Christie & Anor v Rogers

This is an application made on 20 November last year for a further interim payment on account of damages. The first claimant is now 48. She suffered catastrophic injuries in a road traffic accident on 28 November 2006. She is tetraplegic, has an amputation of her left arm above the elbow and, not surprisingly, requires a substantial amount of care constantly.

Liability for the accident is not in dispute. She has previously received interim payments totalling £1.54 million made up by a series of voluntary interim payments prior to proceedings of £1.19 million, a further £100,000 made by order on 19 September 2008, and a further £250,000 made by order of Master Rose on 30 March 2009.

In support of the application I have read witness statements both from the first and second claimants, (the second claimant being the first claimant’s husband), her solicitor, Mr Brazington, and statements in response from Mr King, the defendant’s solicitor. I have also had sight of the witness statements and arguments presented in the previous applications for interim payments, and in particular that before Master Rose on 3 March last year.

The feature that makes the determination of this application so difficult is the amount of the earlier interim payments and the use to which they have been put, primarily for the purchase of a property.

At the time of the accident both claimants lived at a property called Red House. Following her injuries, the first claimant received advice that that was not suitable for her needs and could not reasonably be adapted. That is disputed by the defendant. However, in August 2007 she purchased a house, the Old Rectory, with a view to it being adapted for her and her carers’ needs. The purchase price was £985,000. It was funded by a voluntary interim payment from the defendant’s insurers. At that time, and since, the defendant has maintained that the property is unsuitable for her needs, being too expensive too big, and requiring too much by way of adaptation. Indeed, the claimant’s own architectural expert witness, Mr Wethers, states at paragraph 8.07 of his report of 19 December 2008:

“It is my opinion that the property offers more external space than is necessary for Mrs Christie. It is set in grounds of 1.4 acres. In respect of the internal space, I consider the total area is excessive for what is needed. However, one must take the property as it is found. The accommodation provided in terms of the rooms is exactly what is needed for Mrs Christie.”

He goes on to say that it would have been theoretically possible for a property to be found for a sum of between £750,000 and £800,000.

In March 2008 the Red House was sold and, pending adaptations to the Old Rectory, the claimants moved to a rented property at White Cliff Farm, the rent being £3,825 per month. I am told that the named tenant under the rental agreement is Mr Christie, the claimant’s husband.

The application for further interim payment that came before Master Rose on the 30^th March 2009 was for the sum of £1.2 million and was first, to fund further care until trial, and, secondly and predominantly, to provide funds for the adaptation to the Old Rectory so that the claimant and her carers and indeed her husband could move in. That application was rejected by Master Rose on the grounds that, following the decision of the Court of Appeal in Cobham Hire Services Limited v Eeles [2009] EWCA Civ 204, he felt there was a risk that the overall level of interim payment, if granted, was such that it might interfere unduly with the trial judge’s discretion to make a periodical payments order in respect of the claimant’s future needs.

Consequently, the adaptations have not taken place. The Old Rectory remains vacant. Master Rose did order £250,000, on the broad basis that the claimant had presented evidence that her monthly expenses for care were around £24,000 and he was hopeful that the matter would come to trial in January this year. Therefore, effectively, the interim award was to cover the claimant’s living expenses and care expenses until trial.

Unfortunately the case is not ready for trial and the parties agree that the earliest it will be will be November this year. This application is therefore advanced on the basis that the money is required to cover the claimant’s legitimate and reasonable living expenses and care expenses until then. Effectively, I am invited to follow the reasoning and logic which was behind Master Rose’s order.

In addition, there were outstanding liabilities in respect of previous care and physiotherapy at the time of this application of around £50,000, and further additional sums are sought for what I can call ‘contingencies’ and a proposed holiday for the claimant and her family in Florida. The total now sought in the application is £370,000 of which it seems around £293,000, in round terms, is in respect of care and other essential expenses for 12 months from November, the date of the application, to anticipated trial, November 2010.

