ANDREW RITCHIE QC 9 Gough Square, London For APIL Spinal SIG 2010

1. ANDREW RITCHIE QC 9 Gough Square, London For APIL Spinal SIG 2010

2. QUANTUM UPDATE • In detail analysis of recent cases on: • Loss of earnings – loss of a chance of the “big bucks” • Damages for Care in catastrophic cases • Multipliers, discount rates and Helmot v Simon

3. Future Loss of Earnings – loss of chance of big bucks • Where the C is young and had dreams of riches • How will the court assess them? • Blamire vagueLump sum? • Normal Ogden 6 multiplier/multiplicand? • Allied Maples/Langdon v Hebron: % prospects

4. Future Loss of Earnings – loss of chance of big bucks • Clarke v Maltby,[2010] EWHC 1201 • Facts – 45 yo, female solicitor in regional solicitors (Blake Lapthorn) earning £65,000 pa doing banking work. • She had 4 children, was divorced/remarried and separated. C had trained /worked at Clifford Chance for 7 years taking 5 of those years off for the kids. • RTA 2004, liability admitted, fs passenger, numerous fractures (neck, face, shoulder, ribs, ankle) and PTSD and mild/subtle brain injury.

5. Post accident • Good physical recovery • Continuing symptoms: fatigue, cognitive dysfunction, disinhibition, temper, reduced memory • Moved firms and did so well she was made equity partner in 2007. Moved firms again as equity partner • 2009 reduced to 3 day week then stopped work and claimed loss of career

6. Loss of earnings claim • C’s case: Promotion post accident achieved at substantial cost – exhaustion and fatigue • Lengthy psychological treatment evidenced this (Levett) • Highly intelligent but now suffering, concealing struggle • Residual capacity £40k as mere employee

7. Claimant’s case Defendants case • Loss of earnings: • Unable to pursue legal career in private practice (£110K) • 85% chance of moving to medium size city firm with more money (+£ 20K) • 30% chance of moving to top city firm (+£50K) • W Featherby QC (greenwoods) • C exaggerating • Decision to stop work driven by PI lawyers • Able to work full time • In private practice • In regional firm • Earning £120K pa • But reasonable to drop to employee status if she desired

8. Owen J • Defence did not plead malingering or exaggerating • Defence experts did not assert malingering or exaggerating • XX of C went on for 4 days on malingering/exaggerating • J found no evidence of exaggerating or malingering • Allegation of malingering against a solicitor is serious and – “ought never to have been made” para 38/39 • Neurology evidence of Dr Harvey preferred over Dr Foster • Foster said non organic cause – but psychs said not psychiatric, therefore the only remaining cause would be malingering and J rejected that

9. Post Script • Allied Maples & Langford v Hebron assessment of loss of chance • C awarded indemnity costs due to defence lawyers behaviour • See Lawtel

10. Morjaria v Samwell (2008) • C was a Cambridge student • She planned to become an investment banker • After taking accountancy qualifications • Finished 3rd year exams then… • RTA 2003 multiple physical injuries (# pelvis, degloving groin and PTSD)

11. Post accident • 6 months off • KPMG trainee accountant, did not complete qualification • Transferred to small investment bank • Failed there and gave up work for treatment • Multiple operations • Continuing fatigue, reduced cognition and memory, depression due to PTSD

12. Claimant’s case Defendants case • 100% prospect of qualifying as accountant and transferring to banking earning £325K pa • 35% chance of rising to director level in bank £452k pa • 4% chance of head of M & A £1.8 million pa • Residual capacity around £33k • W Featherby QC • Claimant lawyer driven decision to stop work and claim investment banking! • Would have failed in banking due to crisis in 2008 • Capable of accountancy with big earnings anyway

13. Settled • For £2 million • Round table failed • Mediation succeeded • Allied Maples rules where C is a good witness • (Her sister was in investment banking)

