Updated Loss of Earnings 2021

LOSS OF EARNINGS
Amendment in 1984
Amendment in 2019
Living Expenses
Multiplier v Multiplicand
Deductions For Contingencies, Accelerated Payments and
Other Vicissitudes Of Life
Non-deductibles: Money Paid under Contract Of Insurance
EARNINGS
u Earnings include wages, salary, allowances, Employment
Provision Fund (EPF), profits, overtime, part-time etc.
excluding living expenses and income tax.
u Awarded as compensation for claims made in respect of
personal injuries.
u Personal injury - loss of future earnings (Section 28A(2)(c) & (d)
of the Civil Law Act 1956 by way of the Civil Law (Amendment)
Acts 1984 and 2019);
u Limiting pre-conditions for loss of future earnings
Dr Noraiza Abdul Rahm an 2
1
EARNINGS
u Further with the amendments made in 2019 and 1984 to the
Civil Law Act 1956, provisions pertaining to claims for loss of
earnings were introduced which restricted claimants to certain
age category and other requisites before losses can be
compensated.
u The number of years to be compensated for the loss of earnings
is restricted by a fixed multiplier depending on the ages of the
injured or deceased.
LOSS OF FUTURE EARNINGS

Amendment in 1984
u The legislature amended the Civil Law Act 1956 to provide
under Section 28A a more precise calculation of loss of
future earnings for personal injury.
u It covers all cases of personal injury that occurs from 1st
October 1984 onwards.
u Hence, loss of future earnings has always been regarded
as general damages.
2
Amendment in 1984
u Conventionally, loss of future earnings is divided into
actual loss and future loss.
u Actual lost of earnings is calculated from the date of the
accident to the date of trial (pre-trial loss) while loss of
future earnings is calculated from the date of trial (post-
trial loss).
u Pre-trial loss would be special damages and post-trial loss
would be general damages.

Amendment in 1984
u Where the plaintiff was working before the accident and
as a result of the accident, he lost his job and there is no
chance of him getting another job, loss of future earnings
should be awarded.
u Dirkje Pieternella Halma v Mohd Noor Baharom [1990] 1
CLJ 99: The basis for the calculation of loss of future
earnings is from the date of the injury and ends when the
person reaches 55 years of age.
3
u In Dirkje's case, the appellant was a qualified registered nurse who
had been employed to look after the mentally retarded in Holland
from 1 October 1980.
u On 1 November 1983, she took no pay leave for a period of 2 1 /2
years to enable her to go on a world tour.
u After completion of her world tour she was to continue her
employment at the same salary.
u The appellant went on a cycling tour and arrived in Malaysia on 21
October 1984.
u On 24 October 1984, while cycling towards Ipoh, she was knocked
down by a bus belonging to the second respondent and driven by the
first respondent.
u The appellant suffered very serious injuries.

Amendment in 1984
4
Amendment in 1984
u Section 28A(2)(c)(i): In awarding damages for loss of
future earnings, the court shall take into account that:
u The plaintiff must be below 55 years old
u Tan bin Hairuddin v Bayeh Belalat [1990] 2 MLJ 773: A person aged
55 and above at the time of the accident cannot claim.
u The plaintiff was in good health before the injury
u Osman Effendi b Mahmud & Anor v Mohd Noh bin Khamis [1998] 4
AMR 3687: Any evidence of bad health would cause the plaintiff’s
claim to be barred.
u Loh Hee Thuan v Mohd Zani Abdullah [2003] 1 CLJ 410: The
plaintiff must have been able to lead a normal life before the
accident.

