England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM JUDGMENT OF HH JUDGE YOUNG,
SITTING AS A DEPUTY HIGH COURT JUDGE

		Royal Courts of Justice Strand, London, WC2A 2LL
		18th June 1998

LORD JUSTICE OTTON:

This is an appeal from the judgment of HH Judge Young, sitting as a High Court Judge given on 7 March 1997 whereby he awarded the plaintiff damages of £1,010,162 after an agreed and approved deduction of one-third for contributory negligence, for injuries in a road traffic accident on 7 May 1989.

The plaintiff was then 19 years of age. She sustained moderately severe brain damage which left her cognitively impaired and suffering from poor memory and behavioural changes. She retains full mobility with some difficulty with balance and has all her senses. On full liability the award would have been £1,409,373 plus Court of Protection and Legal and Investment advice costs. There is no appeal from the award of £90,000 for General Damages.

This matter came before us for hearing on Thursday 23 April 1998. During the course of argument we were informed that the appeals from decisions of this Court in Wells v Wells etc. were due to be heard by the House of Lords. Their Lordships have heard the argument but have not yet given their decisions. Some of the issues which their Lordships are to decide also arise in this appeal. I am of the view that we should determine and announce our conclusions on those issues which are not likely to be affected by the appeals to their Lordships' House but defer those that probably are. To that extent both parties are entitled to know what this Court has decided.

Ground 1: Special Damage

The Judge awarded £4,500. The plaintiff's schedule claimed £5,148. The defendant's counter schedule suggested £3,000. At trial the plaintiff's counsel conceded that there should be reductions to the sums claimed for laundry and electricity and suggested figures of £500 and £1,400 respectively. The Judge accepted the reductions and rounded the award down to £4,500. Mr John Leighton-Williams QC on behalf of the Appellants, submitted that a greater deduction should have been made in respect of laundry, electricity, clothing and bedding. I regard the award as eminently justifiable on the evidence. The Judge considered the figures advanced by both sides, the concessions and the argument and arrived at a round figure. I can find no reason to disturb this part of the award.

Ground 2: Past Loss of Earnings

The Judge awarded £38,521. The plaintiff's schedule suggested £67,875. The defendant's schedule £25,000. The plaintiff's primary case for both Past and Future Loss of Earnings was that she would have qualified and been employed as a drama teacher commencing work in 1993 but that until then she would have received a student grant and worked while a student. Alternatively, it was argued that failing qualifications as a teacher she would have obtained clerical or administrative work. On behalf of the plaintiff it was contended that her chances of becoming a teacher were not less than 50%, that her past loss should be assessed on the basis of allowing the plaintiff a 50% chance of becoming a teacher and her loss assessed on the basis of taking a middle figure between earnings as a teacher and earnings in a clerical capacity.

The Judge posed the question:

"Would she have succeeded in obtaining the qualification and would she have got a job? - I take the view that it is 50/50. I also take the view that the best way to reflect that is to adopt the approach suggested by Counsel for the plaintiff. That seems to me to be fair and reasonable and that is the way forward that I propose to go in this case. I have no doubt that whatever she chose to do she would have stuck at it and would have worked. She would not have been a layabout or drop-out and would have continued to work for a significant period of time. ..... she was going to be a working woman and she would have set out on that course throughout the foreseeable future."

Mr Leighton-Williams submits that the reasoning underlying the award was fundamentally flawed both in fact and in law and the errors underlying the reasoning were perpetuated in the award for Future Loss of Earnings. Moreover, in accepting the plaintiff's Counsel's approach the Judge made assumptions of fact which were too favourable to the plaintiff, alternatively gave too much weight to the plaintiff's hope to teach drama and he misdirected himself in Law. The Judge should have decided what probably would have happened. It was not probable that the plaintiff would have qualified and been employed as a drama teacher. Accordingly, earnings as a drama teacher should have been disregarded. In support, Leading Counsel cited a passage from the speech of Lord Bridge in Hotson v East Berks HA [1987] AC750 at p782.

