PZC (A Child, By Her Mother and Litigation Friend, JZC) v Gloucestershire Hospital NHS Trust

There are two applications before me, both for interim payments, in an action for damages for clinical negligence. The first seeks £85,000 to cover limited future expenditure and is not disputed by the Defendants. The second which now seeks £845,000 (initially £935,000 was claimed), is to enable suitable accommodation to be provided for the Claimant. It is made to fund the purchase of Bryn Melyn, Bredons Norton, near Tewkesbury at a recently negotiated purchase price of £805,000 plus stamp duty.

The Defendant has admitted breach of duty and causation and by order dated 18^th July 2008 judgment was entered for the Claimant for damages to be assessed. The assessment of damages is listed for trial commencing on 7th November 2011 ie in just over 5 months' time and, prior to that, a joint settlement meeting is due to take place on 19^th September, just under 4 months from now. These days it is more usual than not that settlement is achieved at a joint settlement meeting.

To date the Defendants have made interim payments of £367,352 (including a CRU payment of £17,352), of which I was told £72,278 remained available for use on 18^th May 2011. Adding the now agreed further interim payment of £85,000 will mean total interim payments of £452,352.00, subject to any further interim payment I make. The Claimant has served a Schedule of Loss. The Counter Schedule is due by 6^th June 2011. The Defendant is awaiting a care report.

The Claimant, now 9 years old, sustained injuries at or close to her birth on 1st January 2002. As a result she suffers from dyskinetic quadriplegic cerebral palsy. She has some limited independent mobility using a walker and can take a few supported steps eg from the car into the house. She gets about the house by bunny hopping. Much of her time is spent in a wheelchair. She has very limited hand function. She requires considerable support in nearly all activities of daily living. Her speech is difficult to understand. At the same time her cognitive abilities have been reasonably well preserved. She attends a mainstream school where she is supported by a teaching assistant. Her reading and comprehension are above average for her age. It is not yet entirely clear whether or not she will have capacity to manage her affairs but meanwhile an application has been made to the Court of Protection for the appointment of a receiver.

It appears likely that she will remain severely handicapped to the extent that she will never be able to live an independent life but will require 24 hour care in accommodation meeting her needs, will require special equipment and transport, therapies etc. To date her needs have been met largely by her parents, with the assistance of a case manager and some paid care.

Her life expectancy is not agreed. Dr Rittey, who advises the Claimant, has assessed it as being to age 70. Dr Neil Thomas, who advises the Defendant, has assessed it to age 58.

To date PZC has lived with her parents and her 4 year old sister at 49 Arundel Road, Mitton, Tewkesbury, a two storey semi-detached house purchased in March 2004 for £170,000 and which has been extended so that it now provides 5 bedrooms, 2 bathrooms, a conservatory, and off-street parking, at a cost of about £95,400, part of which was met by a grant of £25,000. This property is now valued by the Claimant's accommodation expert at £230,000.

For the Claimant it is said that this property is no longer suitable for PZC and they wish to move so that they may have proper accommodation for her. They wish to stay in the Tewkesbury-Cheltenham area. I was told suitable properties are hard to find there. In her witness statement PZC's mother said they had been looking for a suitable property for 2 years, had found one for which the asking price was £900,000 but that was sold within two days. They have now found Bryn Melyn, which it is said is only the second property which had come on the market, of which they know, which would be suitable for PZC.

In her witness statement dated 5th March 2011, PZC's mother said of 49 Arundel Road

Her statement makes no mention of Bryn Melyn. Evidently at that stage Bryn Melyn had not been found. The only evidence of the family’s desire to move to Bryn Melyn comes from the Claimant’s solicitor, Ms Scheel. Her witness statement dated 20^th April 2011, states that the Litigation Friend (PZC’s mother) believes the property is ideally suited because it requires no extension and only requires internal alterations and refurbishment, has level access throughout and has a lift shaft already installed to access the first floor, which is a converted attic space. She exhibited the estate agents’ sales particulars for Bryn Melyn, which contains photographs showing a building of considerable size, most of which is at ground floor level, in extensive gardens. The particulars state that the property is set in about 2 acres and located on the slope of Bredon Hill.