Amendment in 1984
u The plaintiff was receiving earnings by his own labour
before he was injured
uDirkje Pieternella Halma: Only the amount that the
plaintiff was receiving at the time of injury can be
taken into account. Thus, if the plaintiff was not
receiving any earnings at that point of time, she
does not qualify for any award of damages for loss
of future earnings.
10
5
Amendment in 1984
u In the case Sumarni v Yow Bing Kwong & Anor [2008] 3 CLJ
489; one of the issues are pertaining to the difference
between loss of earning capacity and loss of future earnings.
11

Amendment in 1984
u THE DIFFERENCE BETWEEN LOSS OF EARNINGS AND LOSS OF FUTURE EARNINGS
12
6
Amendment in 1984
13

Amendment in 1984
u Loss of future earnings can be either partial loss or total
loss depending on the extent of the injuries.
u Partial loss of future earnings is awarded when as a result
of the injury, the plaintiff has gone back to to some form
of employment but cannot earn as much as he used prior
to the accident.
u This loss represents the difference between the pre-
accident earnings and his post-accident earnings.
14
7
u However, even if the loss of
LOSS OF future earnings commences
from the date of injury, there is
FUTURE nothing in Section 28A to
prevent the Court from dividing
EARNINGS the sum to be awarded as loss
Amendment in of future earnings into pre-trial
and post-trial loss for the
1984 purpose of awarding interest, as
has been done in several cases.
15
u The Civil Law (Amendment) Act 2019 came

into operation on 1 September 2019.
u For personal injuries, one factor for
calculation of compensation payable is loss
LOSS OF
of future earnings (since the person injured FUTURE
would have been able to continue working
and draw income were it not for the injury). EARNINGS
u Previously, loss of future earnings would not Amendment in
be considered if the person was 55 years old
and above when he/she was injured. 2019
However, with the amendments, the
applicable age is increased to 60 years old.
16
8
Amendment in 2019
u Also, previously the loss of future earnings is on
condition the person injured was in good health
and was working. With the amendments, the good
health aspect has been removed.
u Hence, if the person injured was below 60 years
of age, working and regardless of his/her health,
the loss of future earnings would still be taken
into consideration when making compensation.
17

Amendment in 2019
18
9
Section 28A(2)(c)(ii): The court shall not
take into account any prospective
increase in earnings. The cut-off date
for determining the earnings is the date
of the injury and any increase thereafter
should not be taken into account.
19

Minors & Unemployed
Earnings must be Legal Plaintiffs
u Chua Kim Suan & Anor v u Minors and unemployed persons
who have never earned before
The Government of cannot claim for loss of future
Malaysia & Anor [1994] 1 earnings.
AMR 3189: Earnings made u Tan Kim Chuan & Anor v Chandu
illegally such as through Nair [1991] 1 MLJ 42: The plaintiff
an illegal operation of a was a 12 year old student who was
taxi cannot be taken into not earning anything at the time of
the accident. Held: As he was not
account. earning at the time of the
accident, he was not entitled to
Dr Noraiza Abdul Rahm an
any claim for loss of future 20
earnings.
20
10
u Section 28A(2)(c)(iii): The plaintiff’s Out-of-pocket
living expenses shall be deducted from expenses/proportion of earnings
the amount awarded. that the plaintiff has spent
u Abdul Ghani bin Hamid v Abdul Nasir
bin Abdul Jabbar [1995] 4 MLJ 182: It is
only logical that some part of the
plaintiff’s earnings must have been
devoted to his own maintenance, but it
can only be deducted if the amount is
either admitted by the plaintiff or
proven by the defendant.
21

Living expenses have been
held in Chang Chong Foo v For purposes of Section 28A(2) of the
Shivanathan [1992] 2 MLJ 473 CLAA, living expenses are incurred by the
to include petrol expenses, plaintiff in earning the income ie it must
meals at the workplace, be related to the work he does and NOT
the expenses to maintain himself ie cost
maintenance of vehicles and
taxi/bus fares incurred in of housing, clothing etc.
relation to work
22
11
Living Expenses
u In arriving at the exact multiplicand; a deduction was to
be made for “any diminution of any such amount as
aforesaid by such sum as is proved or admitted to be the
living expenses” of the plaintiff at the time he was
injured (Section 28A (2)(c)(iii)) or of the person deceased
at the time of his death (section 7(3)(iv)(c)).
23

