England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		25/06/2010

Mr Justice Tugendhat :

1. On 12 April 2008 at about 11pm, the Claimant, who was then aged 38, suffered major injury to his spinal cord in a road traffic accident. He has been left paraplegic but he is of full capacity. He was a passenger in a van driven by the Defendant. They had met earlier in the day and had been drinking together. Primary liability is admitted. There are issues as to contributory negligence. the Defendant's case is that the Claimant was not wearing a seat belt, and that he got into the van when he must have known that the Defendant had had far too much to drink (his alcohol/blood level when tested gave a result of 166mg compared to the legal limit of 80mg).
2. It is agreed that the Claimant requires accommodation with good wheelchair access (internally and externally). The Claimant was discharged from hospital to unsuitable accommodation in a rented flat. He lived there for 15 months with his teenage daughter. In February 2010, about 5 months ago, he and his daughter moved into a bungalow at 30 Lister Drive. This is rented at present, but the Claimant would like to buy it for £375,000, and to make extensive alterations to it at a cost said to be some £230,000. Some adaptations have already been made to enable him to live in it. But he can only buy it if he obtains a sufficient sum on the application for an interim payment which he now makes. The application is for a payment of £800,000 net of money due to CRU.
3. The breakdown of the figure is given by Ms Wiseman at p51 of her witness statement. A total of £646,000, is for the purchase (£390,000), running for two years (£15,000), and adaptation (£231,000) of 30 Lister Drive. The balance is for Aids and Equipment and Equipment (£53,000) and care (£73,000).
4. The Defendant has already made interim payments in the sum of £155,000 and continues to fund both the case manager and the Claimant's support worker directly.
5. The present owner and landlady of the property has made a witness statement. She explains that she had previously tried to sell the property, and now wishes to put it on the market again with vacant possession. The Claimant's tenancy agreement expires on 25 July 2010. On 16 May she served a notice to quit and states that she is unable to wait another year or 18 months to sell it. I see no reason to doubt her evidence.
6. If the Claimant is unable to buy this bungalow, he will have to move into other rented accommodation until he has the means to buy another property. It was not easy for him to find 30 Lister Grove, and the evidence suggests that it would not be easy for the Claimant to find a suitable substitute.
7. Solicitors for the Claimant asked for an interim payment as long ago as 17 October 2008. But the Claim Form was not issued until 21 April 2010. The Application Notice was issued on 24 May, one month ago. It was served with voluminous evidence in support. A Defence was served on 3 June.
8. CPR Part 25.6 makes general provision for applications for interim payment orders and CPR Part 25.7 specifies the conditions to be satisfied and matters to be taken into account when the court is considering whether to make such an order. The claimant must show first that he has obtained judgment or would, at trial, obtain judgment for a substantial amount of money against an insured defendant or public body. It is not in dispute that that condition is satisfied. CPR 25.7(4) provides that:

"The court must not order an interim payment of more than a reasonable proportion of the likely amount of the final judgment."

9. In previous decided cases there has been a difference of views as to how that is to be applied in a case, such as the present, where the court might make a Periodical Payments Order. But it is agreed that the applicable principles are now set out in Eeles v Cobham Hire Services Ltd [2009] EWCA Civ 204. The Court there said:

43. "The judge's first task is to assess the likely amount of the final judgment, leaving out of account the heads of future loss which the trial judge might wish to deal with by PPO. Strictly speaking, the assessment should comprise only special damages to date and damages for pain, suffering and loss of amenity, with interest on both. However, we consider that the practice of awarding accommodation costs (including future running costs) as a lump sum is sufficiently well established that it will usually be appropriate to include accommodation costs in the expected capital award. The assessment should be carried out on a conservative basis. Save in the circumstances discussed below, the interim payment will be a reasonable proportion of that assessment. A reasonable proportion may well be a high proportion, provided that the assessment has been conservative. The objective is not to keep the claimant out of his money but to avoid any risk of over-payment.

