R (Hopley) v Liverpool Health Authority and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Pitchford,MR JUSTICE PITCHFORD |
| Judgment Date | 30 July 2002 |
| Neutral Citation | [2002] EWHC 1723 (Admin) |
| Docket Number | Case No: CO/1369/2002 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 30 July 2002 |
[2002] EWHC 1723 (Admin)
IN THE HIGH COURT OF JUSTICE
Royal Courts of Justice
Strand,
London, WC2A 2LL
The Honourable Mr Justice Pitchford
Case No: CO/1369/2002
Richard Hone QC and Sarah Moore (instructed by Edwards, Abrams & Doherty) for the Claimant
Robert Seabrook QC and Shaheen Rahman (instructed by Hill Dickinson) for the First and Second Defendants
Susan Chan (instructed by The Department of Health) for the Third Defendant
The Claimant seeks judicial review of a decision by the First Defendant not to consent to the payment to him of damages for personal injury by periodical payments under a With Profits Structured Settlement pursuant to s.2 Damages Act 1996. The Second and Third Defendants are joined since, it is contended by the Claimant, they contributed to or directed the First Defendant's decision.
The Claimant was born on 20 March 1973 and is now aged 29 years. He is the son of Kenneth and Patricia Hopley. Richard Hopley was at birth the victim of hypoxic ischaemic encephalopathy. He suffers a form of athetoid cerebral palsy which renders him severely physically incapacitated. Richard retains much of his cognitive functioning, indeed he attended most of the hearing before me, but suffers profound communication difficulties. He is wheelchair dependent, requires assistance with transfers and his carers are on 24 hour call. His bravery and the care he has received from his family are impressive.
The Claimant pursued a claim for clinical negligence arising from the treatment provided by the First Defendant, Liverpool Health Authority, at or about the time of his birth. That claim was compromised on 20 June 2000 at 50 % full liability with damages to be assessed. On 27 February 2001 Ouseley J. adjourned approval of a proposed settlement between the Claimant and First Defendant in the conventional sum of £2,100,000 for consideration of a structured settlement under s. 2 Damages Act 1996.
The Second Defendant is the National Health Service Litigation Authority, (‘NHSLA’), a creature of statute. It is necessary to examine the statutory provisions. Section 21 National Health and Community Care Act 1990 empowered the Secretary of State for Health, with the consent of the Treasury, to make regulations establishing a scheme by which Health Authorities and other bodies would be enabled to meet their liabilities to “third parties for loss, damage or injury arising out of the carrying out of the functions of the body concerned”. Such a scheme could, by s. 21(3), provide for its administration by the Secretary of State or a Special Health Authority, could require any participating body to make payments in accordance with the scheme, and could provide for the making of payments for the purpose of the scheme by the Secretary of State.
One such scheme was established by the Secretary of State by means of the National Health Service (Existing Liabilities Scheme) Regulations 1996. That scheme applied to liabilities arising out of or in connection with any breach of duty by Health Authorities and other bodies before 1 April 1995. There is a separate scheme for post 1 April 1995 breaches. The breach alleged by the Claimant against Liverpool Health Authority in this case was a breach of duty qualifying under the 1996 Regulations and the Authority was an eligible body within the meaning of Regulation 2. The scheme, to be administered by and be subject to the directions of the Secretary of State, offered Health Authorities and other bodies, on terms, indemnity against their liabilities for breach of duty. The regulatory provisions include the following:
“Establishment of Scheme
2. There is hereby established a scheme, to be known as the Existing Liabilities Scheme, whereby an eligible body may, in accordance with the following provisions of these Regulations, make provision to meet qualifying liabilities.
[Regulation 3 omitted]
Liabilities to which the Scheme applies
4. The Scheme applies to any liability in tort owed by an eligible body to a third party in respect of or consequent upon personal injury or loss arising out of or in connection with any breach before 1 st April 1995 of a duty of care owed by that body, or a body referred to in regulation 3(b)(ii), to any person in connection with the diagnosis of any illness, or the care or treatment of any patient, in consequence of any act or omission to act on the part of a person employed or engaged by such a body in connection with any relevant function of that body.
