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

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Birmingham Civil Justice Centre 33 Bull Street, Birmingham B4 6DS
		22nd November 2018

HHJ McKenna :

Introduction

1. This is an application by the Claimant LP acting by her litigation friend and husband, MP for an interim payment on an account of damages in the sum of £400,000, the purpose of which is to fund future care and more particularly to enable the purchase and adaptation of a suitable single storey property. The Claimant's present home is a two storey ex-council mid terrace house with a bathroom on the first floor and is unsuitable.
2. The cost of this alternative accommodation is identified in the report of Thomas Andrew Skerratt, the Claimant's accommodation expert, as follows:

Purchase price	325,000.00
Adaptations	157,704.00
	_________
Total:	£482,704.00

3. The Defendant has previously made a voluntary interim payment of £100,000 and is prepared to make a further voluntary payment of £100,000 but resists the Claimant's application for £400,000.

Background

4. The Claimant is 69 years old. She suffered from undetected atrial fibrillation, that is to say an irregular heartbeat, which causes thrombus to form in the left ventricle. These thrombi can then embolise, entering the arterial blood system and, on occasion, passing up to the aorta to the arteries that supply the brain blocking the blood flow and causing a cardioembolic stroke.
5. In May 2011 the Claimant suffered a stroke which caused damage to her right parietal lobe. This caused some left hemiparesis although the Claimant made a good recovery so that by the summer of 2013, she only had some very minor residual weakness in her left limbs and was able to engage in all the activities of daily living and to socialise independently and indeed, in the summer of 2013, she was fit enough to go on holiday to Vermont in the United States of America with her husband.
6. In August 2013 the Claimant suffered a further significant stroke; this caused acute aphasia and affected her executive skills so that she was much less able to plan tasks or remember what was required of her. These cognitive impairments had a significant impact upon her ability to perform the activities of daily living.
7. In December 2013 the Claimant suffered a further severe stroke. This caused a new left cerebellar infarct and ischaemia to both occipital lobes resulting in problems with cognition, behaviour and emotional regulation, balance and fatigue.
8. Following discharge, the Claimant, was even less able to care for herself and had become very dependent upon her husband.
9. The combined effect of the August and December 2013 strokes is that the Claimant lacks capacity and is both a protected party and a protected beneficiary.
10. The Claimant had been treated at the Defendant's hospital following each of her strokes. Investigations to identify atrial fibrillation were not undertaken until after the December 2013 stroke when the condition was diagnosed and an anticoagulant prescribed to prevent any further cardiac thrombosis and cardioembolic strokes.
11. In 2013 the Claimant also developed a lump in her left breast. This was malignant. It was identified in a CT scan undertaken while she was on holiday in the United States. The scan was passed to the Claimant's GP who referred her to the Defendant but unfortunately the Defendant did not diagnose breast cancer until June 2014. The Claimant then underwent a mastectomy with chemotherapy. In November 2014 whilst undergoing and, the Claimant asserts, as a result of her chemotherapy, the Claimant suffered a yet further stroke. This further stroke made little, if any, appreciable difference to the level of her disabilities or to her care needs.
12. Following the August 2013 stroke, the Claimant's husband gave up his work as a college lecturer to look after the Claimant and has, ever since, continued to provide care and, as a result, has not been able to return to work.
13. Currently the Claimant requires almost round the clock care from her husband. Fatigue and problems with balance mean that she requires assistance with mobility and many of the physical aspects of daily living. The effect of these physical deficits is compounded by her cognitive impairments. She has significant difficulties with memory, attention, praxis and language. She also suffers from emotional and behavioural changes that make her anxious and irritable. Her dependence on her husband therefore, is physical, cognitive and emotional and she is resistant to receiving care from anyone but her husband.
14. The Claimant has a reduced life expectancy. Dr Bamford, the Claimant's neurological expert, estimates that the pre-existing health problems combined with her neurological deficits mean that her life expectancy is reduced from 18 to 11 years. In January 2018, the Claimant's oncologist, Dr Price, estimated a life expectancy of 3 to 6 years and a 50% chance of survival past 5 years and a 15.5% chance past 10 years although this will improve the longer the Claimant avoids a reoccurrence of her cancer. There has been no relapse to date.