44. For this part of the process, the judge need have no regard as to what the claimant intends to do with the money. If he is of full age and capacity, he may spend it as he will; ….

45. We turn to the circumstances in which the judge will be entitled to include in his assessment of the likely amount of the final judgment additional elements of future loss. That can be done when the judge can confidently predict that the trial judge will wish to award a larger capital sum than that covered by general and special damages, interest and accommodation costs alone….. Before taking such a course, the judge must be satisfied by evidence that there is a real need for the interim payment requested. For example, where the request is for money to buy a house, he must be satisfied that there is a real need for accommodation now (as opposed to after the trial) and that the amount of money requested is reasonable. He does not need to decide whether the particular house proposed is suitable; …. But the judge must not make an interim payment order without first deciding whether expenditure of approximately the amount he proposes to award is reasonably necessary. If the judge is satisfied of that, to a high degree of confidence, then he will be justified in predicting that the trial judge would take that course and he will be justified in assessing the likely amount of the final award at such a level as will permit the making of the necessary interim award."

10. There is no dispute that the Claimant has a real need for accommodation now (as opposed to after the trial) it is not accepted that he has a real need to buy this particular property now. The issue is whether the amount of money requested is reasonable. The Defendant's case is that the Claimant has moved into accommodation that is too expensive and that making the interim payment that he seeks would fetter the trial judge's freedom when deciding how to allocate the award between capital and PPO. He should rent accommodation until he finds something cheaper. The Defendant accept that some interim payment is justified, but only so much as is needed to cover the cost of renting, or, when a suitable house is found, so much as is need to pay for that.
11. The main issue between the parties on the cost of the present accommodation is not the purchase price, but the cost of conversion. The Claimant claims that would cost about £230,000, whereas the Defendant claim it should cost about £62,000. The difference is thus about £170,000.
12. There are two issues regarding contributory negligence. One issues concerns the facts, most notably whether or not the Claimant was wearing a seat belt, and if not, whether that contributed to his injuries, and whether the. Claimant was aware of the Defendant's unfitness to drive. The second is as to the percentage reduction that would be appropriate if the Defendant were to be successful on the facts. The Defendant recognises that since Froom v Butcher [1976] QB 286 the maximum reduction likely to be awarded for failure to wear a seat belt is 25%. And since Owens v Brimmell [1977] QB 859 the figure of 20% is commonly regarded as the appropriate reduction for a claimant who has got into a vehicle when he must have known that the driver had had too much to drink. The Defendant wishes to argue at trial that that figure is too low. He also wishes to argue that a total reduction in this case should be 50%. The Claimant submits that a conservative assessment would lead this court to proceed with the present application on the basis of a maximum reduction of 30%.
13. In my judgment the Claimant's submission is to be preferred. There is no support in any authority for a reduction of the order contended for by the Defendant. And looking at the matter overall, it seems an ambitious submission to me that the passenger in such a case should be considered equally to blame with the driver. I proceed on the basis of a maximum reduction of 30% in respect of the issue of contributory negligence.
14. The Claimant has prepared a Schedule of Loss. The Defendant has prepared what is called a "Preliminary Counterschedule of Loss and Damage". There is a summary comparing the two. The totals (on the basis of full liability) are about £4.4m for the Claimant and £1.4m for the Defendant. The difference between the parties on general damages and past losses are not significant for the purpose of the issue I have to decide. The significant issues between the parties appear from the following table in £,000:

	Claimant	Defendant
General	190	160
past losses	120	90
Future earnings	448	230
Care and case management	1,500	394
Aids and equipment	427	115
Household expenses	229	51
Medical and therapy	179	5
Accommodation	998	175
Transport	200	100
Holidays	120	34
Other	7	2
	4,418	1,356
70%	3093	950

