Clinical decisions – a recent history

Heil v Rankin & Ors Court of Appeal, 23 March 2000

This was an eagerly-awaited case, as the Law Commission in Report No 257 had recommended that the level of damages for non-pecuniary loss for personal injuries (PI) should be increased where awards for the non-pecuniary loss for the injury alone would be more than £3,000. The recommendation made was for an increase by a factor of 1.5-2.

The Court of Appeal heard eight cases jointly in order to express its views on the recommendations and to consider the submissions of insurers the Motor Insurance Bureau and the National Health Service.

The conclusion of the court was that in the cases of the most catastrophic injuries, the conventional awards were in need of adjustment and should be increased by around 33 per cent. However, in cases where conventional awards for non-pecuniary loss were below £10,000, no change should be made. Between the highest level awards and those where no adjustment is required, the extent of the adjustment should taper downwards. (In light of this, the Judicial Studies Board (JSB) has published a fifth edition of its 'Guidelines for the Assessment of General Damages in Personal Injury Cases'.)

The court warned that the exercise upon which they embarked was not one that should be undertaken again unless there is real reason to think the level of awards are significantly out of line with awards already made, for example in other member states of EU and European Free Trade Association (EFTA) countries. As for future updating, the court said that the JSB guidelines, updated by the Retail Price Index, should be sufficient to find the appropriate award.

Warren v Northern General Hospital Court of Appeal, 4 April 2000

Luke Warren was born on 14 November 1991 at Northern General Hospital, Sheffield. He suffered from severe postnatal asphyxia, resulting in severe disability due to cerebral palsy. Liability was admitted in February 1999. Trowers & Hamlins was instructed by the respondent, and Irwin Mitchell by the claimant.

Damages for pain, suffering and loss of amenity was assessed at £135,000, but increased on appeal to £175,000 (this was one of the eight cases heard by the Court of Appeal, along with Heil v Rankin). The fund for investment to cover the future cost of care for Luke Warren was £2.5m. The issue for the court was whether it could, and should, reduce the guideline discount rate of three per cent, which was set by the House of Lords in Wells v Wells [1999], because of an alteration in economic circumstances since that decision, and whether the impact of taxation on the fund should be taken into account.

Lord Justices Stuart-Smith, Mummery and Tuckey held that they should not depart from the opinion of the House of Lords, expressed clearly in Wells v Wells. The majority view there was that there should be no change until the Lord Chancellor sets a new rate under Section 1 of the Damages Act 1996. The court went on to state that even if it was open to them changing the discount rate, the reduction in the Index Linked Government Securities return rate, from a gross of 3.53 per cent at the time Wells was decided, to a gross of 2.58 per cent over the three-year period to trial, was not a sufficient change of economic circumstances to justify a change in the discount rate. Lord Justice Stuart-Smith explained that the need for certainty to facilitate settlements and the undesirability of extensive evidence from accountants, actuaries or economists with a view to persuading courts to change discount rates, militates strongly against any court seeking to do so before the Lord Chancellor has acted under the 1996 act. It was further held that the discount rate should not be lowered, nor the multiplier increased to take account of the impact of taxation on the award to the claimant. The Lord Chancellor has still not set a rate.

Lawrence v Chief Constable of StaffordshireCourt of Appeal, case heard 29 June 2000

The Court of Appeal was asked in this case to increase the appropriate guideline rate of interest for damages for pain, suffering and loss of amenity from two to three per cent, to be in line with the discount rate set down in Wells v Wells. It refused.

By Section 69 of the County Courts Act (and Section 35a of the Supreme Court Act 1981), interest will be awarded on damages for PI or death where the damages exceed £200. The rate of interest is "such rate as the court thinks fit", and interest is intended to compensate the claimant for the damages being awarded at the date of judgment when the claimant was, or might have been, notionally entitled to those damages earlier.