It is not in issue that the claim is one where at trial the court will have to consider whether or not to exercise its discretion to make periodical payments orders under the 1996 Damages Act. The proper approach to an application for an interim payment in such circumstances, was considered by the Court of Appeal in the case of Eeles, to which I have referred. The starting point is part 25.74 of the Civil Procedure Rules which provides that:

“On such an application the court must not order an interim payment of more than a reasonable proportion of the likely amount of the final award.”

It is not in dispute that in cases such as this, where a periodical payments order is likely to, at least, be considered, the interim payment, or the total of them, must not be more than a reasonable proportion of the likely capital award. In other words, the court must not, on this application, exercise its discretion in a way so as to affect or interfere with the trial judge’s discretion to award periodical payments.

With that in mind, Smith LJ in Eeles set out the approached that this court should take. The relevant paragraphs are 43, 44 and 45. She says this:

“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.”

The first task, therefore, is to assess the likely amount of the final judgment on a conservative basis in accordance with the first stage in paragraph 43 of Eeles. The parties have assisted me with that exercise, but are not in agreement. The claimant’s schedule values the claim on a conventional basis in excess of £8.5 million. The defendant has not yet served a counter schedule but Mr Sharp has helpfully put forward what he contends are cautious but reasonable estimates in his skeleton argument. He stresses, and I take into account, that these are not the figures the defendant will contend for at trial, which may well be in some instances considerably less. .Mr Westcott has replied, accepting that the defendant’s position is broadly the position to be adopted and he has set out a helpful summary in his document B. He does challenge some of the defendant’s cautious assessments as being even then too low and too cautious.

Against that background, the starting point is the value of general and special damages and accommodation costs. With regard to general damages, I accept the claimant’s conservative figure of £225,000, taking into account the Judicial Studies Board guidelines for these injuries, including the amputation, which I think takes the matter higher than that assessed by the defendant.

With regard to special damages, the claimant’s schedule claims £1.23 million. The defendant’s cautious assessment is £974,000. The claimant’s response is £1,065,000. I do not seek to make any assessment today or usurp the functions of the trial judge, but I think the figure I can reasonably adopt for these purposes is a round figure of £1 million.

With regard to future accommodation, this is far more difficult. Indeed it is one of the main issues in the case. A number of substantial issues arise. First, the price paid for the alternative accommodation, ie, the Old Rectory; secondly, the suitably of the Old Rectory adaptation for the claimant’s needs; thirdly, the reasonable costs of such adaptation; fourthly, whether or not a hydrotherapy pool should be included in that adaptation; fifthly, the recoverability of the rent on White Cliff Farm, and, if at all, for how long. Sixthly, I glean there is an issue about the cost of doing some work on a property in France.

The differences are stark. The claimant’s schedule is at £1.606 million. The defendant’s cautious assessment is £264,000. The claimant realistically in this application more or less accepts that I must go with the defendant’s caution, but assesses a figure even then of slightly higher, £265,000. I propose for these purposes to allow that figure: £265,000. Therefore following paragraph 43 of Smith LJ’s judgment in Eeles, the total conventional capital award on a cautious assessment is £1.49 million.

As I have stated, the claimant has already had interim payments of £1.54 million. Therefore, on this assessment, the amount she has had already impacts on the awards for future loss.

That being the case, I must go on to consider the extent to which I can take into account other heads of future loss as set out in paragraph 45 of the judgment in Eeles. The issue is whether I can confidently predict that the trial judge will wish to award a larger capital sum than that covered by the heads of damage I have dealt with. I bear in mind that before taking such a course I must be satisfied by evidence that there is a real need for the interim order requested.

There are effectively two strands to the claimant’s argument. First of all, that the claimant can indeed show and demonstrate a real need for a further interim payment at this stage and prior to trial. Secondly, that, because of that, the trial judge is highly likely to make an award to cover that real need, even if it does mean ‘trimming’, to use the words of Mr Westcott, any future award of periodical payments.

As Burnton J put it in Braithwaite v Homerton University Hospital, paragraph 15: “If the making of a capital award means that there will have to be some discount to, or postponement of, periodical payments, then, in my judgment, the judge is bound, so to order.”

