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

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY

		Manchester Civil Justice Centre 1 Bridge Street West, Manchester, M60 9DJ
		26/03/2014

See also: Loughlin v Singh & Ors [2013] EWHC 1641 (QB) (19 June 2013)

The Honourable Mr Justice Kenneth Parker :

Introduction

1. After judgment was landed down on 19 June 2013 the parties were able to agree the amount of damages on a substantial part of the claim, namely, pain, suffering, loss of amenity (with accrued interest) and past losses, that is, gratuitous care, paid care and management, loss of earnings, past accommodation costs and deputyship and Court of Protection costs. A total sum has now been agreed in respect of these heads of loss and damage: £1,620,512.60.

2. However, notwithstanding the exercise of best endeavours, the parties were not able to reach agreement on a number of important matters. Written submissions were filed. I believed that a further oral hearing was required, which was initially set down for November 2013. Unfortunately, I had to undergo an unexpected medical procedure and the oral hearing had to be re-scheduled for 22 January 2014. I am grateful to counsel for their patience and for their clear and helpful written and oral submissions on the outstanding matters in issue.

3. The remaining issues are as follows.

A. Future Care and Case Management: First Four Years

4. The parties have been able to agree the amount required in respect of care and case management from January 2013 to 19 June 2013 (date of judgment) : £34,256. However, they cannot agree on the amount required for the first 4 years beginning on 19 June 2013, and for subsequent years.

5. In their Joint Statement of October 2012, the care experts, Maggie Sargent (for the Claimant) and Jill Ferrie (for the Defendant) agreed that at that time the Claimant needed a sleep-in worker at night and a carer during the day. The provision of care up to trial had been 24-hour care, save for the absence of sleep-in support on Friday and Saturday nights and with day care commencing at 10:00 am on Saturday and 1 pm on Sunday. Mrs Sargent proposed a reduction in care to 8 hours a day with a sleep-in carer. Mrs Sargent's costings for this care together with case management were £83,061 in the first year and £81,161 thereafter. Mr David Allan QC, on behalf of the Claimant, submits that a figure of about £83,000 is appropriate. The reduction in care to 8 hours a day represented a substantial reduction on the full time care package that was in place before the trial, and there was no good reason to question the detailed costings advanced by Mrs Sargent. Furthermore, Ms Ferrie had allowed for 6 hours care each day and 5 nights of sleep-in support each week as appropriate in the first six months, and the Defendants in their final submissions had adopted the costings, predicated on such a care package, for the first 4 years. Those costings amounted to about £64,184 per annum for care, and case management costs of £19,296 per annum, producing a total annual cost of £83,480 for the complete package.

6. Mr David Heaton QC, on behalf of the Defendants, does not dispute that in his initial submissions he contended for a figure of about £83,480 to cover the complete package for the first 4 years. However, he submits that the first submission was advanced on a different hypothesis. I found that after a further period of 4 years of practiced routine resulting in the internalisation of an appropriate daily routine, the Claimant would be capable of organising his day and evening routine with four hours of support worker input together with a contingency for emergency back-up facility overnight. Mr Heaton has, therefore, "stretched" the reducing regime described by Ms Ferrie in her July report over a 4 year period, on the footing that the actual reduction in the 8 hour per day care package should start immediately after the first six months, so that with appropriate progressive reduction the first target of the 4 hour per day care package would be reached by the end of the 4 year lead-in period. In the same way Ms Ferrie's costings for case management were "stretched" over the 4 year lead-in period. The average annual expenditure was then £50,628, substantially less than £83,000.

7. It seems to me that the logic of Mr Heaton's argument is compelling. For the reasons stated in the judgment I had contemplated that the care package would be reduced progressively over the following 4 years so that by the end of the lead-in period the daytime care would be no more than 4 hours, with appropriate night time cover. In my view, even allowing for the fact that Mrs Sargent's starting point of 8 hours per day of care already represented a substantial reduction, the claimant's approach does not sufficiently reflect the staggered reduction of the care package that was contemplated in the judgment. I recognised that the precise manner in which the reduction would occur was a matter of judgment, to reflect the legitimate interest of the claimant, and that different methods were feasible. There is no unique way in which this can be achieved, and I do have certain reservations about Ms Ferrie's detailed costings. I am concerned that £50,628 would be unduly favourable to the Defendant, having regard to the fact that the progressive reduction in the care package during the lead-in period has to be sensitive to what is realistically achievable to meet the legitimate needs of the Claimant, and has to be costed on a fair basis. Balancing these considerations, I assess an annual sum of £65,000 for the first 4 years, to cover both the costs of care and case management.

B Future Care and Case Management: After the First Four Years

8. Mrs Sargent produced for the trial long-term care costs based upon 8 hours support per day and a sleep-in carer. Those figures needed adjustment in two ways. First, day time care of eight hours had to be replaced by four hours support and, secondly, a sleep–in carer had to be replaced by overnight back-up provision (estimated by Mrs Sargent at £45 per night). The resulting annual cost was £38,631.20, which included £16,425 for overnight cover by the case manager. Mrs Sargent's long term provision for case management was £9,700 per annum. The total care package would therefore cost (rounded up) £47,700 per annum.

