Landmark case: PI claimant wins £800,000 for special accommodation

The Court of Appeal has rewritten the approach to personal injury compensation for capital costs in relation to special accommodation, to reflect ‘modern conditions’.

The outcome is that the claimant, who was awarded zero compensation for a new property by the trial judge, has now been awarded £800,000 to purchase special accommodation.

Swift v Carpenter [2020] EWCA Civ 1295 was a test case on the issue of calculating damages for special accommodation in serious cases.

The claimant had been seriously injured in a road traffic accident and had her leg amputated below the knee.

She won more than £4m in compensation but appealed the decision not to award capital costs of accommodation on the basis of the appeal court’s guidance in Roberts v Johnstone (1989) – when the personal injury discount rate was 2.5% (it is now -0.25%).

That decision produced an increasingly unsatisfactory and unfair situation which, the appeal court said, was no longer capable of delivering fair and reasonable compensation to a claimant.

The appeal judges ruled that claimants are entitled to fair and reasonable compensation to purchase such a property.

Lord Justice Irwin said: “In my view, [Roberts v Johnstone] cannot be regarded as full, fair or reasonable compensation to award nil damages in respect of a large established need, on the basis that, if all the relevant predictions hold good over many decades to come, there will arise a windfall to a claimant’s estate.  

“Nor is it fair or reasonable compensation to follow the Roberts v Johnstone approach on the basis that if all the same predictions hold good, there will in addition be in existence a suitable market to enable a claimant, by then elderly or aged, to release equity at a reasonable cost and without unacceptable disruption.”

Instead of the Roberts approach, the court decided it was more appropriate to award the additional capital cost less the property’s current market value of reversionary interest in it – with a discount rate of 5%.

However, Irwin LJ pointed that although a claimant is entitled to fair and reasonable compensation, over-compensation was to be avoided.

The Personal Injuries Bar Association intervened in the appeal.

The court called for effective guidance in this area of personal injury law