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Tameside & Glossop Acute Services NHS v Thompstone (by his mother and litigation friend Heather Bridley); South Yorkshire Strategic Health Authority v Corbett (by his mother and litigation friend Catherine Elizabeth Corbett)

8 February 2008
The issues

Future loss – indexation – measure of damages – periodical payments orders

The facts

The four trusts appealed against similar decisions at first instance regarding the making of periodical payment orders under s.2(1) of the Damages Act 1996. In all four cases, liability had been admitted and a lump sum payment had been made to compensate the claimants, all of whom had been severely injured, for issues other than care.

In each matter, the judge at first instance had considered the Court of Appeal decision of Flora v Wakom (Heathrow) Ltd (formerly Abela Airline Catering Ltd) when it had been decided that s.2(9) of the Damages Act allowed the court to make orders whenever it deemed appropriate. In three out of the four cases at first instance, the judge at first instance had modified the order by making specific reference to ASHE 6115, the Annual Survey of Hours and Earnings for the occupation group of care and home carers for the indexation of the periodical payments.

The appellant trusts put forward a number of arguments, including that:

(1) using an earnings related measure would lead to differences in compensation between the lump sum system and periodical payments;

(2) ASHE 6115 is not an appropriate measure and, furthermore, is not sufficiently local to the claimant to provide the necessary information;

(3) s2(9) of the Damages Act does not allow the court to move away from the RPI but only to modify the index itself.

(4) the principle of “Distributive Justice” should be applied to take account of the significant costs of an earnings related measure to the NHS.

The decision

All four appeals and all of the appellants’ arguments were rejected by the Court of Appeal. The Court of Appeal based their judgment upon the 100% recovery principle. Because the periodical payments were being sought for carers, the Court of Appeal, in these cases, took the view that because of the chance the RPI index would not match the increases in earnings, that the periodical payments should be linked to the earnings index to pay the carers. There was, in the alternative, a risk that the claimant would not be 100% compensated for the defendant’s negligence.

Because the Court of Appeal took the view that s.2(9) gave the court power to move away from the RPI, the 100% compensation principle in these cases led them to the use of ASHE 6115.

Indeed, not only did the Court of Appeal refer to the 100% compensation principle in rejecting the appeal but they reminded lower courts of their obligation to consider the possibility of a periodical payments order for the compensation of the claimant, even in circumstances where neither party had sought one.

The Court of Appeal made it clear how they see the future after this case, now that they have given a clear indication that s 2(9) of the Damages Act does allow the court to refer to indices other than the RPI such as ASHE 6115:

“It will not be appropriate to reopen [this] issue in any further proceedings unless the defendant can produce evidence and arguments significantly different from, and more persuasive than that which has been deployed in the present cases. Judges should not hesitate to strike out any defences that do not meet that requirement.”

The court accepted that in a complex case the claimant is likely to instruct and call an Independent Financial Adviser. Their evidence will be given “great weight” by the court. It is be a rare case where the Defendant would need to obtain their own evidence to demonstrate that the form or order preferred by the claimant would not best meet his needs. Both parties’ preferences should be given equal weight by a judge but any decision should be based upon an objective assessment of what the claimant needs and not what they or the Defendant wants.

For further information contact Richard Kaye.

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