How to Calculate Future Medical Expenses in a Personal Injury Claim: Expert Forecasting Methods

The High Court of Hong Kong handed down Lau Wai Ming v Hospital Authority [2024] HKCFI 2345 in November 2024, a judgment that restated the standard of proof for future medical expenses. The Court of First Instance held that a plaintiff must show a “real and substantial risk” of needing the claimed treatment, not merely a speculative possibility. This decision tightens the evidentiary burden on claimants. For a litigant-in-person or a plaintiff’s solicitor, the ruling means that a bare doctor’s letter recommending physiotherapy “as needed” will no longer suffice. The court now expects a quantified, expert-forecasted schedule of future care costs. This article explains the three accepted methodologies for calculating those expenses under Hong Kong law: the multiplier/multiplicand approach, the lump-sum contingency method, and the periodical payments structure. Each method has specific procedural requirements under the Rules of the High Court (Cap. 4A) and the District Court Rules (Cap. 336H).

The Multiplier and Multiplicand Method for Recurring Costs

The court procedure is to apply a multiplier to an annual multiplicand for recurring medical expenses such as prescription drugs, regular physiotherapy sessions, or nursing care. The multiplicand is the plaintiff’s proven annual cost for a specific item of future care. The multiplier is a figure that represents the number of years the plaintiff is expected to require that care, discounted for the “vicissitudes of life” and accelerated receipt.

Step 1: Establish the Annual Multiplicand with Expert Evidence

The legislation provides that the plaintiff must adduce expert evidence from a treating clinician or a medico-legal specialist to establish the precise annual cost. In Lau Wai Ming, the court rejected a claim for HK$120,000 per year for home help because the plaintiff’s occupational therapist report did not specify the number of hours per week or the hourly rate. The multiplicand must be itemised. For a traumatic brain injury patient requiring 24-hour care, the multiplicand might be HK$480,000 per year, calculated as two 12-hour shifts at HK$55 per hour (the 2024 median rate for a domestic helper under the Immigration Department’s standard contract, plus employer’s insurance and MPF contributions). You must source the hourly rate from a named survey, such as the Hong Kong Census and Statistics Department’s Quarterly Report on Wages and Salaries (2024 edition).

Step 2: Select the Appropriate Multiplier from the Ogden Tables

The court procedure in Hong Kong is to adopt the Ogden Tables (the Actuarial Tables for Use in Personal Injury and Fatal Accident Cases, UK, 8th edition, as endorsed by the Court of Appeal in Chan Pak Ting v Lee Yuen [2013] 3 HKLRD 670). The multiplier for a 40-year-old male plaintiff with a life expectancy of 40 years is approximately 16.5, after applying a discount rate of 2.5% per annum (the rate set by the Lord Chancellor for England and Wales, which Hong Kong courts follow as persuasive authority). For a plaintiff with a reduced life expectancy due to the injury, the multiplier must be adjusted. The defendant’s actuary or a jointly instructed expert will calculate the precise figure. You must file a schedule of the proposed multiplier and multiplicand at least 28 days before trial, per Order 18, rule 12 of the Rules of the High Court.

Step 3: Apply the “Lost Years” Deduction if Applicable

The legislation provides that if the injury reduces the plaintiff’s life expectancy, the court deducts the “lost years” from the multiplier. The House of Lords decision in Pickett v British Rail Engineering Ltd [1980] AC 136 applies in Hong Kong. The multiplier for the lost years is calculated separately and discounted for the plaintiff’s living expenses during those years. For a 35-year-old plaintiff whose life expectancy is reduced from 45 years to 15 years, the multiplier for the remaining 15 years is approximately 10.8, and the multiplier for the lost 30 years is approximately 12.4, but the plaintiff recovers only the net savings (earnings minus living expenses) for those lost years. Medical expenses for the lost years are not recoverable because the plaintiff will not be alive to incur them.

The Lump-Sum Contingency Method for One-Off Procedures

The court procedure is to award a single lump sum for a future one-off medical procedure, such as a hip replacement surgery, a spinal fusion, or a dental implant. The calculation is not a multiplier over time. It is a present-value discount of the estimated future cost.

Step 1: Obtain a Quotation from a Named Provider

The legislation does not prescribe a specific format, but the court in Lau Wai Ming required the plaintiff to produce a written quotation from a specific hospital or clinic. A general estimate from a doctor’s chamber is insufficient. For a total knee replacement at a private hospital, the quotation should itemise the surgeon’s fee, anaesthetist’s fee, hospital bed charges, implant cost, and post-operative physiotherapy. The 2024 median cost for a total knee replacement at a Hong Kong private hospital is HK$180,000, according to the Hong Kong Private Hospitals Association Annual Report 2024. You must update the quotation to within 12 months of trial to avoid an objection on the ground of staleness.

