RH v United Bristol Healthcare NHS Trust
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Swift |
| Judgment Date | 23 November 2006 |
| Neutral Citation | [2006] EWHC 2904 (QB),[2007] EWHC 1441 (QB) |
| Docket Number | Case No: MA224108 |
| Court | Queen's Bench Division |
| Date | 23 November 2006 |
[2006] EWHC 2904 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY
Mrs Justice Swift Dbe
Case No: MA224108
David Allan QC (instructed by Linder Myers Solicitors, Phoenix House, 45 Cross Street Manchester M2 4JF) for the Claimant
Paul Rees QC (instructed by Bevan Brittan LLP, Interchange Place, Edmund Street Birmingham) for the Defendant
Hearing Dates 30 th October to 6 th November 2006
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mrs Justice Swift :
The Background
The Claimant, Lee Carl Thompstone, was born on 15 March 1999 and is now aged seven years eight months. He claimed damages for personal injury and consequential losses incurred as a result of the negligence of the Defendant in the management of his birth. The Defendant did not dispute liability and causation. The only issue to be resolved was therefore that of quantum.
The Claimant suffers from a spastic quadriplegic cerebral palsy as a result of anoxia at birth. He has, and will always have, a high level of physical and intellectual disability. He requires adapted accommodation, specialised aids, equipment and transport and therapies of various kinds. He will incur higher expenses than an able-bodied person for holidays and certain other items. He will never be employable so will incur loss of earnings. When he reaches adulthood, he will be incapable of managing his affairs so that Court of Protection and receivership expenses will be incurred. All these heads of damage (together with damages for pain, suffering and loss of amenity) have been the subject of agreement between the parties.
The Claimant will also require a high level of care for the rest of his life. As is usual in cases of this type, the claim for the cost of care forms by far the largest head of damage. While some measure of agreement about the care claim has been reached by the parties, there remain important disputes between them which I must resolve.
At a hearing on 29 March 2006, I approved the acceptance by the Claimant of agreed lump sums in settlement of all the heads of damage referred to above, save for loss of earnings and the cost of care. There was agreement, which I approved, in relation to the value of past gratuitous care up to 1 June 2005. No agreement had at that time been reached as to the appropriate award for past gratuitous care after 1 June 2005. In addition, I approved an agreement as to the appropriate annual cost ('the annual multiplicand') of future care for each of three periods of the Claimant's life. These multiplicands were as follows:
£43,000 to age 11
£57,400 from age 11 to age 19
£91,000 from age 19 for life.
The Claimant has a reduced life expectancy which the paediatric experts estimated was to the age of 60 (the Defendant's expert) and to the age of 64 (the Claimant's expert). At the hearing, I approved an agreement by the parties (based on a life expectancy to 62 years) as to the multiplier which would be appropriate (provided that the trial of outstanding issues commenced no later than 26 June 2006) if the award of damages for future care were to be made on a lump sum basis.
At the hearing, Leading Counsel for the Claimant, Mr David Allan QC, made clear that the Claimant's preference was for the award for future care to be by way of a periodical payments order. That would have the advantage of guaranteeing to the Claimant annual payments for the whole of his life, however long he survived. The question was whether those annual payments would be sufficient to meet the costs of care. At the hearing, Mr Allan referred to financial advice received by the Claimant's legal advisers. This advice indicated that, if a periodical payments order were to provide for annual increases in the costs of care in line with the retail price index (RPI), it was likely that, over time, the periodical payments would not keep pace with the increased costs of care, so that the Claimant would be unable in later life to meet his care needs. Mr Allan indicated that, for that reason, the Claimant would be seeking to persuade the Court to make an order for periodical payments providing for annual increases to be referable to some other index which better reflected increases in the wages payable to carers. At this stage, it was intended that the Court should also be invited to make a periodical payments order linked to an alternative index in respect of the claim for future loss of earnings. The Defendant opposed the use of an index other than the RPI, so plainly there had to be a hearing of the issue. The parties had agreed directions, including the giving of permission for the adducing of expert evidence, and trial of the issue of indexation was adjourned to 26 June 2006.
