Sarwar v Ali & Anor [2007] EWHC 1255 (Admin)

[2007] EWHC 1255 (QB)Case No TLQ/05/0386
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 25 May 2007
Before
MR. JUSTICE LLOYD JONES
Between
Waseem SarwarClaimantKamran Ali and Motor Insurers’ BureauDefendant
Mr. Frank Burton QC and Mr. William Latimer-Sayer (instructed by Stewarts) for ClaimantMr. Richard Methuen QC and Ms Katherine Awadalla (instructed by Greenwoods) for Second Defendant for The First Defendant did not appear and was not represented.Hearing Hearing dates: 11, 12, 15, 16, 17, 18, 19, 22, 23, 24, 25 January, 26, 27 March 2007.
Judgment

Mr. Justice Lloyd Jones:

[1]On the 29th September 2001 the Claimant, Mr. Waseem Sarwar, who was then aged 17, was very seriously injured in a road accident. He was a rear seat passenger in a car driven by the First Defendant, Mr. Kamran Ali. The First Defendant, who was uninsured, lost control of the car whilst driving at speed on a shallow bend. The car left the road and collided with a hedge. The Claimant was ejected through the back window sustaining multiple and severe injuries. He was rendered a C5 tetraplegic.[2]The Claimant now sues for damages for personal injury. Liability has been admitted and judgment has been entered against the First Defendant on the basis of a 75:25 apportionment in favour of the Claimant, the reduction for contributory negligence arising from the fact that the Claimant was not wearing a seatbelt. The hearing before me has been limited to issues of quantum and the form of the award, including the appropriate index to which any periodical payments for future loss should be linked.[3]The First Defendant did not take any part in these proceedings.[4]At the request of counsel for the Claimant and the Second Defendant, the Motor Insurers’ Bureau, on the 21st February 2007 I delivered a preliminary judgment on the life expectancy of the Claimant and on the appropriate multiplier (Sarwar v Ali and Motor Insurers’ Bureau [2007] EWHC 274 (QB)). For the reasons there given I concluded that the life expectancy of the Claimant is a further 49 years and that the appropriate multiplier, applying a discount rate of 2.5%, is 28.42. Items that have been agreed. The parties have agreed damages as follows;(1) General damages including interest £ 227,384(2) Special damages up to 18th January 2007 inclusive of interest £1,100,000(3) Future medical treatment £ 375,000(4) Future equipment £ 275,000(5) Future household expenses £ 250,000(6) Future expenditure on computers, information technology and entertainment £ 224,000(7) Future trusts £ 40,000 Remaining issues.[5]The remaining heads of claim can be considered under the following headings;(1) Provisional damages(2) Loss of earnings(3) Care(4) Transport(5) Holidays(6) Accommodation PROVISIONAL DAMAGES.[3]In opening this case the Claimant invited the court to make a provisional award of damages in order to take account of three possible developments in his condition, namely epilepsy, syrinx and heterotrophic ossification. The power of the court to make such an award arises under section 32A, Supreme Court 1981:
“32A. – (1) This section applies to an action for damages for personal injuries in which there is proved or admitted to be a chance that at some definite or indefinite time in the future the injured person will, as a result of the act or omission which gave rise to the cause of action, develop some serious disease or suffer some serious deterioration in his physical or mental condition. (2) Subject to subsection (4) below, as regards any action for damages to which this section applies in which a judgment is given in the High Court, provision may be made by rules of court for enabling the court, in such circumstances as may be prescribed, to award the injured person - (a) damages assessed on the assumption that the injured person will not develop the disease or suffer the deterioration in his condition; and (b) further damages at a future date if he develops the disease or suffers the deterioration.” (2) Subject to subsection (4) below, as regards any action for damages to which this section applies in which a judgment is given in the High Court, provision may be made by rules of court for enabling the court, in such circumstances as may be prescribed, to award the injured person - (a) damages assessed on the assumption that the injured person will not develop the disease or suffer the deterioration in his condition; and (b) further damages at a future date if he develops the disease or suffers the deterioration.”
[4]The court is empowered to make such an award only if the Claimant establishes that he has suffered personal injuries and that he faces a chance or risk of developing a serious disease or suffering some serious deterioration in his condition. The Claimant must also persuade the court that his is an appropriate case in which to exercise the discretion.[5]So far as concerns the degree of risk contemplated by the use of the words “ a chance” in section 32A(1), in Willson v MOD [1991] All ER 638 at p. 642 B Scott Baker J, as he then was, considered that in order to qualify as a chance a risk must be measurable rather than fanciful. This approach was approved by the Court of Appeal in Curi v Colina (29th July 1998, unreported). So far as the seriousness of the condition is concerned, the Court of Appeal in Curi v Colina concluded:
“The disease or deterioration must be such that an award of damages which includes a sum for the chance would be wholly inadequate to compensate the claimant for the position in which he would find himself once the chance had materialized.”
[6]By the time we had reached closing submissions in the present case, the parties had agreed to invite me to make an award of provisional damages in respect of epilepsy and syrinx but not to make any award in respect heterotrophic ossification. In the light of the evidence of Mr. F. Derry, the consultant surgeon called on behalf of the Claimant, and Mr. Anthony M. Tromans, the consultant surgeon called on behalf of the Defendant, I am satisfied that that is an appropriate course and that the statutory criteria for the making of an award of provisional damages are satisfied.[7]So far as epilepsy is concerned, the experts were agreed that the risk of its developing was small but not so small as to be minimal. The condition is clearly sufficiently serious for a once for all damages award to be inadequate to compensate the Claimant for the condition should it occur. Similarly, the evidence of the experts supports the conclusion that the risk of the cyst, from which the Claimant is already suffering, developing into a syrinx with major symptoms is about 5%. Here again, this degree of risk and the seriousness of the condition should it develop make it appropriate to deal with it by way of provisional damages. On the other hand, I consider on the basis of the expert evidence, that the risk of the Claimant developing heterotrophic ossification, given that it has not developed in the first year after the accident, is so small that it can properly be disregarded.[8]Accordingly, I propose to make an order for provisional damages to the above effect. LOSS OF EARNINGS Likely career.

LOSS OF EARNINGS

[9]In attempting to quantify the Claimant’s loss in respect of future earnings it is necessary to attempt to form some view as to the career he would have been likely to pursue and to assess the likely degree of success he would have met had he not suffered the accident.[10]At the date of the accident the Claimant was 17 years of age. He had passed the 11+ examination and had been a pupil at Slough Grammar School where, in the summer of 2000, he obtained 9 GCSEs, 3 at grade B and 6 at grade C. These were below his expected grades. His school report showed that he did not work to his full potential and that he was on occasion excluded on account of his behaviour. He then left school, intending to take a year off to consider his future and what A levels to study. During that year he did various jobs including working as a shop assistant. He says that he knew he wanted to do something with economics. A careers advisor at school had said he would be very well suited to accountancy but he had not limited his options to accountancy and would have been happy to work in some financial or business role in the City. At the time of the accident he had just enrolled at East Berkshire College and was studying for ‘A’ levels in mathematics, economics and information and computer technology.[11]The GCSE grades he obtained, while respectable, are not particularly promising. However, there is a considerable weight of evidence to support the view that his own assessment that he performed substantially below his potential is accurate.(1) The agreed neuropsychological evidence is that the Claimant’s pre-accident IQ was at least in the above average range. Dr. Leng suggests his IQ was at least 110 or higher. Professor Beaumont suggests that it is likely to be in the range 115-125. The Second Defendant’s psychiatric expert, Dr. Rosen, is of the opinion, on the balance of probabilities, that the Claimant would have completed his ‘A’ levels and would have gone on to university.(2) Mr. Anthony Cullingworth, now a retired school teacher, had been the Claimant’s form tutor when he was in years 10 and 11 at Slough Grammar School i.e. the period leading up to GCSEs. He gave evidence that during this time the Claimant grew up very quickly. It was clear that he had ability and determination and that with time it could have been channelled more productively. He found mathematics very satisfying. His GCSE results were not as good as had been expected and certainly not as good as they could have been if he had concentrated on and worked harder at the subjects he did not enjoy. It was Mr. Cullingworth’s considered opinion that he had no doubt that Waseem would have gone on to further education of some kind.(3) Mr. Cullingworth also spoke of the Claimant’s character. He had formed the view that Waseem was a real leader of the class. He was a very strong personality. He could command attention in a way that other pupils could not. Mr. Cullingworth considered that “Waseem had a certain know how that I certainly believe would have allowed him to make his mark on the world as an entrepreneur.” He spoke of Waseem’s flare and independence.(4) The Claimant comes from a family of six; he has one brother and four sisters. At the time of the accident his brother Imran was studying for a BA in Classics and English at King’s College London. One of his sisters worked for British Airways as a cabin crew controller. A younger sister completed a degree course before going on to study for a law conversion course.[12]Despite the very serious injuries he has suffered, which include a brain injury and psychiatric damage, something of the Claimant’s former drive and determination is apparent from his conduct since the accident. In this regard, I have in mind his determination to exercise and keep fit (which has been described by some of the experts as exceptional), his unsuccessful attempt to return to his studies and his unsuccessful attempt to set up some sort of business with his sister. In giving his evidence he impressed me as someone who has resolved to make the best of the position in which he is now placed. In the light of all this evidence I accept that the overwhelming likelihood is that but for the accident the Claimant would have obtained a degree and then obtained some sort of professional qualification probably relating to his interest in finance, economics or accountancy. Residual earning capacity.[13]It was submitted on behalf of the Second Defendant that the multiplicand for future loss of earnings should be reduced by £2,500 per annum to take account of future earning potential. Despite the attempts by the Claimant to resume his studies and to embark on a hobby business selling trainers with his sister on the internet, I have come to the conclusion that the Claimant has no residual earning capacity. It was the joint opinion of Mr. Derry and Mr. Tromans, the spinal consultants, that the Claimant would never enter into significant remunerative employment. This was also the view of the expert psychiatrists in their joint statements. Professor Beaumont found that there are residual impairments in working memory, visual memory and visual-perceptual functions. The Claimant is also suffering from depression. In the light of this evidence I find it impossible to conclude that he has any residual earning capacity. Accordingly, I am unable to accept the submission of the Second Defendant and I do not reduce the multiplicand for future loss of earnings to take account of future earning potential. The claim for future earnings.[14]The Claimant seeks an average lifetime multiplicand of £60,000 (gross) or £43,832 (net of tax and national insurance) on the basis of his likely professional status. The Claimant relies upon the average earnings for managers and senior officials (ASHE SOC 1) and professional occupations (ASHE SOC 2). In addition the Claimant relies on the fact that he has been based in the South East of England and, but for the accident, may well have worked in the City of London where male full time earnings are considerably higher than in the country at large.[15]The Second Defendant, by contrast, proposes a stepped multiplicand as follows;(1) £25,000 gross (£18,670 net of tax and national insurance) for the first five years.(2) £42,250 gross (£30,541 net of tax and national insurance) for his remaining working life. That figure is calculated as the average between earnings in England and earnings in London. The Second Defendant points to the fact that the ASHE mean for all male employees is £32,774 (gross) and the ASHE median for all male employees is £25,769 (gross).[16]I am persuaded that the more appropriate course is to adopt a single multiplicand based upon average earnings across the whole of the Claimant’s working life. In coming to this conclusion, I am influenced by the following considerations. First, we are concerned with a Claimant who at the time of his injury had not embarked on a career. As a result, the calculation of loss of future earnings will, in the nature of things, have to be assessed on a rather general basis. The calculations proposed by the Second Defendant suggest a degree of precision which may not be obtainable. Secondly, I consider that the use of the stepped multiplicands suggested by the Second Defendant may be unfair to the Claimant in that they take account of lower earnings in the early years while limiting the Claimant to an average figure for the remaining years, without taking account of the likelihood of higher than average earnings towards the end of a career. While people tend to earn less when they first start working, and possibly towards the very end of their career, there may well be a phase where they earn an above-average wage. The approach of the Second Defendant is to deny the Claimant the full benefit of the average figures. I consider that the use of a single multiplicand is fair to both parties provided that it is a realistic average of the likely wage throughout the Claimant’s career. I consider that, but for his injuries, the Claimant would have obtained a professional qualification and would have obtained employment in the field of finance, economics or accountancy. The following figures from the Annual Survey of Hours and Earnings (ASHE) 2006 are particularly relevant. Occupational Group – Male/UK SOC 2006 - Gross ASHE SOC 1: Managers and Senior Officials 1 £ 53,879 ASHE SOC 2: Professional occupations 2 £ 41,293 Financial managers and chartered secretaries 1131 £ 96,498 Financial institution managers 1151 £ 54,320 Financial and investment analyst/advisers 3534 £ 42,639 IT and communication managers 1136 £ 53,423 IT strategy and planning professionals 2131 £ 52,469 Business and finance associate professionals 130 £ 50,145 21. In addition, I consider it highly likely that the Claimant would have obtained employment in the City of London or in Greater London where, as the following ASHE figures show, salaries are higher. Region 2006 - Gross Increment All employees earnings in the City of London Table 7 £ 102,258 233% Male employees earnings in London (all professionals) Table 7 £ 47,308 54% All employees earnings in Slough (all professionals) Table 7 £ 35,881 17% All employees earnings in UK (all professionals) Table 7 £ 30,689 0% Having regard to this regional variation and taking account of the range of gross salaries in the occupational groups identified above, I have come to the conclusion that £55,000 gross per annum represents the most likely average of the Claimant’s earnings to the retirement age. Pension.