Judgment has been handed down by Mr Justice William Davis in the case of JR (a protected party) v Sheffield Teaching Hospitals NHS Foundation Trust [2017]. Not only was this an important judgment dealing with Roberts v Johnstone in the world of a negative discount rate, but it was a rare judgment dealing with quantum in a catastrophic injury case. The claimant, JR, was born with cerebral palsy and cognitive impairment as a result of negligence on the part of the hospital.
At the time of the judgment the claimant was 20. The medical experts agreed that the claimant’s life expectancy was to age 70.
The judge found the claimant’s earnings would have been higher than the median figure for a skilled tradesman. He was persuaded by the claimant to consider the earnings of the claimant’s brother and cousins as comparators. However the most influential factor was the claimant’s innate personality which was likely to have resulted in him over-achieving rather than under-achieving.
The defendant relied on Croke v Wiseman [1982] to deny a lost years claim in relation to pension. They argued that although the claimant was not (now) a child, the principle in Croke applied to him. The claimant persuaded the judge that the principles in Pickett v British Rail Engineering [1980] and Gammell v Wilson [1981] applied and there was every prospect he would enter a relationship in the future which may give rise to a dependency. The judge referred to Pickett which made it clear it was not necessary to show a claimant has / will have dependants to establish a lost years claim. In the present case the judge awarded a lost years figure for pension, reduced by one third for living expenses that would have been incurred had the claimant survived.
It is understood that this point is being appealed. The decision creates uncertainty about claims for lost years in circumstances such as this one – where the claimant was a child at the date of negligence but an adult at the time of trial. If the decision is upheld, defendants will need to make the most of the speculative nature of these claims and focus their efforts on increasing the reductions for ‘but for’ living expenses.
It was not in dispute that the claimant’s three bedroom bungalow where he lived with his parents and elder sibling was unsuitable to meet his needs. The judge considered George v Pinnock [1973] which preceded Roberts v Johnstone [1989]. In that case, the Court of Appeal thought it made no difference whether the accommodation claim was considered in terms of a loss of income from the capital spent on the property or in terms of annual mortgage interest payable. Following the change in the discount rate from 2.5% to -0.75%, the defendant argued that there is no ability to obtain any positive return on a capital fund based on risk-free investment so the correct approach is that the claimant’s accommodation claim would be zero.
The claimant argued for 2.5%. Whilst it was accepted that the effect of Roberts v Johnstone combined with a negative discount rate would lead to a nil award (and that was his finding), the judge was not in a position to find a proper solution to the problem. However he did give some obiter comments that an alternative method could work with the current rate of mortgage interest. He gave the example that the interest element could be calculated on a mortgage (e.g. £600,000 as the cost of a property less general damages) over a 25 year term. The judge also raised the option of the defendant taking a reversionary interest in the property. He thought this was “superficially attractive” although as no evidence had been placed before him on either basis, he was unable to adopt one of these solutions.
This part of the decision is also being appealed. Claimants are likely to start including calculations in their schedules based on mortgage interest and / or produce Independent Financial Advisor evidence to support this. The judge had factored in general damages to his suggested calculation whereas other calculations may factor in a deposit. The suggestion of the defendant taking a reversionary interest in the property is unlikely to appeal to defendants given financial / accounting issues, having to deal with eviction of families at the end of a claimant’s life and having to resell the property afterwards. An added issue is that different tiers of reinsurance can make the issue of ownership very messy in cases where the reinsurance retention is low.
The case also heard issues relating to reasonableness and necessity of adapted accommodation. The claimant had made an offer on a property costing in excess of £1.5m and more than twice the square meterage of a property recommended by the claimant’s own expert. The judge said it was his job to consider the position on the basis that appropriate and reasonable accommodation does become available and will be purchased. The defendant’s evidence in relation to cost of a suitable property in the area and cost of extension / adaptation was not evidenced forensically and so the claimant’s expert’s evidence was preferred on these points. The judge reduced the figure for increased running costs by 25% for the fact his parents and sibling would remain living with him.
Defendants should make sure their accommodation experts provide evidence from estate agents as to other potentially suitable properties in the area and also a proper breakdown of anticipated adaptation costs. They should also seek to maximise the reduction for other family members living in the property.
The care experts agreed that the claimant required two carers 24/7 but disagreed as to whether one of the night carers could be sleeping. The judge considered the carer diaries which showed disturbances at night equating to 10 weeks per annum (p.a.), significantly more than the maximum allowed for sleeping carers. On that basis, the judge allowed the cost of two waking night carers for the claimant’s life. When considering the parties’ care expert evidence, the judge preferred the claimant’s evidence from Maggie Sargent largely because of her significant experience of case management, even though in some instances the defendant’s care expert produced higher figures.
