This illustrates that a failure to ensure that the client understands how the Duxbury returns are calculated can result in the fund being exhausted long before the recipient's death.
The Duxbury tables and the default settings in programmes such as Capitalise are based on the recommendations of the panel who prepare the Duxbury tables. Although there are a large number of assumptions the core is essentially based around an assumption of a 3.75% net rate of capital growth, a 3% net rate of income from investments and 3% inflation. As I understand it, the calculations are based on a medium risk investment strategy and are designed to replicate the risks which are inherent in relying upon an income stream from periodical payments which are, unless secured against a capital fund, always susceptible the vagaries and vicissitudes of life e.g. death, ill-health, unemployment etc.
The Ogden committee performs a similar task in providing calculation tables for personal injury lawyers, but with a key difference. In PI cases the discounting rate of return is set by statute at 2.5% (which has itself been the subject to withering criticism, including recently by Lord Sumption in a case in the Jersey Court of Appeal) . The Duxbury rate of return, by contrast, has no statutory basis but relies on the courts adopting the Duxbury tables.
My experience is that, certainly away from the really specialist judges and practitioners in this field (and, consequently, the parties whose wealth allows for specialist accountancy, actuarial and investment advice), many judges and lawyers do not really grasp the basis upon which Duxbury works and use the tables literally. Clients are then left walking away with a settlement which they are told will provide for their needs for life, but without really understanding the assumptions upon which that has been based. Using the Capitalise programme can demonstrate very graphically how a single change in one of the assumptions as to the future can massively change the outcome. These are the sort of hypothetical illustrations which Thorpe LJ referred to in Harris v Harris  1 FCR 78 (at para 22) as providing the basis for moving from the Duxbury 'starting point'. If there are real concerns and unusual aspects to the case, expert evidence may also be required (at least from a ‘shadow’ expert, even if not one authorised by the court).
I am amazed Capitalise is not used more routinely. In two recent seminars to solicitors on this topic I asked for a show of hands as to how many in the audience used Capitalise. Out of nearly 100 attendees only one hand went up! Trouble ahead?