Accommodation Claims • Wednesday 13th August
Options: • Adapt current accommodation. • Move to more suitable accommodation. • Residential care.
Purchase of a suitable home • Problem: Property an asset not an expense -windfall. • Solution: Roberts v Johnstone
Roberts v Johnstone • C compensated for loss caused by having to invest a greater amount of capital in home. • Assumed that the additional capital would earn net rate of return 2.5% per annum • Annual loss of interest on the additional capital x life expectancy of C.
R v J example: • Claimant is aged 22 when spinally injured • He is now wheelchair dependant. • His existing property worth £100,000. • He not only needs ground floor space but extra space to accommodate carers and recommended equipment. • Evidence suggests he reasonably requires bungalow at cost of £300,000. • The agreed multiplier for his life expectancy30.
R v J example • Cost of home required: £300,000 • Value of current home: £100,000 • Difference: £200,000 £200,000 x 2.5% x 30 = £150,000.
Accommodation costs overview • R v J calculation for additional tied up capital • One off costs: adaptation, moving costs etc. • Increased running costs on multiplier/multiplicand basis
Objection to capital cost • Like for like area? • Size reasonably required to meet C’s needs? • Purchase price reflect true value? • Cogent evidence required if going to attack.
Objection to capital cost continued.. • Crispin v Webster 2011: • “There is an issue and distinction between what a Claimant might understandably want or desire and what, in law, the Claimant’s reasonable needs might be………one here is looking at the difference between the perfect and the not quite so perfect but nevertheless reasonable…..it will be a matter for the trial judge to decide what the yardstick should be”.
Objection to capital cost continued.. • Sawar v Ali(1) MIB (2) • Joint statement from experts agreed cost of suitable property would be £485,000. C purchased Purbeck Lodge for £595,000. Allowed: • C and family spent a considerable time searching for suitable property • Urgent need for C to be rehoused • Purchased on advice of C’s accommodation expert
Credit to be given under R v J calculation • Credit to be given for value of existing home • If C rented, credit for rent C would have paid (capitalised and set off) • Credit for home/s would have bought but for accident
Credit to be given under R v J calculation • Roberts v Johnstone 1989 • Sawar v Ali (1) MIB (2) 2007 – shared equity • Howson v Swann 2011 – shared equity
Credit for family home? • Problem: • Disabled C buys house in which entire family live • Parents get benefit of being housed at Defendant’s expense – unfair • Former home is parents not C’s, so why should C give credit for it?
Credit for family home? • M v Leeds Health Authority 2002 PIQR Q4 – No deduction • Lewis v Royal Shrewsbury Hospitals NHS Trust 2007 – rent for former house • Iqbal v Whipps Cross University Hospital Trust – notional rent to C? • Whiten v St Georges Healthcare NHS Trust 2011 EWHC 2066-notional rent/cost of family house?
Injustice of Roberts v Johnstone • Cost of home required: £300,000 • Value of current home: £100,000 • Difference: £200,000 • £200,000 x 2.5% x 30 = £150,000. (£50k) • £200,000 x 2.5 x say 10 = £50,000 (£150k)
Injustice of Roberts v Johnstone • Law Commission Review 1999: • Concluded in most cases “inappropriate” and “leads to under compensation”. • Ministry of Justice Consultation Paper • Alternatives either unworkable/undesirable • No clear consensus on way forward
Injustice of Roberts v Johnstone • Civil Justice Council Injury Committee 2007 • Concluded “outdated” • Alternatives suggested: • Interest only mortgage funded by periodical payments or • Interest free loan • Retain option for R v J in appropriate cases
Injustice of Roberts v Johnstone • Ryan St George v Home Office 2008 • C had a significantly impaired life expectancy. • Lived in a London borough in rented accommodation • R v J produced tiny proportion of capital required. • Suitable rented accommodation found • Periodical payments for rent awarded instead of RvJ. • Wider application?
Injustice of Roberts v Johnstone • Oxborrow v West Suffolk Hospital NHS Trust 2012 • C born with quadriplegic cerebral palsy. • Life expectancy was to age 21. • Interim Payment Application - £740,000 for suitable accommodation • C sought a declaration that RvJ unsuitable • C’s deputy offered an undertaking to repay any windfall on capital sum on C’s death.
Injustice of Roberts and Johnstone • Justice Tugendhat: • “..considerable force to the Claimant’s submissions” • Not appropriate for a court of 1st instance to deal with the issue on an interim payment application. • Did not need to specifically address the issue as could award the interim payment sought under the test in Eelesin any event.
Conclusion • Despite problems, Roberts v Johnstone remains good law. • Change? • C lawyers waiting for “the right case”.