15. In her witness statement for the Defendant Mrs Craigie exhibits 65 pages of evidence on the issue of contributory negligence. She also exhibits a Report dated September 2009 prepared by Mr Lord, a Chartered Architect concerning 30 Lister Drive. He lists the alterations which he considers would be required at a cost of about £61,000. The only other material she exhibits is the Preliminary Counterschedule. That is a reasoned document covering some 19 pages, but it is not supported by any evidence other than that of Mr Lord in relation to the accommodation.
16. The Claimant has prepared a calculation in accordance with what is said in Eeles to be the first task. For this purpose he includes the cost of accommodation at about £750,000. He reaches the figure of £750,000 by taking the £998,000 (more fully explained in his Skeleton Argument) and applying a discount of 25%. The result is a figure of £1.2m for total of general damages, past and future losses to the date of a trial two years in the future, and accommodation. To this he applies the 30% discount for contributory negligence. He thus arrives at about £830,000 as the figure for the likely amount of the final judgment. However, he must give credit, as he does, for interim payments and money received from CRU in a total of £178,000. The net result available according to this calculation is therefore about £650,000 for the likely amount of the final judgment.
17. Thus the Claimant accepts that on this calculation the interim payment sought in the sum of £800,000 cannot be justified. To justify that figure he has to have recourse to the second alternative calculation envisaged in Eeles ("when the judge can confidently predict that the trial judge will wish to award a larger capital sum than that covered by general and special damages, interest and accommodation costs alone").
18. For the purpose of this second calculation, the Claimant assumes that all his figures other than general damages and past losses (together amounting to about £300,000) are to be reduced by 25%, thereby arriving at a total of £3.3m. Applying a 30% reduction to this for contributory negligence, he arrives as £2.3m. That makes £2.1 after deduction of interim payments and money from CRU already received. He submits that £800,000 is no more than a reasonable proportion of £2.1m.
19. For the Defendant Mr Norris submits that this application for an interim payment is premature. An interim payment of £800,000 as sought, in addition to the £155,000 already made, would make a total of £955,000. The Claimant is proposing to spend the bulk of that on accommodation where the reasonableness of that expenditure is very much in issue. He submits that the sum suggested for alterations at £230,000 is not explained, and it is not clear that he will in fact be required to leave the house imminently if the present application results in a figure too low to enable him to buy the property. There is nothing to suggest that the present care regime, funded directly by the Defendant, does not work adequately, or that the Claimant wishes to adopt the care regime envisaged in this own figures. Mrs Craigie states that the care figures used to support the claim were prepared in 2009, at a time when the Claimant was in his previous, unsuitable accommodation, and when did not have the support of his current support worker, and of his case manager, both of whom are funded by the Defendant. Omitting this part of the claim would reduce it by about £36,000 per year. Nor is there evidence of an urgent need for the equipment costed in his figures.
20. Mrs Craigie notes that once the figures have been reduced by 30% to take account of contributory negligence, £955,000 represents more than the Claimant's total entitlement on the basis of the Defendant's figure of about £950,000, and about one third of the total figure of the Claimant.
21. A difficulty that I face is that the Defendant has chosen not to adduce evidence to support its figures, other than in the form of the Counterschedule, and Mr Lord's 2009 report. Mr Norris submits that a defendant is not required by the Practice Direction to submit evidence with his defence, and it is premature to do so in response to this application.
22. CPR Part 25.6(4) provides that if a respondent wishes to rely on written evidence, he must file it. Of course, a respondent is not obliged to rely on written evidence. During the hearing I canvassed with Mr Norris whether he wished to apply for an adjournment. He did not apply. Mrs Craigie's witness statement might have set out why the Defendant has chosen not to adduce evidence, but only the Counterschedule. She gives no explanation.
23. The Counterschedule is a very detailed document, apparently prepared by advisers knowledgeable in this type of litigation. But it contains a number of entries which suggest it is not up to date. In respect of accommodation, under Past Losses, the Counterschedule disputes that £375,000 is a reasonable cost to incur in purchasing a house other than 30 Lister Drive, while accepting that renting 30 Lister Drive is a reasonable short term solution to the Claimant's immediate accommodation needs. Under Future Losses the Counterschedule states that it is unreasonable for the Claimant to buy 30 Lister Drive, but states that the Defendant has no expert evidence on a number of items, including increased running costs.