14. Limits of Loss of chance: Leesmith v Evans [2008] EWHC 134 (QB) (Cooke J) • Facts • Pre-accident personality: drug use, unruly school behaviour • C’s qual: Btech in performing arts left early. C & G lighting • Work: Lighting tech at “Alton Towers”, Spot light operator Yarmouth Pier & some freelance TV work. • C was a 24 yo, apprentice lighting warehouse technician for a company working in the entertainment industry earning £13,600 gpa • He planned to qualify, build up contacts then go freelance earning a lot more (rock music lighting)

15. Accident • RTA 2003 liability admitted • left leg amputation above knee + hand injury • Reduced ability to lift and carry.

16. Claim Defence • £2.7 million • Based on career progression: • 2 years as Qualified technician • Then freelance lighting designer for rock bands on £50K • Rising to highflyer in lighting design earning £250K in rock music industry • Residual capacity £12,000 • £172,000 • Denied progression • Residual capacity agreed • Too uncertain to use Allied Maples %s • Use “Blamire” lump sum

17. Evidence • C called a top freelance lighting designer earning £250K • Well established progression up employer and into freelance • D called evidence that it was a tough industry and average earnings were £37k to £50k gpa • No established progression • Only 25% made it, the rest were “wanabees” …..

18. Clarke J Factual findings • C diligent and hard working • C matured after school • He took a drop in pay to go to lighting employer for hope of freelance contacts • C lied about established career ladder at employers • C’s evidence a bit “unreal” • On balance C would have stayed as employee and worked up. • C would have sought contacts and gone freelance • Cocaine and amphetamines were only social and would not have stopped him! Rock and Roll! • Would have gone freelance by trial date.

19. Damages • Freelancers earn around £33K on average till around 35 and £50K to age 45 and £47.5K to age 65 • Would not have progressed to top level • Not a “Blamire” case • Will use conventional multiplier multiplicand approach on Ogden 6th • Award £600K

20. Damages for care XXX v A Strategic Health Authority • Issues: • Family or commercial care? • 2 carers or 1 carer? • Hourly rates? • 52 weeks pa or more? • Team leaders or grunts? • Training for carers? • Leisure costs for carers?

21. Facts • Liability admitted clinical negligence at birth causing Cerebral Palsy • C had some right hand movement, little or no left hand movement, he could log roll, no leg movement, he had been through mainstream education with average intellect • He needed round the clock care. • Age 17 at trial his parents had cared for him since birth.

22. Peto Centre • C’s father was a management consultant who gave it up to care for him • Parents took C to the Peto Institute in Poland for physical therapy each year • Unique reputation for advancing CP suffers physical condition

23. Peters Promise • Parents intended to transfer to commercial carers in 2 years • C’s life expectancy was agreed at 57-60 years • Parents rejected LA care throughout as rubbish • D did not suggest LA care should be deducted at all but feared the future - double recovery • J considered requiring a Peters Promise from father but rejected the idea

24. Care Rates • Plan – family move to Surrey after the 2nd son goes to Uni • Surrey care will be expensive • Guildford rates: • For C: MS Daykin: £12 ph midweek and £14 w/end. Based on what case managers were paying carers in that area. • For D: Mr Pace: £10 and £12 ph based on agency advertisements in that area. • Jack J • The actual rates paid in Guilford were a safer guide than the advertised rates • On the ground evidence is best C won

25. Two carers or one? • C submitted that: • C needed two carers available all of the time • To move him in and out of the chair • To toilet him • To deal with urinary incontinence • To keep him straight in his chair • D submitted that: • For much of the time only 1 is needed: when he is reading or watching tv or listening to music • Having 2 carers doing nothing was unreasonable

26. Jack J held • During the night only 1 carer is necessary • During the day two are needed so that C can be moved in and out of his chair anytime that is necessary

27. 1 trained 1 untrained? • C claimed that two well trained carers were needed at their (higher) rates • D argued that two well trained carers are not needed. Have one good one and one untrained one. • Jack J ruled: • “Some sympathy” with the trained + untrained carer suggestion. • Rejected suggestion because it would be difficult to schedule and might give rise to difficulties between carers

28. 52 weeks or 60 weeks? • C submitted that 60 weeks of paid care was needed • 52 weeks of work • 5.6 weeks of holiday cover (statutory) • 2.4 weeks of training • Awarded: 60 wks

29. Handover time • C submitted that he needed: • Handover time of 3 x 20 minutes per day • For carers to update each other • Jack J • Rejected • Carers can spend 5 minutes unpaid dealing with that.

