Cook v United Bristol Health Care
| Jurisdiction | England & Wales |
| Judge | Lord Justice Laws,Lord Justice Dyson,Lord Justice Carnwath |
| Judgment Date | 16 October 2003 |
| Neutral Citation | [2003] EWCA Civ 1370 |
| Docket Number | Case Nos: B3/2003/ 1520, B3/2003/1585 & BC2003/1411 |
| Court | Court of Appeal (Civil Division) |
| Date | 16 October 2003 |
(conjoined appeals)
[2003] EWCA Civ 1370
Lord Justice Laws
Lord Justice Dyson and
Lord Justice Carnwath
Case Nos: B3/2003/ 1520, B3/2003/1585 & BC2003/1411
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(COOKE) HH JUDGE BURSELL QC (SITTING AS A DEPUTY
HIGH COURT JUDGE AT BRISTOL
(PAGE) HIS HONOUR JUDGE MCKENNA (SITTING AS A
DEPUTY HIGH COURT JUDGE AT BIRMINGHAM
(SHEPPARD) SENIOR MASTER TURNER
A Hogarth QC (instructed by Burroughs Day) for the 1 st Appellant Cooke
D Westcott QC (instructed by Beachcroft Wansbroughs) for the 1 st Respondent United Bristol Heath Care
F Burton QC (instructed by Stewarts) for the 2nd Appellant Sheppard
A Palmer QC (instructed by Beachcroft Wansbroughs) for the 2 nd & 3 rd Respondents Stibbe & anr and Lee
R Davies QC and S Killalea (instructed by Irwin Mitchell) for the 3 rd Appellant Page
London EC4A 2AG Tel No: 020 7421 4040, Fax No: 020 7831 8838 Official Shorthand Writers to the Court)
INTRODUCTORY AND OUTLINE FACTS
These conjoined appeals raise an important question about the calculation of damages for future loss in personal injury claims.
In the case of Sheppard the claimant appeals against the order of Senior Master Turner made on 7 July 2003, permission to appeal having been given by the Senior Master. Sonni Cooke appeals against the order of His Honour Judge Bursell QC, sitting as a deputy High Court Judge, made at Bristol on 1 July 2003 with permission given by Hale LJ on 28 July 2003. Christopher Page's appeal is brought against the order made by His Honour Judge McKenna sitting as a deputy High Court Judge at Birmingham on 19 June 2003, with permission granted by Mantell LJ on 2 July 2003.
In each case the claimant has been very severely injured, and there is no outstanding dispute as to liability. In Sheppard and Cooke (if I may use the claimants' surnames for convenience) liability has been admitted to the tune of 100%, and in Page to the tune of two-thirds. Sheppard and Cooke are both infants. Sheppard is nine. He suffered grave internal and spinal injuries in a road traffic accident on 25 July 2000. He is estimated to have a life expectancy of about 69 years. Cooke is twelve. His claim is for damages for what is described as neo-natal negligence. He has suffered severe brain damage and other grave associated deficits. His life expectancy is put at sixty years. Page is a young man of twenty. He suffered severe cerebral damage in a traffic accident in 1996. His life expectancy is said to be sixty-one years.
As must be obvious, the major element in the damages to which each of these claimants is entitled represents the cost of his being cared for in the years to come. So it was that in each case the claimant's advisers sought an order to admit the evidence of a Mr Rowland Hogg. He is a chartered accountant who has established a practice, as he himself puts it, "advising on the financial aspects of legal disputes". The burden of his evidence, were he to be allowed to give it, would be to the effect that the future cost of care in each of these cases would be grossly underestimated if what has been called the conventional method of assessing damages is applied. I will explain what is meant by the "conventional" method shortly. In the Sheppard case there is also a substantial claim for future loss of earnings and pension, and in these respects also it is said that Mr Hogg's evidence would demonstrate that the conventional method of assessment would yield a substantial shortfall from the real position.
Mr Hogg had prepared reports in the cases of Page and Sheppard, though not, by the time the matter went before HH Judge Bursell, in the case of Cooke. Each of the judges below ordered that Mr Hogg's evidence should not be admitted when the issue of quantum of damages came to be tried. The appeals are against those orders.