The Claimant’s accommodation advisor, Mr Reynolds has not been able to visit Bryn Melyn but on his behalf Mr Nic Cosmos inspected the property on 27^th April 2011. He recorded that the property comprises a 4 or 5 bedroom detached bungalow with a former bedroom at first floor level, that it has 5 reception rooms, a large kitchen breakfast room, a separate utility room, an attached double garage and a workshop. Two of the bedrooms have en-suite bathroom facilities, there is a separate family bathroom and 3 separate wcs. He says the property has a large floor area in excess of 330 sq metres excluding the garage workshop and first floor. He points out that the roof space has been significantly extended from the original single bedroom but the spaces have not been fully converted and none of it can be described as habitable. He considered the ground floor area sufficient to provide for PZC’s needs without further extension.

Mr Cosmos envisaged that a fairly minimal scheme could provide a bedroom, bathroom and store room for PZC within one of the existing bedrooms, and that together with minor alterations to the entrance hall and doorways would cost £60,000-£70,000 plus the cost of special equipment, VAT and fees etc. He suggested the age of the heating and electrical installations may require replacement. Cost of all this was largely dependent upon the extent of the alterations and refurbishment proposed.

The guide price for Bryn Melyn was £895,000. I was told that negotiations had led to the vendor being willing to sell to the Claimant for £805,000. If one adds stamp duty at 4% then the base purchase cost would be £837,200.

CPR 27 provides that a court may make an interim payment inter alia where liability has been admitted, judgment has been obtained and the defendant is a public body, all conditions satisfied here. CPR 25.7.4 further provides :

This is a case where the trial judge will have to consider which heads of damage should be the subject of periodical payments orders. In clinical negligence cases handled by the NHSLA awards for Future Care and Case Management are regularly made the subject of periodic payments, other heads of damage often being the subject of lump sum awards. The lump sum awards enable a claimant to have sufficient financial flexibility to fund other needs. In Cobham v Eeles [2010] 1 WLR 409, the Court of Appeal set out the approach that courts should adopt when considering making interim payments in personal injuries actions where damages are likely to include one or more periodical payments orders.

At paras 42 - 45 Smith LJ said :

“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 where the trial judge may wish to make a PPO. We also wish to clarify the roles of the judge and the Court of Protection……….

"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 overpayment.

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 the Braithwaite case [2008] LS Law Medical 261. 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.

In Braithwaite v Homerton University Hospitals Foundation Trust [2008] EWHC 353 QB the Claimant's age and injuries were very similar to the present claimant's. Stanley Burnton J. awarded an interim payment of £850,000 for accommodation, although that exceeded sums that might be awarded for PSLA, Interest and Past Loss. He did so because he considered he could confidently predict that the trial judge would make a capital payment significantly in excess of £850,000 and because unless he did so, the claimant's needs could not confidently be met.

Eeles 2 enables a claimant’s immediate needs to be met there and then. This may mean, as Stanley Burnton J observed in Braithwaite, in a claimant having to use damages awarded under other heads of damage to fund those needs. Accommodation is a good example of that. Where accommodation is required courts do not award the increased capital cost but 2.5% of that sum on an annual multiplier : see Roberts v Johnstone [1989] 1 QB 878. To fund his accommodation an impecunious claimant will necessarily have to employ damages awarded under other heads. But care must be taken to ensure that too much is not taken from other heads of damage to fund accommodation, lest those other needs cannot be met.

Whilst it is important that the needs of an injured claimant are met timeously, it is also important to ensure, particularly where applications are made for substantial interim payments, that such payments do not tie the hands of the trial judge. It is important to exercise caution where a claimant's future is still uncertain.