30. Team leaders • C submitted: • that a team leader was needed • charging an extra 4 hours per week to arrange rotas; 4 hours pa for supervision/liaison and 12 hours pa of team meetings • charging an extra £2 ph • D submitted: • Team leader can do most of this when there is nothing to do for C • Jack J: • A team leader at an extra £2 ph was needed. • The work would mainly be done when C was not needing help. • A extra 2 hrs per month to cover rotas was allowed. • 9 hours pa of liaison was allowed and 10 hours pa of team meetings.

31. Cleaning/domestic work • C submitted: • 15 hrs pw at £8 ph for was needed for cleaning and laundry • Qualified carers do not do that stuff • D submitted that: • the carers could do that in their spare time when C did not need them • Jack J decided: • 15 hrs per week was excessive • 4 hpw was enough

32. Liability Insurance for carers • C submitted that the insurance cost for the carers should be awarded • To cover negligence and wrongful dismissal claims against C • Jack J • Wendy Daykin had never heard of this insurance • Mr Young (case manager) did not mention this • Not awarded

33. Training costs, pensions etc • C claimed the costs of training carers in manual handling • And NI for 6 of the 10 carers on the team • And the costs of advertisements to replace staff • And pension contributions 2012 Pensions Bill will make these compulsory • And staff meals whilst on duty • Jack J • Training costs of £1750 allowed pa. • Advertising costs of £1000 pa allowed • Pension costs of 3% of pay allowed • Staff meals of £50 pw allowed

34. Discount rate: Helmot v Simon • RTA, head on collision, severe brain damage • C was 28, life expectancy reduced by 5 years due to injury • Claim in Guernsey • In law in Guernsey: common law the same but no PPOs and no Lord Chancellors discount rate • Future losses: how did they calculate the discount rate?

35. The issue: multipliers • Johnathan Sumption QC • Summarised English law: • Put C back into the position he would have been in but for • Lump sum used • Multiplicand x multiplier

36. Multiplier • Determined by life expectancy and discount for accelerated receipt • Discount rate: assumed rate of investment return over inflation

37. Investment returns UK approach • In England in 1970s assumed rate 4-5% • Gilts issues early 1980s (government borrowing – no risk to investor, gives profit over inflation each year) • Wells v Wells (1999) assumed C will invest in gilts • S.1 of Damages Act 1996 Lord Chancellor sets that assumed rate of gilts return • 2001: set at 2.5%

38. Guernsey approach • Evidence of Mr Rowland Hogg. • Return on gilts in UK is 1.28% • After tax net equivalent 1.13% • Guernsey RPI increased by 0.5% above UK RPI hence deduct 0.5% = 0.63% • Also for loss of income there should be a different multiplier – in Guernsey the incomes inflation was consistently 2% above RPI, therefore: discount rate -1.5%

39. Can this be used here? • Discount rate is set by LCD • S.1(2) of the Damages Act 1996: allows the court to set a different rate if it would be more appropriate. • Challenges: Warriner v Warriner [2002] and Cook v United Bristol [2004] both failed despite Rowland Hogg’s clear evidence on lower returns on gilts. • Warren v Northern General [2000] failed on high tax rates making discount rate unfair.

40. Ways around • Persuade LCD • Mount another gilts challenge for a high earner with high tax • Use Rowland Hogg.

41. ANDREW RITCHIE QC 9 Gough Square, London