The essential objection to the admission of Mr Hogg's evidence, and the basis of all three judgments below, is that its acceptance by the court of trial would frustrate or nullify the proper operation of s.1(1) of the Damages Act 1996 and the order made by the Lord Chancellor under that subsection on 25 June 2001, and confirmed by him on 27 July 2001. I will of course cite the statute and describe its operation, and the Lord Chancellor's order, in due course. But for the sake of clarity it is necessary first to give an account of the background. I will start with a description of the conventional means by which damages for future losses are calculated in cases such as these. To anyone with experience of personal injury litigation, what follows is elementary, but I am not only addressing the tutored reader.
FUTURE LOSS: CONVENTIONAL MEANS OF ASSESSMENT
Damages for personal injuries have long taken the form of a single lump sum payment assessed at the date of trial. (We are not on these appeals concerned with other models, such as that of the structured settlement constituted by an order for periodical payments.) Thus the single lump sum must include compensation both for the claimant's pre-trial losses (and of course general damages for pain, suffering and loss of amenity) and the losses which he will sustain in the future, notably represented in cases like these by the cost of future care. In fixing the lump sum, the trial judge must follow a basic principle, namely that it should represent "as nearly as possible full compensation for the injury which the plaintiff has suffered": Wells v Wells [1999] 1 AC 345, 363F per Lord Lloyd of Berwick (my emphasis). Lord Lloyd added at 364 A-B:
"The purpose of the award is to put the plaintiff in the same position, financially, as if he had not been injured. The sum should be calculated as accurately as possible, making just allowance, where this is appropriate, for contingencies. But once the calculation is done,… there is no room for a judicial scaling down."
There are other no less emphatic references in the books to the principle of full compensation. Although this principle has been a central pillar of the appellants' arguments, I need not set out any further learning. There is no suggestion by the respondents to these appeals that the principle should be called into question, nor, they would submit, has it been called into question by virtue of the orders made in the courts below.
How is the element of future loss contained in the single lump sum payment to be arrived at? Suppose that at prices current at the date of trial the loss is proved or agreed to amount to £1,000 per annum. Assume further that the claimant's life expectancy is taken to be 20 years. It would obviously be possible simply to award the product of these two factors: £1,000 x 20 = £20,000. But that would leave out of account two important matters. The first is that the claimant does not receive his money as and when he suffers the loss, that is, over the 20 year period, but now and all at once. So he can invest the cash, thus ultimately getting more (maybe a lot more) than £20,000. The second is that the calculation of the annual loss at current prices (£1,000) leaves out of account the possibility, or rather (now and for many years past) the certainty, of future inflation. It will be plain that the first of these two circumstances may tend to lead to the claimant being over-compensated, and the second to his being under-compensated. Accordingly some adjustment has to be made either to the 'multiplicand' – the £1,000, or the 'multiplier' – the figure of 20, or both. As I shall show it has been well settled for many years that the adjustment is to be made to the multiplier alone.
In Hodgson v Trapp [1989] AC 807, Lord Oliver said this (826–827):
"Essentially what the court has to do is to calculate as best it can the sum of money which will on the one hand be adequate, by its capital and income, to provide annually for the injured person a sum equal to his estimated annual loss over the whole of the period during which that loss is likely to continue, but which, on the other hand, will not, at the end of that period, leave him in a better financial position than he would have been apart from the accident. Hence the conventional approach is to assess the amount notionally acquired to be laid out in the purchase of an annuity which will provide the annual amount needed for the whole period of loss. The process cannot, I think, be better described than it was in the speech of Lord Diplock in Cookson v Knowles [1979] AC 556. He was there concerned with a claim under the Fatal Accidents Act 1846 –1959… but his description of the approach to and method of assessment of damages is equally applicable to claims for future loss of earnings and future expenses by the injured party himself. Lord Diplock said, at pages 567–568:
'When the first Fatal Accidents Act was passed in 1846, its purpose was to put the dependants of the deceased, who had been the bread-winner of the family, in the same position financially as if he had lived his natural span of life. In times of steady money values, wages levels and interest rates this could be achieved in the case of the ordinary working man by awarding to his dependants the capital sum required to purchase an annuity of an amount equal to the annual value of the benefits with which he had provided them while he lived, and for such period as it could reasonably be estimated they would have continued to enjoy them but for his premature death. Although this does not represent the way in which it is calculated such a capital...
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