The Claimant’s primary case is that this is an Eeles 1 situation, but if not then the award sought can be justified under Eeles 2. The Defendant’s case is that neither Eeles 1 nor Eeles 2 is satisfied on the facts of the case. For the Claimant, Mr Westcott QC has relied in particular on the reports and letters of his accommodation expert evidence, Mr Reynolds, in support of his contentions of likely need and cost of accommodation and on the statements of PZC’s mother and Ms Scheel, particularly and PZC’s case manager on the issue of immediate need. For the Defendant Mr Bishop QC has relied on the evidence of his accommodation expert, Mr Hill, on the question of need and cost.

I shall deal first with whether entitlement is made out under the first head of Eeles.

Counsel have very helpfully adopted a common approach, applying the principles set out in Eeles, each setting out his respective figures for pain suffering and loss of amenity (“PSLA”), heads of special damage, interest on both and accommodation costs. In the course of the hearing some of these figures were amended. Each bore in mind the need for a conservative approach in his assessment. I set out in the following table their respective contentions.

In the course of argument Mr Westcott referred me to Webster v Hammersmith Hospitals NHS Trust (2002), where in a comparable case the award for PSLA was £180,000 (updated £240,794). Mr Bishop did not seek to contradict this figure with any reported award, nor did he address me on the appropriate award for PSLA. I am satisfied that the Claimant’s assessment of £230,000 is one I can properly rely on for present purposes. PSLA plus interest will therefore amount to £247,342. The table shows there is very little difference between the parties on special damage. In closing submissions Mr Bishop accepted that PSLA and Special Damage could reasonably be taken at about £670,000 - £675,000. In my judgment the appropriate figure for Special Damage is £450,000 or so which produces a total of £697,342 (£247,342 + £450,000) for PSLA and Special Damage.

It is quite clear therefore that entitlement under Eeles 1 will turn on the appropriate award for future accommodation. The total scheduled claim for future accommodation is based on the assumption that the Claimant’s family will move soon but that when the Claimant is aged 25 she will likely move again to achieve independence of her family and will likely move again at age 35 in the ordinary course of life. The scheduled claim is also based on the assumption that the family will rent their present home with no credit being given for the rent.

Recognising that there will likely be a dispute over entitlement to future moves, and in adopting a conservative approach to valuing future accommodation Mr Westcott has

The expert evidence is as follows.

Mr Reynolds has provided two reports and a letter. His first report dated June 2009 was based on a visit to the present family home in 7^th November 2008. He recorded that PZC was being carried upstairs to her bedroom not having adjusted to sleeping downstairs. He noted that Arundel Rd was on two storeys, that there was no space to accommodate overnight carers, no space to accommodate PZC’s therapy needs and no undercover access to the off street parking. He considered a larger bungalow or house with space to extend would be required. Generous circulation areas were important. He stated the following would be required :

His report states he had undertaken general research within 3 miles of the family home and identified 2 suitable properties, a 4 bedroomed detached house with room to extend at an asking price of £580,000 and a 5 bedroomed detached house at an asking price of £595,000. He stated that a likely extension would measure 45 sq m, a therapy room 16 sq m and accommodation for carers 26 sq m, a total of 86 sq m. He estimated that the cost of such provision would be about £202,000 and the extension would enhance the value by about £30,000.

