PRACTICAL GUIDE to RUNNING CEREBRAL PALSY and BRAIN INJURY CASES (Some Random Thoughts) Christopher Sharp QC, St John s Chambers

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1 Cerebral Palsy & Brain Injury Cases: Ensuring you do the best for your client 11 November 2010, Mercure Holland House Hotel, Bristol PRACTICAL GUIDE to RUNNING CEREBRAL PALSY and BRAIN INJURY CASES (Some Random Thoughts) Christopher Sharp QC, St John s Chambers NOTES A Trial preparation/trial. 1. When preparing for this talk and in discussion with litigation solicitors acting in this field, what came as a surprise was the very few contested cases that the individual solicitor will actually see brought to trial. What follows therefore may seem very basic to some but from a barrister s (and part time judge s) practical experience it covers areas that are frequently unrecognised by solicitors, especially young solicitors, whose exposure to the court room is (because of the way the system operates) limited Page 1 of 32

2 2. The trial process, and the period leading to it, is and must be a team effort. The forensic presentation of the case is or may be a very different process from the gathering of the evidence to make the case. The advocate must consider how the case will develop before the judge, what the issues are likely to be and how the other side are likely to attack the case you are presenting. The advocate will have that forensic experience and must be involved from an early stage so that (s)he can advise on evidence as it is gathered, with an eye on the trial 3. Let the advocate see the draft experts reports and comment on them and, of especial importance in clinical negligence cases, ensure that there is provision for consultation with the experts before the reports are disclosed, so that ambiguities can be ironed out and weak points identified. The team approach includes the experts in these cases so try and get all experts whose evidence is likely to impinge on the others to attend one meeting. 4. Schedules form the basis of the quantum claim and must correlate with the evidence to be called, so it is best if the advocate either drafts or has the opportunity to review the schedules in good time to remedy any gaps in the supporting evidence and to ensure that all the evidence interlocks. 5. Witness statements: CPR 32.5(2) provides that the statement shall stand as the evidence in chief unless the court orders otherwise. It is therefore Page 2 of 32

3 important to ensure all relevant material is included, structured in a logical (usually chronological) way, and includes the personal detail which the claimant and her carers want the judge to understand. It may be quite a long document but that may be appropriate to convey what is relevant (and assuming it is not to be found elsewhere in medical or care reports). Nevertheless bear in mind that the Queens Bench Guide (White Book vol 2, section 1B) at para observes: (3) a witness statement should be as concise as the circumstances allow, inadmissible or irrelevant material should not be included, and (4) the cost of preparation of an over-elaborate witness statement may not be allowed. Again the advocate must have the opportunity before exchange of witness statements to review the material. 6. Bundles and Medical Records: It is impossible to overemphasize the crucial importance to the efficient presentation of a case of well organised bundles, delivered and agreed in good time, logically prepared, properly paginated, and each party (and the judge and witnesses) having exactly the same material in the same place. This may seem obvious but the sad reality is that day after day in the courts, bundles are defective and the presentation of the case suffers or unnecessary delay follows. Presentation is a crucial part of any case. 7. The QB Guide at para states: Page 3 of 32

4 The efficient preparation of bundles is very important. Where bundles have been properly prepared, the claim will be easier to understand and present, and time and costs are likely to be saved. Where documents are copied unnecessarily or bundled incompetently, the costs may be disallowed. Paragraph 3 of the Part 39 Practice Direction sets out in full the requirements for compiling bundles of documents for hearings or trial. Para adds: The trial bundle must be filed not more than 7 and not less than 3 days before the start of the trial.... The contents of the trial bundle should be agreed where possible, and it should be made clear whether in addition, they are agreeing that the documents in the bundle are authentic even if not previously disclosed and are evidence of the facts stated in them even if a notice under the Civil Evidence Act 1995 has not been served. If the trial/hearing bundles are extensive and either party wishes the judge to read certain documents in advance of the hearing, a reading list should be provided. This is all important in clinical negligence and serious injury cases where a substantial part of the bundles will be medical notes, whose provenance and status must be established. Para 27 of Practice Direction to CPR 32 provides: 27.2 All documents contained in bundles which have been agreed for use at a hearing shall be admissible at that hearing as evidence of their contents, unless (1) the court orders otherwise; or (2) a party gives written notice of objection to the admissibility of particular documents. But beware of the trap that what is recorded in (eg) GP notes has only limited admissibility as Page 4 of 32

