Mealing v Chelsea & Westminster Healthcare NHS Trust

This is an appeal from two case management orders made by Master Yoxhall in a medical negligence action. The orders were made on 15 April 2008. Permission to appeal was given on 23 May 2008 and the appeal was heard on 11 July 2008.

The claim concerns the catastrophic brain injury suffered by the Claimant when she was two years and eight months old after she contacted pneumococcal meningitis. The Defendant has admitted liability for the injury. The trial of the quantum of the claim is fixed for 27 November 2008 (time estimate 15 days) with a pre-trial review on 21 October 2008.

The claim is very substantial. A summary of the claim put before me based on the Claimant’s schedule of loss puts the lump sum value of the claim in the sum of £17,046,168. The Defendant contends that the claim has been greatly exaggerated. Amongst the disputes to be resolved at trial is (i) an issue as to whether the Claimant and her family have settled in France and are likely to remain there and (ii) an issue as to whether the Claimant’s father was likely to earn and/or realise considerable sums from a hedge fund he was in the course setting up when his daughter sustained her injury.

The Claimant contends that if she and her family have settled in France and are likely to remain there any Periodical Payments Order (“PPO”) will have to be adjusted in accordance with an earnings index appropriate to conditions in France. She has therefore sought permission to adduce expert evidence concerning the appropriate earnings index in France. The master refused permission to adduce such expert evidence. That is the first order which is the subject of this appeal.

The Defendant does not accept that the Claimant’s father was likely to earn and/or realise considerable sums from the hedge fund he was in the course of setting up. The Defendant sought permission to adduce expert evidence on that issue and was granted permission. That is the second order which is the subject of this appeal.

Since the orders under appeal are case management directions it is necessary to bear in mind that an appellate court will not substitute its view of the appropriate order for that of the master unless it can be shown that the master failed to apply the correct principles, failed to take into account relevant matters, took into account irrelevant matters or reached a decision which no reasonable master, properly directed, could have reached; see Royal & Sun Alliance Insurance plc v Brian Smith and T & N Limited [2002] EWCA Civ 1964 at paragraph 38.

The master expressed his reasons for his order as follows:

“As far as indexation issues are concerned in this case, and they may arise in relation to the provision of care in France and the extent to which costs rise beyond the retail price index, bearing in mind French conditions, that is a matter which I shall adjourn to the trial judge to give such directions as are necessary. I bear in mind, albeit in a different context, that there may be further appeals in various cases relating to questions of indexation. It follows then that I shall refuse permission to rely on the expert evidence of an economist and, again, that application may be renewed before the trial judge.”

It is to be observed that, apart from stating that he bore in mind that there may be further appeals in various cases relating to questions of indexation, the master gave no reasons for his decision. The “further appeals” to which the master referred are likely to have been the further appeals to the House of Lords then thought likely in Tameside & Glossop Acute Services NHS Trust v Thompstone [2008] EWCA Civ 5 and other related cases. The Court of Appeal had given judgment on 17 January 2008. However, after the hearing before the master it became clear that such appeals would not in the event be pursued.

Tameside & Glossop Acute Services NHS Trust v Thompstone concerned the question whether PPOs could be only be adjusted by reference to the retail price index or whether PPOs could be adjusted by reference to an earnings related index. It was common ground between counsel before me that Tameside & Glossop Acute Services NHS Trust v Thompstone did not involve a claimant who was to receive care abroad. For that reason it was submitted on behalf of the Claimant that the master took into account an irrelevant matter when considering whether to grant permission to adduce expert evidence with regard to an earnings related index in France.

I am not convinced that the master took into account an irrelevant matter. Tameside & Glossop Acute Services NHS Trust v Thompstone raised many related issues about PPOs and how they should be adjusted. It seems to me that the master had in mind that the House of Lords might have given judgment before the trial date in this action and that therefore it was appropriate to adjourn the application to the trial judge so that he could assess the application in the light of such judgment. It was the only consideration that he mentioned as having taken into account when deciding this issue. This seems to me to have been a legitimate consideration to bear in mind, notwithstanding that Tameside & Glossop Acute Services NHS Trust v Thompstone did not involve a claimant who was to receive care abroad. The master recognised that the “further appeals” were “in a different context” which suggests that he had in mind that they concerned a domestic rather than a foreign earnings related index.

The thrust of the argument for the Claimant on this appeal is in essence as follows. The Court will, at the trial of this matter, have to determine whether it is appropriate to make an award in the form of a lump sum or a PPO. In order to determine that issue it may well be necessary to know whether there is an appropriate earnings related index in France. For example if there is no such index in France then that would be a cogent argument in favour of a lump sum; cf A v Powys Local Heath Board [2007] EWHC 2996 (QB) at paragraphs 17-26 per Lloyd-Jones J. If the Claimant is not given permission to adduce expert evidence on that issue now and it becomes relevant at trial then the trial will have to be adjourned in order for such evidence to be adduced. That would be undesirable. Also, the parties will have to know whether there is an appropriate earnings related index in France in order to conduct effective negotiations with a view to settling the case. It would be a sensible case management decision to grant permission now for that evidence to be adduced rather than to leave the application to be determined by the trial judge.