Following the conclusion of argument, and just before delivering judgment, Mr Westcott has helpfully provided me with an illustration of how this difficult task has been approached by His Honour Judge Bullimore in the case of Mollie Johnson v Chesterfield v Derbyshire Royal Hospitals NHS Trust. I have read that authority and heard supplemental submissions by both parties. It is a difficult exercise, as His Honour Judge Bullimore recognised, but I accept that the decision in that case is merely an illustration. of how the exercise was performed. There is no statement of principle which really assists me in this case.

What about the need? The claimant puts forward a real need as set out fully in her own witness statement, as supplemented by that of her solicitor, Mr Brazington. Essentially, she says she has a need for the sum of £24,416.10 per month, made up predominantly of a care package, £17,666 per month and costs of neurophysiology at £2,000 per month. She says she finds that to be of considerable benefit and, not unimportantly, hope in relation to her rehabilitation. There is the sum of the rent on White Cliff Farm and sums included for the carers’ expenses, extra running costs and living expenses.

She also says, as I have indicated, she has exhausted all the money from previous interim payments and owes £50,000 for expenses already incurred. She also says she reasonably needs money, as I have said, for the contingency fund and for a holiday with family in Florida. She says that she realistically has no other source of funds which she should have to touch in order to meet her needs other than through the making of a further interim payment.

The defendant does not challenge the need, but challenges to the overall cost that is needed. In particular, in relation to the care package, the defendant’s evidence is that the care could be provided cheaper by employed carers rather than agency carers. In relation to the physiotherapy, whilst the benefit is not disputed, the defendant objects there is no real evidence of either the continuing need for it at the cost, and I do take from the evidence that I have read that the neuro-physiotherapist has been training the carers and now that the claimant has a settled care package, as I understand it, it may well be that the actual costs will be reduced as the carers take over that specific sort of physiotherapy.

It is objected that the rent should not form part of this need because it is, in legal terms, Mr Christie’s liability, he being the tenant, not Mrs Christie. It is said that there is no real need for contingency fund or no real need for a Florida trip in order to justify interim payment particularly in the difficult financial circumstances that faces the court today.

Having taken all those matters into account, I think there is a legitimate argument to reduce the annual amount of real need which is advanced as the basis of the interim payment. For the purposes of this application, I accept a real need of a sum of £20,000 per month, to cover care expenses and living expenses to take this claimant through to the trial of this action. In particular, I am not persuaded that rent should be included. I am certainly not persuaded that the contingency fund or the holiday, despite the undoubted benefit that would have to the claimant, I am not persuaded it is a real need specifically for the purposes of this application.

Therefore, allowing 12 months from the date of application to trial, and accepting that the claimant will need the sum of £240,000 in order to keep her effectively with the care that she now has, and adding to that the outstanding invoices to the date of the application of £50,000, there is a total need, in my assessment, of £290,000.

However, when looking at the issue of need in particular, and in relation to the exercise of my discretion generally, the defendant argues that there are a number of other significant factors that need to be considered. The first is that the claimant’s current financial position and her inability to meet those needs to trial has come about largely by her own actions and, the defendant says, imprudence, in particular in the way the interim payments to date have been spent. Of particular concern is the money spent on the Old Rectory, which, it is said, is too big, too expensive, and which still, even at this stage, almost two years after buying it, is not able to be occupied.

Although the reasonableness of the claimant’s actions in buying the Old Rectory are matters which are purely for the trial judge, and I do not at all seek to trespass upon the trial judge’s assessment of that, I have to form an impression at this stage. At this stage, on the evidence before me, I do understand some of the defendant’s concerns about the purchase of the Old Rectory, given that it has used up so much of the claimant’s interim payments to date.

Secondly, it is alleged that the claimant has in any event been profligate generally with her money. She has allowed herself to get into a debt and even on the claimant’s own figures, she has been spending nearly £30,000 per month over the past few months when her case is that her real needs are only £24,000 per month. It is argued that that improvidence with the money would itself tend to lead to a trial judge to prefer the making of periodical payments orders, rather than a lump sum award, to ensure that her money in the future is not frittered away.

