Thomas v Wignall
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE NICHOLLS,LORD JUSTICE LLOYD,THE MASTER OF THE ROLLS |
| Judgment Date | 10 December 1986 |
| Judgment citation (vLex) | [1986] EWCA Civ J1210-6 |
| Docket Number | 86/1105 |
| Court | Court of Appeal (Civil Division) |
| Date | 10 December 1986 |
[1986] EWCA Civ J1210-6
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
CARDIFF DISTRICT REGISTRY
(MR. JUSTICE HUTCHISON)
Royal Courts of Justice.
The Master of The Rolls
(Sir John Donaldson)
Lord Justice Lloyd
and
Lord Justice Nicholls
86/1105
1978 T. No. 1307
and
MR. MALCOLM PILL, Q.C. and MR. VERNON PUGH, Q.C. (instructed by Messrs. Hermer & Flack of Cardiff) appeared on behalf of the (Plaintiff) Respondent.
MR. PIERS ASHWORTH, Q.C. and MR. MICHAEL BAKER (instructed by Messrs. Hempsons) appeared on behalf of the (Defendants) Appellants.
This is a tragic case. On the 6th March, 1976 Linda Thomas was married, at the early age of 16 1/2 years. She had left school some time previously, and was working locally as a sales assistant in a chemist's shop. She had become engaged on her 16th birthday. Two weeks after her marriage she underwent a routine operation for the removal of her tonsils in the University Hospital of Wales in Cardiff. That was on the 25th March. The anaesthetic went wrong. Linda suffered severe permanent brain damage. Mercifully, she is not aware of what has happened to her or of what she has lost. The defendants, who are the local area health authority and the anaesthetist, admitted liability for negligence, and so the issue before Mr. Justice Hutchison at the trial of the action was limited to the amount of the damages. By his decision, given on the 20th December, 1985, the judge awarded the plaintiff the sum of £679,264. We were told that this is the largest award ever made in a personal injuries case. The defendants have now appealed against that decision.
The plaintiff was born on the 10th October, 1958. Thus at the time of the trial she was 27 years old. She is now very seriously disabled, physically and intellectually. For practical purposes she is confined to a wheelchair, and she will need constant care and attention for the rest of her life. She is incontinent, particularly at night. She also has serious behavioural problems, exhibiting very disturbed and even aggressive behaviour. One of the doctors described her as a profoundly damaged and difficult lady. Save for very short periods she cannot be left alone, and she needs help in virtually every aspect of daily living. The doctors were agreed that for the foreseeable future she will need a high degree of individual attention. She requires a house of her own in which she can live, with suitable nursing and other care. She is not now expected to live beyond the age of 55 years, so her expectation of life at the time of the trial had been reduced to about 28 years.
The principal items in the very large sum awarded by the judge are as follows. First, general damages were agreed between the parties at the sum of £60,000, plus £6,396 interest thereon. Second, £10,000 in respect of recoverable loss of earnings up to the time of the trial. Third, £52,662 as the cost of the plaintiff's care up to the time of the trial, and a further £14,906 as the cost of care until the 14th February, 1986 when it was expected that the plaintiff's house would be ready for occupation. Fourth, £5,000 in respect of the cost of parental visits to the plaintiff when she was in hospital in Cardiff, and for extra care and work by her parents on her visits home, and a further £2,896 for the cost of parental visits to Northampton and London, and damage done to the parents' house on her visits home. Fifth, £39,000 for loss of future earnings. Sixth, £25,000 in respect of the difference between the cost of the house when converted to suit the plaintiff's particular requirements and its then market value, and an allowance for increased running costs, and a further £2,000 for the extra cost of furnishing a house suitable for the plaintiff. Finally, the judge awarded the sum of £435,000 in respect of the cost of the plaintiff's future care.
Of these items the appellants have sought to challenge only some elements in the amounts awarded in respect of future care and loss of past and future earnings.