Following a further visit to the family home on 4^th November 2010 he provided a second report. His report to a large extent repeats what he stated in his first report. He repeated his general recommendations. He replaced his recommendation for carer’s’ accommodation (see para 27 (vii) above) with “Sleeping–in carer’s accommodation including bedroom, shower room and kitchenette” and added the need for a further room to be used by a waking carer but also as an activity room for PZC. He considered that renting Arundel Rd would produce a £7,000 pa after expenses. He said that having carried out further research he concluded that potentially suitable properties were not readily available on the open market and, given current market conditions, tended to sell quickly given under-supply. He said he had looked at a number of properties with PZC’s mother and from current market conditions a potentially suitable property was likely to cost between £750,000 and £900,000. He identified two suitable properties, the first a 4 bedroom detached bungalow at an asking price of £745,000 ; the second a 6 bedroomed detached predominantly single storey accommodation at an asking price of £795,000. This time he again estimated that a likely extension would measure 45 sq m, but he reduced the size of a therapy room to 15 sq m and increased accommodation for carers to 38 sq m, a total of 98 sq m. The estimated cost of such provision would be about £244,350 and the extension would enhance the value by about £30,000. Although he had stated that a potentially suitable property was likely to cost between £750,000 and £900,000, and the properties he identified as suitable were at asking prices of £745,000 and £795,000, in his summary he adopted a bracket of “between £850,000 and £900,000” for a potentially suitable property.

In a letter dated 18^th May 2011 he stated that he was recommending single storey accommodation as PZC would not sleep at a different level from her family and had concluded that a suitable bungalow would cost between £750,000 and £900,000 having extended his search to Cheltenham as no suitable properties were currently available close to the family home. In her statement PZC’s mother indicated that she would like to move to Cheltenham.

Mr Hill has provided a single report dated May 2011 and a letter dated 13^th May 2011, commenting on the suitability of Bryn Melyn. He visited the family home on 30^th March 2009. He recorded that the total heated area of Arundel Rd was 159.9 sq m. He considered the family and PZC required areas for the following :

Mr Hill also considered the availability of suitable local properties, finding 6 properties ranging in price from £295,000 to £455,000 and attached estate agents’ particulars of each to his report. He rejected 3 of these properties as unsuitable on further analysis, one of which was the property on the market at £455,000 since he considered it was too expensive : he observed it included two stables and a tack room and was inappropriate given the availability of lesser priced properties suitable for extension. His adjusted 2011 average cost of all these properties was £316,742 - £488,534 but of the three remaining properties was £325,167. Recently he repeated the exercise a found three suitable properties at prices ranging between £300,500 and £360,000. One of these properties was one of his original six, which had returned to the market, interestingly at an asking price £360,000, £5000 less than had been asked 2 years earlier. Mr Hill costed necessary building works for each appropriate property. He considered that this last mentioned property was the most appropriate and that the basic costs of extending it would be about £81,609. His overall conclusion was that a likely reasonable price for a property suitable for extension would be about £335,000. He assessed necessary works and associated costs at about £200,000 before allowing for a grant of £20,000. All the properties he considered were bungalows.

Against this background the parties put forward figures for my consideration. In the course of submissions both Mr Bishop and Mr Westcott put forward some modified figures. The following table contains the figures submitted by the parties and I have added a column containing my own conclusions with regard to the various heads:

The table shows that a great deal depends on the purchase price of the property.

I am not satisfied that the suggested purchase costs put forward by Mr Reynolds can be taken as a sound basis for a conservative estimate of the cost of purchasing a property. His initial researches produced two properties at asking prices of £580,000 and £595,000 but both were houses. In his recent report he has suddenly jumped to £750,000 - £900,000 but it is not clear how he arrived at a figure of £900,000 unless he merely adopted the asking price for the property earlier taken off the market after two days. The difference between Mr Hill’s researches and Mr Reynolds’ are surprising, especially since Mr Hill found bungalows which at first glance appear potentially suitable. Mr Westcott has taken the bottom of Mr Reynold’s latest bracket (£750,000) as a base cost but that is £150,000 more than his earliest researched costs which were themselves about £150,000 higher than Mr Hill’s.

Mr Bishop has pointed out that in both his reports his Mr Reynolds said:

“In my opinion it is appropriate to consider the provision of essential housing which provides a similar standard of housing to that which the family would normally have provided for themselves at this point in Poppy’s life, and to allow for such enlarged or improved accommodation as is necessary to accommodate Poppy’s particular disability”

I consider there is some justification for Mr Bishop’s comment that there is some doubt whether Mr Reynolds has properly taken into account this statement of principle, which is one I regard as correct.

