The Court of Appeal in Carpenter v Swift have declined the Claimant’s application for a Protective Costs Order. The case is listed for hearing next month.
The Judge at first instance made a lump sum award of £4,098.051 for the Claimant who was a below knee amputee. The Judge found the additional capital cost of the required special accommodation would be £900,000 more than the value of the Claimant’s existing home. However, she concluded she was bound by the approach in Roberts v Johnstone to apply the discount rate to the additional cost. With a negative discount rate of -0.75% she was unable to make any award in respect of the additional capital cost.
The issue on Appeal is whether a Judge can make an award for the additional capital cost to fund the special accommodation arising from his or her disability. Although the issue is narrow it is of general importance and can make a difference of several hundred thousand pounds on an individual case. The Claimant’s Counsel described the issue as the “issue of the generation”. The Defendant’s position was that it was an issue of particular and enduring financial importance to Insurers in respect of their continuing business, and, indeed, to the legal profession and Insurers generally who deal with the cases of seriously injured litigants.
The Appeal was originally listed for hearing in July 2019 but was adjourned to enable the parties to obtain further expert evidence. The Claimant applied for leave to introduce evidence of a mortgage package backed by a periodical payment order (PPO). The Defendant objected to the appeal, but the parties now have permission to adduce evidence from four experts in different disciplines.
The parties exchanged expert evidence in November 2019. It maybe of significance that following exchange the Claimant applied for a Protective Costs Order (PCO). The general purpose of a PCO is to enable a Claimant of limited means to advance a case without fear of an Order for substantial costs.
At the time of the original Appeal the Claimant’s cost exposure would have been £209,000 which represented the Defendant’s costs and her own minimal disbursements. By the time of the hearing of her application for a Protective Costs Order the Claimant was facing Defendant/own costs of £710,000 and if the case proceeded to a full hearing as much as £944,000. This sum is considerably higher than the Claimant’s life savings. Her own Counsel described her as:
“An unwilling participant in the litigation as she was compelled to bring the proceedings and fight them to trial in order to recover from the Respondent the amount that she was eventually awarded as compensation for the serious injuries she suffered as a result of a traffic accident for which the Defendant was entirely responsible; and she is now compelled to bring the Appeal in order to recover damages for the cost of suitably adapted accommodation, a long established head of recoverable loss”.
Having reviewed the authorities the Court of Appeal concluded the policy in practice of the Court was that a Protective Costs Order (PCO) should not be made in private litigation and on this basis the Claimant’s application was dismissed.
The Claimant did not say whether she will proceed with her Appeal if her application for a PCO was refused. However, the timing of the application does seem to indicate a lack of confidence on the Claimant’s side. It remains to be seen whether the appeal which is listed for March 2020 will proceed.
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Philip D’Netto, Partner
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