5 evidence of what a patient is reported to have said. In respect of medical notes and scans: ensure that these are in a logical order. Almost always this will be chronological but where a patient is moved from hospital to hospital (or from hospital A to hospital B and then back to A) it will be important to separate out the hospitals and to identify separate stays in any one hospital. Best practice is to create a paginated and fully indexed medical records bundle at an early stage and ensure that each party and each expert has a matching set so that all references are common and can be easily found both in court but also before hand. The standard direction in clinical negligence cases in London provides: Legible copies of the medical records of the [Claimant or Deceased or Claimant's Mother etc] are to be placed in a separate paginated bundle at the earliest opportunity by the Claimant's Solicitors and kept up to date. All references to medical notes in any report are to be made by reference to the pages in that bundle. All reports coming into existence for the purpose of the case disclosed by any party are to be placed in a separate paginated bundle at the earliest opportunity by the Claimant's Solicitors and kept up to date. Upon reports being added to such bundle the Claimants are to serve a revised index to such bundle upon all other parties. All references to such reports in subsequent reports shall include a reference to the relevant pages in that bundle. When you get to trial brain scans and similar need to be available to the Court, preferably on a large screen, so that neuro-radiologists can Page 5 of 32

6 demonstrate relevant issues, and if an expert is giving evidence by video-link it is essential a) that they have a fully paginated bundle which is the same as the one being used in court; and b) that they have the means to refer to aspects of the scan so that the judge and parties in court can see (this can be a challenge and is a good reason for not agreeing to the video-links). Liaise with the experts ahead of the hearing to see if they need any such facilities, if this has not already been covered in pre-hearing conferences. 7. Skeleton arguments: The QB Guide gives the following direction: Lists of authorities for use at trial or at substantial hearings before a Judge should be provided to the usher by 9.00am on the first day of the hearing. For other applications before a Judge, or applications before a Master, copies of the authorities should be included in the bundle or in a separate bundle. [Outside London you cannot rely on the Court having the authorities, especially the specialist medical law reports and professional negligence reports - bring your own and ensure the other side have copies] For trial and most hearings before a Judge, and substantial hearings before a Master, a chronology, a list of the persons involved and a list of the issues should be prepared and filed with the skeleton argument. A chronology should be noncontentious and agreed with the other parties if possible. If there is a material dispute about any event stated in the chronology, that should be stated. [Obviously the same applies in District Registries] Page 6 of 32

7 Skeleton arguments should be prepared, filed and served; (1) for trials, not less than 2 days before the trial in the Listing Office, and (2) for substantial applications or appeals, not later than 1 day before the hearing in the Listing Office and, where the Master has requested papers in advance of the hearing, in the Masters' Support Unit Room E16 or directly with the Master. Parties should avoid handing skeleton arguments to the other party at the door of the court even for less substantial hearings, so that each party has time to consider the other party's case. [And again obviously the same applies in District Registries. However, while you can put your faith in e-filing, check it happened and ensure your opponents have received their copy as a judge there is nothing more annoying than receiving a skeleton argument at for with an essential reading list of 1 hour s material] A skeleton argument should; (1) concisely summarise the party's submissions in relation to each of the issues, (2) cite the main authorities relied on, which may be attached, (3) contain a reading list and an estimate of the time it will take the Judge to read, (4) be as brief as the issues allow and not normally be longer than 20 pages of double-spaced A4 paper, (5) be divided into numbered paragraphs and paged consecutively, (6) avoid formality and use understandable abbreviations, and (7) identify any core documents which it would be helpful to read beforehand. [For counsel to be able to comply with these directions it is important to brief in time ideally at least 14 days before trial] Page 7 of 32