The two per cent rate was set by the court (Master of Rolls Lord Denning giving the leading judgment), in the case of Birkett v Hayes [1982]. The House of Lords refused to interfere with this rate in Wright v British Railways Board [1983] and the court saw no reason to interfere with it in the absence of a powerful economic case being made out. There is, according to Lord Justice May, no reason why the guideline rate of return to be used for calculations for future loss should be the same as the guideline rate of interest on general damages for pain, suffering and loss of amenity, as these rates serve different purposes. As in the Warren case, the court was concerned that guideline rates of interest shoul

d be predictable to facilitate settlements and inexpensive litigation. Lord Justice May pointed out that there was clearly an arguable case in Warren to reduce the net rate of return from three per cent, but correspondingly there could be no compelling case to increase the rate of interest on general damages from two per cent.

Wadey v Surrey County Council; Wisely v John Fulton (Plumbers) Ltd

House of Lords, The Times Law Reports, 7 April 2000

Mr Wadey, represented by John Foy QC and Charles Pugh, was awarded damages for PI, loss and damage suffered as a result of injuries sustained through his employment with the defendant as a firefighter. Mr Justice Simpson sitting at Wandsworth County Court, in accordance with Section 17 of the 1997 act, included in the sum of special damages the claimant's past loss of wages without deducting benefits that the claimant had received in the relevant period. When he assessed interest, however, he deducted those benefits. The Court of Appeal (Lord Justices Brown, Otton and Schiemann) held that the judge had erred in deducting benefits before calculating interest. The defendants appealed to the House of Lords against this decision.

(The same issue arose in the Scottish case of Wisely, and the cases were heard together to ensure a common approach to this question in both England and Scotland.)

The House of Lords (full judgments being given by Lords Hope, Clyde and Millett) held that a claimant in a PI action who had received social security benefits which would be repayable to the Secretary of State by the tort-feasor, pursuant to the Social Security (Recovery of Benefits) Act 1997, was entitled to recover interest on all his damages for past loss of earnings. Accordingly, they dismissed the defendant's appeals. Lord Millett held that the claimant's apparent double recovery of interest was due to the fact that the Secretary of State was content to be repaid without interest, but this was a matter between the Secretary of State who paid the benefits, and the claimant who received them. It did not affect the amount of the tort-feasor's liability, although it reduced the amount he would otherwise have been liable to pay to the claimant.

Sniezek v Bundy Court of Appeal, 7 July 2000

Mr Sniezek suffered from sore throats from around 1984, which he attributed to the chemicals he had worked with as a cleaner. By 1988 he was suffering from severe symptoms, but was told by numerous doctors between 1989 and 1992 that there was no abnormality with his throat, and in 1992 a consultant physician instructed by the claimant's solicitors attributed Mr Sniezek's symptoms to hypochondria. However, later in 1992 a hospital doctor attributed the burning sensation Mr Sneizek complained of in his throat to the chemicals with which he had worked. Counsel advised in May 1994 that there was a factual and contemporaneous link between exposure and symptoms, but further information was requested in relation to the chemicals. Answers to these queries were finally provided in 1997, and proceedings were issued in September 1998.

The question which exercised the Court of Appeal in this case was the date of the claimant's knowledge that the injury from which he suffered was significant and that it was attributable, wholly or in part, to the acts or omissions of the defendant (Section 14, Limitation Act 1980).

Drawing on the previous decisions in the cases of Nash v Eli Lily [1993], Spargo v North Essex District Health Authority [1997] and O'Driscoll v Dudley Health Authority [1998], Judge Bell stated that there is a distinction between a claimant who has a firm belief that they have a significant injury attributable to their working conditions (a belief they retain whatever contrary advice received), and a claimant who believes they may have a significant injury attributable to their working conditions but is not sure, and feels it is necessary to seek expert advice on those questions. The former has knowledge for the purposes of Section 14, the latter does not. Mr Sniezek was held to fall within the former category and was therefore fixed with a date of knowledge of 1989 when he first consulted a medical expert. (The Court of Appeal went on to hold that it was just and equitable to allow this claim to proceed, and exercised its discretion pursuant to Section 33 of the Limitation Act 1980.)

Lord Justice Brown agreed with the judgment of Judge Bell, but also stated that his judgment in Ali v Courtaulds [1999], was incorrect in its reasoning, as it proceeded on the footing that Mr Ali had to know that his deafness actually "was" noise induced, rather than merely knowing that this was a real possibility, before he could be said to have actual knowledge.

Matthais Kelly QC and Rebecca Tuck are both tenants at Old Square Chambers.