Court of Appeal upholds recovery by claimant of ‘Roberts v Johnstone’ damages

20 Jan 2017

Lamarieo Manna (A Child and Protected Party by his Father and Litigation Friend Samuel Manna) v Central Manchester University Hospitals NHS Foundation Trust [2017] EWCA Civ 12

In a judgment handed down this week the Court of Appeal dismissed an appeal by the defendant against the award to the claimant of damages calculated in accordance with Roberts v Johnstone (R v J), in respect of two properties. The principal one in which he lived with his natural mother and her partner, and a second one in which his natural father would live, and where the claimant would spend some of his time. [A detailed briefing note was prepared in August 2015 in respect of the first instance judgment which dealt with a number of quantum issues. It is available on request].

Background

The background to this case is highly relevant to the decision to allow the second property.

During birth on 20 December 1996, the claimant sustained severe brain injury resulting in bilateral tetraplegic cerebral palsy and very severe cognitive, social and communication problems with profound autism. His condition is permanent and he would remain dependent in respect of all activities of daily living activities for the rest of his life, assessed to be to age 67.5.

Liability had been resolved in June 2013 on the basis of 50% recovery. The claimant was 18 at the time of the quantum trial in July 2015.

The claimant’s natural father was the litigation friend. He and the claimant’s mother lived in a two bedroom council property in Moss Side, Manchester. The marriage ended in 1998 but both remained in the home sharing the claimant’s care. In June 2000 the mother began living with someone else in Bolton taking the name Mrs Cocking. The claimant remained with the father due to Mrs Cocking’s pregnancy. In March 2001 the claimant went to live with Mrs Cocking; the father remained in Moss Side, Manchester.

The father continued his involvement in the claimant’s care. The claimant visited Moss Side three weekends of out four, and substantial parts of the summer holidays. This situation continued until September 2013 when Mrs Cocking stopped the shared care as she discovered the father had been leaving the claimant alone for inappropriate periods. From that time until the first trial the father had limited contact with the claimant.

Subsequently both parents expressed a wish to return to shared caring, but Mrs Cocking stipulated that time with Sam had to be in suitable accommodation with space for the claimant and carers. The home in Moss Side was not suitable and could not be adapted.

The second home – the judge’s decision

The claim including the costs of acquiring and adapting two properties. The principal home with Mr and Mrs Cocking and a second property for the father to allow the claimant to visit with carers. The judge quantified the former at £817,925 on a 100% basis.

The trial judge held that the claimant was entitled to recover the cost of acquiring a second property for his father. The 100% cost of that was £368, 578.

In fact the defendant did not dispute the availability of such a claim in principle. Instead it argued that it was unjustified and unsupported by the evidence given that the claimant’s last contact with his natural father was in September 2013 (the date Mrs Cocking stopped the visits) and there had been little contact since then.

The trial judge took into account the long history of shared care and the father’s extensive involvement in his son’s life over many years. She accepted that there was a genuine desire for shared care to resume, and that it was very much in the claimant’s best interests for his relationship with his natural father to be restored.

The trial judge said she had considered the claim with great care, mindful both of the costs and the claimant’s right to family life. However, she emphasised that “the decision had been reached on the particular evidence before the court in this case and is not to be regarded as establishing any wider precedent in respect of such recovery.” Importantly (given the grounds of appeal) the judge also said “the defendant raised no issue at trial as to the application of the multiplier for this calculation.” [The judgment does not set out the full calculation referring to “appendix 6” not served with the report but it has to be taken that the approach was to calculate R v J for the second home using the claimant’s life expectancy].