Multiplicand and Multiplier (1984)
u Once the exact multiplicand is established, the court needs to
determine the multiplier.
u Multipliers are the number of years the living plaintiff or the
dependants are entitled to claim for the loss of future earnings
or support from the defendant.
u Section 28A(2)(d)(i) fixed the multiplier at 16 for all victims of
30 or below (fixed multiplier) and for those victims between
the ages of 31 and 54, under Section 28A(2)(d)(ii) the multiplier
is “…calculated by using the figure 55, minus the age of the
person at the time when he was injured and dividing the
remainder by the figure 2” (fixed formula).
24
12
Multiplicand and Multiplier (1984)
u Prior to the amendment, the court would apply separate multipliers for pre-
trial loss and post-trial loss of earnings.
u For pre-trial loss of earnings, the court would take the period between the
date of the accident and the date of judgment as the multiplier.
u As for post-trial loss of earnings, the balance of the working years, which the
plaintiff or deceased would have had, but for the accident was used as the
multiplier.
u The common practice was to determine the multiplier by first taking the age
of 55 years as the age when earnings would cease, then deducting the age of
the victim at the date of trial from this figure of 55 and reducing the balance
obtained by one-third for contingencies.
25

Statutory Multiplier (1984)
u The amendment abolished the significance of pre-trial and post-
trial loss of earnings; both were subsumed into loss of future
earnings as indicated by the Federal Court in the case of Dirkje
Pieternella Halma.
u As a result of the Amendment Act, a new section 28A(2)(d) has
altered the position by providing fixed (statutory) multipliers.
u For example, section 28A(2)(d)(i) provides that for a person of the
age of 30 years or below "at the time when he was injured the
number of years of purchase shall be 16".
26
13
u A random comparison between multipliers calculated under the old
practice and the fixed multipliers created by the new section show
that the legislature had in fact reduced the multipliers previously
applied by our courts.
u A simple arithmetical exercise will show that for a person of age 25
years, the multiplier calculated under the old practice has been
reduced by about four years.
u It is clear that Parliament had taken into account contingencies and
other factors when it provided for fixed multipliers in the new
section. These facts prompt an important question.
27

Formula for the Assessment
Multiplier X Multiplicand
u Section 28A(2)(d): Statutory multiplier

u [Multiplier refers to the number of years the plaintiff is entitled to
claim for loss of future earnings]
u (i) If the plaintiff is aged 30 and below, the fixed multiplier is 16.
u (ii) If the plaintiff is aged between 31 – 54:
u Multiplicand: [Gross salary – income tax (if any) – living expenses] x 12

28
14
u The Supreme Court in Siti Rahmah v Marappan [1990] 1 MLJ 99
declared that a direct multiplier should be adopted in assessing loss of
future earnings under the said section.
u As an illustration, take a plaintiff who is 23 years old at the time of
the injury and was earning a sum of RM500 per month (RM6,000pa)
after taking into account his living expenses.
u The multiplier pursuant to the aforesaid section is fixed at 16.
Applying the formula, the plaintiff is entitled to claim a of RM96,000.
In the event that the plaintiff was 45 years old, then the multiplier is
as follows:
u (55 – 45)/ 2 = 5 years x [RM500 x12] =RM30,000.00
29

u However, the Supreme Court recently has caused some
confusion in so far as the multiplier is concerned.
u In Chan Chin Ming & Anor v Lim Yok Eng [1994] 3 MLJ 233, the
brief facts were as follows. The respondent, a widow and
housewife, had lost her 25-year-old son upon whom she was
dependant for support, in a road accident in 1991.
u Prior to the son's death, the respondent had been receiving
from the son some RM750 per month. The respondent instituted
a dependancy claim against the appellants for loss of future
support under Section 7(3) Civil Law Act 1956.
30
15
HIGH COURT SUPREME COURT
u The High Court awarded the u Upon appeal, the majority of
respondent RM144,000, being the Supreme Court took the
loss of support computed on view that in assessing loss of
the basis of loss of RM 750 per support, the Court need not
month spanning throughout the follow the statutory multiplier
statutory 16 years. in the case of a deceased who
was not married at the time of
death who has left aged
parents as dependents. The
Court accordingly reduced the
multiplier of 16 years to 7
years.
31