8 8. Above all (and no apology for repetition) liaise with the advocate and ensure (s)he has adequate time to advise on any last minute evidential issues and for them to be addressed, and so that (s)he has time to comply with the Practice Directions B. The role of financial advice since Thompstone 1 1. The decisions in Thompstone (in respect of care costs) and Sarwar v Ali and MIB 2 (in respect of earnings) applied the provisions of s.2(9) of the Damages Act 1996 to disapply or modify the effect of s.2(8) which makes the RPI the default basis for indexation of a PPO. Indexation, of course, is the core of the attraction of periodical payments, but the limitation to the RPI was a significant disadvantage where cost inflation (usually earnings) was likely to outstrip retail prices. It is a statistical fact that earnings have increased more quickly than prices. Between 1963 and 2003 the ONS figures show earnings increased at an average of 2% pa above RPI. Nursing and care costs tend to rise more quickly still. Manifestly where the principal cost to be met by a damages claim is the cost of care which will obviously reflect what the carers are paid, an award at to-day s values will rapidly fall behind the real cost even if indexed at RPI. After 20 years, with a differential of 2% pa the award will only meet 2/3 of the cost. The situation plainly gets worse as life expectancy increases. To be able to employ a different index is 1 Tameside and Glossop Acute Services MHS Trust v Thompstone [2008] PIQR Q10, [2008] 2 All ER [2007] EWHC 1255 Page 8 of 32

9 therefore essential to achieve the objective of 100% recovery and to ensure that costs arising from the tort are fully met. 2. While the battle to enable the courts to apply an index other than RPI has now been fought and won, there may still be cases to be fought as to the appropriate index to apply in particular cases. For instance there is an argument developing over ways of overcoming the problems raised by the Roberts v Johnstone calculation which (especially in cases with low life expectancy) can fall hopelessly short of making adequate provision for the acquisition of appropriate accommodation. A PPO with an index linked to the mortgage rate may be one way forward and detailed expert financial advice will be needed to ensure this is correctly structured and argued. 3. An IFA (and perhaps also an employment expert) will also be needed to calculate the appropriate centile of ASHE 6115 which is applicable for the particular care regime. It usually falls within the 70 th to 80 th centile and usually the higher the rate of pay the higher the centile, but it is not necessarily the case that the higher rates are applicable in larger conurbations. When a claimant lives in the heart of the country it is frequently more difficult to recruit and retain appropriately competent care workers and so higher rates may need to be paid. The case manager or nursing care expert can advise on the rates that have to be paid. But the IFA can then assess these against the ASHE data to fix the centile. Page 9 of 32

10 4. Similarly, if a future loss of earnings claim is being dealt with on the basis of a PPO, the probable index will be the relevant ASHE category at its median level, but the IFA (perhaps with the assistance of an employment expert) can advise as to the appropriate level having regard to the claimant s pre-accident history and probable future career path but for the accident. 5. Turning to the PPO itself, a glance at the mathematical formulae in the schedule to a periodical payment order 3 will demonstrate the complexity of the calculations that have to be applied to ensure not only the basic indexing, but also the adjustments that may be necessary in the event of reclassification or revision of the index used 4. In my experience the negotiation of these schedules is complex and hard fought and it is essential to have available an experienced IFA and/or an accountant (and some are both), with real experience of catastrophic personal injury claims and periodical payments orders to whom one can refer the computations and proposals to ensure they work, and that they are fair. 6. It is essential that you get someone to check that you have the correct values entered in the formulae, that you have referred back to the correct year s data, that you have got the date of the first uplift correct and so on. If you get the wrong date by a year that will affect your base 3 see eg the model NHSLA order which was provided as an appendix to Sir Christopher Holland s judgment approving it in the Thompstone case in December This is not a wholly academic possibility for instance following the Coalition Government s emergency budget, the statutory revaluation of deferred pensions and increases to pensions in payment for defined benefit (final salary) schemes is to change from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI). New public service pension valuations are already being published (eg the fire fighters pension) Page 10 of 32