The Appeal

The grounds for appeal covered two areas, one of which had two main arguments:

1. The second home award in that:

  • The judge should not have awarded it on the facts
  • The multiplier should have been based on the father’s life expectancy

2. The award to the claimant of costs on an indemnity basis.

The Appeal decision

Second home award

Tomlinson J recognised that there was no reported case in which such an award had been made and yet “the situation must be very common not least because the strain of caring for a seriously disabled child can typically have an effect upon the relationship of mother and father.” He regarded the award in respect of a second home as “generous”, that it should be “intensely fact-dependent” and the case should not be regarded as setting a precedent. Spending time with his natural father, at the father’s home, was a reasonable expectation to which the “law should strive to give effect.” Accepting that it was in the claimant’s interest that the contact and care at the father’s home should be restored, the Court of Appeal would not be justified in setting aside the award as it fell within the generous ambit of decision making entrusted to the judge. The defendant had accepted that in principle such an award was possible under the R v J principle. The appeal on this ground was dismissed.

The multiplier

The R v J award on the second home was calculated using a multiplier based on the claimant’s life expectancy (28.43) double that of the father (14.9) who would be in the home. The defendant was not allowed to appeal on the point as it had not argued against it at trial; it elected to run the case solely on the factual justification for a second home without a fall back alternative case on the multiplier. The trial, the Court of Appeal said, was conducted on the basis that if the claim was to succeed “it would be conceded on conventional R v J lines which would involve adoption of the claimant’s lifetime multiplier” (our emphasis).

It was too late to allow the defendants to argue that the multiplier should be other than that which related to the claimant. If the Court of Appeal had decided otherwise it would have been minded to remit the matter back to the High Court for further argument and evidence  suggesting that the result might be a wider enquiry as to the basis on which the damages in respect of the second home should be calculated. The appeal was dismissed.

Indemnity costs

In a separate judgment dealing with costs the defendant was ordered to pay indemnity costs from a date prior to trial, that date being when the defendant refused a pre-trial offer not complying with CPR Part 36; nevertheless costs on an indemnity basis were awarded. The trial judges reasons were (1) a failure by the defendant to enter into meaningful and collaborative negotiations notwithstanding self-evident weaknesses in the case and (2) the nature of the case against Mr and Mrs Cocking as unsustainable and inappropriate – essentially allegations of dishonesty were made. The costs issue related to the whole of the quantum case made by the defendant in respect of a number of heads of loss not just the accommodation claim.

The Court of Appeal rejected the first of the judge’s reasons for imposing indemnity costs. It recounted the events leading up to trial, and in particular the late flurry of evidence and disclosure. It was not prepared to accept the defendant’s conduct was unreasonable, Tomlinson LJ stating: “A judge should be… very slow to entertain a discussion as to whether parties to litigation have negotiated in a reasonable manner. Such an enquiry opens up the prospect of undesirable and wasteful satellite litigation as to the reasonableness of a negotiating stance and almost certainly will depend upon a careful evaluation of the respective stages of knowledge of the parties. The Part 36 regime is designed precisely to obviate this kind of enquiry.”

With regard to the second ground, the Court of Appeal took the view that the case against Mr and Mrs Cocking, essentially that they had deliberately set out to mislead the professionals by exaggerating the difficulties involved in the claimant’s care, took the case outside the norm. Moreover two of the experts (Care and OT) for the defendant were “illogical”, “unrealistic” and “extraordinary”,

The Court of Appeal did not feel it would be justified in interfering with the judge’s decision and the appeal against the indemnity costs order, including all the costs of trial, was dismissed.

The relevance to catastrophic injury claims

  1. The case did not involve any challenge to the R v J approach – indeed the Court of Appeal made clear that the court and the case was not concerned with that. Although some references were made to “hard outcomes” often used to illustrate criticisms of the approach[1], Tomlinson J’s view was that the approach was “imperfect but pragmatic”. R v J represents the approach to be adopted, though it remains open to parties to consider other approaches if helpful in the context of a case.

