The main legal point established in the judgment is the need for a moderate approach in assessing the income of a self-employed individual for loss of dependency, considering year-on-year variations, and rejecting a rigid age-dependent approach for adding future prospects.

G.S. PATEL, J.

1. The short question for consideration in this motor accident First Appeal is this: where the victim is shown to be self-employed, what is the appropriate method or approach in assessing his income for calculating the loss of dependency? For a salaried person, the question presents no difficulty at all. Similarly, where there is a regular income received from a defined source with periodic increments, there again there should be no difficulty at all. But a self-employed person may have a widely variable income from year to year. This may be attributable to a variety of reasons: market fluctuation if he is in business, the ebb and flow of consultancy work if he is otherwise self-employed, a sudden dip in income because of illness or temporary incapacity of some kind, and so on. At the most general level, it is common experience to find among self-employed professionals years in which their income is reasonable or moderate, followed by a sudden increase, only to be followed in the next year by a decline that may be of a level higher than the first year but less than the second. This may particularly happen in certain professions that demand personalized or individual attention, or where income is dependent on the person gaining or securing a high-paying or profitable project. This may not be necessarily true of the medical profession, but it is very likely true of architects, civil engineers, chartered accountants, consultants of every stripe — anyone who earns from unpredictable client inflows — and it is almost certainly true of lawyers. There may be a period during which an advocate of some standing has a high paying brief, but this is not necessarily repeated month to month or year on year and it is not unusual to see wide variations.

2. What then should be the approach of a Court or a Tribunal in insurance claims? Three distinct alternative present themselves. The first is to take the lowest reported income, because that is the least shown to have been earned. The next option is to take the highest because it shows what the deceased was capable of earning. The third is a position in between, where an average is taken of the years for which evidence is available, and this can safely be said to be a median level of income.

3. Where the deceased is salaried, I have no hesitation in accepting the submission that the last-drawn income should be the one to be taken as his income. Equally it is not possible to accept the submission that where the deceased is a self-employed person it is only the lowest reported income that should be taken. After all, one must see what the deceased was capable of earning and that is not to be assessed on the basis of the least that he earned. For the same reason, the highest reported income also cannot be taken as representative, because, as I have noted, it may be an unusual occurrence. Unless it is established that it is part of the rising pattern, always difficult to do, I see no reason why the highest reported income should be taken as the base either. In my view, where the deceased is shown to be a self-employed person either in a profession or having his own business and it is demonstrated that there are year-on-year variations in the income, the correct and moderate approach is to take the average.

4. The next question is about whether to add a certain amount as future prospects or not. There is a line of authority that suggests that future prospects are age-dependent. That is arguably far too rigid a formulation. Future prospects, as we know — perhaps most pertinently in the legal profession — have very little to do with age. The nature of the profession also cannot be a factor. In fact, future prospects must correctly be gauged from a variety of factors. One of these would be the income statements themselves. This must be tested and weighted against other factors. It is entirely possible that an employed professional on reaching a corporate-mandated age of retirement