There is a key distinction between a plaintiff who has to prove on a balance of probabilities that a particular result would have come about and when he needs to prove only that a chance, which may be less than a probability, of achieving that particular result has been lost. Lord Reid in his speech in Davis v Taylor [1974] AC207 at 213 said:

"When the question is whether a certain thing is or is not true - whether a certain event did or did not happen - then the Court must decide one way or the other. There is no question of chance or probability. Either it did or did not happen. But the standard of civil proof is a balance of probabilities. If the evidence shows a balance in favour of it having happened, then it is proved that it did in fact happen".

He continued:

"You can prove that a past event happened, but you cannot prove that a future event will happen and I do not think that the Law is so foolish as to suppose that you can. All that you can do is to evaluate the chance. sometimes it is virtually 100%: sometimes virtually nil. But often it is somewhere in between. And if it is somewhere in between I do not see much difference between a probability of 51% and a probability of 49%"

Thus with matters past, the Court has to determine on the balance of probabilities whether the defendant's act caused the plaintiff's loss, and if the answer is in the affirmative there is full recovery, while if in the negative there is none. In McGregor on Damages, 16th Edition para 379, Dr McGregor states:

"We are in the realm of causation and liability not in the realm of chance and quantification. It is this that explains the decision of the House of Lords against the plaintiff school in Hotson v East Berks AHA."

In that case a hip injury which the plaintiff incurred in a school accident was through negligence not diagnosed by the defendant Authority until 5 days later. Had the correct diagnosis been made immediately, with the consequent appropriate treatment, there remained a 75% risk of the boy's disability developing, but the defendants breach of duty turned that risk into an inevitability. The defendants contended that damages for loss of the 25% of chance of avoiding the disability were not claimable since the plaintiff had not shown that on the balance of probabilities that the negligence had caused the disability. The House of Lords upheld that this contention, exonerating the defendant entirely from liability for the plaintiff's disability, on the basis that its sole cause had been the original accident and that no loss of a chance was caused to the plaintiff by the defendants' negligence. I would respectfully agree with Dr McGregor. Hotson was concerned with causation and liability not with the quantification of chance.

The distinction between what falls within the realm of loss of a chance and what requires proof on the balance of probabilities was considered by this Court in Allied Maples v Simmons and Simmons [1995] 1WLR 1602. In their purchase of certain business and shop properties the plaintiffs were advised by the defendant solicitors. The solicitors had allowed the sale to proceed with the deletion of a warranty by the sellers that no contingent liabilities existed whereas there was a liability on a lease which in due course materialised. Two questions arose in relation to causation and damages. First, if the defendants had properly advised the plaintiffs of the effect of deleting the warranty, would the plaintiffs have taken steps to obtain from the sellers some protection, by way of warranty or otherwise, against this liability? Secondly, would the sellers have been prepared to accede to such a request by the plaintiffs?

Stuart-Smith LJ distinguished between three types of situation. In his first category fell cases in which the defendant's negligence consisted of some positive act or misfeasance and the question of causation was one of historical fact, in which event proof on the balance of probability prevailed. In the second category fell cases in which the defendant's negligence consisted of an omission where causation depended not upon a question of historical fact but upon the answer to the hypothetical question 'what would the plaintiff have done if there had been no negligence?'; here the answer is provided by the application of proof on the balance of probabilities. In the third category fell cases in which the plaintiff's loss depended upon the hypothetical action of a third party, whether in addition to action by the plaintiff or independently of it; here the plaintiff need only show that he had a substantial chance of the third party acting in such a way as to benefit him. The Court of Appeal held that the plaintiffs needed to show only that there was a significant chance, which could be less than likely, that the third party would have been prepared to offer them this protection and held that the loss of such a chance had been made out and it was assessed at 50%. This Court adopted a similar approach to the valuation of a chance in Stovold v Barlows (The Times, 30 October 1995), Stuart-Smith LJ presiding). The Court evaluated the chance as 50% on the ground that a successful sale depended on two contingencies, first that, if the deeds had been posted as instructed, they would in fact have arrived by the stipulated date, and secondly, that even if they had arrived by then, the prospective purchaser would not have decided to buy another house. A similar test in a personal injury award was adopted by Mr Roger Bell QC (now Bell J) in Anderson v Davis [1993] PIQR Q87, when he held that the plaintiff, had it not been for his injuries, would have had a two-thirds chance of obtaining promotion as a principal lecturer. He said at p293:

"Where the question is one of what might have been the situation in a hypothetical state of facts, then, to the extent that a chance of the event necessary to an award of damages fall significantly below 100%, the award should be discounted in my view."