The Claim

15. The Claimant's letter of claim alleges a failure to identify and treat her atrial fibrillation, the earlier diagnosis of which would have led to treatment and have avoided the August and December 2013 strokes and the breast cancer. Breach was admitted but causation was denied. Proceedings were served in March 2017. A defence was served which admitted breach but denied causation and in particular it was specifically denied that the November 2014 stroke arose as a result of the Claimant's chemotherapy.
16. On 3^rd July 2018 District Judge Griffith approved a compromise under which the Defendant accepted that it was 95% liable for any damage caused by the August and December 2013 strokes and the Claimant for her part discontinued her claims in respect of the cancer. This left the issue of the effect of the strokes unresolved and a trial was listed to commence on 24^th October 2018. This issue has now been compromised, with the Defendant agreeing to accept the expert evidence of Dr Bamford in his report of 20^th November 2016 and that of Dr Carr, the Claimant's neuropsychiatrist, in a report dated 2^nd December 2016. The agreement is recorded in a consent order dated the 19^th September 2018, a schedule to which provides that the August and December strokes are responsible for (a) 80% of the Claimant's problems with stamina and fatigue (b) 100% of her impaired balance; (c) 100% of her difficulties with swallowing; (d) 100% of her problems processing complex information; (e) 80% of her cognitive impairments and (f) 100% of her emotional and behavioural issues.

The Relevant Law

17. CPR Part 25.6 makes general provision for applications for interim payment orders and CPR 25.7 specifies the conditions to be satisfied and matters to be taken into account when the court is considering whether, and if so, how much to order by way of an interim payment. At CPR 25.7(4) it is provided that:

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

18. It is common ground that the principles to be applied are those set out by the Court of Appeal in Eeles – v – Cobham (2009) EWCA Civ 206. At paragraphs 42-45, Smith LJ summarised the approach to be taken as follows:

42. "Before leaving this case, we wish to summarise the approach which a judge should take when considering whether to make an interim payment in a case in which the trial judge may wish to make a PPO. We also wish to clarify the roles of the judge and the Court of Protection, as it appears to us that Foskett J may not have properly appreciated their respective roles.

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; if not, expenditure will be controlled by the Court of Protection.

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. We endorse the approach of Stanley Burnton J in Braithwaite. 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; that is a matter for the Court of Protection. 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".

19. In summary, therefore, under Eeles 1 as it is commonly described, the Court must assess the likely amount of the final judgment leaving out of account those heads future loss which the Trial Judge might wish to deal with by way of an order for periodical payments (PPO) and the Court must be assiduous not to fetter the discretion of the Trial Judge to make a PPO in respect of any particular head of claim for future loss. The heads of loss commonly considered include general damages for pain, suffering and loss of amenity and special damages in respect of past losses and interest. The assessment should be carried out on a conservative basis but once that has been done a reasonable proportion may well be a high proportion.
20. Where, however, the interim payment required exceeds a reasonable proportion of the likely amount assessed on the conservative basis set out above, the Court can have regard to the second stage, commonly known as Eeles 2, and in so doing can include in the assessment the capitalised amount of future losses but only where it can confidently be said that the Trial Judge would wish to award a larger capital sum than that which is covered by the matters falling within Eeles 1 and only where the Court can be satisfied that there is a real need for the payment requested.
21. In this case, on the basis of the medical, care and accommodation evidence served to date on behalf of the Claimant, there can, to my mind, be no doubt that there is a real need for the payment requested and, to be fair to the Defendant, I do not understand such an argument to be any part of its opposition to the payment sought.