Administration of the Scheme
5. The Scheme shall be administered by the Secretary of State.
Payments under the Scheme
6. (1) Where, in any year, a qualifying liability falls to be met by any eligible body, the Secretary of State may, subject to paragraph (2), pay to that body an amount to be determined by him in accordance with paragraph (3).
(2) No payment shall be made under paragraph (1), except to such extent as the Secretary of State may determine, in respect of –
(a) any liability admitted by the eligible body without the consent in writing of the Secretary of State;
(b) any liability determined by a Court in proceedings conducted by the eligible body otherwise than in consultation with the Secretary of State; or
(c) any payment which the eligible body has agreed to make otherwise than in the course of legal proceedings, or in consequence of its having compromised legal proceedings, without the consent in writing of the Secretary of State.
(3) The amount of any payment to an eligible body under paragraph (1) shall be determined by reference to –
(a) where an award of damages has been made against the eligible body by a Court, the amount of that award, together with the amounts of the legal and associated costs awarded to the plaintiff and of any such costs incurred by the eligible body;
(b) where legal proceedings have been compromised by the eligible body, the amount of –
(i) any sum paid by the eligible body in relation to the plaintiff's claim for damages,
(ii) the eligible body's contribution towards any legal and associated costs incurred by the plaintiff; and
(iii) any such costs incurred by the eligible body;
(c) where, in any legal proceedings, a Court has declined to award damages against the eligible body, the amount of any legal and associated costs incurred by the eligible body, to the extent that such costs are not recoverable from the plaintiff or from the Legal Aid Board under section 18 of the Legal Aid Act 1988;
(d) where the eligible body has agreed to make a payment, otherwise than in the course of legal proceedings, in settlement of the plaintiff's claim, the amount of that payment.
Provision of information
7. An eligible body shall, at such times and in such manner as the Secretary of State may require, furnish to the Secretary of State such information as he may request about –
(a) the nature of any relevant function carried on, during any period falling before 1 st April 1995 which the Secretary of State may specify, by the eligible body or by any body whose liabilities have been transferred to the eligible body; and
(b) any event of which the eligible body is aware which it considers might give rise to a qualifying liability.
Availability of directions and guidance
8. The Secretary of State shall make available to eligible bodies, in such form and at such times as he may consider appropriate –
(a) any direction he may give, to any body directed under section 21(4)(b) of the Act to carry out functions in connection with the administration of the Scheme, with respect to the discharge by that body of those functions; and
(b) any guidance he may give to that body as to the manner in which the Scheme is to be administered.”
By section 21(4) of the Act of 1990,
“Without prejudice to any other power of direction conferred on the Secretary of State,—
(a) if the Secretary of State so directs, a body which is eligible to participate in a scheme shall do so;
(b) where a scheme provides for it to be administered by the Secretary of State, a Health Authority, Special Health Authority, Primary Care Trust or NHS Trust shall carry out such functions in connection with the administration of the scheme by the Secretary of State as he may direct.”
Exercising powers given by ss.11 and 126(4) National Health Service Act 1977, the Secretary of State, by the National Health Service Litigation Authority (Establishment and Constitution) Order 1995, created the National Health Service Litigation Authority. One of its functions was to administer funding on behalf of the Secretary of State under the 1996 Regulations.
T hose parts of the Order dealing with establishment, function and constitution of the Authority provide:
“Establishment of the National Health Service Litigation Authority
2. There is hereby established a Special Health Authority which shall be known as the National Health Service Litigation Authority.
Functions of the Authority
3. Subject to and in accordance with such directions as the Secretary of State may give to the Authority, the Authority shall perform on behalf of the Secretary of State such of his functions in connection with the establishment of a scheme under section 21 of the National Health Service and Community Care Act 1990 (scheme for meeting liabilities of health service bodies), and such...
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