The cost of future care; the multiplier
I turn first to the cost of future care. The judge arrived at the sum of £435,000 by applying a multiplier of 15 to the estimated annual cost of future care. He took the sum of £34,000 as representing the present annual expenditure on care, and the sum of £24,000 as being the annual cost of care exclusive of extra night care. He applied one half of the multiplier (7 1/2) to the larger sum and one half to the smaller sum. He did this to give effect to his finding that there was no greater chance that the plaintiff's incontinence, which necessitates night nursing, would be substantially cured than that it would continue unabated.
The judge arrived at the multiplier of 15 in respect of the cost of future care as follows. This was the multiplier he had used in respect of loss of future earnings. Since the plaintiff was not expected to live to be older than 55, and at the time of the trial she was aged 27, he equated her position to that of a 3 7-year old person due to retire at the age of 65. He considered that the appropriate multiplier for such a person would ordinarily be 14. To make some allowance for the high incidence of taxation on the damages award he increased the multiplier to 15.
The appellants submitted that the appropriate multiplier in this case, where the period in question was just under 28 years, was 13 and not 14. Moreover, and this was a point much stressed by the appellants, to increase the multiplier by 1 as an allowance for the high incidence of taxation was wrong in law and not supported by evidence.
Our attention was drawn to certain authorities. The first of these was the decision of the House of Lords in Cookson v. Knowles [1979] A.C. 556, a case under the Fatal Accident Acts. In that case both Lord Diplock (at page 571) and Lord Fraser of Tullybelton (at page 577) observed that conventionally the multipliers generally adopted are those appropriate to interest rates of 4 per cent to 5 per cent and that, in a rough and ready way, this takes care of inflation, in that in times of high inflation much higher interest rates will readily be obtainable as one of the consequences of inflation.
The second authority relied upon by the appellants was that of Lim Poh Choo v. Camden and Islington Area Health Authority [1980] A.C. 174. In that case Lord Scarman (at page 193) said of those passages in the speeches of Lord Diplock and Lord Fraser in Cookson v. Knowles that he did not read them as modifying the law in any way, which is "now settled that only in exceptional cases, where justice can be shown to require it, will the risk of future inflation be brought into account in the assessment of damages for future loss."
The present case is not one where any allowance was made, or is being claimed, for the prospect of future inflation. But Mr. Piers Ashworth for the appellants prayed in aid those decisions in this way. The sum awarded in Lim v. Camden Health Authority was £250,000. The trial in that case took place in December 1977. terms, £250,000 in December 1977 corresponds to a sum of about £500,000 at the date of the trial in the present case (November 1985). Thus the award in Lim v. Camden Health Authority was a very substantial one. The burden of higher rates of tax was much heavier in December 1977 than it is now, but despite this, and even though the award there was a very substantial one, in Lim v. Camden Health Authority the House of Lords did not suggest that it would be appropriate to adjust the multiplier or make some other allowance for the incidence of higher rates of tax.
Furthermore, it was pointed out that there was before the judge no evidence of the likely burden of taxation in this case. In Cookson v. Knowles Lord Fraser observed that what the dependant loses by inflation will be roughly equivalent to what she gains by the high rate of interest, "provided she is not liable for a high rate of income tax." He added (at page 5 77):
"In exceptional cases, where the annuity is large enough to attract income tax at a high rate, it may be necessary for the court to have expert evidence of the spendable income that would accrue from awards at different levels and to compare the total annuity with the amount of the lost dependency having regard to the net income (after tax) of the deceased person. Whether in such cases it might be appropriate to increase the multiplier, or to allow for further inflation in some other way would be a matter for evidence in each case."
So here, it was submitted, the observation made by Lord Fraser regarding expert evidence of the spendable income accruing from awards at different levels is equally applicable where the comparison is with the amount of the cost of future care and lost earnings.
The plaintiff's answer was that the appropriate multiplier in this case falls between about 13 and 15, and that she does not contend that tax reasons make this a case for a multiplier outside the normal, conventional bracket. This is not an exceptional case. Within the reasonable range of appropriate multipliers the judge was entitled to take higher incidence of tax into account as one of the factors.
I shall consider the matter first without reference to authority Higher rates of income tax are a fact of life. In general, the larger an individual's income, the greater is the percentage of it which...
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