[17]The Claimant claims for the loss of a company pension to which his employer would have made a contribution of between 5% and 10% of his gross earnings. In his schedule the Claimant has adopted the mid point of 7.5%. The Second Defendant does not challenge such an award in principle but maintains that the lower figure of 5% would be more appropriate. I consider that in all the circumstances, and having regard in particular to the occupation the Claimant would in all likelihood have followed where provision for a substantial pension is usual, the figure of 7.5% fairly represents the likely employer’s contribution to pensions. The question of contingencies is considered below. Likely retirement age.[18]The Claimant contends that but for the accident the Claimant would have worked to the age 70. Mr. Burton QC, on behalf of the Claimant, points to the fact that, but for the accident, the Claimant would have had an average life expectancy to about 85 and that in light of the pensions crisis many people are continuing to work beyond the previously accepted state retirement age of 65. He submits that people are in good health to a later age and therefore able to work longer and in many cases people feel the need to work longer the better to provide for their retirement which is likely to stretch into their 80s. He points to the White Paper “Security and Retirement: Towards a New Pension System” published in May 2006 in which the Government outlined its commitment to raising the State retirement age. It recommends that anyone aged 27 or younger at 7th April 2006 should not be eligible for a State pension until the age of 68. The Second Defendant contends that if the court proceeds on the basis that the Claimant would have entered into graduate employment it is unlikely that he would have been dependent on a State retirement pension and therefore unlikely that he would have worked beyond the age of 65.[19]I entirely accept that the Claimant, in selecting a date for retirement, would not have been greatly influenced by the availability of a State retirement pension. However, I consider that the expectation in his generation is that people will go on working longer because of the ability and need to do so. Accordingly, I have come to the conclusion that, but for the accident, the Claimant would have retired at the age of 68. In setting this age I attach considerable weight to the recommendation in the White Paper. Reduction for contingencies.[20]At the start of the trial the Claimant contended that a discount for contingencies other than mortality i.e. the risk of gaps in employment due to causes such as unemployment, redundancy and sickness, should be set at 2%. This figure was based on the current 5th edition of the Ogden Tables. However, during the cross examination of the Claimant’s experts it became apparent that although the 6th edition of the Ogden Tables had yet to be published, Dr. Wass and others have submitted research to the Ogden Working Party, which has been accepted, suggesting a higher discount for contingencies is appropriate, in particular in relation to young claimants who have yet to enter the job market. The 6th edition of the Ogden Tables was published on the 3rd May 2007. As a result, the parties have agreed that the appropriate reduction for contingencies other than mortality should be 10%.[21]However, the Second Defendant maintains that a different approach should be adopted in two specific areas.[22]First, the Second Defendant submits that the award for pension loss should be subject to a much higher deduction for contingencies other than mortality. The Second Defendant contends that the Claimant might have been self-employed or might have been employed in a post where the employer makes no pension contributions at all. Accordingly, it is submitted that a deduction of one third should be made to reflect those risks. To my mind it is highly unlikely that the Claimant would have been in an employment where the employer makes no pension contribution. In the financial, professional and managerial occupations where I would have expected him to find employment, it would be unusual for an employer not to make a contribution to pensions. Similarly, I consider it much more likely than not that the Claimant would be employed rather than self-employed, given the nature of his likely occupations. In any event, if he would have been self-employed I consider that he would lose the benefit of a self-employed pension for which he ought reasonably to be compensated. Accordingly, I consider that the appropriate deduction from the award in respect of pensions in order to take account of contingencies other than mortality is 10%.[23]Secondly, the Second Defendant submits that if the court concludes that the Claimant would, but for the accident, have worked beyond the age of 65, the court should make a deduction from any award in respect of salary and pension contributions after the age of 65 on account of contingencies other than mortality at a rate higher than 10%. The Second Defendant suggests that there was no prospect of the Claimant working beyond 65 but that alternatively, if the court were to conclude that he would have been likely to have worked to the age 68 there should be a 50% reduction for contingencies. To my mind, this submission fails to take account of the likely expectations and needs of the generation to which the Claimant belongs. For the reasons I have given, I am confident that the changes in life expectancy will lead to a retirement age of 68 or even higher becoming accepted by employers and employees as the norm. Claim for lost years.[24]Finally in this regard, the Claimant points to the fact that by reason of his injuries the Claimant has a reduced life expectancy of 13 years. It is contended that he has therefore suffered a loss of pension during these lost years and that it would be appropriate to make a small upward adjustment to the multiplier to allow for this. (In this regard I have been referred to Hunt v Severs [1993] QB 815.)[25]I accept that the Claimant has identified a loss for which he would not otherwise be compensated. However, in considering a claim in respect of a notional loss of pension between the ages of 72 and 85 it is necessary to take account of the fact that the Claimant would not incur any living expenses during that period. Any award should be limited for this reason. However, I am persuaded that it is appropriate to add 0.5 to the existing multiplier for loss of earnings.[26]In the course of his oral submissions Mr. Burton demonstrated that the appropriate multiplier if retirement is taken to be at the age of 68 would be 23.75. If 0.5 is added to this figure to allow for the lost years claim this gives a multiplier of 24.25. Mr. Burton compares this with the multiplier of 24.27 if the retirement age is taken to be 70 and suggests that it may be simpler to calculate on the basis of a retirement age of 70 and to disregard the claim for lost years. I am content that the parties should adopt either of these approaches. FUTURE CARE AND CASE MANAGEMENT. (1). Whether care should be calculated according to a 58 or 59 week year.[27]The Claimant contends that the care package should be calculated by reference to a 59 week year. The Claimant’s case is founded on the evidence of Mrs. Sargent, the Claimant’s care expert. In fact, her calculations, when bank holidays are brought into account, proceed on the basis of a year of 60 weeks and one day. She calculates this in the following way. All carers are contracted to work 52 weeks a year. Carers are allowed 4 weeks holiday per year and in addition are entitled to 8 days public holidays. In addition, Mrs. Sargent would allow 6 days for sickness and other absences from work and one week to cover training. She also maintains that an additional 8 days should be allowed for the care required to replace the usual carers during bank holidays where they are not contracted to work.[28]The Defendant’s case is that calculation by reference to a 58 week year meets all the reasonable requirements of the Claimant. On this calculation, which is supported by Mr. Taylor, the Second Defendant’s care expert, carers are allowed 4 weeks holiday plus 8 days public holidays per year. In addition allowance is made for 3 days of sickness leave and 3 days for training. In this regard, the Second Defendant also relied on the judgment of Sir Rodger Bell in Iqbal v Whipps Cross University Hospital NHS Trust [2006] EWHC 3111(QB). There, the judge considered the allowance of 6 days a year sick leave to be excessive and considered that although some training must be essential he could see no justification for increasing the 3 days a year compulsory training in the circumstances of that case. In that case the judge referred to my judgment in A v B Hospitals NHS Trust [2006] EWHC 1178 (QB) in which I had made an award in respect of costs of care on the basis of a 58 week year. However, in that case it was not argued that the calculations should be by reference to a 59 week year. Similarly, Mr. Burton on behalf of the Claimant was able to point a number of authorities where the calculation had been performed by reference to 59 week year. (Lynham v Morecombe Bay Hospitals NHS Trust, Garland J 25th March 2002, QBD, unreported; Crofton v NHSLA, HHJ Reid QC, QBD, 19th January 2006, unreported; Lewis v Shrewsbury Hospital NHS Trust, HHJ MacDuff, 29th January 2007, unreported.) However, he very fairly pointed out that in each of these cases the question as to what was the appropriate figure had not been argued.[29]Each case must, of course, be decided on the evidence in that case. In the present case I consider that it is reasonable and sufficient that the calculation proceed by reference to a 58 week year. I am not persuaded that a full week should be allowed for training. I would allow 3 days. I consider that 3 days is an appropriate allowance for sickness and other legitimate absences from work. Moreover, Mr. Burton was not able to explain to me why the second period of 8 days in respect of bank holidays in Mrs. Sargent’s calculations did not involve double counting.[30]Accordingly I conclude that the appropriate period for the purpose of calculation of the care package is a 58 week year. (2). The number of double up daytime care.[31]It is common ground between the parties that the Claimant requires care 24 hours a day and that throughout the Claimant’s 16 hour waking day he should be attended by at least one carer. There is, however, an issue as to the appropriate number of hours of double up daytime care.[32]The Claimant claims 8 hours of double up daytime care. This is supported by the evidence of Mrs. Sargent, the Claimant’s care expert. She points to the fact that the Claimant is awake from 8.00 a.m. until midnight and she recommends that double up care should be available for 50% of this time. Her view is supported by Mr. Derry, the Claimant’s spinal expert, and Mr. Stillaway, the Claimant’s case manager. This was also the view of Mr. Pickering, the Head of the Standard Care Division of CPA, the Claimant’s current care supplier. It is not in dispute that two carers are required to assist the Claimant with many everyday tasks including his morning routine (including bowel care, washing and dressing, transfer to wheelchair or standing frame, bowel accidents, transferring to a recliner chair or bed). On behalf of the Claimant it is said that he is an unusually active tetraplegic and that 8 hours of double up daytime care is reasonably required.[33]The Second Defendant, on the other hand, maintains on the basis of the evidence of its care expert, Mr. Taylor, that 4 hours of double up care each day is ample. In addition, the point is made that the proposals on behalf of the Claimant fail to recognize that the Claimant’s routine varies considerably from day to day and that his need for daycare hours will reduce once his routine has become established and settled.[34]I have already referred to the Claimant’s unusual commitment to physical exercise. In particular, he has been using a standing frame for 2 hours each day, although this has been temporarily interrupted as a result of a problem with his feet. There was unchallenged evidence that it requires two carers to lift the Claimant into the standing frame and two to remove him from the standing frame at the end of the exercise period. Two carers are required to comply with Health and Safety requirements. It was the evidence of the Claimant that when he is using the frame he can slip within the harness and it then requires two carers to lift him back in position. There was clear and uncontested evidence before me as to the therapeutic benefits associated with the use of the standing frame. Mr. Derry’s opinion was that these benefits included the reduced risk of fractures and contractures. Miss Constantine gave evidence of the importance of the standing frame in assisting the control of spasms. It was Mr. Derry’s evidence that it is not normal for human beings who are naturally upright to sit for days at a time and that with a good frame the Claimant would continue to stand. Although it was suggested by Mr. Methuen QC, on behalf of the Second Defendant, in his closing submissions that the Claimant was unlikely to continue to use a standing frame throughout the rest of his life, there is no evidence to support this and I am entirely satisfied that he will continue to do so. In particular, there is no medical evidence to suggest that the Claimant would make less use or have less need of the use of the standing frame as he gets older. Accordingly, I conclude that the provision for double up hours must include 2 hours a day to enable the Claimant to use his standing frame.[35]Mrs. Sargent’s assessment that there was a reasonable requirement for 8 hours of double up care per day was attacked on behalf of the Second Defendant on the basis that Mrs. Sargent’s initial position had been that 6 hours of double up care would be sufficient. That appears from her report of the 9th November 2006 and from the record of the first joint discussion between the care experts which took place on the 29th November 2006. However, by the time of the second joint statement of the 14th December 2006 Mrs. Sargent had increased her recommendation from 6 to 8 hours of double up care. Mrs. Sargent’s explanation in her evidence for the increase in her assessment was that this took account of the report of Mr. Stillaway dated the 18th November 2006. There was a dispute between the parties as to whether Mr. Stillaway’s report did in fact require such an increase. It records that Mr. Stillaway expects the new standing frame to be in use by mid December and that, as a result, the care costs of CPA, who are currently providing care for the Claimant, will be increased by an extra 2 hours because the double up time will be extended to 6 hours from that time. However, the report states in a further paragraph:
“Two carers are needed to transfer Waseem. Currently the transfers are done at each end of the day. However there are occasions were Waseem needs to be transferred during the day. A member of the family, usually Waseem’s mother, assists the transfers. We are currently reviewing this situation.”