On this basis the Judge awarded the plaintiff two-thirds of his lost earnings as Special Damages and two-thirds of such loss up to the age of 65 by way of general damages.

Consequently, I have come to the conclusion that the Judge did not err in principle in his approach. He would have fallen into error if he had adopted that proposed by Mr Leighton-Williams. The loss of the chance to become a dance teacher fell within Stuart-Smith LJ's third category and in neither of the other two. He was also correct to apply a percentage as a means of quantification.

Understandably, Mr Leighton-Williams was tempted to attack the 50% finding as being too generous to the plaintiff in the light of her previous lack of attainment and her pre-accident IQ of 90. She would have had to fund herself for four years (her claim that she would have received a grant could not be sustained), pass the examinations and retain her enthusiasm. The Judge observed:

"Nearly everybody would have been able to claim rather more than she had to offer".

In spite of this trenchant argument I would not be disposed to alter the Judge's findings. He clearly formed a favourable impression of the family (in particular the mother) where there was a high work ethic. Although the 50% assessment was probably higher than many judges would have awarded, I can see no sufficient reason for substituting what my assessment might be.

In the course of argument it transpired and was accepted on behalf of the plaintiff that the Judge had made an error in the calculation of the figures. Thus the correct figure, applying the Judge's 50% formula, should be £34,955 and the Judge's award must be reduced accordingly.

Ground 5: Future Loss of Earnings

The Judge awarded £171,616. He reached this figure by reflecting the 50/50 chance and again taking the mid-point between the figure for the annual earnings which produced a multiplicand of £10,726 to which he applied a multiplier of 16.

The thrust of the appellant's argument is that the error of principle adopted in the calculation of the past loss was carried over into the calculation for the future loss. However, I am satisfied that if the Davis v Taylor approach was appropriate for the calculation of the past loss of earnings, it would be logical to apply the same formula to the future. However, I have come to the conclusion that the learned Judge fell into error by his application of the 16 year multiplier to both the clerical and the dancer earnings. I regard it as not unreasonable to apply to a female aged 27 with a retirement age of 60 a multiplier of 16 in respect of the clerical earnings. However, the assumption that the plaintiff would have continued as a full-time drama teacher throughout the whole of her working life is not justified by the evidence. Moreover, the Judge considered that nearly everybody would have been able to claim rather more than the plaintiff had to offer in this field. Thus she would have been at a disadvantage in the labour market against a better qualified and younger teacher. This must lead inexorably to a lower multiplier under this head. I would discount the multiplier to 14. Thus 16 years would be applied to 50% of £8,909 net clerical earnings mid career (£71,272) and a 14 year multiplier would be applied to 50% of £12,545 net drama teacher earnings mid career (£87,815). The remaining 2 points of the multiplier would be at 50% of the clerical earnings figure (£8,909). That gives a total future loss of earnings figure of £167,996.

Ground 3: Family Past Care

Here the award was £69,540. The award was based on 70 hours care per week at 70% of commercial carer rates, plus the amount of care benefit (£8,247) received by the plaintiff's sister. The appellant seeks to attack the number of hours care per week and submits that the Judge failed to give any or sufficient weight to the fact that (although the plaintiff could not be left alone and required constant attendance) the plaintiff had improved and was able to manage substantially all her personal care needs, and that she could assist with household tasks. Further, for many hours on most days, the plaintiff was taken to the local Community Centre, or elsewhere, she spent many hours sleeping or watching videos and she now sleeps undisturbed through the night. Accordingly, to assess the family's attendance at the equivalent of 70 hours paid carer help per week was excessive. Leading Counsel submitted that the evaluation of past care at £40,000 advanced at trial was a fair assessment and sufficient to enable the plaintiff to make proper recompense for care provided.

