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Law Bulletin - September 2005

Damages

Periodic payments

We are going to report approvals of settlements involving periodic payments for sometime until we have seen some track record of how the courts are dealing with periodic payments.

In this case the claimant, aged 22, was a passenger on a motorcycle being ridden by an uninsured driver when the driver lost control, probably when doing a wheelie, and the claimant came off and collided with a lamppost sustaining severe diffuse brain injury rendering him permanently a patient and tetraplegic. The MIB alleged that the claimant had known the driver was going to do a wheelie. Liability was settled between the claimant’s litigation friend and the MIB 85/15 in the claimant’s favour.

The claimant will always need 24-hour care, lives in a specially adapted suite in his parents house, with care paid for partly by the local NHS Primary Care Trust and partly privately.

The principal issues on quantum were:

• A considerable difference of opinion about the claimant’s life expectancy affecting care and case management;
• A considerable dispute about the appropriate multiplicand of future care and case management. On behalf of the claimant it was contended that the multiplicand should be calculated on the basis that he would in future receive purely private care but the MIB contested this.

The case was settled with the approval of Master Lush of the Court of Protection and Cox J on terms that the MIB pay a lump sum of £1.3 million and periodic payments of £236,424 per annum for life, and in return the claimant and those acting on his behalf will continue to use reasonable endeavours to claim and receive such funding or provisions of care from the NHS or the local authority as he may be entitled to, and will account to the MIB for any such funding or provision which he did not have to pay for.

Three points of general interest:

• By agreeing periodical payments, the parties avoided the issue of life expectancy and the inevitable fact that the award would either overcompensate or undercompensate a claimant.
• The MIB agreed to make periodical payments approaching the 100% of the likely future cost of care and case management, rather than the 85% which the claimant was entitled to under the liability settlement, in return for the claimant agreeing to go on claiming as much free state care as he could.
• The court was satisfied by evidence from the MIB and from financial advisers on both sides that the MIB will be a reasonably secure provider of periodic payments (although it is not automatically deemed to be so under Section 2 (4) of the Damages Act 1996).

Thacker -v- Steeples and MIB. Cox J QBD 16 May 2005.

Nursing costs in terminal illness cases

An issue often arises concerning what constitutes compensatable care, the defendants contending that care usually only arises during the final six months of life, or a shorter period, at lesser levels and costs than recommended by the claimant’s nursing experts.

An article at page 15 of APIL’s PI Focus recommends that, for example, in an asbestos-related case with a short life expectancy, a consultant chest physician is not a nursing expert and ought to defer to a suitably qualified nursing expert who can advise properly on nursing rates and packages. The defendant’s assertion that all care may be valued at £3.50 per hour net, as now frequently happens, fails to have economic reality on the complex nursing needs of the terminally ill. The resulting offers for care from defendants are frequently in the order of £4,500, whereas the average award reported in Kemp is not far short of £13,000 for care alone excluding aids and equipment.

Acceleration and recoverable sick pay

The claimant suffered a soft tissue injury to the lumbar spine, soft tissue injury to the neck and shoulder with psychological trauma and distress. The accident caused a two-year advancement of chronic lower back pain.

General damages were awarded of £5,000.

On special damages, this was a case where the defendants were not the employers. There was a claim for sick pay, but the Judge reduced this by about half on the basis that the claimant might not have received 12-months sick pay, and there was a difference between symptoms due to an accident and symptoms due to a constitutional problem. The Judge also said the employers, Worcestershire County Council, had not made out their right to claim contractual repayable sick pay on the documents disclosed, on the basis that there was no signed undertaking. However the Judge commented that, if the claimant did have to repay it, then the defendants should pay this and therefore it was ordered that the defendants undertake to indemnify the claimant in respect of any sick pay repayments sought from Worcestershire County Council.

Britnell -v- Wolverhampton City Council, Birmingham County Court 12 May 2005.