I am satisfied that the increase in Mrs. Sargent’s assessment was intended to reflect the need identified in this passage.[36]Approaching the matter on this basis, it is clear to me that the absolute minimum requirement of double up care is 6 hours a day in order to take account of transfers morning and evening and the use of the standing frame. Accordingly, I consider that Mr. Taylor’s assessment limiting double up care to 4 hours per day is a gross underestimate of the reasonable requirement. Indeed, Mr. Taylor came close to accepting this in his letter of the 1st September 2006 in which he expressed the view that 6 hours of double up care per day was “not uncommon and difficult to demolish or argue”. Furthermore, I consider that Mr. Stillaway correctly identifies the need for further double up care above 6 hours per day, as indicated in his report of the 18th November 2006. The Claimant cannot be dependent on members of his family to assist in transfers. In all the circumstances, I prefer the evidence of Mrs. Sargent and Mr. Stillaway on this issue to that of Mr. Taylor and consider the assessment of 8 hours double up care to be a reasonable requirement.[37]I am fortified in this conclusion by the evidence before me as to the amount of double up care actually provided in October and November 2006. CPA had made provision for 4 hours a day double up care at a time when the Claimant was temporarily not using his standing frame. However, the average amount of double up time actually used in October and November 2006 was 5.29 hours a day and 5.23 hours a day respectively. This came to Mr. Stillaway’s attention when he questioned the hours charged. He was unable to explain the reason why the provision for 4 hours had been exceeded, beyond identifying the sort of problems which might have caused it, for example difficulties with spasms or feeling unwell and needing personal care. However, these figures do confirm the views of the Claimant’s experts that 6 hours of double up care is appropriate before one takes account of the use of the standing frame. Accordingly, this provides further support for my conclusion that 8 hours of double up care per day is reasonable provision.[38]Before leaving this topic I should state that I reject the argument on behalf of the Second Defendant that the Claimant should arrange to have a number of hours of double up care available per week so as to enable him to draw on this bank of hours as appropriate. It seems to me that it is neither practicable nor acceptable to carers to have a carer on call to attend as required. Accordingly, it is necessary to provide provision for an appropriate number of hours of double up care per day. (3). Allowance for monthly cleaning.[39]There is an issue as to whether it is reasonable to make allowance for a monthly clean of the Claimant’s accommodation. Mrs. Sargent has allowed a figure of £80.00 per month in relation to deep cleaning. It is common ground between the parties that the Claimant’s carers will carry out basic cleaning and tidying as the need arises. However, Mrs. Sargent’s opinion was that in her experience carers are generally not particularly good at cleaning and are not employed for their cleaning skills.[40]In view of the importance of hygiene to the protection of the Claimant’s health, I accept Mrs. Sargent’s view that it is desirable that there should be a thorough clean of the premises once a month to ensure cleanliness and hygiene. Accordingly this item is allowed. (4). Case management.[41]We are here concerned with the cost of a case manager who will be expected to oversee the management of the Claimant’s care regime and, in addition, to provide services such as arranging the supply of equipment, assisting in the arrangement of holidays, arranging medical and dental treatment, arranging therapies, and dealing with issues relating to such matters as accommodation and insurance.[42]A preliminary issue concerns the appropriate model for the provision of care to the Claimant. The current arrangement is that he purchases a package of care from a care provider, CPA. The role of case manager is currently performed by Mr. Stillaway. Although some elements of case management are directly provided for in the overheads paid to CPA, there is still a need for a case manager. However, it is the wish of the Claimant to dispense with the services of CPA and to introduce a new model of care in which he will directly employ carers, as opposed to purchasing a package of care from an agency. Initially, it was the position of the Second Defendant and its care expert Mr. Taylor that care should be provided on the model of an agency providing a package of care. However, the Second Defendant has now abandoned that case and accepts that it is reasonable for the Claimant to employ carers directly. I am satisfied that it is entirely reasonable for the Claimant to arrange for the care regime which he contemplates and to be compensated for the cost on that basis. One consequence of this preferred model is that, for the reasons indicated above, the costs of case management are likely to be higher than would otherwise be the case.[43]Mr. Taylor initially recommended a minimal level of case management not only on the assumption that the Claimant would continue to use an agency care model but also on the basis that the Claimant would himself be able to take on most of the case management tasks. However, I am entirely persuaded that the Claimant is not capable of being his own case manager. In this regard I would refer to the following matters.(1) The Claimant has suffered not only spinal injury but also brain injury which has caused psychiatric symptoms. The expert psychiatrists, Dr. Rosen and Dr. Bashir, have agreed that the Claimant suffers from cognitive deficits as a result of cerebral damage and suffers from fluctuating depression with exacerbations in the moderate range of severity. His depression is closely related to his severe physical injuries which include chronic severe pain. His severe neurological impairments are permanent as a result of tetraplegia, chronic pain and cognitive impairment. The expert evidence which I accept is that his prospects of gainful employment are virtually non-existent.(2) Mr. Freestone, the Claimant’s former case manager, states that the Claimant suffers from memory problems which impact on his problem solving abilities. As a result his case management needs are greater than those typically experienced by a tetraplegic.(3) Mr. Stillaway, the Claimant’s present case manager, gave evidence that a great deal needs to be done for the social integration of the Claimant. He is very vulnerable and totally dependant on care, socially disconnected and has a low belief in himself. Mr. Stillaway considers it necessary that there be someone to perform the case management role because the Claimant is incapable in fulfilling that role himself.(4) There was evidence of an occasion when bailiffs had arrived at the Claimant’s parents’ home as a result of a failure of the Claimant to pay a parking fine. There is also evidence in the notes of case management visits to support Mr. Stillaway’s conclusion that the Claimant suffers from lapses of memory and an inability to concentrate for any length of time.(5) The Claimant himself accepted in his evidence that his memory had been affected by the accident and that he suffers from an inability to concentrate.[44]It is clear therefore that the Claimant will require a case manager and that the case manager will have a substantial role to perform.[45]The evidence of Mrs. Sargent, the Claimant’s care expert recommends 140 hours for case management for the first year and 120 hours a year thereafter. As indicated above, Mr. Taylor initially indicated a minimal level of case management. However, in the course of his oral evidence he accepted it was appropriate for the Claimant to employ carers directly. As a result, he suggested for the first time in his oral evidence that a reasonable allowance for case management should be 80 hours in the first year and 60 hours in each year thereafter. He also suggested that the number of hours could eventually be reduced to 30 hours a year. He agreed with Mrs. Sargent that a rate of £80 per hour was appropriate. I have certain misgivings about the evidence of Mr. Taylor in this regard. His recommendations in relation to case management were produced for the first time in the course of his oral evidence and no reason was advanced for the particular figures proposed. In his closing submissions, Mr. Methuen on behalf of the Second Defendant, suggested that an appropriate allowance would be 80 hours for the first 5 years and 45 hours each year thereafter. However, this was put forward on the basis that the Claimant is a bright and capable young man who is able to be more involved in running his life. This is a view which I am unable to accept for the reasons stated above.[46]The provision for case management proposed by Mrs. Sargent differed significantly from the original calculation of Mr. Stillaway. In his report of November 2006 Mr. Stillaway calculated that case management in 2007 would reasonably require 70 hours. In particular, he considered that the requirement would fall very substantially in the second 6 months when only 16.5 hours would be required. However, in his witness statement of the 9th January 2007 he explained that he realized that he had underestimated the amount of time for case management which would be necessary to support the Claimant. He states that this is because he now has a greater understanding of the Claimant’s brain injury and how it has affected him. He explains that in addition to the tasks indicated in his November 2006 calculation he has also needed to become involved in a wide range of rehabilitation and therapeutic issues including support in relation to management and financial affairs, managing equipment provision, arranging and overseeing pain management treatments and increased regular contact with the Claimant to meet his concerns and anxieties concerning care provision. Moreover he has discovered that CPA’s care management role, as opposed to case management, was less extensive than he had supposed. He has become increasingly involved in co-ordinating the care provided for the Claimant. This led him to the conclusion that he would need to spend about 120 hours per year working for the Claimant if CPA continued to provide care for him.[47]This has led the Second Defendant to criticize Mr. Stillaway on the basis that he has simply increased his projected figures in order to accord with the opinion of Mrs.Sargent. However, I consider that an analysis of the hours actually devoted by Mr. Stillaway to the Claimant’s case management in the second half of 2006 does support the conclusion that his projection in November 2006 was unrealistically low. The hours actually spent on case management during the period June–November 2006, on the documentary evidence, combined with Mr. Stillaway’s estimate of 5.5 hours for December, lead to a total of 54.25 hours. Mr. Stillaway estimated that about 10% of this time was connected with litigation. Making an adjustment in respect of this leads to a figure of 98 hours per year.[48]I consider that this figure is a suitable starting point for the calculation of the reasonably required hours of case management. It was common ground that a greater degree of case management will be required where carers are directly employed as opposed to where a package of care is purchased from an agency. However, in view of Mr. Stillaway’s evidence as to the significance of the role played by CPA I consider that an uplift to 105 hours per year would be appropriate. In addition, I consider that an additional allowance should be made for the first year in which there will be a change from one care model to another. Accordingly I consider that the appropriate provision would be 125 hours in the first year and 105 hours in each year thereafter. In addition, for reasons which will become apparent below, I consider that there are likely to be increased costs of case management in the year in which the Claimant obtains his 47th birthday, because of the need to change to waking night care. Accordingly I would allow 115 hours for case management in that year. (5). Waking night care.