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A variable PPO against the Claimant’s wishes and no costs of a PI trust as there is capacity

The judgment of His Honour Judge Bird sitting as a High Court Judge handed down on 11 March 2022 is interesting for two reasons.

Firstly, it deals with an application for a variable periodical payment order pursuant to the Damages (Variation of Periodical Payments) Order 2005 unusually made by the Defendant rather than the Claimant. The application was successful despite the Claimant’s objection. The Court was satisfied that there was a chance that the Claimant could deteriorate to the point of being institutionalised, meaning a significant reduction in her care and case management needs.

Secondly, the judgement considers whether the Claimant who has capacity but is vulnerable to potential exploitation is entitled to an award in respect of the cost of a personal injury trust (PIT). The Court rejected the submission that its protective jurisdiction extended to such a Claimant. In any event, as a bare trust, a PIT does not safeguard against a vulnerability to exploitation of the Claimant who has capacity.  Damages in respect of the cost of a PIT were not recoverable.

 

Background

This was a third judgment in this clinical negligence case. Liability was determined in favour of the Claimant in Martin v Salford Royal NHS Foundation Trust [2018] EWHC 1824 (QB). The Court then assessed the Claimant’s damages in Martin v Salford Royal NHS Foundation Trust [2021] EWHC 3058 (QB), [2022] P.I.Q.R. Q2.  The matter returned to the Court on this occasion for the determination of the form of the award, specifically, whether it should include a periodical payment order and, if so, whether the same should be variable as was contended for by the Defendant.

The issue of recoverability of damages for a PIT was also determined on this occasion and separately from the assessment of damages because the Claimant made a successful application at the end of the quantum trial to amend her schedule of loss to include the cost of setting up and running a PIT. The damages sought in respect of a PIT were not insubstantial. The Judge set out the relevant costs at [83]. The cost of setting up and the first 2 years amounted to an agreed total of £27,200. There was an agreed sum of £24,000 for contingencies and £900 for winding up. Annual cost after year 2 was assessed by the Judge in the sum of £7,500. Bearing in mind that the Claimant’s life multiplier was agreed at 19.46 (see [34] of the quantum judgment), the total cost of a PIT would have been around £183,000.

 

The Court’s decision

The Court had no difficulty deciding at [3]-[8] that a periodical payment order was appropriate. The Judge then analysed the Court’s power under the 2005 Order, reaching the conclusion at [16]-[20] that it had clear similarities with section 32A(1) of the Senior Courts Act 1982, which deals with provisional damages. The Court exercised its discretion to allow a variable order at [21]-[29], notwithstanding the Claimant’s desire for certainty about the level of her future award. The Judge recognised that a variable order should not be a run-of-the-mill occurrence. He also took into account the benefit to the public purse, which would be anticipated if subsequently the Defendant was made a successful application to vary the periodical payment order.

The Claimant’s argument that the Court should not permit the Defendant to make an application to vary before the Claimant’s 60th birthday was also rejected. The Judge observed at [28], “Although the evidence refers to the likelihood or probability of the deterioration occurring once the claimant is in her 60’s, it does not exclude the chance that it will occur earlier”. The order therefore permitted the application to vary at any time during the Claimant’s lifetime.

In her attempt to recover the costs of a PIT, the Claimant argued that the Court was under a positive duty to protect the vulnerable and that this required an award of the PIT costs that she was seeking. The argument advanced on behalf of the Claimant was that the Court was subject to an operational duty pursuant to Article 2 of the European Convention for the Protection of Human Rights and Fundamental Freedoms to safeguard the right to life and therefore was required to take steps to prevent her from committing suicide.

Although the Court was prepared to accept at [70] that the Claimant’s risk of suicide was both real and immediate, it held at [72] that she was not under a direct supervision of the state, the defendant or the Court. Accordingly, the operational duty did not arise. Even if such duty arose, there were no reasonable or proportionate steps that the Court was required to take to address it ([74]-[75]). The Claimant received a substantial award of damages, which was anticipated to reduce her risk of suicide. Separately, the Judge concluded that an award of the cost of a PIT would not have been a reasonable response as it would not have safeguarded the Claimant against the vulnerability to exploitation ([81]).

 

Practical implications

It is perhaps easy to forget that the jurisdiction under the Damages (Variation of Periodical Payments) Order 2005 is not concerned solely with a risk of deterioration that could result in an increase of the level of the periodical payment (e.g. when the Claimant develops epilepsy or a syrinx). Article 2 of the 2005 Order also extends to a chance of “some significant improvement, in [the claimant’s] physical or mental condition, where that condition had been adversely affected as a result of [negligence]”. It follows that it is open to the Defendant to make an application for a variable periodical payment order in circumstances, for example, where there is expert evidence that there is a chance that the combined effect of rehabilitation and/or cessation of litigation would lead to a significant improvement in the Claimant’s physical or mental state. It is of note, however, that in the present case the Defendant did not even rely on the “significant improvement” provision. Instead, it succeeded in persuading the Court that a deterioration in the Claimant’s condition would lead to a reduction in her care and case management needs.

Another significant feature of this case was that a variable periodical payment order was made despite the Claimant objecting to it on the grounds that she did not want to worry about further applications to Court or about the risk of losing some of her award (see [26(a)]). Bearing in mind that the Judge accepted that she was at risk of suicide, which was both real and immediate, it was interesting that this factor was not accorded more weight in the exercise of the judicial discretion.

The costs associated with setting up and running a PIT can routinely be encountered in schedules of loss for Claimants who have capacity. This judgment can be cited as authority for the proposition that such costs cannot be recovered even when the Claimant is vulnerable to exploitation and the vulnerability is “amplified” by negligently caused injuries and the size of the award. The position is reinforced by the Judge’s observation at [64] that his conclusion about non-recoverability of the costs of a PIT is consistent with the absence of any previous reported authority awarding such damages to a Claimant with capacity.

The judgment can be found here.

Nadia Whittaker.



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