Thirdly, the defendant argues that insofar as extra funds are needed to tie the claimant over until trial, which is now later than originally expected, that is her or her advisor’s fault. It is for the claimant and her advisors to push the case to trial and if there is any delay which requires further expenditure, and they have failed to do so reasonably, and as a result further interim payments are required, if that then starts eating into the likely capital judgment, that really is her concern and should not be a concern either to the court or to the defendant.

The defendant also reminds me of the potential forensic prejudice which always arises in cases of this type. If interim payments are used to put the claimant in a position which she then presents at trial as being a fait accompli, defendants are sometimes, face difficulty in arguing that a status quo should be altered. I have to say that in my judgment that argument has limited relevance in the circumstances of this application. The claimant is not seeking to use this interim payment money to set up a care package or buy accommodation or indeed carry out adaptations. That has already been done or, certainly in the case of adaptations, rejected by the court. What she is seeking to do is to maintain the status quo. Indeed she says that she would be unduly prejudiced if she is not given the money because the care package she has, or the accommodation which she has bought, will be at risk if the payment is not made.

Lastly, and importantly, in my judgment, the defendant argues that the claimant does have alternative sources of funds. First, in her witness statement, she describes an inheritance of £140,000, which she does not, understandably, wish to touch, because she has earmarked it as being money which should be available for her children when they have grown older. I am told of that only half, £70,000 is in any event immediately accessible.

Secondly, it is pointed out that the claimant does have the unencumbered asset of the Old Rectory. It has a significant value and equity which could, the defendant argues, be released. The claimant argues that it would be very difficult for her to get a mortgage since she has no income, but the defendant counters by arguing that with the guarantee of either a further lump sum or periodical payments in this case, monies could be released by borrowing at least against the future periodical payments. I am reminded of the observations of Stanley Burnton J in Braithwaite at paragraph 18 when he seems to have contemplated such security himself.

In answer to those arguments the claimant says, that I should look at the reality of the position as it is now. It is not for this court to go into the reasons for her current position. That will be a matter ultimately for the trial judge. The reality is she has a real need for the money, as I have identified, now and the question is how that needs to be funded. It seems to me there is some force in the Claimant’s approach and that in reality I have to decide how her needs as I have found them to be is to be funded, whether through her own funds, whether through an interim payment, or a combination of both.

In my judgment, the various arguments raised by the defendant do have relevance when I come to exercise my general discretion in this case. However, apart from my reservations as to the wisdom of the purchase of the Old Rectory, I have to say I am not wholly persuaded that the claimant has been otherwise unduly profligate. Again, these are matters for the trial judge, but on the evidence and the breakdowns I have had put before me, there is nothing really that stands out as being obviously unjustified or unreasonable.

The next stage in the exercise therefore is to consider whether the need which I have found there is can be properly be funded from future loss claims by way of interim payment without unduly restricting the trial judge’s discretion. It is common ground that I should ignore claims for future care and case management, since it is highly likely that the trial judge will at least consider PPOs for those heads of loss, and I remind myself that those will probably be the highest areas of PPO, if and when they were made. Further, the next most significant area of future loss, the accommodation claim, has already been taken into account. Further I bear in minds the word of Smith LJ at paragraph 37 of Eeles, that “all other heads of future loss should be taken into account”.

The defendant has conceded for the purposes of this exercise, that certain items are probably suitable for a lump sum award. Taking into account the parties’ respective positions on these heads of future loss, I conservatively assess the likely capital awards as follows: medical treatment, £25,000, occupational therapy £5,000, holidays £80,000 and chiropody £2,000. That leads to a further lump sum potential of £112,000 from future losses. When I add that to the £1.49 million I have already identified, that leaves me to conclude a likely award on a conservative basis of £1.61 million, which is £70,000 more than the interim payment already made.

