Accommodation Claims
Wednesday 13th August
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Options:
•Adapt current accommodation.
•Move to more suitable accommodation.
•Residential care.
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Purchase of a suitable home
•Problem: Property an asset not an expense windfall.
•Solution: Roberts v Johnstone
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Roberts v Johnstone
•C compensated for loss caused by having to
invest a greater amount of capital in home.
•Assumed that the additional capital would
earn net rate of return 2.5% per annum
• Annual loss of interest on the additional
capital x life expectancy of C.
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R v J example:
• Claimant is aged 22 when spinally injured
• He is now wheelchair dependant.
• His existing property worth £100,000.
• He not only needs ground floor space but extra
space to accommodate carers and recommended
equipment.
• Evidence suggests he reasonably requires bungalow
at cost of £300,000.
• The agreed multiplier for his life expectancy 30.
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R v J example
•Cost of home required: £300,000
•Value of current home: £100,000
•Difference: £200,000
£200,000 x 2.5% x 30 = £150,000.
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Accommodation costs overview
•R v J calculation for additional tied up capital
•One off costs: adaptation, moving costs etc.
•Increased running costs on
multiplier/multiplicand basis
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Objection to capital cost
•Like for like area?
•Size reasonably required to meet C’s needs?
•Purchase price reflect true value?
•Cogent evidence required if going to attack.
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Objection to capital cost continued..
•Crispin v Webster 2011:
•“There is an issue and distinction between
what a Claimant might understandably
want or desire and what, in law, the
Claimant’s reasonable needs might
be………one here is looking at the difference
between the perfect and the not quite so
perfect but nevertheless reasonable…..it will
be a matter for the trial judge to decide
what the yardstick should be”.
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Objection to capital cost continued..
•Sawar v Ali(1) MIB (2)
• Joint statement from experts agreed cost of suitable property would be
£485,000. C purchased Purbeck Lodge for £595,000. Allowed:
•C and family spent a considerable time
searching for suitable property
•Urgent need for C to be rehoused
•Purchased on advice of C’s accommodation
expert
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Credit to be given under R v J
calculation
•Credit to be given for value of existing home
•If C rented, credit for rent C would have
paid (capitalised and set off)
•Credit for home/s would have bought but for
accident
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Credit to be given under R v J
calculation
•Roberts v Johnstone 1989
•Sawar v Ali (1) MIB (2) 2007 – shared
equity
•Howson v Swann 2011 – shared equity
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Credit for family home?
• Problem:
• Disabled C buys house in which entire family live
• Parents get benefit of being housed at Defendant’s
expense – unfair
• Former home is parents not C’s, so why should C give
credit for it?
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Credit for family home?
•M v Leeds Health Authority 2002 PIQR
Q4 – No deduction
•Lewis v Royal Shrewsbury Hospitals
NHS Trust 2007 – rent for former house
•Iqbal v Whipps Cross University
Hospital Trust – notional rent to C?
•Whiten v St Georges Healthcare NHS
Trust 2011 EWHC 2066-notional rent/cost
of family house?
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Injustice of Roberts v Johnstone
•Cost of home required: £300,000
•Value of current home: £100,000
•Difference: £200,000
•£200,000 x 2.5% x 30 = £150,000. (£50k)
•£200,000 x 2.5 x say 10 = £50,000 (£150k)
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Injustice of Roberts v Johnstone
• Law Commission Review 1999:
• Concluded in most cases “inappropriate” and “leads to
under compensation”.
• Ministry of Justice Consultation Paper
• Alternatives either unworkable/undesirable
• No clear consensus on way forward
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Injustice of Roberts v Johnstone
• Civil Justice Council Injury Committee 2007
• Concluded “outdated”
• Alternatives suggested:
• Interest only mortgage funded by periodical payments or
• Interest free loan
• Retain option for R v J in appropriate cases
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Injustice of Roberts v Johnstone
• Ryan St George v Home Office 2008
• C had a significantly impaired life expectancy.
• Lived in a London borough in rented accommodation
• R v J produced tiny proportion of capital required.
• Suitable rented accommodation found
• Periodical payments for rent awarded instead of RvJ.
• Wider application?
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Injustice of Roberts v Johnstone
• Oxborrow v West Suffolk Hospital NHS Trust 2012
• C born with quadriplegic cerebral palsy.
• Life expectancy was to age 21.
• Interim Payment Application - £740,000 for suitable
accommodation
• C sought a declaration that RvJ unsuitable
• C’s deputy offered an undertaking to repay any windfall on
capital sum on C’s death.
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Injustice of Roberts and Johnstone
• Justice Tugendhat:
• “..considerable force to the Claimant’s submissions”
• Not appropriate for a court of 1st instance to deal with the
issue on an interim payment application.
• Did not need to specifically address the issue as could
award the interim payment sought under the test in Eeles
in any event.
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Conclusion
• Despite problems, Roberts v Johnstone remains good
law.
• Change?
• C lawyers waiting for “the right case”.
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