The figure of £500,000 put forward by Mr Bishop, in my judgment reflects a reasonable cost of the capital cost of a property in the Tewkesbury – Cheltenham area, which can be converted to meet the Claimant’s needs. It exceeds significantly the capital costs allowed by Mr Hill. £500,000 is itself £270,000 more than the value of the present 5 bedroom family home.

As to the other heads, I am satisfied that it is correct to take the net rental income received by the parents into account as opposed to a notional 2.5% of the £230,000 value of Arundel Rd, since the actual income represents the true return. I also consider it right for present purposes to assume that the Claimant’s costs of post age 25 accommodation would have been shared with another. For present purposes only I would allow the cost of the property finder.

The above calculations would, subject to reasonable proportionality, justify a total interim payment of £1,276,576 (£697,342 + £579,234) if no interim payments had been made thus far. However, the sum of £452,352 for interim payments thus made (including the £85,000 now agreed) reduces the figure to £824,224. I consider a maximum reasonable proportion of this would be say 85% ie £700,590 say £700,000.

Eeles 2 permits me, if appropriate, to consider additional elements of future loss beyond those taken into account in under Eeles 1 where I can confidently predict that the trial judge would wish to award a larger capital sum higher than my estimated £680,000. But here I do not have a free hand. I have to be satisfied, in the words of Smith LJ that there is a real need for accommodation now (as opposed to after the trial), that the amount of money requested is reasonable, and be satisfied to a high degree of confidence that expenditure of approximately the amount I propose to award is reasonably necessary.

Trial is fixed for just under 6 months time and a settlement meeting is fixed for September. Mr Westcott has urged on me that that there is an urgent need for the family to move. He emphasises those matters raised in PZC’s mother’s statement of which he underlines the difficulties of accommodating carers at present and the extent to which they intrude on the family when there, the difficulties indeed danger in negotiating the stairs and the awkwardness of toileting PZC in the existing bathroom, the need to ensure that PZC achieves independence in use of her wheelchair so that she can get around the property and develop her independence unrestricted by the present limitations of the property and the stress imposed on the family by the present arrangements. I have been supplied with a DVD showing PZC with her mother in the home, getting around, being walked up and being carried down the stairs, being walked to and from the car.

I take all these matters into account. It is quite clear to me that PZC needs and receives a great deal of patient supervision and support. I accept it is becoming desirable for the family to move but I do not conclude that the requirement is so urgent that it cannot wait until the outcome of this case, given that trial is now close at hand. In her witness statement PZC’s mother refers to the family not being able to cope with living there much longer."

I am not satisfied that the requested interim award of £845,000 for accommodation is reasonable, nor that expenditure of such a sum to purchase a property is reasonably necessary. Bryn Melyn is a very large property the ground floor dimensions of which, assessed at more than 300 sq m far exceed the family’s requirements and the cost of which is 3.5 times the value of the present family home. I am quite satisfied that a suitable property can be acquired at a significantly less cost.

I do not therefore consider it appropriate to award any further sum under the principles expounded in Eeles 2.

Mr Westcott has submitted to me that should I reject the application for the interim sum claimed nevertheless it would be open to me to award a lesser sum, to be retained by the Claimant’s solicitor, so that the family could then have money readily available should a suitable property become available.

Whilst I can see the attractions of such a course, I bear in mind, that at present the Claimant is an infant, so that the court would have to approve monies advanced for her. At present her affairs are not administered by the Court of Protection. I am therefore not at present prepared to award an interim payment for accommodation in general terms, but would, ordinarily, be willing in theory to consider any specific proposal should one be advanced. But given the proximity of the trial I consider it far better that such matters should be dealt with at the trial.

The Claimant’s other needs meantime can be met by the monies available from previous interim payments and the further interim payment of £85,000 which the Defendants have agreed to make.

I would like to thank counsel for their considerable assistance. I would be grateful if the appropriate order could be agreed.