[49]The current arrangement for the Claimant’s care at night are that he is attended by one sleeping night carer. The Claimant requires one turn each night to prevent pressure sores. However, the Claimant maintains that there will come a time when he will require to be turned twice a night and as a result this will require the provision of waking night care. There is a dispute between the parties as to the age at which this need will arise. In addition, the Second Defendant maintains that when the need does arise it will still be possible to meet it by the provision of sleeping night care.[50]In their first joint statement dated November 2006 the spinal experts, Mr. Derry and Mr. Tromans, concluded that the Claimant’s care needs were not likely to increase substantially beyond the current input. However, in their second joint statement which was produced during the trial they agreed that “with the natural ageing process there will be an increased input of care which will be reflected in an increased need for turns. [Mr. Derry] placed this at the age of 45 and beyond while [Mr. Tromans] places this at the age of 50 and beyond.” I consider this represents a fair range of medical opinion. In the circumstances, I propose to take the last anniversary before the Claimant’s 47th birthday as the appropriate date from which the additional turning will reasonably be required. I take this date rather than the precise mid point between 45 and 50 because of the convenience of making a change in the basis of calculations at a year end and because the marginal additional benefit to the Claimant can be justified on the basis of the threat to health should bedsores develop.[51]That leaves the question whether such care can be provided by a sleeping night carer. The Second Defendant maintains that it can. However, in this regard I accept the evidence of Mrs. Sargent, which was not substantially challenged by Mr. Taylor, that sleeping night carers are not expected to provide assistance more than once during the night and are paid a lower rate accordingly. (The evidence before me was that a sleeping night carer usually works an 8 hour shift and is paid for 5 hours.) Mrs. Sargent’s evidence was based on her personal experience. She was adamant that carers are alive to the difference between sleeping care and waking care rates and they would not tolerate being woken up more than once or twice a night if they were paid at the lower rate.[52]The account given by the Claimant to Mr. Tromans, which the Claimant confirmed in the course of his oral evidence, is that at present he calls on the night carer on average twice a night. This suggests to me that the present calls on a sleeping night carer go to the very limits of what is usually regarded as permissible under such arrangements. An additional turn at night would clearly take the arrangement beyond that of a sleeping night carer and would require the provision of waking night care. Accordingly I allow for the provision of a waking night carer from the last anniversary before the Claimant’s 47th birthday. TRAVEL AND TRANSPORT.[53]The parties have agreed that reasonable provision for the Claimant includes the purchase of a Chrysler Voyager with Entervan conversion. They also agree in relation to mobility assessment. The cost of these items is agreed. However, everything else is in issue. These matters are considered in the following sections. (1). Is the claim for special driving lessons reasonable?[54]Prior to his accident the Claimant had taken driving lessons although he had not yet taken his driving test. He will now require specialist driving lessons to enable him to drive a vehicle with hand controls. I consider that this is an additional expense attributable to the injury and that it is reasonable to award it. (2). Is it reasonable to replace the Chrysler Voyager every 4 years?[55]The evidence is that the Claimant is making very extensive use of his converted Chrysler Voyager. Although he is not yet driving himself, he gets out frequently with a carer driving. In his witness statement of the 22nd September 2006 the Claimant confirmed that he had driven 17,305 miles in 9 months which is the equivalent to an annual mileage of 23,000 miles. I accept the evidence that this has had a dramatic affect on the Claimant’s independence. Moreover, it is obvious that a person suffering from the Claimant’s disabilities should have a reliable vehicle. On this basis the Claimant seeks replacement every 4 years.[56]The Second Defendant’s expert, Mr. Taylor, suggested in his evidence that replacement should be every 5 years. (His previously expressed view that it should be replaced at every 6 years appears to have been based on a misunderstanding as to the Claimant’s annual mileage). However, in cross examination. Mr. Taylor accepted that it would be reasonable for the Claimant to change his car after 80,000 miles. On this basis it seems to me that replacement of the vehicle every 4 years would certainly not be unreasonable.[57]However, Mr. Taylor also suggested that the Claimant’s annual mileage would be likely to reduce in future. He suggested that the novelty would wear off. However, there was no evidence to support this. On the contrary, the evidence indicates that the Claimant is unusually energetic and adventurous for someone in his condition. I consider it highly likely that he will continue to use the vehicle to the same extent as at present. Indeed his mileage may well increase when he is driving himself. In this regard I also take account of the evidence of Julia Ho, the Claimant’s expert on occupational therapy, that people suffering from severe disabilities tend to change their cars after 5 years because of the fear that things may start to go wrong. I consider that this is entirely understandable. Accordingly, I conclude that it is reasonable for the vehicle to be replaced every 4 years. (3). Is the claim for driving control reasonable?[58]The agreed items include the cost of Entervan conversion which permits the Claimant to take his wheelchair up a ramp into the vehicle. However, the Claimant also seeks the costs of adapting a Chrysler Voyager so that he can drive it himself. The capital cost for driving controls is £15,820. On the basis of a life expectancy to aged 72, the lifetime loss would be £15,820 x 7.69 = £121,656. I accept that this item is required in order to put the Claimant back into the position he would have been in but for the accident and that it is entirely reasonable. (4). Allowance for depreciation of the car he would have purchased in any event.[59]It is necessary to make an allowance for the value of the cars that the Claimant would have purchased during his lifetime had he not suffered the accident. I accept the submission of the Claimant that the appropriate approach to this issue is to calculate the difference in depreciation between the cars he probably would have bought and the vehicles he has had to purchase as a result of his injuries. (Woodrup v Nicol [1993] PIQR Q104; Goldfinch v Scannell [1993] PIQR Q143.)[60]There will inevitably be a measure of speculation in the assessment of the type of car the Claimant would be likely to have driven before his accident. However, in the light of my conclusions as to the career he would have been likely to follow had he not suffered the accident, I consider that it is reasonable to make an allowance on the basis that in the first 5 years he would have had a small car in the price band of £10,000 - £13,000 and thereafter he would have had a medium sized car in the price band £13,000 - £20,000. I consider that it is appropriate to use the depreciation figures in Facts and Figures 2006 provided by the Automobile Association. (5). Is the claim for Entervan conversion reasonable?[61]The parties are agreed that it is reasonable to include the costs of the Entervan conversion which allows the Claimant side access to the Chrysler Voyager while he is in his wheelchair. The cost is agreed at £23,918. The only remaining issue here is whether this should be awarded as a separate item, as the Claimant maintains, or whether it should be included in the basic price for the Chrysler Voyager, as the Second Defendant maintains. I am persuaded that it should be included as a separate item. The Second Defendant’s method of calculation attributes some resale value to the conversion. However, I consider that it has no resale value and there is no real possibility of the Claimant realising anything in respect of the conversion when he comes to sell the vehicle on replacement. On the contrary, I accept the evidence of Mrs. Ho that many disabled people are wary of cars which are more than a few years old because of the absolute need for reliability. Furthermore, the conversion will make it more difficult to sell the vehicle to members of the public who are not disabled and do not want the conversion. (6). Increased cost of insurance.[62]It is agreed that the Claimant currently pays an annual premium of £4,437 on a policy which covers any driver over the age of 21. The Claimant had previously paid an annual premium of £2,067 when the permitted drivers were restricted to those over 25. The Claimant contends that it is likely that he will continue to have carers under the age of 25 and that therefore the increased cost of insurance should be calculated by reference to the level of the current premiums.[63]The position adopted by the Second Defendant on this issue has shifted. Initially, the Claimant’s expert Mr. Taylor took the view that the allowance for increased cost of insurance should be limited to £500. However, in the note of the joint meeting of experts (Mr. Taylor and Mrs. Ho) Mr. Taylor appears to accept that the claim should be based upon the future cost of insurance premiums to cover any carer (which Mrs. Ho assessed at £4,991.21 for the year commencing January 2007), subject to the caveat that costs should diminish with time and that the figure was not, therefore, an ongoing cost on an annual basis. In his oral evidence Mr. Taylor expressly accepted in cross examination that it was reasonable for the Claimant to insure drivers under the age of 25 and agreed the figure of £4,437 per annum, while reserving his position as to whether that would continue for the future. In his closing submissions Mr. Methuen, on behalf of the Second Defendant did not seek to maintain Mr. Taylor’s initial position which I consider unrealistic. Rather, Mr. Methuen argued that it is likely that his premiums will reduce once he and his carer drivers become older and he acquires more of a no claims discount.[64]The Claimant in his evidence expressed a preference for carers of about his own age. This lends support to Mr. Methuen’s submission that in time, as the age of the drivers increases, the premiums will correspondingly reduce. However, it is the Claimant’s intention that he should be cared for by a team of five carers. Despite the Claimant’s preference for carers of his own age, it seems extremely likely that one or more of the carers will be under the age of 25. In this regard, I note the evidence of Mr. Taylor that carers are often young people and that it is not at all easy to employ carers above the age of 21. Mr. Taylor is himself disabled and he referred to the fact that his insurance had recently gone up by £1,500 because a carer working for him is 19 years of age. He also accepted that it was reasonable to have an insurance policy to cover one or two carers under the age of 25. To my mind it is realistic to assume that the Claimant will continue to have at least one or two carers who are under the age of 25. There was no evidence as to the extent to which naming drivers might reduce the premium. Moreover, I doubt that there is much scope for reduction of the premium on the basis of no claims bonus, (if there are in fact no claims) if, as seems likely, the drivers are constantly changing. In the circumstances, I have come to the conclusion that the current level of premium paid by the Claimant is an appropriate starting point for the calculation.