11 value which will then be magnified over the life time of the claimant so that it can make tens of thousands of pounds difference. Similarly it makes a difference whether the periodical payments are paid annually or quarterly (or by reference to some other period), so check the implications before agreeing the periodicity. 7. The IFA will also be able to advise on the post settlement investment risks and the investment strategy 5 which will best meet the particular claimant s needs and run practical examples to demonstrate whether a PPO or a lump sum or a mixture of the two is most appropriate in the particular case, when the needs that have to be met have been identified. The IFA will be able to feed in to the model different discount rates, different inflation assumptions and identify the sums required. The IFA can advise on the benefit of the security and guaranteed continuity of a PPO against the loss of opportunity (but heightened risk) of self investment of a lump sum award. 8. This is all essential if the parties (and especially the Claimant) are to comply with their obligations under the Rules. CPR 41.7 provides: When considering (a) its indication as to whether periodical payments or a lump sum is likely to be the more appropriate form for all or part of an award of damages under rule 41.6; or (b) whether to make an order under section 2(1)(a) of the 1996 Act, 5 as a lawyer you will be well advised to steer well clear of this, while your client will need informed guidance and protection (to say nothing of your insurance policy exposure!) Page 11 of 32

12 the court shall have regard to all the circumstances of the case and in particular the form of award which best meets the claimant's needs, having regard to the factors set out in Practice Direction 41B. 9. The Practice Direction provides: 1. The factors which the court shall have regard to under rule 41.7 include (1) the scale of the annual payments taking into account any deduction for contributory negligence; (2) the form of award preferred by the claimant including (a) the reasons for the claimant's preference; and (b) the nature of any financial advice received by the claimant when considering the form of award; and (3) the form of award preferred by the defendant including the reasons for the defendant's preference. 10. It follows that it will be necessary to have the financial advice well in advance of the final hearing. Indeed CPR 41.5 provides for the parties to set out their case in their statements of case and if they fail so to do the court may direct that they do. In practice it is usually too soon to tell if a PPO will be appropriate at that stage, but it is an indication that the involvement of an IFA should not be left to the last moment. Nevertheless the FSA (Conduct of Business Sourcebook) does stress that any financial advice must be tailored to the Page 12 of 32

13 individual s specific circumstances and needs and until the court has assessed these and made its findings there is an argument that best advice cannot be given and that an adjournment should be sought for an IFA to then carry out the necessary work with all the information to hand. 11. A further area in which a financial advisor will be able to assist is in establishing if the insurer is able to satisfy the security requirements under s.2(3) of the Act. s.2(3) and (4) provide for the source of the payments to be secure (3) A court may not make an order for periodical payments unless satisfied that the continuity of payment under the order is reasonably secure. (4) For the purpose of subsection (3) the continuity of payment under an order is reasonably secure if (a) it is protected by a guarantee given under section 6 of or the Schedule to this Act, (b) it is protected by a scheme under section 213 of the Financial Services and Markets Act 2000 (compensation) (whether or not as modified by section 4 of this Act), or (c) the source of payment is a government or health service body. 12. Subsection (5) provides for the order to make provision for security and continuity of payment. There may be significant problems in satisfying a court as to security where the paying party is not the NHSLA and does not fit into s.2(4)(a) or (c), as Page 13 of 32