9. The Defendant proposed a cost of £29,378 per annum for the provision of care, and £6,095 per annum for case management, resulting in a total cost of £35,473.

10. The main reason for the difference in the annual costs of care (£38,000 as against £29,378) lay in the costs of overnight cover. Mrs Sargent's figure for such cover was £16,425, whereas the Defendant proposed only £5,840 (a "contingency" allowance of £1460 per week for 4 weeks). However, it seems to me that Mrs Sargent proposed a rational and proportionate method for providing overnight care, namely, an assumption that the case manger could be called upon for 3 periods of 10 minutes each night, resulting in a cost of £45 per night. In some periods that intensity of cover might not be required but there might well be periods when substantial additional cover was required, and the average proposed was reasonable in the round. Mrs Sargent gave evidence on this matter and answered questions in cross-examination.

11. Mrs Sargent's costings also included pension costs of amounts rising to £1300 per annum. Ms Ferrie's costings did not include pension costs though she accepted that allowance for such costs might be appropriate. Mr Allen QC submitted that the relevant statutory regime had been introduced in 2012, and that there was no uncertainty that the costs would be incurred. Although employees could opt out, they would be encouraged to make sufficient provision for retirement. In these circumstances I believe that it is fair and reasonable to include this head of cost, and to accept the Claimant's total cost for care of £38,000 per annum.

12. As to future case management, Mrs Sargent provided a detailed breakdown based on 100 hours of work per annum. This included 12 visits a year at 2 hours for each visit. Ms Ferrie did not provide a detailed cost breakdown but allowed a total cost of £6,095 per annum based on 58 hours of case management time each year. Although in evidence Mrs Sargent suggested that a reduced care package might require more intensive case management, I do not accept that the final care package determined by the Court requires as much case management input as 100 hours per annum. If the care package works successfully and as I envisaged in the judgment, the management of the care should become less onerous and costly. Again, the precise quantification is not a science, but I conclude that input of about 80 hours per annum should be sufficient, an intensity of contribution that does acknowledge the points made by Mrs Sargent. On that basis I allow an annual cost of £7,800 for case management.

C Interest

13. Section 17 of The Judgments Act 1838 provides that every "judgment debt" shall carry interest at the rate of 8 per cent per annum from such time as shall be prescribed by rules of court, and rules of court may also provide for the court to disallow all or part of any interest otherwise payable. CPR rule 40.8 provides that such interest shall begin to run from the date that judgment is given unless the court orders otherwise. The court may also order that interest shall begin to run from a date before the date the judgment is given.

14. In my view, the court has not yet given a relevant judgment within section 17. Some heads of damage within the sum of £1,620,512.60 derive from heads of damage agreed by the parties prior to trial which have not been approved by the court. Furthermore, certain heads of damage could not be agreed and required further assessment (to be found in this judgment) by the court.

15. Interest is, therefore, essentially governed by Section 35A of The Senior Courts Act 1981, which confers a wide power on the court to award interest at an appropriate rate both for the period between the date when the cause of action arose and the date of payment or the date of judgment, whichever is applicable. From January 2013 to 17 July 2013, the date when the parties submitted their written submissions identifying the determined and agreed heads of loss, the Claimant should receive interest on his pre-judgment damages pursuant to section 35A, taking into account the effect on such interest of notional interest at The Special Investment account rate on all interim payments made. The rate of interest should be 2 per cent from the date of service of proceedings in respect of general damages. Interest on past expenses and losses should be at half The Special Investment account rate, that is, at 0.25 per cent.

16. The position is more complex from 17 July 2013. Strictly speaking, the Second Defendant were then in a position to quantify damages to a very considerable extent arising from the terms of the judgment that I delivered. On the other hand the Claimant did not raise the issue of interest until 16 September 2013 when he asserted that interest should at least from 17 July 2013 be payable under section 17. In my view, there was a certain element of opportunism in this assertion, for the sums were large, the Second Defendant had not been put on any previous notice that such a claim would be made, and on what basis, and the Second Defendant were acting perfectly reasonably in not simply transferring a large sum of money to a protected partly without adequate arrangements in place for such transfer. It would, therefore, not be equitable for the Claimant to receive, as is claimed, interest at 8 per cent per annum under section 17 pursuant to any discretion that the court enjoys to award interest at that rate on "crystallised" amounts of damages as at 17 July 2013.

17. The equitable assessment is that the Claimant should receive from 17 July 2013 interest under section 35A in respect of such crystallised amount, on the same basis and at the same rate as already specified in paragraph 15 above.

18. However, the Claimant did squarely raise the issue on 16 September 2013. Given the complexity of the issue, and the circumstances generally, the Second Defendant could have been reasonably expected to respond appropriately by the end of 14 days from that date. By then an appropriate response was the payment of the damages that were "crystallised" by the judgment of 17 July 2013. It is fair that the Claimant should, from the end of the relevant 14 day period, receive interest at 8 per cent per annum under section 17, just as if a judgment had been given on that date for the amount of damages so "crystallised". The amount of interest so payable will, of course, give appropriate credit for any future payments made after 17 July 2013.

19. I also formally record that judgment in this action is entered against the Second Defendant.