With regard to the other heads of loss, aids and equipment, transport, physiotherapy and miscellaneous expenses, it seems to me clear that, following Eeles, I should not normally begin to speculate how the trial judge might wish to allocate those damages. The trial judge may well wish to order PPOs for those heads of loss. For the purposes of this argument, I identify that the defendants have suggested an overall capital value for those claims, if capitalised, of around £190,000, and the claimant at £235,000. I take a broad figure, taking into account the respective submissions of £200,000 as a cautious estimate for those further potential heads of lump sum award.

The claimant argues that all those future heads of loss capitalised should be taken into account for the purposes of this application. I am afraid I disagree. It seems to me that to do so would be to unduly fetter the trial judge’s discretion and really leave him with no option other than to make only a periodical payments order for future care and case management. However, I am satisfied that extra funds are available if I am, in the words of Eeles “confident to a high degree” that, in the circumstances of this case, the trial judge would make a capital award to deal with matters now claimed for by the claimant.

I then look at the other sources of funding. In my judgment, it is legitimate for a court to expect the claimant to look to these other sources now given the difficult financial position she finds herself in. As I have said, the real problem she faces and the real issue in the case is her decision to buy the Old Rectory. If at trial that is found to have been a reasonable decision by the trial judge, then the future accommodation award is likely to be substantial, significantly higher than allowed for in the cautious estimates that I have taken. In those circumstances there may well be sufficient funds either to refund the inheritance pot or to pay off any borrowings which she makes.

If, on the other hand, the trial judge finds that the purchase of the Old Rectory was unreasonable, then, in my judgment, it is not unreasonable for the court to expect her to find the shortfall in respect of her care needs from her own resources.

Finally, I take into account the consequences of making an order and not making one. It seems to me if no order is made then the trial judge will have a full discretion, (subject of course the impact of interim payments already made) about which head of future loss should attract an award of periodical payments. For that the claimant will clearly benefit insofar as index linked PPOs for life is a benefit for any claimant, and indeed is the whole purpose of periodical payments being available. The defendants would also benefit potentially if the claimant did not reach her life expectancy, then their expenditure would be less. Of course the converse to that is true, if she lives longer then clearly they would pay more.

However if no order is made then in the short term the claimant will be thrown heavily on to her own limited resources. In my judgment, there is very real risk that her level or quality of care, which she clearly needs, may be compromised and there is a risk, it is said, that she might be forced to sell the Old Rectory, which would be, I am quite satisfied, both financially and emotionally disastrous for her.

On the other hand, if an order is made, then the effect would be that the discretion of the trial judge towards the PPOs, against all heads of future loss, will be restricted and the authorities are clear that an interim payment award should not have the effect of restricting the trial judge’s discretion.

Taking all these matters into account, I find it a very difficult decision to make. The circumstances are very unusual, if not unique. In my judgment, a just result should be that in the circumstances of this case, the burden of meeting the claimant’s needs to trial should be shared. I propose to make a further interim payment award of £150,000. I justify that by way of reference to potential capital awards being the sum of £70,000 identified as that conceded as likely capital award, and a further £80,000 from the £200,000 which may well be the likely capital awards against other heads of future loss. I stress that in the circumstances of this case, given the real needs that the claimant has for care, in my judgemnt a trial judge, when looking at this matter, would be prepared to make that lump sum so as to fund the claimant’s immediate care needs to trial.

I also take into account that such an interim payment will be sufficient to pay the outstanding debts to the date of the application and to fund the care provided from the date of the application to now, and for a few months into the future, that will allow the claimant sufficient time to secure adequate funding for the remainder of the period from her own resources, be it either from the release of equity from the Old Rectory or otherwise to take her through to trial.

It seems to me that in making this award I am very much at the limits of what could properly be described as being “a reasonable proportion of the likely amount of the final award” as determined in Eeles, but in the very unusual circumstances of this particular case, I consider that the decision is both just and justified, and in accordance with the test laid down by the Court of Appeal in Eeles. The award that I propose to make is of a further interim payment of £150,000.