14 to which see further below. Note that a Local Authority is not included under (c) above and the security of payment by such a body must be investigated. 13. A particular problem is, or may well be, meeting the requirement to satisfy the court as to the security of the payments where the defendant is not a government department. Unless the party making payment is deemed secure this may be a problem. Section 2(4) identifies a number of sources that are deemed reasonably secure 14. Other providers may be able to satisfy the Court they are secure, but some claimants who may not want periodical payments, whereas the insurers may be seeking such an order, may argue (especially in the current economic climate) that an insurer is not secure, so as to avoid the imposition of a periodical payments order. This is a potential problem for even authorised insurers (that is, authorised for Financial Services Authority purposes, and so attracting protection under s.213 Financial Services and Markets Act 2000 and the Financial Services Compensation Scheme) where the periodical payments are indexed other than against RPI. Following Thompstone many periodical payments orders will be made in respect of care costs by reference to earning indices, especially ASHE 6115, but to satisfy FSA requirements the insurers must be able to close match all future liabilities to make the indexed periodical payments by the purchase of government securities (gilts). These gilts are however RPI-linked (if available at all) and not Page 14 of 32

15 linked to any other index so that strictly speaking there can be no close matching. Further, in the case of periodical payments likely to stretch beyond 2060, there are no gilts maturing after that date currently in issue. 15. It follows that unless or until the market generates some new products at least some insurers are unlikely to be able to comply with the requirements of the FSA and if challenged the courts are unlikely to find that they represent a reasonably secure source. 16. If an insurer is not authorised, and therefore does not fall within s.2(4)(b), they may have to purchase an annuity in the market which (i) will be likely to be very expensive with annuity rates being as low as they are, and (ii) may not be available with the necessary indexation. These problems may provide an argument for such an insurer to avoid a periodical payments order. 17. These issues do not affect the situation where the defendant funding the payments is a government or health service body as they are deemed secure by s.2(4)(c). A self funding general insurer may well also be able to satisfy the court of its capital resources, but this may require commitment of significant reserves. 18. The financial advisor will be able to investigate the status of the insurer or party liable for the periodic payments. This may be particularly important with some foreign insurers and perhaps some syndicates at Lloyds 19. The financial advisor will also be able to assist in comparing offers. If an insurer is offering a lump Page 15 of 32

16 sum how does this compare with the PPO option in real terms and values or vice versa? This may be important both to deciding whether to accept (or make) an offer but also in respect of comparing an offer with an outcome for the purposes of Part 36 offers. 20. Given the provisions of the CPR 41.6 and 7 and 41.5 and Practice Direction 41B, there should be little problem over the costs of an IFA being allowed at an early stage. Indeed there may be merit in some assistance being sought in the research preparatory to the drafting of the detailed Schedule of Loss. Moreover the essential role of an IFA was underlined in Thompstone by the Court of Appeal: It is clear that, in a substantial case, the claimant will usually instruct and call an independent financial advisor (IFA) to report on the form of order which he or she considers will best meet the claimant s needs. Even if the parties agree on all issues, such a report is likely to be of assistance to the judge who is asked to approve the form of the order. In practice, if the claimant is advised by an experienced and responsible expert, it is likely that great weight will be given to what the expert advises. And of course see the terms of PD 41B 1(2)(b) 6. On the other hand it will be rare for a defendant to 6 1. The factors which the court shall have regard to under rule 41.7 include (1) the scale of the annual payments taking into account any deduction for contributory negligence; (2) the form of award preferred by the claimant including Page 16 of 32

17 call such an expert to demonstrate that the claimant s preferred form of order does not best meet his needs 7, and the court indicated that a judge will need to be persuaded that the point clearly arises before he will allow the evidence of a second IFA to be adduced. Additionally it should be noted that in Cobham Hire v Eeles the CA observed that it would be an exceptional case where an IFA s evidence would be adduced on an interim payment application. 21. The IFA should also be able to advise on the setting up of a trust to protect the claimant (from gold diggers, and also to retain entitlement to statutory benefits), and on the early setting up of trust or deputyship bank accounts (to deal, for instance, with interim payments). He or she can also advise (independently) on appropriate investment vehicles (many claimants may be advised by their banks or building societies to invest in inappropriate products). 22. In short the financial advisor will be an important member of the team C. Involvement of the Court of Protection - when necessary/when not/what evidence is required and for what purpose. (a) the reasons for the claimant's preference; and (b) the nature of any financial advice received by the claimant when considering the form of award; and (3) the form of award preferred by the defendant including the reasons for the defendant's preference. 7 In RH v United Bristol Healthcare NHS Trust [2007] EWHC 1441 (QB) Mackay J observed that given that the IFA will have taken everything into account It is not, therefore, open to the Defendant to challenge this proposal, or put forward a counter proposal, merely on the basis that there is another way of arranging the award that suits its own interests better. Its role in this exercise is a very limited one, and in view of the respective positions of the IFA experts in this particular case, it does not come into play. Page 17 of 32

