors
The Actuarial Tables incorporate census and economic data to derive sets of multipliers that enhance the statistical backing of the assessment of future losses for victims of personal injury or dependent's in the case of death. The multipliers are intended to realistically reflect the discounted value of an accelerated receipt of compensation and the vicissitudes of life.
The Actuarial Tables are very much in their infancy compared to the (established UK equivalent) Ogden Tables (8th Ed), which incorporate additional adjustment factors based on granular data that is not yet possible in Singapore. For example, the Ogden Tables account for adjustment factors such as gender, age band, education level, and whether the individual was disabled and/or employed at the time of the accident. The confluence of these factors can result in significant reduction factors of between 12-88%.
This may leave the Actuarial Tables open to challenge in the short term, on the argument that recognised adjustment factors under the Ogden Tables should apply — although the Courts may have to be persuaded that the proposed adjustment factor(s) are relevant to the Singapore context, that their application should result in a non-negligible reduction factor, ceteris paribus, and what the reduction factor should be.
Certain assumptions in the Actuarial Tables, eg. 2% inflation per annum, may also be open to challenge. In Pollmann, Christian Joachim v Ye Xianrong (which pre-dated the Actuarial Tables), the plaintiff sought, albeit unsuccessfully, to rely on high-level commentary and statistical data on healthcare inflation in general.
In the future, sufficiently targeted economic modelling may persuade the Courts to depart from the Actuarial Tables’ in-built assumptions. However, a challenge of this nature would need to be backed by the highest level of expert economic evidence to satisfy the Court. Or, in the event of baseline shifts in economic outlook, it might simply be argued that the Actuarial Tables require recalibration.
Over time, the scope for challenges may dwindle. There is promise of a committee, headed by a Supreme Court judge and/or Registrar, and comprising representatives from the Monetary Authority of Singapore, the Singapore Actuarial Society, the General Insurance Association of Singapore and the Law Society, which will meet periodically to ensure that the tables remain updated and relevant.
Adoption by the Singapore Courts
It is plausible that the Singapore Courts will apply the Actuarial Tables in conjunction with traditional approaches, at least initially.
In Pollmann’s case, for example, the Court was disinclined to endorse the use of Personal Injuries Tables Singapore 2015 because it had not attained the status of authoritativeness, and contained outdated data that affected the computation of future medical expenses. Thus, it applied the actuarial approach in conjunction with the arithmetic approach, applying a formula to determine the net present value of a stream of futures payments, and cross-checked against precedent cases (the precedent approach). In doing so, the Court satisfied itself that the multipliers arrived at via all three approaches fell within a comparable range.
Annex I to the Actuarial Tables also provides a glimpse into the UK experience, where the courts have declined to apply the Ogden Tables when there were “too many uncertainties to adopt the conventional multiplier and multiplicand approach”, or where the award arrived at would be “hopelessly unrealistic” or “excessive”.
The local bar awaits the development of local jurisprudence and continued refinement of the Actuarial Tables. Given the Actuarial Tables’ infancy, a great measure of flexibility in application can be expected, with the Singapore Courts retaining the ultimate discretion to adhere to or depart from the Actuarial Tables, or to decline their use altogether.