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Better news than expected for clinical negligence claimants following the government’s review of the discount rate to -0.25%, but continued frustration over accommodation claims.
The government has announced a change to the “discount rate” (the expected rate of return on investments) which is applied to claims for future losses. Having been changed from a longstanding positive figure of 2.5% to a negative -0.75% in February 2017, a change back to a positive figure had been widely expected across the profession.
Whilst the change will mean a modest reduction in the value of claims for future losses such as care, loss of earnings, accommodation adaptation costs, future treatment costs etc, maintaining a negative rate means that these claims will not be impacted as much as a return to a positive rate would have required.
The down-side for some claimants is that claims for the cost of purchase of specially adapted accommodation (often necessary, particularly in the highest value claims) will continue to be difficult as these claims are calculated in accordance with the 1989 Court of Appeal decision in Roberts v Johnstone, which takes account of the discount rate, and for as long as this remains negative, the Roberts v Johnstone calculation inevitably leads to a nil award.
This cannot be right, but to date, the courts are following precedent and making no award for accommodation purchase costs at trial. In some cases, the discount rate of -0.75% meant that there was sufficient provision elsewhere which could be utilised for purchase costs, but this was certainly not the case in all claims. A number of alternative methods of calculating purchase costs have been submitted in cases and usually, where a settlement has been negotiated, a significant allowance has been made by Defendants.
Trial judges, however, have considered themselves to be bound by the Roberts v Johnstone calculation, but those dealing with such claims are now waiting for the Court of Appeal to review the position and clarify how such claims are to be dealt with in the future – their hearing of the appeal in the case of Swift v Carpenter is expected this month.
Those in need of specialist accommodation, and their advisors, hope that the Court of Appeal will conclude that it can only be right that a claimant who needs rehousing due to negligence can recover the cost of purchasing appropriate accommodation as part of their claim.
Moore Blatch advise a number of clients who need specialist accommodation due to the extent of their injuries.