18 1. The subject of the practicalities of running a case with a client who lacks capacity could probably occupy the better part of half a day, let alone a part of a 45 minute slot, and so what follows is simply a few pointers and aide-memoires 2. The first essential (if trite) observation is that no litigant who lacks capacity (a protected party) can proceed to litigate without a litigation friend (CPR 21.2). This is not the same as (although it can be) a deputy who has been appointed by the Court of Protection (CoP) 8. A litigation friend can be appointed by the CoP but does not have to be, provided (s)he can complete the Form N235 Certificate of Suitability and is competent to conduct the litigation, can do so fairly and has no conflict of interest. The litigation friend has also to undertake to pay any costs order which the protected party is ordered to pay. The litigation friend may recover these costs from the protected party s assets and may be able (on application to the court) to recover expenses reasonably incurred from monies recovered on behalf of the protected party. 3. A step taken before a child or protected party has a litigation friend shall be of no effect, unless the court otherwise orders: r.21.3(4). That rule however allows the court to regularise the position retrospectively and provided everyone has acted in good faith and there has been no 8 CPR 21.4(2) Page 18 of 32

19 manifest disadvantage to the party subsequently found to have been a protected party at the relevant time it is most unlikely that the court would refuse to regularise the position: Nevertheless it is relevant to recall that under the old law (and no doubt still) a solicitor who commenced an action on behalf of a party who should have had a litigation friend exposed himself to personal liability to an order for costs. 4. Similarly no settlement will be binding and no acceptance of money paid into court, or of any Part 36 offer, is valid unless or until the court has given formal approval. This includes (importantly) a voluntary interim payment. Application must therefore always be made to the court. The court will be the County or High Court and not the CoP. The old practice of applying to the Master of the Court of Protection for informal approval is therefore no longer necessary or appropriate. For procedure, see further below. 5. Capacity: when should capacity be an issue? Apart from minors the issue concerns those who have a mental incapacity. This is defined in s.2 of the Mental Capacity Act 2005 in terms which are specific: a. to the individual; b. to the issue in question; and c. to the time at which the issue has to be addressed The section provides that a person lacks capacity in relation to a matter if at the material time he is Page 19 of 32

20 unable to make a decision for himself in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain. 6. It follows that it will be essential to have the evidence of a suitably qualified expert 9 to advise on each of these elements, and the burden of proof will be upon the party who alleges the incapacity (s.1 of the 2005 Act includes among its basic principles (qv) that a person must be assumed to have capacity unless it is established that he lacks capacity). 7. Manifestly it will be necessary to resolve this issue before litigation starts but if it becomes apparent during the course of the litigation that the client has or may have lost (or never had) capacity then no further step may be taken until a litigation friend has been appointed although pending the appointment of a litigation friend, further steps in the proceedings may be taken with the permission of the court (CPR 21.3(3)) and steps already taken may have to be approved in retrospect (supra). 8. The test for capacity is further developed in s.3: a person is unable to make a decision for himself if he is unable (a) to understand the information relevant to the decision, 9 usually neuro-psychologist or psychiatrist (possibly a neurologist). There is a book published jointly by the BMA and the Law Society Assessing Mental Capacity: A Practical Guide for Doctors and Lawyers (3 rd Edition, 2009) available to assist Page 20 of 32

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