24. In relation to Medical and Therapy costs the Counterschedule states that the Defendant has not yet obtained evidence and is unable to agree or dispute the claim for Physiotherapy, Occupational Therapy, Spinal injury treatment and provision for future medical and other advances. So there is simply no indication whether or not there is likely to be an issue in respect of about £175,000 of the claim. So too with Aids and equipment. There is an appendix to the Counterschedule in which each item is marked as agreed or disputed. There is nothing to indicate on what basis the Defendant disputes a figure of over £300,000 under this head.
25. The Claimant also attacks the report of Mr Lord by reference to criticisms made of his evidence in another case. I pay little regard to these personal criticisms. They are made on the facts of another case which I have not considered in any detail.
26. I do not regard the position adopted by the Defendant as satisfactory. I have some sympathy with the point made by Mr Norris that the Claimant could have commenced the proceedings sooner than he did, and that by not doing so until he was half way through his lease he is attempting to present the Defendant with an established fact. The urgency, such as it is, of this application is of the Claimant's own making. On the other hand, it seems to me that the Defendant is itself adopting a tactical position. It could have included in the witness statement in opposition to the application a statement of what evidence it has, and what evidence it would wish to adduce in order to oppose the application on its merits. If evidence of that kind had been adduced in support of an application for an adjournment, then an adjournment might or might not have been granted. But no adjournment was sought, and it would have been difficult to support an application for an adjournment without a statement as what the Defendant wished to procure, and within what timescale, by way of evidence in opposition to the application.
27. It is common ground that this application can succeed in full only on the basis of the second of the two approaches discussed in Eeles.
28. Following that guidance, I am satisfied that the Claimant has a real need now for accommodation in a bungalow which is accessible by him in his wheelchair. I do not have to decide whether 30 Lister Drive is suitable or not. In this case that is a matter for the Claimant. What I have to be satisfied of is that the amount of money requested is reasonable. I have to be able confidently to predict that the trial judge will wish to award a larger capital sum than that covered by general and special damages, interest and accommodation costs alone.
29. In support of the claim for accommodation costs I have a number of reports of Wyvern Partnership. One is dated 27 August 2008, supporting expenditure of a total of about £600,000 on purchase and alteration, plus numerous additional running costs. Another is dated 13 November 2009 and relates to purchase of 30 Lister Drive (this is referred to in the Counterschedule). Two further reports comment upon the report of Mr Lord. They are dated 8 June and 24 June 2009. I must approach the matter by comparing the reports that I have, of Mr Lord for the Defendant and Wyvern Partnership for the Claimant. I cannot speculate whether the Defendant might adduce another report, or what it might say. Nor do I take the reports for the Claimant at face value. I read them and consider how persuasive they are. Having done that, and the information now before me (which may change before any trial), I feel able to have a high degree of confidence that the trial judge will accept this evidence for the Claimant.
30. I am willing to assume that the claim for care may be much reduced for the reasons given by Mrs Craigie. I do not consider that it is necessary for the Claimant to expend £73,000 on care for the two years before which it is said a trial is due to take place. In any event, I think it likely that a trial will take place (if the action is not settled) in a period that is likely to be nearer one year than two.
31. By this route (rather than the across the board discount of 25% on his figures contended for by Mr Heathcote Williams QC) the claim can conservatively be assessed at about £2m taking into account deduction for contributory negligence.
32. Expenditure of approximately the amount required to buy 30 Lister Drive is reasonably necessary now. I do not consider that it is necessary for the Claimant to expend now all the £231,000 suggested as necessary for alterations.
33. Accordingly, on a conservative basis, I am satisfied to the high degree of confidence required that what is necessary now is a sum of about £650,000. I consider that to be no more than a reasonable proportion of the likely amount of the final judgment I shall order an interim payment in that sum.