A factor that weighed in his judgment was her expertise in regime management and her qualification as a nurse as opposed to the defendant’s expert who was an Occupational Therapist (OT) with less hands on expertise.
The award provided for periodical payments for care and case management was at just under £300,000 pa linked to ASHE 6115 80th centile.
When dealing with Maggie Sargent, defendants will have to fight fire with fire. Short, focussed, forensic reports from experts with hands on expertise in managing cases of the type in hand are needed.
The claimant’s OT expert costed for two powered wheelchairs, one for indoors and one for outdoors. The judge agreed with the defendant’s expert that this was not reasonable.
Various items including electric toothbrush, electric shaver and tumble drier were rejected as being items the claimant would have purchased in any event.
Whilst it is accepted that the purchase cost of these items is minimal, with the new minus discount rate, everyday items will now add up significantly on a replacement basis. Defendants will need to take a harder line and argue that ‘but for’ items should be disregarded. Use a separate OT expert from care and get them to ask the questions at the assessment to build a “but for case” that will reveal any “feather bedding” by the claimant experts. The very high multipliers are such that a £1,000 here or there produces a six figure outcome!
The claimant’s physiotherapy expert costed for 26 sessions pa of land-based physiotherapy to age 40 plus six sessions pa of water-based therapy. The judge allowed the 32 sessions recommended. The judge had no evidence that additional physiotherapy past the age of 40 would prevent future deterioration and so he allowed the same provision as to age 40. The judge had seen a video of the claimant which showed his enjoyment for water based activity and on that basis, the judge agreed that a modest element of water based therapy was justified. The judge rejected the claim for a hydrotherapy pool in the claimant’s home on the basis it would not be reasonable or proportionate.
The judge instead allowed the cost of 35 visits to a local pool each year even though the capitalised sum was significantly greater than the cost of a swim spa pool suggested as an alternative to a hydrotherapy pool.
The claim for massage therapy was granted on a modest lump sum basis given the lack of therapeutic benefit and the fact that massage therapists were not a registered profession.
This is a useful authority for a more sceptical view on a hydrotherapy pool and a very good lesson in avoiding them having “done it and bought it”. Even if you allow money for a house - carve out the claim for a pool to be left to the trial judge before they dig foundations for now. Local enquiries about pool access and cost are helpful.
The claimant had purchased a VW Caravelle. The judge rejected the defendant’s OT expert’s evidence that the claimant should have purchased the cheaper Renault Master because it looked too much like a van. The claimant was to give credit for the cost of his pre-accident vehicle on a five-yearly replacement cycle and also the resale value, reducing the cost of the Caravelle from £46,000 to £34,000 every five years. The claimant was also awarded the cost of a caravan recoverable on a 20 year cycle.
This highlights the need for defendants to consider a range of options for transport and to weigh up cost and aesthetics. Use a separate transport expert to tackle these big items who will research the market with real numbers. Watch out for experts with a link to the provider Mobility Solutions.
The judge agreed it was reasonable for the claimant to travel abroad occasionally. He would need to take six carers on holiday and be compensated for the additional cost of the holiday in terms of accommodation and travel. The annual sum awarded was £14,500. In addition the judge awarded a contingency sum of £25,000 for an occasional long haul holiday.
The cost of holidays will be an even more expensive head of loss with the negative discount rate and defendants will need to provide proper evidence (quotes) as to the additional cost of holidays to have a chance at reducing sums claimed. Drill in on the “but for“ habits. This is a disastrous head of claim for defendants, pure and simple.
The claimant’s expert produced a very detailed breakdown of likely costs. The defendant’s expert’s evidence, Hugh Jones, was more general and based on his experience. Whilst the judge approached the annual costs of deputyship in the same general way as the defendant’s expert, he barely reduced the claimant’s expert’s figures at all. He agreed the experts’ evidence that other costs including appointment of a new deputy, crises periods, applications, wills etc should be on a single lump sum basis.
This highlights the need for defendant Court of Protection evidence to be as detailed and broken down as possible to allow the judge to find a middle point between both parties’ evidence, otherwise the judge cannot compare like with like and may, as in this case, err on the side of caution with the claimant’s higher figures. Hugh Jones remains a good expert but ask him to be more forensic.
Andrew Underwood
Partner, Head of Complex Injury Claims
T: 01204 677162
E: aunderwood@keoghs.co.uk
Rachel Coombs
Partner
T: 02381 907022
E: rcoombs@keoghs.co.uk
Andrew Underwood
The service you deliver is integral to the success of your business. With the right technology, we can help you to heighten your customer experience, improve underwriting performance, and streamline processes.