u The Court of Appeal in the case of Takong Tabari @ Takung
Tabari v Government of Sarawak & 2 Ors (1998) 4 MLJ 512, felt
that they were bound by the principle of stare decisis to accept
the majority decision in the case of Chan Chin Ming, as it was a
Supreme Court decision.
u The latter case involved a claim for loss of dependency by the
plaintiff whose husband died as a result of an explosion at the
premises of a Bank in Miri, Sarawak.
32
16
u In a recent case of Ibrahim bin Ismail v Hasnah Puteh Imat &
Anor (2004) 1 CLJ 797, the Court of Appeal held that the
majority decision in Chan Chin Ming was wrong while the
minority judgment was correct and went on to hold that the
statutory multiplier was not subject to any deduction for the
purposes of calculation loss of earnings.
u Subsequent cases such as Muniyandi a/l Periyan v Eric Chew
Wai Keat (2003) 3 MLJ 527, refused to follow Chan Chin Ming
and Takong Tabari; and allowed a multiplier of 16 years in full.
33

u However, the case of Tan Leong Wei & Ors v Omar bin Ahmad
(2005) 2 MLJ 576 at p 578, the High Court Judge awarded the
dependants of a 21 years old deceased RM 300 per month for a
period of 10 years following the decision in Chan Chin Ming as
he felt that “…the then Supreme Court admirably dealt with
the issue as to why the courts can reduce the multiplier from 16
to a figure it felt was reasonable and appropriate”.
34
17
Amendment in 2019
u Previously, the loss of earnings was calculated as
follows:
u With the amendment in 2019, age 55 has been

replaced with 60.
35

Amendment in 2019
u The change to Section 28A(2)(d)(ii):
36
18
After the 1984 Amendment Act is it still necessary to
take into account contingencies, vicissitudes of life and
accelerated payment when calculating the multiplier
for the award for loss of future earnings? This question
has become relevant after the Court of Appeal's
decision in Takong Tabari v Govt of Sarawak[1998] 4
MLJ 512, a fatal accident case.
37
DEDUCTIONS FOR CONTINGENCIES,

ACCELERATED PAYMENTS AND OTHER
VICISSITUDES OF LIFE
u In Takong Tabari the Court of Appeal, relying on another fatal

accident case, Chan Chin Ming v Lim Yok Eng [1994] 3 MLJ 233,
upheld a trial judge's decision to reduce the total award for loss
of support under Section 7 of the Civil Law Act 1956 by one-
third for contingencies, other vicissitudes of life and
accelerated payment.
u The Court of Appeal rejected the argument that the multipliers
introduced by the 1984 Amendment Act had a built-in reduction
and therefore had already taken into account contingencies and
other factors.
38
19
u Takong Tabari was a claim for u The argument has been received
dependency under section 7 of the favourably in some High Court
Civil Law Act 1956. cases.
u It was not a claim for damages by a u The unreported case, Teah Cheng
living plaintiff. Gow v Elias bin Abdul Ghani (1997)
is one such decision.
u Unfortunately, the decision has
been used by the defendants in u Some High Court cases have
personal injury claims to argue avoided applying the one-third
that a similar one-third reduction reduction in personal injury
should be made to award for loss claims.
of future earnings for living
u Loh Hee Thuan v Mohd Zaini [2003]
persons.
1 MLJ 213 and Kanan a/l
Subramaniam lwn Aman
Syah [2002] 6 CLJ 34 are two
Dr Noraiza Abdul Rahm an examples. 39
39

