Court of Appeal
Thompstone v Tameside and Glossop Acute Services NHS Trust
Corbett v South Yorkshire Strategic Health Authority
RH v United Bristol Healthcare NHS Trust
De Haas v South West London Strategic Health Authority
Published January 30, 2008

Where a court made a periodical payments order for a claimant in proceedings involving catastrophic injury in the context of future care, of which the main element was the wages of the carers, the annual earnings survey published for care assistants and home carers was the more appropriate and usable index than the retail price index.

The Court of Appeal so stated, inter alia, when dismissing the appeals of:

1 Tameside and Glossop Acute Services NHS Trust against a periodic payments order made by Mrs Justice Swift in Manchester District Registry (\ EWHC 2904 (QB)) under section 2 of the Damages Act 1996, as substituted by section 100(1) of the Courts Act, 2003, linked to a wage-related index in favour of Carl Lee Thompstone, aged seven, suing by his mother and litigation friend, Heather Brindley;

2 South Yorkshire Strategic Health Authority against a similar order made by Judge Bullimore in Sheffield District Registry on March 28, 2007, in favour of John Paul Corbett, aged 24, suing by his mother and litigation friend, Catherine Corbett;

3 United Bristol Healthcare NHS Trust against a similar order made by Mr Justice Mackay (\ EWHC 1441 (QB)) in favour of RH, aged eight, suing by his mother and litigation friend, LW; and

4 South West London Strategic Health Authority against a similar order made by Mr Justice Nelson in the Law Courts, Liverpool on November 24, 2006, in favour of Johanna Ellen de Haas, suing by her father and litigation friend Paul de Haas.

The decisions appealed concerned serious injury to young claimants suffered at birth as a result of negligence for which liability had been admitted. The damages for future care were in large measure agreed but the question whether periodical payment orders should be made under section 2 of the 1996 Act, as substituted, and, if so, what form the orders should take was in issue.

The judges had applied the Annual Survey of Hours and Earnings (ASHE) and the occupational group of care assistants and home carers (group 6115) produced by the Office of National Statistics, to index the amounts.

Mr David Allan, QC and Mr David Heaton for Thompstone; Mr Philip Havers QC, Mr Paul Rees, QC and Mr David Manknell for Tameside and Glossop.

Mr John Grace, QC, Mr Robin Oppenheim, QC and Mr Harry Trusted for Corbett; Mr Philip Havers, QC, Mr Paul Rees, QC and Mr David Manknell for South Yorkshire.

Mr John Grace, QC, Mr Robin Oppenheim, QC and Mr Harry Trusted for RH; Mr Philip Havers, QC, Mr Paul Rees, QC and Mr David Manknell for Bristol.

Mr Stephen Grime, QC for de Haas; Mr Paul Rees, QC and Mr David Manknell for South West London.

LORD JUSTICE WALLER, giving the judgment of the court, said that the Court of Appeal in Flora v Wakom (Heathrow) Ltd (\ 1 WLR 482) held that section 2(8) of the 1996 Act identified a default position and section 2(9) allowed the court to make other orders whenever it appeared appropriate and fair to do so.

The court had to consider whether a periodical payments order was appropriate and whether it would best meet the claimant’s needs. Then the question of indexation had to be considered. The question whether the retail price index should be replaced depended on the alternatives available.

If in the context of future care, of which the main element was the wages of the carers, the retail price index was not suitable for tracking wage inflation, the question was whether a more suitable index or measure was available.

Suitability should be tested against the following criteria: (i) accuracy of match of the particular data series to the loss or expenditure being compensated; (ii) authority of the collector of the data; (iii) statistical reliability; (iv) accessibility; (v) consistency over time; (vi) reproducibility in the future and (vii) simplicity and consistency in application.

The objections to any form of wage-related indexation as a matter of law or principle failed in Flora and failed here. The defendants, however, objected on a particular level to indexation based on ASHE 6115.

The trial judges considered that ASHE 6115 met the requirements for indexation; that indexation by reference to ASHE 6115 could be achieved without undue complexity and as to workability, that, while in the initial stages some expert assistance would be required to operate the process of indexation, the relevant material and approach would over time appear in practitioners’ works and rapidly become familiar to the specialists who practised in the area.

Their Lordships hoped that as a result of these proceedings the National Health Service and other defendants in proceedings that involved catastrophic injury, would now accept that the appropriateness of indexation on the basis of ASHE 6115 had been established after an exhaustive review of all the possible objections to its use, both in itself and applied to the recovery of costs of care and case management.

It would not be appropriate to re-open that issue in any future proceedings unless the defendant could produce evidence and argument significantly different from, and more persuasive than, that deployed in the present cases. Judges should strike out any defences that did not meet that requirement.

Section 2 of the 1996 Act created a new power to make a periodical payments order where the parties did not consent to it. That power was to be exercised in accordance with rule 41.7 of the Civil Procedure Rules and Practice Direction - Periodical Payments under the Damages Act 1996 (paragraphs 41BPD.1-7)

In applying section 2(1) there were two facets to the decision: how to allocate the heads of damage between lump-sum provision and periodic orders and how to index any such order. When a judge had to decide whether to make a periodical order and, if so, what order, allocation and indexation were inter-related and should be considered together.

The judge’s overall aim must be to make whatever order best met the claimant’s needs. Those needs were not limited to the needs he demonstrated for the purpose of proving the various heads of damage; they included those things he needed to enable him, or those caring for him, to organise his life in a practical way.

The test which the judge must apply was an objective one. The judge’s mind should be focused not on what the claimant preferred but on what best met his needs: the two were not necessarily the same.

This Lordships thought that it was most undesirable that cases should be unnecessarily burdened with evidence on satellite issues. Judges should have regard to the defendant’s general preferences advanced on instructions without the need for evidence to be called.

Their Lordships accepted that there was nothing in the legislation to suggest a defendant was not permitted to call an independent financial adviser.

However, it would rarely be appropriate for a defendant to argue that its proposals would meet the claimant’s needs better than the proposals advanced on the claimant’s own behalf.

Solicitors: Linder Myers, Manchester; Bevan Brittan LLP, Birmingham. Irwin Mitchell, Newcastle upon Tyne; Kennedys. Barcan Woodward, Bristol; Kennedys. Lee & Partners, Birkenhead; Bevan Brittan LLP, Birmingham.

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