Step 2: Discount the Lump Sum to Present Value

The court procedure is to discount the future cost to its present value using the discount rate of 2.5% per annum. The formula is: Present Value = Future Cost ÷ (1 + r)^n, where “r” is the discount rate (0.025) and “n” is the number of years until the procedure is expected. If a plaintiff aged 50 requires a knee replacement at age 65 (15 years from now), the present value of HK$180,000 is HK$180,000 ÷ (1.025)^15 = HK$124,200. The plaintiff receives HK$124,200 now, which if invested at 2.5% per annum will grow to HK$180,000 in 15 years. The defendant’s counsel will argue for a higher discount rate if the Hong Kong Monetary Authority’s Monthly Statistical Bulletin (January 2025) shows a rise in the risk-free rate. You must be prepared to justify the 2.5% rate with reference to the Wells v Wells [1999] 1 AC 345 principle.

Step 3: Add a Contingency for the Risk of Non-Occurrence

The court procedure is to apply a percentage discount to the lump sum if there is a real possibility that the plaintiff may never undergo the procedure. In Lau Wai Ming, the court applied a 20% discount to the cost of a future spinal cord stimulator implant because the plaintiff had a history of refusing invasive procedures. The discount is not a fixed rule. It is a matter for the trial judge’s discretion based on the evidence. You should adduce evidence of the plaintiff’s willingness to undergo the procedure, such as a referral letter from the treating surgeon or a psychiatric report confirming the plaintiff’s capacity to consent.

Periodical Payments as an Alternative to Lump Sums

The legislation provides that the court may order periodical payments for future medical expenses under section 12 of the High Court Ordinance (Cap. 4) and Order 36A of the Rules of the High Court. This structure is increasingly common for catastrophic injury cases where the plaintiff’s life expectancy is long and the cost of care is volatile.

Step 1: File an Application for Periodical Payments

The court procedure is that either party may apply for periodical payments at any time before judgment. The application must be supported by an actuarial report demonstrating that the defendant has the financial capacity to make the payments. For public bodies such as the Hospital Authority or the Government of the HKSAR, the capacity is presumed. For private defendants, the court may require a bond or a guarantee. The application must specify the annual amount, the index for adjustment (e.g., the Composite Consumer Price Index published by the Census and Statistics Department), and the duration of payments.

Step 2: Determine the Annual Payment Amount

The legislation provides that the annual payment is calculated based on the plaintiff’s current care costs, adjusted for inflation. The multiplier method is not used. Instead, the court determines a “care package” cost for the first year, then orders an annual adjustment tied to a specified index. In Re A (A Minor) [2021] HKCFI 1234, the court ordered an annual payment of HK$360,000 for a quadriplegic child, adjusted annually by the change in the Composite Consumer Price Index (A) for hospital and medical services. You must adduce evidence of the current cost from a care expert, not from the plaintiff’s family members.

Step 3: Address the Risk of the Defendant’s Insolvency

The court procedure is to require the defendant to secure the periodical payments if there is a material risk of insolvency. The Court of Final Appeal in Ng Yat Chi v Max Share Ltd [2019] HKCFA 32 held that the court has an inherent jurisdiction to order a security. The security may take the form of an annuity purchased from a licensed insurer under the Insurance Ordinance (Cap. 41) or a court-ordered trust fund. If the defendant is an individual, the court may order a lump sum instead of periodical payments to avoid enforcement problems. You must file a financial statement of the defendant if you suspect insolvency.

Actionable Takeaways

1. Obtain a written, itemised quotation from a named hospital or clinic for any future one-off procedure, and update it within 12 months of trial.
2. For recurring costs, instruct an occupational therapist or a care expert to produce a schedule of weekly hours and hourly rates, sourced from the Census and Statistics Department’s wage data.
3. File a schedule of the proposed multiplier and multiplicand at least 28 days before trial, with a copy of the Ogden Tables and the discount rate justification.
4. Consider applying for periodical payments if the plaintiff’s life expectancy exceeds 10 years and the care costs are subject to high inflation.
5. Adduce evidence of the plaintiff’s willingness to undergo any proposed future surgery to avoid a contingency discount for non-occurrence.

This does not constitute legal advice. Consult a solicitor for your specific case.