u Loh Hee Thuan v Mohd Zani Bin Abdullah (2003)
1 MLJ 213
u Ibrahim b Ismail & Anor v Hasnah Puteh & Anor No deductions
& Another Appeal (2004) 1 CLJ 797 were made by
u Noraini Omar & Anor v Rohani Said & Anor the Courts
Appeal (2006) 1 CLJ 895
u Marimuthu A/L Velappan v Abdullah Ismail
(2007) 1 CLJ 436
u comment by Judge that Marappan’s case applies to
personal injury claims thus maintaining the statutory
multiplier.
40
20
u If money is received as of right from an
employer under a statutory/ contractual
obligation, then the amount is deductible (ie the NON-
Plaintiff is not entitled to claim from Defendant)
u The Court decided in the case of Khairul Sham
DEDUCTIBLES
bin Ahmad & Anor v Yesudass a/l Michaelsamy
[2005] 2 MLJ 679 that the Plaintiff cannot claim
MONEY PAID
for medical expenses paid by the insurance UNDER
company as the rights to recover the medical
expenses lies in the hands of his insurer. CONTRACT OF
u This was followed in Sathisvaran a/l
Chandrasegaran v Agilan a/l Vanmugelan & Anor
INSURANCE
[2012] 4 MLJ 548.
41
u Hence, there are three principles pertaining to money

NON- paid under contract of insurance:
u It is only when the payment relates to general damages,
DEDUCTIBLES then it cannot be deducted (ie the Plaintiff can claim
from Defendant)
MONEY PAID u If the sum paid relates to special damages, it can be
UNDER deducted (ie the Plaintiff is not entitled to claim from
Defendant)
CONTRACT OF u If money is received as of right from an employer under
a statutory/contractual obligation, then the amount is
INSURANCE deductible (ie the Plaintiff is not entitled to claim from
Defendant)
42
21
THE CLA 1956: Unsatisfactory Claims
Above 60
years
cannot
claim
Students,
Deduction graduates,
unpaid leave
of living employees &
expenses temporarily
out of work
Prospective
increase in
earnings
43
CONCLUSION
u Judges do consider ‘all relevant factors’ and tend to

follow ‘the general system of law’
u Numerous calls for review of the pertinent sections in the
Civil Law Act 1956
u To prevent delay – alternatives
44
22
SUGGESTIONS
Third
Party
Separate Bodily
Court or Injury
Tribunal and
No Fault Death
Liability Scheme
Scheme (BNM)
45
HOMEWORK
CASES ARTICLES
u Chan Chin Ming & Anor v Lim u “Deductions of Living
Yok Eng (1994) 3 MLJ 233 Expenses from Damages for
Loss of Future Earnings” by
u Ibrahim b Ismail & Anor v P.Balan (1992) 1 JMCL 229-
Hasnah Puteh & Anor &
235
Another Appeal (2004) 1 CLJ
797 u “The extent of the application
of the Maxim “Ex Turpi Causa
Non Oritur Actio” in
considering illegal earnings in
tort actions” by Ravi Neeko
(1999) 2 MLJ xi
46
23
QUESTIONS TO PONDER
u Do you agree that 60 years is appropriate to be regarded

as the age limit to claim for loss of future earnings?
u The requirement of “…must be receiving earnings…at the
time of injury” proved burdensome to certain categories
of claimants. Comment.
u Do you think that the law is already settled in applying
the statutory multiplier to personal injury claims?
47
THANK YOU
48
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LOSS OF EARNINGS

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u The Civil Law (Amendment) Act 2019 came

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LOSS OF FUTURE EARNINGS

u Section 28A(2)(d): Statutory multiplier

u Multiplicand: [Gross salary – income tax (if any) – living expenses] x 12

LOSS OF FUTURE EARNINGS

LOSS OF FUTURE EARNINGS

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LOSS OF FUTURE EARNINGS

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u With the amendment in 2019, age 55 has been

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DEDUCTIONS FOR CONTINGENCIES,

u In Takong Tabari the Court of Appeal, relying on another fatal

DEDUCTIONS FOR CONTINGENCIES,

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u Hence, there are three principles pertaining to money

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u Judges do consider ‘all relevant factors’ and tend to

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u Do you agree that 60 years is appropriate to be regarded

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