  2. Both at first instance and appeal, stress was placed on the decision not creating a precedent, being entirely on its facts (the defendant having conceded the principle) and described by the Court of Appeal as “generous” yet within the judge’s “generous ambit of decision- making”. This does suggest some “coolness” on the part of the Court of Appeal. Inevitably the approach will be emulated by claimants and attention should be paid to the factual justification advanced,whether the drivers for shared care in a separate home exists or alternative approaches perhaps involving more proportionate adaptations to an existing second home are appropriate. The “principle” conceded by the defendant in this case remains open to be argued.

  3. Although there was a strong pointer from Tomlinson J to the “conventional” approach requiring the multiplier to be based on the claimant’s life expectancy, the point wasn’t argued nor decided. In fact it must be the case that the R v J calculation for the second home should be based on the father’s life expectancy. The purpose of the second home was to allow the claimant to spend time with his father.

  4. A further point flowing from the multiplier issue is the need to prepare for and develop alternative fall back arguments in case they are needed.

  5. The observation by Tomlinson J that marriage breakdown is the not uncommon result of caring for a disabled child may lead claimants to pursue contingent “second home” costs on the basis of a risk of breakdown at some time in the future. This may be tactical to boost the R v J damages and reduce the shortfall the approach produces against the actual purchase cost of the principal home. A number of studies have looked at the levels of marriage breakdown in families caring for disabled children. Outcomes vary but the rate of breakdown is usually reported as higher than in the normal population. However, account has to be taken of the fact that surveys do not differentiate the cause of disability and capture families other than those where damages have put in place considerable levels of support, carers, adapted accommodation which would remove many of the stressors recognised as causing marriage breakdown.[2] There is an argument that the support in place for the disabled person consequent upon a successful damages claim removes those stressors responsible for the increased rate. Perhaps there is a pointer here towards “holistic” rehabilitation and collaborative handling in that support to the claimant’s family pre-settlement could also remove the risk of breakdown with, in the light of “Manna”, the opportunity to raise a double R v J claim.

  6. As we await the Lord Chancellor’s announcement on the outcome of the review of the discount rate[3] it is worth noting that unlike many other heads of damage, a rate reduction will reduce the outcome of the R v J calculation. The percentage to be used has been pegged to the discount rate and a reduced rate reduces the amount to which the multiplier is applied. Although the multiplier becomes larger it does not make up for the reduced annual amount. Appended below is a graph which illustrates for an alternative purchase cost of £500,000 and for ages 20, 30, 40 and 50 the different R v J outcomes at each of a range of discount rates. Of course the rate may go up in which case the R v J “pot” becomes bigger. However the data illustrates that a change in the rate may drive further attempts to increase recovery under, or challenge, R v J to meet the cost of alternative accommodation. The “two homes” approach may be employed to that end and needs to be closely scrutinised.

  7. The indemnity costs order was an unwelcome finale to the case. Although the Court of Appeal is clear that negotiation activity should not be opened up for review and made subject to value judgments on the stances taken, this should not taken as a change in approach to poor conduct, refusal to negotiate or accept offers of mediation. Sanctions are still likely to flow where unreasonable refusal to negotiate has taken place – here the parties did negotiate and Part 36 was said by the Court of Appeal to be the way to deal with a party adopting a stance which may be unjustified or unwise. It is also clear that defences based on accusations of dishonesty are likely to be penalised unless fully justified on the evidence.

Appendix – illustration of R v J outcomes at various discount rates (1% to 2.5%) based on male ages 20, 30, 40, and 50 with a “purchase” cost of £500,000

Andrew, Felicity and Alexandra are members of the Severe Brain Injury Subject Matter Expert Group within BLM’s Catastrophic Injury Group.


Andrew Kerr
Partner

Felicity Lowe
Associate

Alexandra Payne
Associate
 

[1] Where there is contributory negligence or very short life expectancy – in both cases the “pot produced by the RvJ calculation would be small.

[2] Usually noted as isolation, lack of money, struggling to balance work and care, lack of support from state

[3] Subject to any impact from the ABI’s judicial review

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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Andrew Kerr

Andrew Kerr

Partner,
Manchester


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