Discussion and Conclusions

22. I turn now to a consideration of what would constitute a conservative assessment of the likely award of damages in this case.
23. So far as general damages are concerned there is an issue between the parties as to the appropriate bracket within the Judicial College Guidelines (14^th edition) with the Claimant arguing for 3(a)(b), moderately severe brain damage, where the range is £192,090 to £247,280 and the Defendant arguing for 3(c)(ii), moderate brain damage, where the range is £79,530 to £131,620.
24. To my mind, it is plain from the medical evidence that the August and December 2013 strokes have caused significant physical impairments in the form of loss of balance, loss of stamina and fatigue with difficulty swallowing, serious cognitive deficits and an altered emotional state. As a result, the Claimant is no longer able to look after herself and has become wholly dependent upon her husband.
25. The appropriate Judicial College guideline, in my judgment, therefore is 3(a)(b)). As a result of her impaired life expectancy, the Claimant will fall at the lower end of that bracket. It was submitted on behalf of the Claimant that a comparable case is that of Parry v North East Wales NHS Trust where an award of £183,000 at today's value was awarded to a stroke victim with physical and cognitive defects and a 7 year life expectancy. I accept the force of that submission and, for the purposes of this application, I conclude that a figure of £150,000 is a conservative estimate of the Claimant's prospective award for pain, suffering and loss of amenity. In addition, the appropriate figure for interest on the same basis is £4,500.
26. So far as past care is concerned, there is a very significant difference in approach between the Claimant and the Defendant as to both what should be included and the date up to which the calculation should properly be made. The Defendant for its part submits that the only losses which fall for consideration are past care (quantified in the schedule of loss up to October 2018 at £150,000) and a modest figure for other losses in a global sum of £16,500. The Claimant, by contrast, argues that, for the purposes of this application I should look at the value of care up to the likely trial date or more accurately to the date when any PPO would commence, that is to say 15th December 2019, assuming, as I have timetabled, a trial in the summer of 2019 and that I should also include other past expenses and future case management and therapies up to the December 2019 date.
27. From my part I can see the force of the submissions made on the Claimant's behalf. The case has been timetabled to a trial in the summer of 2019 and the first payment under any PPO is likely to take effect on 15th December 2019. In those circumstances it seems to me entirely appropriate that the assessment of the likely amount of a final judgment should be calculated to that date and, can properly include the cost of future case management and therapies calculated to that date as well as other more traditional past expenses.
28. The Claimant's care needs have been provided to date by her husband. This gratuitous care has been assessed by Ms Rodd, and for the purpose of this application, the Claimant has assumed that this care will continue to be provided until 15th December 2019 at the earliest. A 25% reduction has been applied to Ms Rodd's figures to reflect the gratuitous nature of the care and during 2014 a discount of 50% has been made to represent care that it is accepted the Claimant would have required in any event as a result of her breast cancer and the November 2014 stroke. Accordingly, it is submitted on behalf of the Claimant that the appropriate figure in respect of past care is £135,513.
29. In addition, the Claimant also seeks to place reliance on other past losses, namely gardening and DIY at £3,413, travel at £784.12 and the cost of relocating from Malta to the United Kingdom at £17,000 plus an additional expenditure of £7,081 making a total of £28,278. I should say in parenthesis that it was submitted on behalf of the Claimant that the ultimately unsuccessful move to Malta was a reasonable step to mitigate her loss by seeking accommodation which met her needs and that in any event those costs could be equated to the cost of renting in the United Kingdom. I accept the force of those submissions.
30. So far as future case management and therapies are concerned, it was submitted that Dr Carr recommended a psychologically informed care package, Ms Rodd recommended a care package which encompasses occupational therapy, speech and language therapy, a dietician, psychological intervention and, if the Claimant would allow it, following the rehabilitation, support from paid carers including domestic support and as a result a case manager would be required. A quote was obtained from Bridget Laffoley who, assuming 'light touch' case management of 10 hours pcm until December 2019, costed case management at £14,300. To this the Claimant seeks to add the cost of OT at £2,940, a dietician at £600, SLT and psychology both at £2,500 each up to December 2019 giving a total cost for case management and therapies of £22,840.
31. As the Claimant lacks capacity it was submitted that a financial deputy would be required. Costs have been obtained from Irwin Mitchell Trust Corporation Ltd who are to act as a deputy in the first instance and the sum sought calculated to December 2019 is £34,997.
32. So far as aids and equipment are concerned applying a multiplier of 5.16 the amount claimed is £30,967.
33. I am conscious that at this stage I do not have any expert evidence from the Defendant as to these various heads of loss and having regard to the need to ensure that my assessment is on a conservative basis it seems to me to be fair and reasonable that I apply a discount of 25% to these figures as follows:

Past Care 135,512.00

Other Past expenses 28,278.00

Future case management and therapies 22,840.00

Court of Protection costs 34,997.00

Equipment 30,960.00

_________

252,594.00

Less 25% 63,148.50

_________

£189,445.50

_________

say £189,500.00

34. Now I turn to the somewhat vexed issue of accommodation costs. Mr Skerratt has assessed the cost of purchasing an appropriate property at £325,000. The uninjured equity is £105,000 so a capital sum of £220,000 is required to allow a purchase. The traditional Roberts v Johnstone approach using the current discount rate of -0.75% would allow nothing for the capital costs of accommodation.
35. In JR v Sheffield Teaching Hospitals NHS Foundation Trust (2017) EWHC 1245, the trial judge, William Davies J, with some hesitation, refused to make an award for capital costs but indicated that he was concerned that, with a negative discount rate, the Roberts v Johnstone approach was no longer appropriate. He granted permission to appeal. However, at the last moment, the NHS Resolution compromised that appeal, paying to the Claimant a significant proportion of his capital costs. A similar approach was taken by Lambert J in Swift v Carpenter 2018 EWHC 206 (QB) a decision which I understand is also going to be the subject of an appeal.
36. The Defendant submits that I should follow the approach of William Davies J and Lambert J and allow nothing for the capital cost of accommodation.
37. Leading Counsel for the Claimant, by contrast, urges on me the argument that where, as here, the Claimant requires alternate accommodation because of the injuries caused by the tortfeasor it cannot be correct that there is no recovery for the capital cost of that accommodation. After all, the principle to be followed is to place the injured party as nearly as possible in the same financial position as he or she would have been in but for the negligence. It is, therefore, to be anticipated that accommodation costs must be capable of being assessed as damages where, as here, as a direct result of the injury caused by the Defendant's negligence, the Claimant requires specific adapted accommodation which is of a size and kind that she would not have required but for the Defendant's negligence.
38. That is the approach adopted by HHJ Curran QC sitting as a Judge of the High Court in Porter v Barts Health Care NHS Trust (2017) EWHC 3025 (QB) in an interim payment application case where he allowed a child claimant suffering cerebral palsy to purchase suitable accommodation and in which he commented:

"I am satisfied that the trial judge will allocate by way of damages in the form of a lump sum sufficient capital to enable her to be accommodated substantially in accordance with the requirements set out in the expert's reports" (paragraph 37).

39. For my part I accept the force of leading counsel for the Claimant's submissions on this aspect and would adopt the reasoning of HHJ Curran QC in the Porter case. As it seems to me, the NHS Resolution having compromised the appeal in JR, it would be wrong in principle to allow it now to rely on the negative discount rate to deny the Claimant any capital costs when such costs are plainly required to return her to the position she would have been but for the Defendant's admitted negligence.
40. In those circumstances an alternate rate of return needs to be adopted. Leading counsel for the Claimant has submitted that an appropriate rate would be 4% which is the standard variable rate for an interest only mortgage. This would comply with the principles identified by the Court of Appeal, he submitted, in George v Pinnock (1973) 1 WLR 118 which identified the principled approach to the recovery of these costs subsequently adopted in Roberts v Johnstone. Alternatively, he submits a rate of 1.3% should be adopted which is the conservative rate of return the Claimant can expect if investing over 30 years as identified by the Government Actuarial Department in its personal injury discount rate analysis document dated 19th July 2017. The capital costs are £45,408 at 4% and £14,757.60 at 1.3% respectively.
41. Once purchased a property will have to be adapted. Mr Skerratt has identified the cost of adaptation at £157,704 plus a further £45,000 if carer accommodation is to be added and ancillary costs of moving including purchase costs of £9,700, sale costs of £2,700 and a property finder and feasibility study of £7,250 making a grand total of £19,650.
42. For my part, having regard to the need for a conservative valuation, I would adopt the latter of the 2 suggested approaches based on the Government Actuary Department figures, a figure of £150,000 in respect of adaptation and £15,000 in respect of ancillary costs but would exclude the cost of carer's accommodation. The figures for accommodation therefore are as follows:

Capital costs 14,758.00

Cost of adaptation 150,000.00

Ancillary costs 15,000.00

_________

£179,758.00

_________

say £180,000.00

43. To summarise therefore in my judgment, a conservative assessment of the relevant heads of loss is as follows:

Pain and suffering and loss of amenity	150,000.00
Interest	4,500.00
Other losses	189,500.00
Accommodation	180,000.00
	_________
	£524,000.00
	_________

44. There must be a 5% reduction to reflect the compromise on liability which leads to a figure of £497,800.00.
45. In the circumstances, an appropriate sum to award by way of a further interim payment would therefore be £350,000 which together with the sum of £100,000 already paid, would amount to just shy of 90% of my conservative estimate of the likely damages and as such amounts to no more than a reasonable proportion of the likely amount of the final judgment.

Disposal

46. For all these reasons therefore, I would order a further interim payment of £350,000 such payment to be made in 14 days.
47. I trust the parties will be able to agree the terms of an order which reflects the substance of this judgment including the issue of costs.
48. To the extent that the parties are unable to agree on any matters then I would invite written submissions setting out the parties' respective positions, such submissions to be filed and served no later than 72 hours prior to the date fixed for the handing down of this judgment.
49. Finally, I should like to take this opportunity to record my thanks to both Counsel for all their assistance in this application.