I am unable to accept this line of argument. At trial Mr Ryland, the defendant's expert, proposed 10.5 hours per week which was abandoned and 40 hours per week substituted. The Judge preferred the views, the evidence, the findings and the opinions of Mrs Sargent (the plaintiff's expert) on any issue as to opinion or to fact where they were at variance with the defendant's expert. Accordingly, the Judge accepted her assessment and in my view he was fully entitled to do so. It is true that the plaintiff did spend considerable periods of time away from her home. However, during this period it was generally acknowledged that the plaintiff, when at home, required constant attendance if not nursing. Making as generous allowance in favour of the defendant's for the periods away from home still left a substantial number of hours per week where attendance was required. Thus, assuming a total number of hours in a week of 168, an absence of 68 hours left 100 hours of attendance. Applying the 70 hourly rate discounted to 70% produces a very modest figure in round terms of about £4.00 per hour or less. This figure is unassailable. There was no error of principle and the Judge correctly applied the line of authority flowing from the decision of this Court in Hosecroft v Burnett [1986] 1AER 332. I can see no basis upon which it would be appropriate to reduce this part of the award.

Ground 4: Travelling Expenses

The award was £12,000. This part of the Appeal was not pursued.

Ground 8: Accommodation Costs

The award of £26,500 was an agreed figure for the cost of providing separate accommodation for the plaintiff and her carers. The appellants contend for a discount for the prospect that the plaintiff would continue to live in the family home. For reasons which appear on Ground 7 (Future Care and Attendance), the Judge's finding of fact fully justifies this award and is not to be disturbed.

Grounds 9 and 10: Future Rehabilitation

The award was £83,304. At the time of the preparation of this Appeal it was known only that the plaintiff went to Banstead for assessment. However, it subsequently transpired that following the 6-week initial assessment she has been accepted at Banstead for a 2-year period. Mr Leighton-Williams realistically accepted that this turn of events placed him in some difficulty. He suggested that the only remaining question was whether the cost was reasonable. He did not advance any cogent argument to suggest that it was unreasonable or that the benefit to be gained from a period of rehabilitation when measured against the cost was not justified.

Ground 11: Future Case Management

The award was £168,636. I consider that this award is insupportable. £8,748 was awarded for supervision during the time it was assumed that the plaintiff was undergoing rehabilitation at Banstead. This has now proved to be the case. For the next 2 years the cost was claimed at £23,664. Thereafter the award was for costs of £8,000 to supervise a care budget of £33,366 per annum. The claim for Case Management at this level for these periods is unsustainable. The figure of £8,000 is far and above figures which are normally awarded for even more disastrous injuries where there would be constant supervision of a team of carers selected to perform more arduous nursing tasks. It does not take account of the fact that case management costs are more expensive in the early years and settle down as the need diminishes in the later years to a considerably reduced figure (see Goldfinch v Scannell [1993] PIQR 143 and Page v Sheerness Steel [1997] PIQR Q1.

The plaintiff called Carmen Welch to substantiate these figures but I have considerable reservations in accepting her approach. Her evidence is not of an independent expert, merely what she would expect to charge in this situation. Clearly the plaintiff is entitled to some award under this head and I would adopt the pragmatic approach of £5,000 per annum with a multiplier of 16 which produces a figure of £80,000 under this head. This figure should prove to be more than sufficient for the supervision of this patient.

	The total of the Judge's awards under the above headings	The total of the Court of Appeal awards:
1	4,500	4,500
2	38,521	34,955
5	171,616	167,996
3	69,500	69,500
4	12,000	12,000
8	26,500	26,500
9+10	83,304	83,304
11	168,636	80,000
TOTAL	574,577	452,525

Accordingly the awards above must be reduced by £95,822 in total before the deduction of one third.

This leaves the following items to be determined, namely:

Ground 6: Loss of Pension Rights

£16,000 awarded.

Ground 7: Future Care and Attendance

£616,753 awarded.

Ground 12: Future Investment Service

£70,580 awarded.

The Cross Appeal - The Discount Rate

I am concerned that there may be money standing in Court or that there may be a stay of execution pending the outcome of this appeal. I anticipate that whatever the outcome of the appeals to the House of Lords may be it is unlikely to lead to a substantial reduction of the present outstanding awards. Accordingly I would be prepared to order that notwithstanding the above reduction the plaintiff should be protected by an interim award of £750,000 in part satisfaction of the final assessment of damages, credit being given for any interim payment already made.

It would, of course, be open to the parties to reach a settlement without returning to Court.

LORD JUSTICE CHADWICK:

I agree.

LORD JUSTICE NOURSE:

I also agree.

Order: directed that no order be drawn.