BE Girl of seven Tetraplegic, but functionally very close to a high paraplegic Settled for a lump sum of 2.8 million in 2009
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1 BE Girl of seven Tetraplegic, but functionally very close to a high paraplegic Settled for a lump sum of 2.8 million in 2009 The Claimant was born in 1994 and so was 15 when her claim was settled. She was seven years old when she sustained catastrophic spinal injury in a road traffic accident in Sadly, her father was killed in the accident. Proceedings were issued in 2004 and included a claim pursuant to the Fatal Accidents Act 1976 and personal injury claims for the Claimant s mother and brother in addition to the Claimant s claim for personal injury. Liability was not disputed. The Court directed a joint settlement meeting which took place in January The outcome of that meeting was an agreement between the parties, subject to the approval of the Court, to settle the claim on a full and final lump sum basis for a gross sum of 2,800,000. A Schedule of Loss had been prepared for the settlement meeting, which put the total value of the claim at 3,262,685. This was not a final Schedule. During the negotiations, we had in mind the possibility that some heads of claim might increase once the evidence was complete. We also had to consider carefully whether it was appropriate to seek to finalise the claim at this stage. It was almost eight-and-a-half years since the accident and we acknowledged that the Defendant s insurers had a legitimate interest in seeking to conclude the matter. However, there remained some uncertainty in relation to the Claimant s long-term needs. In 2005, Mr Brian Gardner, spinal injuries consultant, who was instructed on behalf of the Claimant, suggested that ideally settlement should be postponed until the Claimant reached the age of 18; he was less optimistic about the Claimant s future independence than Mr Ravichandran (instructed on behalf of the Defendant). We took the view that settlement could only be contemplated if the Defendant s insurers made an offer that was sufficiently
2 generous as to mean that the risks associated with the uncertainty were not being borne by the Claimant. The Claimant had not yet obtained financial advice in relation to the form of the award. We anticipated that a financial adviser would probably say that it would be preferable to have a periodical payments order linked to an appropriate earnings index in respect of future care costs if the choice was between that and an equivalent lump sum assessed on a conventional basis. However, at the outset of the negotiations, the Defendants indicated that they would not agree to a periodical payments order and would do all they could to avoid one. This gave rise to the possibility that they would be prepared to buy off the prospect of a periodical payments order with a more generous lump sum award. It also meant that the Claimant would have had to proceed to trial (with all issues potentially remaining open) in order to secure a PPO. We advised that financial advice should be obtained and should be placed before the Court for the Approval Hearing. Given the Defendants stance, the negotiations were directed towards a lump sum valuation. Together with the Claimant s mother and step-father and our experienced instructing solicitor, we worked through the Schedule identifying areas where compromise might reasonably be considered. The Schedule put the claim at its reasonable highest on the basis of the current evidence. We reworked the figures taking a realistically critical view, trying to predict what a judge would do if faced with assessment of damages at this stage. The results of this exercise are detailed below. PAIN, SUFFERING AND LOSS OF AMENITY Although the Claimant is technically tetraplegic, Mr Gardner said Functionally she is very close to a high paraplegic. We thought that this took her outside the bracket for tetraplegia within the JSB Guidelines ( 206,750 to 257,750). The schedule adopted a figure of 200,000. However, we acknowledged that the claimant might have received an award equivalent to the top of the paraplegia bracket ( 140,000 to 181,500). We allowed 180,000 plus interest.
3 Care PAST LOSS 36,984 Case management 11,251 Transport 26,000 Physio 3,920 Equipment 12,644 Accommodation FUTURE LOSS Care (including child care) 123, ,622 Case management 51,583 Equipment Medical and therapy costs Physio 161, ,788 15,152
4 Future earnings 180,000 Accommodation 345,346 Transport 133,720 Technology Holidays 60, ,750 Miscellaneous 27,100 Overall valuation Our reductions to the various heads reduced the total to 2,238,734. We did not regard this as representing a final settlement position. However, we did feel that it reflected the lowest possible end of the range of awards that the Court might make. In considering a settlement valuation, we also had in mind the following: (i) after completion of the evidence, some heads of claim might increase in value; (ii) a periodical payments order might well represent the most appropriate way to secure the Claimant s future care needs; (iii) there was a claim for Provisional Damages in respect of the risk of syringomyelia. The Defendant s insurers had made it very clear that they wished to reach a full and final settlement on a lump sum basis. Any such settlement had to take account of these factors, all of which had to be carefully weighed in the balance alongside the amount of any offer.
5 We considered the prospects of the claim increasing in value after completion of the evidence. On any basis, the claim was likely to be resolved long before the Claimant had tried living independently (currently predicted to be around her mid-20 s). The family s preference for managing with little privately paid provision was probably unlikely to change significantly in the meantime. The accommodation situation will remain the same. We did give careful consideration to the claims for loss of earnings and future care. We did not think a delay would significantly change the claim for loss of earnings. If anything, the Claimant might demonstrate progress that would tend to increase the allowance for residual earning capacity. The care position was somewhat uncertain, but on balance we thought we could make reasonable predictions for the future and that the claim was unlikely to be taken to a wholly different level by any new evidence. We considered that the Defendants would have to buy off the claim for provisional damages. The Defendants first offer was 2,675,000 gross of interim payments. This was appreciably higher than the lowest end of the range identified above and we considered it to be a sensible offer. It was our opinion that this sum made adequate allowance for the uncertainty resulting from the evidence not being fully finalised and for the risk of syringomyelia. We had to consider whether at that sort of level it was appropriate for the Claimant to forego periodical payments and to accept a lump sum. The Defendant s insurers were not going to offer periodical payments. Therefore, if we had refused the offer, we faced a risk that the claim would proceed to trial and that the awards under the various heads would equate to a significantly lower overall assessment with the Claimant being left to fight for periodical payments. The Claimant s litigation friend was inclined towards accepting a generous lump sum offer rather than running this risk. Indeed, we believed that she had a general preference for a lump sum to allow flexible management of future needs. We advised that if the Defendants
6 increased the offer to 2,800,000 such sum would be sufficiently generous that we would feel able to positively support the idea of a lump sum. The Claimant s mother agreed and we accordingly put forward a counter-offer on that basis which the Defendants accepted. BILL BRAITHWAITE QC and AMANDA YIP were instructed by Andrew Greenwood of Emsleys 3 rd July
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