The case came before me again on 9 June 2006. By that time, it was known that the appeal in the case of Flora v Wakom (Heathrow) Ltd [2006] EWCA Civ 1103, a decision of Sir Michael Turner (sitting as a Judge of the High Court), was due to be heard by the Court of Appeal in early July and it was thought that, in the course of its judgment in the case, the Court of Appeal might give some guidance on the interpretation of the relevant statutory provisions. Consequently, it was agreed by the parties that trial of the issue of indexation in this case should be adjourned until a date after the Court of Appeal had delivered its judgment.
At the time of the hearing on 9 June 2006, the parties had agreed a further global figure, which I approved, to cover awards for future loss of earnings and future educational costs, together with the value of past gratuitous care, past case management costs and past private care costs up to the date of the hearing. The claim for a periodical payments order for future loss of earnings was, therefore, not pursued.
The Court of Appeal handed down its judgment in Flora on 28 July 2006 and the case came before me for hearing, commencing on 30 October.
The Issues
At the hearing on 9 June 2006, the parties agreed that the following issues fell to be determined:
(i) Whether an order for periodical payments in respect of the cost of future care should be varied by reference to the RPI, pursuant to section 2(8) of the Damages Act 1996 (the 1996 Act), or whether such order should contain a provision and, if so, what provision, modifying the effect of sub-section (8), pursuant to section 2(9) of the 1996 Act;
(ii) Following my determination of (i) above, whether the award for the cost of future care should be by an order for periodical payments or by lump sum.
In addition, there were two further issues outstanding from the previous hearings, namely:
(iii) Valuation of the costs of past gratuitous care, case management costs and private care costs from 26 June 2006 to the date of my judgment;
(iv) In the event that I were to decide that the award for the cost of future care should be by way of an order for lump sum, determination of the appropriate lifetime multiplier. This would be necessary since the trial of the issue of indexation would commence later than 26 June 2006 (see paragraph 5) and the agreement as to the multiplier reached by the parties on 29 March 2006 would therefore no longer stand.
Although the issue of indexation is one which affects many high value personal injury claims, the parties were in agreement that I should approach this case on an individual (rather than a generic) basis and this I have done.
The Evidence
I heard evidence from three expert witnesses for the Claimant. They were Dr Victoria Wass (an academic labour economist based at the Cardiff Business School), Mr Richard Cropper (an independent financial adviser specialising in providing advice to the recipients of personal injury and fatal accidents damages) and Mr Anthony Carus (a consulting actuary). The Defendant relied on the evidence of Mr Hugh Gregory (an accountant with considerable experience of forensic accountancy), Mr Raymond Storry (a principal researcher with Income Data Services) and Mr Joe Monk (a member of the firm of consulting actuaries which advises the NHSLA).
Different Forms of Damages Awards
Lump Sum Awards
In the past, damages awards have in general been paid by way of a single lump sum, comprising (as applicable) awards for pain, suffering and loss of amenity, past losses, interest and future losses. In the case of a claim for future loss, a lump sum is calculated by reference to a series of multiplicands, representing the claimant's future annual loss or cost in respect of each head of damage. To those multiplicands are applied multipliers derived from a combination of the Claimant's estimated life expectancy and a discount rate based on an assumption that the capital, notionally invested, will produce an annual return equivalent to 2.5% net per annum (pa) over and above the increase in the RPI.
A lump sum award has a number of advantages. It is final, simple and offers flexibility to a claimant, who can decide for himself how to prioritise his various needs and wants. However, the 'once and for all' approach frequently results in over—or under-compensation. The multiplier is calculated by reference to average life expectancy which may have little bearing on the actual life expectancy of the individual claimant concerned. A claimant may die well before his expected time; in that event, the defendant cannot recover the excess of damages paid and that excess constitutes a windfall for the claimant's family. Conversely, a claimant may survive longer than expected, in which case his...
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