[65]It is, of course, necessary to make a reduction to take account of the cost of motor insurance which would have been incurred had the Claimant not suffered the accident. There was no evidence directly on this point. However, I accept the suggestion of Mr. Methuen that at his present age the Claimant would be likely to be paying in the region of £1,000 a year. However, as he grew older it is likely that this would have reduced. This is not a matter which is susceptible of precise calculation. However, I consider that it would be fair to allow £750 per annum as an average figure in respect of the likely costs of insurance which would have been incurred in any event. (7). Increased running costs.[66]I accept that as a result of the accident the Claimant will incur increased running costs. I also accept that a fair and relatively simple method of calculation is to apply the AA Motoring Costs Table (2006). This table gives a figure of 28.91 pence per mile as running costs for vehicles costing more than £30,000 which would be the appropriate band for the Chrysler Voyager. However, against this must be set the cost of running the car which the Claimant would have run but for the accident. I have already concluded that, but for the accident, the Claimant in the first 5 years would have had a small car in the price band of £10,000 - £13,000 and thereafter would have had a medium sized car in the price band £13,000 - £20,000.[67]The Claimant also includes a claim for increased mileage. The Claimant’s current mileage is 23,000 miles a year. I have concluded that he is likely to run up such a mileage for the rest of his life. Against this must be set the mileage he would have run up in any event. Here again, this is simply not susceptible of precise calculation. However, I consider the figure of 10,000 miles per annum proposed by the Claimant to be a substantial underestimate given the Claimant’s energetic character. I consider that an allowance of 20,000 miles per annum would be appropriate. (8). Ancillary items.[68]Under this head the Claimant seeks to recover the costs of AA breakdown cover, car washing, a multi-CD changer and a hands free telephone kit. I am satisfied that these items should not be allowed because the cost of these items would have been incurred in any event. HOLIDAYS AND LEISURE. (1). Holidays.[69]The Claimant claims the additional cost of future holidays. Since his accident he has taken two holidays, each costing approximately £10,000. In February 2004 he visited Pakistan. In January 2005 he visited Dubai. The visit to Pakistan in 2004 was a result of family bereavement. The Claimant went with his brother and sister. They had planned to stay for just under a week but the trip was cut short to 3 days because of the difficulties he experienced. They travelled business class. The total cost of the trip to Pakistan was £10,812. In normal circumstances a similar trip would cost about £2,000. The trip to Dubai, which marked the Claimant’s 21st birthday, was much more successful. The Claimant was accompanied by his brother and his mother. The cost of the business class travel for the Claimant and his brother was £4,530. His mother traveled economy class at a cost of £306. The hotel cost £2,780.[70]The Claimant clearly wishes to take holidays abroad in the future and I consider that it would be entirely reasonable for him to do so. As a result of his injuries the Claimant will incur increased costs which will include the following;(1) It is common ground that the Claimant would have to be accompanied by three carers. Mr. Taylor accepted in his evidence that it would not be appropriate to rely on members of the family to act as carers. I entirely agree.(2) The Claimant and one carer would have to travel business class.(3) The Claimant would incur the additional cost of accessible accommodation and transport.[71]The Claimant seeks an allowance of £10,000 additional cost per year. Mrs. Ho and Mr. Stillaway support his claim. In particular, Mr. Stillaway has produced costings for a 14 day holiday ranging from £4,500 to £20,000. With one exception, the costings do not include business class travel for the Claimant and one carer. This should be contrasted with the earlier assessments by Mrs. Ho of increased holiday costs of £3,000 on the 18th August 2003 and £5,000 on the 31st March 2005. However, these seem to be figures plucked out of the air and the later researches of Mr. Stillaway (and to a lesser extent Mrs. Ho) do support the view that the likely costs are likely to be about £10,000. Unfortunately, in his calculation the Claimant does not allow for the cost of holidays which he would have taken in any event. However, the Claimant points to the fact that the costing relates to only one trip and it is reasonable to expect the Claimant to go on more than one holiday per year as he would have done each year as he would have done before the accident.[72]On behalf of the Second Defendant, Mr. Taylor allowed £3,500 per annum for increased holiday costs. This was clearly an estimate. In his oral evidence he accepted it was an intuitive figure that had not been calculated on the basis of any research. In his closing submissions, Mr. Methuen on behalf of the Second Defendant submitted that the sort of holidays costed by Mrs. Ho and Mr. Stillaway are more luxurious than the Claimant would have been likely to have taken in any event. Furthermore, he submitted that allowance would have to be made for the holidays that would have been taken in any event. Accordingly, he submitted that a reasonable differential was unlikely to be more than £5,000 a year.[73]I accept the evidence of Mrs. Ho and Mr. Stillaway that the cost of a 7-14 day trip for the Claimant is likely to be in the region of £10,000. That figure is, to my mind, realistic when one considers that most of Mr. Stillaway’s costings would have to be increased to allow for business class travel for the Claimant and one carer. Moreover, this figure is supported by the actual cost incurred by the Claimant on his trip to Pakistan. It will clearly be necessary to make allowance for the costs which would have been incurred by the Claimant on the holidays he would have taken had he not suffered the accident. On the other hand, I accept that it would be reasonable for the Claimant to take more than one 7 -14 day holiday each year, as he no doubt would have done had he not suffered the accident. The matter cannot be the subject of a precise calculation. However I consider it fair to approach it on the basis that these competing considerations cancel each other out and that an annual figure of £10,000 in respect of increased holiday costs is reasonable. (2). Leisure.[74]The claimant claims the cost of attending two disability-related outward bound courses at a cost of £800. These courses were recommended by the joint physiotherapist, Mrs. Constantine. However I consider that this is the sort of cost which the Claimant would probably have incurred in any event. Accordingly this item is not allowed. (3). Attending football matches.[75]The Claimant is an Arsenal supporter. He seeks to claim the additional cost of attending matches. There is little if any evidence that the Claimant will in fact incur additional costs in attending football matches in the future. Moreover there is no evidence that he has yet attended a match since his accident. In these circumstances, I accept the suggestion of the Second Defendant that a nominal single payment in the sum of £1,600 would be reasonable. ACCOMMODATION.[76]The following issues were agreed during the trial;(1) Betterment was agreed at £60,000 (£40,000 in respect of the adaptations carried out to Purbeck Lodge and £20,000 in respect of the hydrotherapy pool.)(2) Increased running costs were agreed at £5,643 to age 28 and £2,367 thereafter.(3) The capital cost of installing air conditioning units was agreed at £9,625 and the maintenance costs were agreed at £360 per annum.(4) The cost of installing a burglar alarm and associated maintenance costs were agreed (subject to the court’s decision on reasonableness).(5) Adaptation reversal costs were agreed at £4,000.(6) The net cost of building a pool extension was agreed at £100,000 (taking into account the agreed £20,000 deduction for betterment from the gross building costs of £120,000). In addition it should be noted that the costs claimed in relation to past adaptation of the Purbeck Lodge have been agreed.[77]The award in respect of the cost of accommodation is to be calculated in accordance with Roberts v Johnstone [1989] QB 878. For this purpose it is necessary to determine whether it was reasonable for the Claimant to purchase Purbeck Lodge and what costs of accommodation he would have incurred but for the accident.[78]Accordingly, the following issues remain to be determined.(1) Whether it was reasonable for the Claimant to have purchased Purbeck Lodge.(2) The appropriate amount of credit to be given for accommodation expenses the Claimant would have occurred but for the accident.(3) Whether the claim for a burglar alarm is reasonably necessary.(4) Whether it is reasonable to allow the costs of the extension to house the hydrotherapy pool. (1). The purchase of Purbeck Lodge.[79]Purbeck Lodge was purchased by the Claimant in 2004 for the price of £595,000. Although the estate agent’s details stated that the floor area was 172 square metres, when the internal floor area was measured by Mr. S. E. Cumbers, the Claimant’s property expert, after purchase it was found to be in fact 195 square metres. The Claimant moved into Purbeck Lodge in April 2006 after adaptations had been completed.[80]The Claimant maintains that the purchase price was reasonable. However, the Second Defendant points to the agreed joint statement of 4th February 2004 between Mr. Cumbers, the Claimant’s property expert and Mr. D. A. Reynolds, the Second Defendant’s property expert. This document records that Mr. Cumbers and Mr. Reynolds agreed that the Claimant needed a bungalow which was suitable for appropriate extension and adaptation. However they were not able to agree on the likely acquisition cost of such a bungalow. Mr. Cumbers cited a selection of currently available bungalows that were typical of those that might be suitable for extension and adaptation. They had an average floor area of 122 square metres and an average asking price of £441,000. Accordingly he considered the price of £441,000 to be reasonable. Mr. Reynolds, on the other hand, found two of the bungalows within that selection were priced at £425,000 and accordingly he took that figure as the reasonable purchase price. It was common ground between the experts that such a bungalow would require extension and that the minimum floor area required to achieve full wheelchair manoeuverability would be 170 square metres. However it should also be noted that Mr. Cumbers entered a caveat in this joint statement:
“Mr. Cumbers cautions that not only must this bungalow have adequate scope for the necessary extension, but it must have scope for yet further extension in the happy event of Waseem Sarwar creating his own family. This means that the bungalow must have sizeable gardens if it is not to become unviable in the longer term.”
