A Singapore district court awarded a man S$128,471.44 after he sued the driver for compensation, following an accident he had with a car while riding his motorcycle.

Left with permanent scars and abnormal gait

The accident on Jul. 30, 2018, left Shawn Tan with permanent extensive scarring on his legs and an "abnormal gait" due to his stiff right knee, which did not recover after physiotherapy.

Tan, who was a hawker boss for a few months before the accident, said the injuries meant he could not be a in that trade anymore and claimed that "he was forced to give up his dream of being a successful hawker and business owner".

He also claimed that he had lost out on "business expansion and franchising opportunities which would have netted him an income of S$10,000 to S$20,000 per month".

Tan is now an insurance agent.

The compensation awarded included S$40,000 for his "loss of earning capacity".

However, the district judge who ruled on the case, pointed out in her judgment that the "rather novel fact" was that Tan now earns more as an insurance agent than when he was a hawker.

She explained further in the judgment why her decision did not arise from his "prospects" as a hawker.

No guarantee hawker business will do well: Court

According to the judgment made publicly available on Aug. 12, 2023, the bulk of Tan's compensation came from the "pain and suffering", "loss of amenity", and "future medical expenses" due to the accident.

Tan also sued for the "loss of earning capacity", which the judge pointed out was characterised to be "more akin to a claim for loss of a chance at running a successful business".

She pointed out that Tan asserted that his hawker business was "profitable within three months of operation" but did not back it up with evidence.

Tan claimed that his business was doing well due to the "glittering reviews on social media".

However, the judge pointed out that even if Tan's assertions were true, it would merely indicate a "promising start" and she did not think it was evidence that the stall could remain successful in the long haul.

She said Tan also agreed that the F&B industry is highly competitive and most businesses are unable to stay afloat over time.

She also pointed out that Tan's business partner had even ended their partnership before the accident, which she took as an indication of "some dark clouds looming".

Court agrees disability will disadvantage him as insurance agent

While the judge did not find that Tan's loss of his hawker prospects was a basis to claim for the "loss of earning capacity", she agrees that the accident had left him with permanent disabilities that would put him at a disadvantage as an insurance agent.

She explained that Tan could not walk or stand for more than 30 minutes and has to take frequent breaks when attending roadshows or meeting clients.

As the industry is highly competitive — heavily reliant on one's ability to network and meet clients — she believes Tan would be disadvantaged relative to his "able-bodied peers".

Faces real risk of losing job as insurance agent

She pointed out that even though Tan is earning more than he did as a hawker, he is still a rookie in the industry and faces a real risk of losing his job due to his disabilities before the end of his working life.

The judge pointed out that if he were to re-enter the labour market, he would be again at a disadvantage should he compete for a job that requires him to walk and stand for extended periods.

However, she highlighted that Tan has a diploma in hotel management and had worked in the industry before, so he might be able to look for administrative or clerical positions in the hotel industry where his disabilities would not affect his work as much.

Rejected claims of over S$100,000 for "loss of earning capacity"

The judge rejected Tan's claims of over S$100,000 for the "loss of earning capacity".

She said Tan's lawyer's method of calculation was not appropriate.

The method employed, which she disagreed with, was to take the difference between Tan's average monthly income of S$3,994.17 and the median monthly wages of insurance agents of S$4,479 in 2020, then multiply it by 22.65 years based on the actuarial tables.

She once again pointed out that Tan was a rookie in the industry and was not persuaded that he could have earned an average income of S$4,479 monthly, even without his injuries.

Instead, she referred to Court of Appeal precedents, which took a fraction of the plaintiff's income to be used as calculations for the reduction in earning capacity.

S$40,000 is equivalent to S$210 every month for 30 years, tax free: Court

After comparing Tan's situation to more severe cases, she assessed that taking 4 per cent of Tan's average income of S$3,611.71 in 2019 and 2020, multiplied by 19.25 years was more appropriate to reflect his loss of earning capacity.

She pointed out that she reduced the year multiplier as Tan would need to spend less time attending roadshows and events after he built up a clientele, and he still has prospects in the hotel industry should he lose his insurance agent job.

The judge also rounded up the figure to S$40,000, which she believes would be adequate to compensate for any further loss of earning capacity if he stopped being an insurance agent while looking for another job.

She commented:

"Looked at another way, the award of S$40,000 for loss of earning capacity roughly translates to the plaintiff receiving an additional income stream of S$210 per month, tax-free, for the next 30 years of his life based on a discount rate of 5.33 per cent per annum."

Claims of "loss of marriage prospects" rejected

On another note, the judge rejected Tan's S$6,000 claim for "loss of marriage prospects".

She explained that while Tan's scarring was no doubt "distressing" to him and could "potentially impact his dating life", she found that he had "fallen short of proving on the balance of probabilities that he will have no prospect of ever marrying or that his prospect of marrying will be grossly reduced".

Tan also agreed that his future spouse could overlook his scars but argued that it had affected his ability to have a "stable career".

The judge disagreed, pointing out that "objectively, he was earning more post-accident", and running a hawker business was "by no means more stable an income source than being an insurance agent".

She pointed out that Tan also admitted that being an insurance agent has better working hours, which gives him "more time to date seriously".

In conclusion, the deputy judge found that Tan's scarring was adequately addressed through the compensation for his "pain and suffering" and "loss of amenity".

Top image via Mothership file & Unsplash