On behalf of the Defendant a number of points were made in response. Firstly, it was said that if it is found at trial that the Claimant and her family are likely not to live in France then it will be unnecessary to incur the costs of researching whether there is an appropriate earnings related index in France. Secondly, it was said that the trial could proceed to the stage of assessing the value of the claim on a conventional lump sum basis. If, as a result of findings made by the trial judge, it was then necessary to research whether there is an appropriate earnings related index in France that could be done. All that would be adjourned would be determination of the question whether the form of the award should be a lump sum or a PPO. This is what has happened in similar clinical negligence actions in the past. Indeed, it may have to happen in any event for reasons unconnected with the question whether there is an appropriate earnings related index in France. For the determination of the form of the award may have to be considered in the light of the trial judge’s findings of fact and the claims that are allowed or disallowed. Thirdly, settlement negotiations could take place, assuming good will on both sides, as to the amount of the recoverable damages on a lump sum basis. True, final resolution of the claim would have to await determination of the form of the award, but that has often been the case in the past, for example in those cases where the litigants were awaiting the outcome of the appeal in Tameside & Glossop Acute Services NHS Trust v Thompstone.

Both of the rival arguments are, it seems to me, cogent and both were attractively presented. The matters raised are certainly matters which are relevant to take into account when deciding whether to grant permission to adduce expert evidence relating to the question whether there is an appropriate earnings related index in France. However, the master’s reasons do not reveal that he took them into account. He is particularly experienced in the management of clinical negligence actions so it is possible that he did so without mentioning them. But this is speculation. When one comes to the second order under appeal it will be seen that he gave very careful consideration to a number of factors. By contrast his reasoning with regard to the indexation issue is sparse. I fear that I must conclude that he did not bear these matters in mind.

It follows that I must determine the application to adduce expert evidence afresh.

If permission is granted the parties will be able to enter into settlement negotiations with evidence on all potentially relevant issues. Similarly, that evidence will be available at trial and will inform the Court’s judgment as to whether the form of order should be a lump sum or a PPO. Of course, the expert evidence may prove to be unnecessary in the event that the court determines that the Claimant and her family are unlikely to live in France. But it is often the case that a trial is prepared on all issues and that is not usually regarded as a disproportionate extravagance. Also, the final determination of the form of the award may have to be adjourned to enable the parties to consider the effect of the court’s factual decisions and the quantum of the award on a lump sum basis. But if it is adjourned for that reason it may only be for a short time compared with a possibly more lengthy adjournment necessary to enable the subject of a wage related index in France to be investigated.

On balance I am persuaded that the better course is for permission to be granted now for the Claimant (and the Defendant if it wishes) to adduce expert evidence on the subject of a wage related index in France rather than to adjourn that question to the trial judge. There are no further appeals in Tameside & Glossop Acute Services NHS Trust v Thompstone and so that consideration, which affected the mind of the master, is no longer effective.

The potential rewards of Mr. Mealing from setting up a hedge fund are relevant to the amount to be allowed in respect of gratuitous parental care and to the amount to be allowed in respect of the costs of accommodation required by the Claimant. With respect to the former claim a sum of over £350,000 is claimed to reflect the high level of earnings given up by Mr. Mealing. With regard to the latter claim a sum of over £4.5m. is claimed to reflect the high value of accommodation it is said the family would have enjoyed but for the injury to the Claimant.

On behalf of the Claimant it was submitted that it is highly unusual for expert employment or earnings evidence to be permitted. The earnings or rewards of Mr. Mealing but for the injury to the Claimant will be a matter of fact for the Court to determine. Expert evidence would be unnecessary and unhelpful since the inquiry into Mr. Mealing’s likely rewards will be highly individual.

The master gave permission for such an expert to be called. His reasons for doing so were very full. He noted that it was tempting to say that this issue should be left to the judge to deal with having heard cross-examination of Mr. Mealing and argument. But he also noted that there was a difficulty in that the evidence provided by Mr. Mealing was “rather sparse” and that in terms of income “there is remarkably little documentary evidence”. He recognised that Mr. Mealing’s earnings were of “particular importance” but asked himself whether that meant that expert evidence was needed. He concluded as follows:

“On balance I am persuaded that, given the importance of these issues and the rather nebulous way in which the claim is being put, I think the defendant is entitled to rely on the expert of a financial adviser to assist. It may be, as it turns out, that the expert may not take matters much further. But I think in a claim of this size (and I am referring not to the £17million but to the size of the accommodation claim and in relation to the 250% uplift) it seems to me proportionate and reasonable that the defendant should have the assistance of a financial adviser.”

It seems to me that the master carefully considered this matter. It was a case management decision. It was not said that he applied the wrong principles or that he took into account irrelevant matters or that he failed to take into account relevant matters. If and in so far as it was said that the conclusion was one to which he could not reasonably come, I disagree. The two claims to which the question of Mr. Mealing’s rewards from setting up a hedge fund relate are unusually high. Whilst there is statement evidence from Mr. Mealing on this issue there is little hard documentary evidence against which that evidence can be tested. Requests for supporting material have not been fruitful. Mr. Mealing claims that he would have been able to realise about £25m. from his work in setting up the hedge fund. Whether this is a likely possibility is something on which the Court might well be assisted by expert evidence. In these circumstances there was a reasonable need for expert evidence. Whilst it is possible that expert evidence might not assist (because the inquiry might prove to be a highly individual inquiry on which an expert may not be able to throw light) this is not so obvious an outcome that the master ought to have refused permission.

I have therefore concluded that this is a classic case management decision with which an appellate court cannot legitimately interfere.

There is no dispute that if the Claimant also wishes to adduce expert evidence on this issue she may do so.

I shall ask counsel to prepare an order giving effect to my decisions on this appeal.