And for this reason Mr. Cumbers suggested that the acquisition costs for the bungalow might exceed £441,000.[81]If the range of £425,000 to £441,000 is adjusted to current price levels it gives a range of £475,000 to £494,000, with a mid point of about £485,000.[82]The actual price paid for Purbeck Lodge at £595,000 is substantially in excess of the figures mentioned in the joint statement of February 2004. Nevertheless, I have come to the conclusion that it was reasonable for the Claimant to purchase Purbeck Lodge for the following reasons.(1) The Claimant spent a considerable amount of time looking for a suitable property. His evidence was that he started to look for a new house in June or July 2003. He was assisted by his sister Sheepa and his brother Imran. They would search the internet and drive to visit properties if they were considered suitable. Mr. Freestone, who was then the Claimant’s case manager, also assisted in the search for a property and confirmed that no suitable property had been found prior to Purbeck Lodge. The Claimant’s evidence was that the search was hard and protracted. They found that there were relatively few true single storey bungalows that had not been adapted and extended into the roof so as to make them larger with more bedrooms. They inspected a number of properties. Purbeck Lodge was the first really suitable property they had seen. Although Mr. Methuen suggested that there was little written evidence of any significant search in the first half of 2004 before the purchase of Purbeck Lodge, I am satisfied that the Claimant, with the assistance of his brother and sister, carried on a diligent search for a suitable property from June or July 2003 until they found Purbeck Lodge.(2) There was an urgent need for the Claimant to be re-housed. The acquisition of a property could not reasonably be left any longer. The Claimant was living in his parent’s home which was originally a four bedroomed terraced house and had been extended to include a total of six bedrooms and two living rooms. Most of the rooms are small. The Claimant lived there with his parents, his sister Sheepa, her 7 year old daughter, two other older sisters and his brother Imran. The Claimant slept in one of the sitting rooms which was very restrictive. Mr. Freestone’s evidence was that the Claimant was confined to that room where he slept and spent the majority of his time. He had only the most limited, rudimentary bathing facilities and was unable to access the rest of the house, with the exception of the kitchen, without significant assistance from carers.(3) Purbeck Lodge was purchased on the advice of Mr. Cumbers. He recommended that the Claimant offer the asking price because he felt it was reflective of the true value of the property and also because it was his opinion that finding a more suitable house would be difficult. Mr. Reynolds, in the course of his oral evidence, accepted that it was reasonable for the Claimant to rely on his expert’s advice.(4) The purchase price was undoubtedly higher than that indicated by the joint statement of February 2004. However, the opinion of Mr. Cumbers expressed in that document was not unqualified. In this regard I also note that in a report dated the 20th June 2003 Mr. Cumbers had suggested that a property in the Claimant’s locality suitable for extension and adaptation would cost between £445,000 and £795,000. The mid point of this range is £580,000.(5) The joint statement contemplated the acquisition of a property for extension. In the event it has not been necessary to extend Purbeck Lodge. As a result these expenses and the complication of applications for planning permission have been saved.(6) The Claimant was clearly restricted as to the location of the property. It is necessary that the property should be relatively close to the other members of his family who have been hugely supportive of him since the accident. Purbeck Lodge is about ten minutes by car from his parents’ home.(7) As Mr. Cumbers indicated in his qualification to the joint statement, should the Claimant be fortunate enough to have his own family, as he hopes, Purbeck Lodge will be entirely suitable accommodation. Accordingly, there is no claim in the present case for the costs of the purchase and adaptation of a larger property at a later stage in the Claimant’s life.(8) There was a mistake in the estate agent’s particulars as to the area of Purbeck Lodge. In the joint statement Mr. Cumbers expressed the view that full wheelchair manoeuverability would require a bungalow of 170 square meters. The advertised area was very close to that. There clearly has to be a margin for reasonable provision. While I consider that the actual area of 195 square metres lies towards the upper limit of that margin, it does not, to my mind, render the purchase of the property unreasonable.(9) The cost of Purbeck Lodge expressed in cost per square metre (£3,051 per square metre) compares favourably with other properties which were being considered by Mr. Cumbers which ranged from £3,296 to £5,089 per square metre. For all these reasons, I have come to the conclusion that the purchase of Purbeck Lodge is reasonable. (2). Credit for the accommodation expenses that the Claimant would have incurred but for the accident.[83]The Claimant submits that allowance should be made by reference to the following stages.(1) Between the ages of 23 and 28 the Claimant would have continued to live at home paying a notional rent of approximately £30 per week or £1,500 per annum.(2) From age 28 the Claimant would have bought his first starter home, a one bedroom flat, with a partner at a cost of £130,476. Credit should be given for 50% of the equity at 2.5% = £1,418.45 per annum.(3) From age 35 the Claimant would have moved to a 3 bedroomed family home together with a partner at a cost in the region of £165,000. Credit should be given for 50% of the equity at 2.5% = £2,062.50 per annum.[84]During the trial the Second Defendant accepted that the first stage of the Claimant’s calculation is reasonable. However, the Second Defendant submits that the other figures proposed by the Claimant are considerably too low. Mr. Methuen contends that it is inconceivable that someone who would have been earning in excess of £40,000 per annum, as the Second Defendant suggests, would not have had a greater stake in a property. Mr. Methuen points to the fact that the property experts agreed in February 2004 that the likely cost of a starter home was about £180,000. In oral evidence we were told that the equivalent figure at current prices would be £195,000. Accordingly the Second Defendant submits that from the age of 28, credit should be given for a property of the value of £195,000.[85]I consider that this issue is influenced to a considerable extent by the likely level of the Claimant’s earnings had he not suffered the accident. I consider that he would have been likely to acquire a substantial property for his family. In the light of my conclusion as to the likely level of his earnings I consider it probable that at the age of 28 he would have purchased a 3 bedroom family house in or around Slough at a value, at current prices, of £195,000. However, I also consider that his partner would have a 50% share in the equity. Accordingly, for the purposes of the Roberts v Johnstone calculation credit should be given from the age of 28 on the basis that he would have acquired a 50% interest in a property costing £195,000 at current prices. (3). Burglar alarm.[86]Mr. Derry expressed the opinion that a burglar alarm was an essential item of equipment for the Claimant. I accept that the Claimant has a particular concern about security following a burglary at his parent’s home when he was still living there as a result of which his laptop was stolen. However, I consider that a burglar alarm is a standard household item that the Claimant may have bought in any event. Accordingly, I accept as reasonable the Second Defendant’s submission that I should allow 50% of the total sum claimed in respect of this item (£15,795.) Accordingly, I allow £7,898 in respect of this item. (4). Extension for hydrotherapy pool.[87]The Claimant submits that reasonable compensation should include the cost of construction and maintenance of a hydrotherapy pool. This claim can be broken down into the following heads. Purchase of pool £ 17,000 Replacement costs for the pool £ 9,170 Extension to house the pool, poll cover, recovery system and appropriate hoisting (less betterment) £100,000 Maintenance costs of pool £ 51,730 Replacement costs of pool hoist £ 20,320 Maintenance costs of pool hoist £ 8,129 All of these items, with the exception of the claim for the extension, form part of the Claimant’s claim for equipment in the total sum of £371,493 which has been compromised in the sum of £275,000. Accordingly, I am here concerned only with the reasonableness of an extension to house the hydrotherapy pool. That turns on the question whether the hydrotherapy pool is reasonably required.[91]The Claimant gave evidence that when he was a patient at the Royal Buckinghamshire Hospital he did a lot of hydrotherapy and really enjoyed it. It helped him relax and decreased his spasms during the day. The course was recommended by Mr. Derry. In his statement of December 2006 the Claimant stated that he was very keen to start hydrotherapy again as this had helped him with neurological pain and helped to reduce spasms. He had been assessed by the NHS in the autumn of 2006 and he was told that he was not an ideal candidate for this type of therapy because of his weight. In any event they would only be able to provide a finite number of sessions. He stated that he would already have started this therapy but for the problems with his feet which had prevented this. He hoped to begin these sessions in the Royal Buckinghamshire Hospital when the case came to an end or when his feet were better. In his oral evidence he stated that he had tried the pool at the local hospital at Stanmore but this had not been a good experience because there was a small changing room, there was no hoist and the pool was crowded. He could not reach out and swim. He also felt very awkward when people stared at him, especially because of the scars on his head. He had not repeated the experience at Stanmore.[92]The Claimant’s brother Imran gave evidence that he had accompanied the Claimant to the Royal Buckinghamshire Hospital for hydrotherapy sessions. The Hospital is at Aylesbury, 31 miles from Purbeck Lodge, and the journey takes approximately an hour.[93]It was clear from the evidence of Miss Constantine, the jointly instructed expert physiotherapist, that the hydrotherapy pools closest to the Claimant’s home are not suitable for him. Accordingly, the choice is between his travelling to Aylesbury and the installation of a pool at this home.[94]There was conflicting evidence as to the therapeutic benefits of hydrotherapy in the Claimant’s case.(1) Miss Constantine recommended access to hydrotherapy for the Claimant. She considered it would be an excellent medium for both resisted and passive exercise and would provide a unique opportunity for freedom of movement that the Claimant would be unable to experience in any other environment. She considered that it would be highly beneficial for him. In her oral evidence she also spoke of the cardiovascular benefits of swimming. (She was challenged on this aspect of her evidence on the ground that her first two reports had made no mention of the benefits of hydrotherapy and it was only in her third report she had made this recommendation. Her response was that she was aware of the costs implications and made the recommendation only after careful thought and consideration and only when she was aware that the Claimant’s new home at Purbeck Lodge was suitable for a hydrotherapy pool.)(2) Mr. Derry, the Claimant’s spinal expert, gave evidence that hydrotherapy is regularly prescribed as a therapy for all patients at Stoke Mandeville Hospital unless there are contrary indications. It helps with the circulation and reduces spasms. He also spoke of a feel good factor. It also helps with joint problems. He considered it would benefit the Claimant.(3) Mr. Tromans, the Second Defendant’s spinal expert, was of the opinion that the ability to undertake a full range of passive movements is more difficult in water. It was his view that the use of normal upper limbs does not produce a great deal of cardiovascular exercise. Tetraplegics have less upper muscle bulk so the advantages of hydrotherapy in this regard would be even less. In his view the main advantage of hydrotherapy is that it gives the patient independence of the wheelchair and the ability to move freely without assistance. His view was that the benefits are not in physiological or physical gains but rather in terms of a pleasurable leisure experience.[5]On the basis of this evidence I have come to the conclusion that any physiological gains from hydrotherapy in the Claimant’s case would be very limited. I have no doubt that he would enjoy the exercise. However, I am not persuaded that a case is made out on therapeutic grounds that a hydrotherapy pool is reasonably required at Purbeck Lodge.[6]Furthermore, I have come to the conclusion that it would not be unreasonable for the Claimant to travel to the Royal Buckinghamshire Hospital for hydrotherapy. In this regard, I note that the Claimant has travelled greater distances for other forms of therapy or to meet friends. I entirely understand his concerns on cosmetic grounds but these may be overcome if were to wear a swimming cap. Furthermore, I am not persuaded by Mr. Burton’s submission that installing a pool at Purbeck Lodge would actually cost less than attending the Royal Buckinghamshire Hospital for hydrotherapy. I do not accept that the Claimant would travel three times a week for hydrotherapy at the Royal Buckinghamshire Hospital. The evidence does not suggest that prior to his recent problems with his feet, which I accept have limited his ability to exercise, the Claimant was actively pursuing hydrotherapy. In any event, the provision I have made elsewhere (including, in particular, the provision I have made for annual mileage and double up daytime care) will, to my mind, enable the Claimant to travel frequently to the Royal Buckinghamshire Hospital for hydrotherapy should he wish to do so. CONCLUSION ON QUANTUM.[7]The calculations under the various heads of claim are set out in the Schedule to this judgment.[8]The award will be reduced by 25% to take account of the agreed effect of the Claimant’s contributory negligence.

FORM OF AWARD AND INDEXATION

[9]At the outset of these proceedings the Claimant’s position in relation to the form of the award was that he sought an order combining periodical payments and a lump sum award. So far as the claims in respect of the future cost of care and case management and loss of future earnings were concerned, the Claimant contended that there are significant advantages in an award of periodical payments. In particular such an award would ensure a flow of compensatory payments for the remainder of the Claimant’s life, would protect him from the risk of poor investment performance and would hold significant tax advantages. However, it was made clear that this preference on the part of the Claimant was inseparable from the issue of indexation. The Claimant sought periodical payments linked to an earnings based index or measure. If the periodical payments were to be linked to the retail price index (RPI) the Claimant’s preference would be for a lump sum in respect of all heads of future loss.[10]The position of the Second Defendant at that stage was set out in its Counter-Schedule. “18. The MIB is happy to consider whether any part of the award should take the form of periodical payments. 19. It will contend that such payments should be varied by reference to RPI in accordance with section 2(8) of the Damages Act 1996…” I did not understand the Second Defendant to be maintaining a positive case that any award in respect of the future cost of care and case management and loss of future earnings should be in the form of periodical payments varied by reference to RPI.[11]During the hearing the Claimant called expert evidence in support of his case that the appropriate form of the award in respect of care and case management and loss of future earnings should be in the form of periodical payments varied by reference to an earnings based index or measure, as opposed to a lump sum payment or periodical payments linked to RPI. This evidence was given by Dr. Victoria Wass, a Labour Economist at the Cardiff Business School and by Mr. Rowland Hogg, a Fellow of the Institute of Charter Accountants in England and Wales and a member of the Ogden Working Party since 1999. The Second Defendant called expert evidence critical of the linking of periodical payments to any of the various earnings based indices or measures which had been proposed by the Claimant’s experts and pointing to the advantages of the use of the RPI. That evidence was given by Mr. Adrian Cooper, a Labour Economist and Managing Director of Oxford Economics since 1998, and by Mr. Douglas Hall, a Fellow of the Institute of Chartered Accountants in England and Wales and Head of Forensic Accounting at Smith and Williamson Ltd.[12]At the conclusion of the evidence it was necessary to adjourn the final submissions because of lack of time. At the resumed hearing on 26th March 2007 I was informed by Mr. Burton, on behalf of the Claimant, that his instructions had changed. His new instructions were that damages for the future cost of care and case management and loss of future earnings should be awarded in the form of a lump sum. Alternatively, if they were awarded in the form of periodical payments such payments should be linked to an earnings index or measure. Periodical payments linked to RPI would be the form of award least favoured by the Claimant. The matter was expressed as follows: “Since closing the case, the Claimant has changed his preference as regards the form of award he seeks. Notwithstanding the expert advice he has received, he now seeks a single lump sum payment which will offer certainty and a clean break. Given the delays to the resolution of his claim which have occurred to date, he is mindful of the further delays that are likely to be involved, especially considering the length of time it may take before any appeal, possibly to the House of Lords, is concluded and the risks of a substantial adverse costs order if his case is, on this issue, ultimately unsuccessful.” (Closing Submission on behalf of the Claimant: Form of Award and Indexation, paragraph 2.)[13]The initial response of the Second Defendant to the Claimant’s change of position was as follows: “3 (ii) The Second Defendant has indicated a preference for a periodical payment order for both of those two heads of claims and contends that each order should be linked to the RPI. 4. However, whatever the Court’s decision may be on indexation, the Second Defendant asks the Court to make a periodical payment order in respect of both those heads of future loss.” (Second Defendant’s Closing Submissions on Indexation, paragraphs 3(ii), 4.) However, subsequently Mr. Methuen withdrew paragraph 4 of his Closing Submissions and told me that if the award in respect of the future cost of care and case management and loss of earnings was not in the form of periodical payments linked to RPI, the Second Defendant expressed no preference between a lump sum and an award of periodical payments linked to a different index or measure.[14]In these somewhat unusual circumstances, I turn to consider the appropriate form of award in respect of the future cost of care and case management and loss of future earnings. The statutory framework.[15]The history of the development of the court’s powers to award damages for future pecuniary loss in respect of personal injuries in the form of periodical payments as opposed to a lump sum has been considered in detail by Swift J. in Thompstone v Thameside and Glossop Acute Services NHS Trust [2006] EWHC 2904 (QB) and I gratefully adopt her account. As originally enacted section 2, Damages Act 1996 conferred a very limited power to make an award by way of periodical payments only if both parties agreed. The shortcomings of that state of affairs were identified by Lord Steyn in Wells v Wells [1999] 1 AC 345 at p. 384B:
“…[T]here is a major structural flaw in the present system. It is the inflexibility of the lump sum system which requires an assessment of damages once and for all of future pecuniary losses.In the case of the great majority of relatively minor injuries the plaintiff will have recovered before his damages are assessed and the lump sum system works satisfactorily. But the lump sum system causes acute problems in cases of serious injuries with consequences enduring after the assessment of damages. In such cases the judge must often resort to guesswork about the future. Inevitably, judges will strain to ensure that a seriously injured plaintiff is properly cared for whatever the future may have in store for him. It is a wasteful system since the courts are sometimes compelled to award large sums that turn out not to be needed. It is true, of course, that there are statutory provisions for periodic payments: see section 2 of the Damages Act 1996. But the court only has this power if both parties agree. Such agreement is never, or virtually never, forthcoming. The present power to order periodic payments is a dead letter. The solution is relatively straightforward. The court ought to be given the power of its own motion to make an award for periodic payments rather than a lump sum in appropriate cases. Such a power is perfectly consistent with the principle of full compensation for pecuniary loss. Except perhaps for the distaste of personal injury lawyers for change to a familiar system, I can think of no substantial argument to the contrary. But the judges cannot make the change. Only Parliament can solve the problem.”
[16]With effect from 1 April 2005, the Courts Act 2003 amended the provisions of the Damages Act 1996 governing periodical payments. The purpose behind the new system was to promote the use of periodical payments as the means of paying compensation for future financial loss in personal injury cases.[17]Section 2, as amended, now provides (in relevant part):
“2.- (1) A court awarding damages for future pecuniary loss in respect of personal injury – (a) may order that the damages are wholly or partly to take the form of periodical payments, and (b) shall consider whether to make that order. (2) A court awarding other damages in respect of personal injury may, if the parties consent, order that the damages are wholly or partly to take the form of periodical payments. (3) A court may not make an order for periodical payments unless satisfied that the continuity of payment under the order is reasonably secure. … (a) may order that the damages are wholly or partly to take the form of periodical payments, and (b) shall consider whether to make that order. (2) A court awarding other damages in respect of personal injury may, if the parties consent, order that the damages are wholly or partly to take the form of periodical payments. (3) A court may not make an order for periodical payments unless satisfied that the continuity of payment under the order is reasonably secure. … (8) An order for periodical payments shall be treated as providing for the amount of payments to vary by reference to the retail prices index (within the meaning of section 833(2) of the Income and Corporation Taxes Act 1988) at such times, and in such a manner, as may be determined by or in accordance with Civil Procedure Rules. (9) But an order for periodical payments may include provision – (a) disapplying subsection (8), or (b) modifying the effect of subsection (8).”
[18]The rules governing the award of damages by way of periodical payments are set out in CPR 41.4 – 41.10. These provide, in relevant part: 41.5 –(1) In a claim for damages for personal injury, each party in its statement of case may state whether it considers periodical payments or a lump sum is the more appropriate form for all or part of an award of damages and where such statement is given must provide relevant particulars of the circumstances which are relied on.(2) Where a statement under paragraph (1) is not given, the court may order a party to make such a statement.(3) Where the court considers that a statement of case contains insufficient particulars under paragraph (1), the court may order a party to provide such further particulars as it considers appropriate. 41.6 The court shall consider and indicate to the parties as soon as practicable whether periodical payments or a lump sum is likely to be the more appropriate form for all or part of an award of damages. “41.7 When considering (a) its indication as to whether periodical payments or a lump sum is likely to be the more appropriate form for all or part of an award of damages under rule 41.6; (b) whether to make an order under section 2(1)(a) of the 1996 Act, the court shall have regard to all the circumstances of the case and in particular the form of award which best meets the claimant’s needs, having regard to the factors set out in the practice direction.” 41.8- (1) Where the court awards damages in the form of periodical payments, the order must specify (a) the annual amount awarded, how each payment is to be made during the year and at what intervals; (b) the amount awarded for future - (i) loss of earnings and other income; and (ii) care and medical costs and other recurring or capital costs; (c) that the claimant’s annual future pecuniary losses, as assessed by the court, are to be paid for the duration of the claimant’s life, or such other period as the court orders; and (d) that the amount of the payments shall vary annually by reference to the retail prices index, unless the court orders otherwise under section 2(9) of the 1996 Act. … (3) Where an amount awarded under paragraph (1)(b) is to increase or decrease on a certain date, the order must also specify– (a) the date on which the increase or decrease will take effect; and (b) the amount of the increase or decrease at current value. … ”[19]Practice Direction 41B provides in relevant part:
“1. The factors which the court shall have regard to under rule 41.7 include: (1) the scale of the annual payments taking into account any deduction for contributory negligence; (1) the scale of the annual payments taking into account any deduction for contributory negligence; (2) the form of award preferred by the claimant including (a) the reasons for the claimant’s preference; and (b)the nature of any financial advice received by the claimant when considering the form of award; and (3) the form of award preferred by the defendant including the reasons for the defendant’s preference.”
THE COURT’S APPROACH TO THE FORM OF AWARD AND INDEXATION.[20]The effect of the amendments to section 2, Damages Act 1996 made by the Courts Act 2003 is that with effect from the 1st April 2005 when a court is making an award of damages for future pecuniary loss in respect of personal injury it must consider whether the damages or part of them should be paid by way of periodical payments. Moreover, by virtue of the new section 2(9) the court may disapply or modify subsection (8) which requires the use of the RPI as the basis of indexation of periodical payments. It was on that basis that the Claimant in the present case originally sought periodical payments linked to an index or measure other than RPI.[21]This new system governing periodical payments was considered by the Court of Appeal in Flora v Wakom (Heathrow) Limited [2006] EWCA Civ. 1103. In that case, Sir Michael Turner, sitting as a High Court Judge, had refused an application by the defendants to strike out certain paragraphs of the statement of case and to exclude certain expert evidence, all of which related to a claim for periodical payments. The Court of Appeal dismissed the appeal. The judgment of Brooke L.J., with which the other members of the court agreed, establishes the following principles:(1) If a periodical payments order does not identify on its face the manner in which the amount of the payments is to vary in order to maintain their real value, the effect of section 2(8) is that it is to be treated as providing for what is set out in that subsection unless the order contains a provision of a type identified in section 2(9). There is nothing in the language of these sub-sections to suggest that the power to make provision such as is identified in section 2 (9) may only be exercised in an exceptional case. (Paragraph 10.)(2) There is no indication in section 2 of the 1996 Act, as substituted, that Parliament intended the courts to depart from the “100% principle” formulated by Lord Blackburn in Livingstone v Rawyards Coal Company [1880] 5 App. Cas. 25, 39 and by Lord Hope in Wells v Wells [1999] 1 AC 345, 390 A-B, namely that a victim of a tort is entitled to be compensated as nearly as possible in full for all pecuniary losses. Accordingly, the Court of Appeal rejected the submission that in enacting subsections 2(8) and (9) of the 1996 Act Parliament must be taken to have intended to provide compensation lower than that which would be awarded through adherence to the 100% principle, if a periodical payments order was to be made. (Paragraphs 18, 19, 27-29)(3) In a case where periodical payments are claimed, the trial judge should decide whether it is appropriate to use the powers given by Parliament in sub-section 2(9) and make such an order for index-linking the periodical payments (if a periodical payments order is in fact made) as he considers appropriate and fair in all the circumstances, without being obliged to detect exceptional circumstances before he is at liberty to depart from indexation linked to the RPI. (Paragraph 37).[22]In the light of this decision, I can deal briefly with the submission of Mr. Methuen on behalf of the Second Defendant that the power of the court to modify the operation of subsection 2(8) arises only in exceptional circumstances. Mr. Methuen accepts that I am bound by the decision of the Court of Appeal in Flora v Wakom to reject that argument and he reserves his submission for any appeal. That is clearly correct. I should add, however, that even were I not bound by authority I should conclude on the basis of the plain meaning of the provision that it was the intention of Parliament in enacting these amendments to section 2 to confer a wide discretion on trial judges to make an order for periodical payments linked to an index or measure other than RPI where it is appropriate and fair to do so in all the circumstances. I can detect no basis in the text for any restriction of the power of the kind contended for by Mr. Methuen, nor can I identify any sound reason in principle why the scope of subsection 2(9) should be so confined.[23]I approach the question of indexation on the basis that its purpose is to ensure, so far as is possible, that periodical payments move in line with inflation so that the real value of annual payments is maintained over the entire period for which payments will be payable, while at the same time guarding against unfairness to the Defendant as a result of overcompensation of the Claimant. If payments are linked to an inappropriate index or measure, they will either result in over-compensation of a Claimant or lead to the result that periodical payments will fail to keep pace with inflation. In the latter case, where the award is in respect of future costs the Claimant will not be able to meet his needs. Either outcome would be incompatible with the 100% principle.[24]On behalf of the Claimant it was submitted that the exercise with which we are concerned is one of finding the best or “least worst” match so that as far as possible any periodical payments are adjusted to take account of the future effects of inflation. This was vigorously contested by Mr. Methuen on behalf of the Second Defendant. He submitted that before the court could modify the application of subsection 2(8) by adopting an index or measure other that RPI, it would need to be satisfied that that index or measure truly fits the bill. He submitted that the court should not approach this issue on the basis of a comparison of the various indices or measures available. In his submission the fact that an index might be more appropriate than RPI in the circumstances of this particular case would not of itself justify the displacement of RPI. Accordingly, he submitted that while an alternative index or measure need not be a perfect match it must be a very close match before it could be adopted.[25]A consideration of the suitability of an index or measure will inevitably involve a comparison between that index or measure and the RPI which it is intended it should replace and a consideration of the extent to which the use of each is likely to assist in achieving the objective I have identified. It will also necessarily involve a comparison of potential replacement indices or measures. To my mind this is an essential part of the consideration of the appropriateness and fairness of the substitution of an alternative index or measure described by Brooke L.J. in his judgment in Flora v Wakom. I note that this process of comparison is the basis on which all the experts have approached the issue. I would however accept that in the absence of a relatively high degree of assurance that a given index or measure is likely to achieve that objective, the court is unlikely to adopt it.[26]Closely linked with this submission was the Second Defendant’s criticism of the Claimant’s stance, and that of the Claimant’s expert Dr. Wass, in failing to identify a single index or measure which should be applied in preference to RPI. Despite some encouragement from me, Mr. Burton would not be drawn into identifying a preferred index or measure for the loss of future earnings and the cost of future care, respectively. Similarly, Dr. Wass identified a number of indices and measures which she considered would ensure that the real value of annual payments was retained more effectively than would RPI. I am unable to see that there can be any justification for requiring the Claimant to identify and elect for a single alternative to RPI. As will become apparent when I turn in detail to the various indices and measures proposed, this is a highly complex area. The process of their evaluation, which is essential to the determination of what is appropriate, fair and reasonable, requires a consideration of many different aspects of these indices and measures and their likely future operation. They are likely to possess differing strengths and weaknesses and views may legitimately differ as to the likely impact of these characteristics on their suitability for the task in hand. In the present case I have been assisted by the manner in which counsel for the Claimant and the Claimant’s expert Dr. Wass have placed a number of different options before the court. Indeed, I consider it a great strength of Dr. Wass’s evidence that she readily drew attention to the potential advantages and disadvantages of each of the competing candidates. This has assisted me greatly in evaluating the various options under consideration.[27]It will be apparent from what I have already said that I consider that the function of this court is to seek to arrive at an appropriate, fair and reasonable solution to the problem of maintaining the real value of future payments in the particular circumstances of this case. A “one size fits all” approach is not required by the statutory provision. On the contrary, the purpose of the amended provision is to enable the court to adopt an index or measure which most appropriately meets the justice of the particular case. This conclusion also appears to me to flow inevitably from paragraph 37 of the judgment of Brooke LJ in Flora v Wakom to which I have referred above. It seems to me one of the great advantages of the new system is the flexibility which allows the court to adopt solutions appropriate to the facts of each particular case. Accordingly, I approach the issue of the suitability of periodical payments and the appropriate indexation in the context of the facts in this particular case and the needs of this particular Claimant. The evidence of the expert witnesses I have heard has, rightly in my view, concentrated on the best means of ensuring full compensation for this Claimant. Although the expert witnesses have, on occasion, expressed their opinions on the suitability of the different indices for use on a more general approach which may be applied in a range of cases, this is to my mind inappropriate. I am required to establish the most appropriate means of securing full compensation for this Claimant in this particular case.[28]In the same way, I am unable to see that there can be any sensible objection in principle to the adoption of different indices or measures for different heads of claim within the same case. In the present case we are concerned with compensation for the loss of future earnings and the cost of future care and case management. The considerations which apply under each head differ significantly and a single index or measure may not be the most appropriate in both cases.[29]On behalf of the Second Defendant Mr. Methuen submitted that there is a legal burden of proof on the party seeking to disapply or modify the application of subsection 2(8). I am unable to accept this submission. I note that a similar argument was advanced before Swift J. in Thompstone v Thamesside and Glossop Acute Services NHS Trust. There, the judge considered that the determination of what form of order best meets the Claimant’s needs under CPR 41.7 and the determination of what is appropriate, fair and reasonable so far as subsections 2(8) and (9) is concerned, does not lend itself to determination by the burden of proof. In so far as the Claimant bears any burden, she considered that it is an evidential burden i.e. an obligation to adduce evidence sufficient to establish a case that the RPI is an inappropriate measure of indexation and that there is at least one alternative, more appropriate, measure that the court might adopt in its stead. Thereafter, it is for the court to decide on the evidence before it what is appropriate, fair and reasonable (at paragraph 52). I entirely agree. Moreover, I consider that, in the unusual circumstances which now arise in the present case, the effect of CPR 41.7 is that I am bound to have regard to all the circumstances of the case and in particular the form of award that best meets the Claimant’s needs on the basis of all the evidence before the court, notwithstanding the fact that the Claimant no longer seeks an award of periodical payments linked to an earnings index or measure.[30]I am fortified in my conclusions on these preliminary issues relating to indexation by the fact that many similar issues were raised before Swift J in Thompstone where she came to the same conclusions for very similar reasons.[31]Finally in this regard, I should say something about what I consider, are the appropriate criteria in selecting an appropriate index or measure for the indexation of periodical payments. The principal criterion will necessarily be the degree of accuracy with which it is likely to reflect future movements bearing on the loss for which the Claimant is to be compensated. In this regard, consistency and accuracy of the index or measure in the past will be highly relevant considerations, as will reliability of the source. However, it is also necessary to have regard to the need to avoid unnecessary complications and to provide an order which is workable in practice. Ideally, an order for periodical payments should be simple and consistent in its application. Furthermore, in view of the fact that the order in the present case is likely to continue in force for some fifty years, it will be necessary to have particular regard to the accessibility and availability of the necessary statistical information throughout the period of the order.

LUMP SUM

[32]In general, the disadvantages which can accompany a lump sum award in respect of future loss are well known. The inherent uncertainty in the variables used to determine the correct multiplier for future losses makes it unlikely that the lump sum award will ever provide exactly the right sum of money to restore a Claimant to the financial position he would have been in but for the accident. Estimates of life expectancy cannot be precise. Moreover, assumptions about the real return on investments are likely to be too high or too low. The risk of these uncertainties is placed on the Claimant. In particular, the Claimant bears the risk that the fund may run out. This can have catastrophic consequences if the Claimant is no longer able to meet the costs of his care.[33]Mr. Rowland Hogg, the Claimant’s accountancy expert, produced a comparison between periodical payments and lump sums. His conclusions may be summarized as follows;(1) Lump sums are calculated by reference to a view as to the Claimant’s life expectancy. However, the medical evidence is frequently disputed and may turn out to be wide of the mark. If a Claimant lives longer than expected his lump sum damages will be inadequate, but if he dies sooner it is his estate which will benefit from over-compensation. Concerns about a Claimant living longer than allowed for and running out of money may lead to skimping on payments and not buying the level of care or other services needed.(2) The calculation of a lump sum award requires the use of an estimate of the net of tax return that the Claimant can expect to achieve from the investment of his damages. The current discount rate of 2.5% was set by the Lord Chancellor in July 2001. The rate of return actually achieved can vary from Claimant to a Claimant and from time to time. It will be affected by the class of investments chosen, movement in investment markets, the particular investment selected, the effect of taxation and investment charges.(3) Seriously injured Claimants have a pressing need for an expendable source of income to meet the costs of their future care. It is accordingly unrealistic to require severely injured Claimants to take even moderate risks when they invest their damages awards. Minimum risk investment at present provides a return well below the rate of 2.5% used to calculate damages for future losses.(4) Proper investment advice is essential for investment in equities to keep the risk as low as possible. Fees and charges are high and reduce the net return.(5) Tax is payable on income arising from investment of lump sum damages. A rate of 15% was used in the process of deciding on the discount rate of 2.5%. However, seriously injured Claimants may suffer a greater deduction because substantial damages will lead to tax being payable at a higher rate. Furthermore, income in the crucial early years after damages are awarded will suffer the highest deductions of tax.(6) Investment growth matching inflation is possible but this involves significant risk, high investment charges and high deductions for tax.(7) The largest elements in most claims for seriously injured Claimants comprise loss of future earnings and future costs of care. Both of these tend to increase in line with earnings and at a rate much faster than general inflation. The effect of this differential can be huge, especially for a young Claimant. While it is possible for a Claimant’s investments to achieve returns large enough to provide for future increases in care costs, this is unlikely and would certainly involve unacceptably high risks for a seriously injured Claimant.(8) While periodical payments provide a substantial degree of certainty to severely injured Claimants, removing uncertainties over life expectancy and investment returns, they are also inflexible in that they involve rigidity in the timing of future payments. This is not so in the case of lump sums. If an event, such as an increased need for care, occurs earlier than expected there is no facility for periodical payments to reflect this and the Claimant may have no money to deal with it. The inflexibility of periodical payments can be counteracted by awarding part of the damages as a lump sum contingency fund.(9) Certain items of major expenditure, for example expenditure on a house, adaptations and cars, are likely to be more suited to a lump sum award over and above the need for a contingency fund.(10) There are some non-financial issues in play here. A Claimant may not want continuing contact with the Defendant’s insurers and may prefer the clean break and finality of a lump sum. On the other hand there may be concerns that a Claimant may waste the lump sum damages, not invest it properly or be taken advantage of. The lump sum damages require complex long-term financial planning with the risk of over-spending or under-spending especially in the early years.(11) Contributory negligence is likely to result in damages, in whatever form they are awarded, being inadequate to provide the Claimant’s needs. This, combined with the inflexibility of periodical payments, could result in payments for life being inadequate throughout. This could indicate that a lump sum would be preferable as it would provide for the Claimant fully albeit for a limited period. This is an issue that requires careful consideration on a case by case basis.[34]The Second Defendant’s experts, Mr. Adrian Cooper and Douglas Hall, expressed their general agreement with Mr. Hogg’s conclusions summarized above. The only points of disagreement were limited to specific matters. Mr. Cooper did not accept that the cost of care tends to increase in line with earnings because of the impact of pay drift and potential improvements in productivity, matters to which I shall return. Mr. Hall did not accept that investing in equities involved significant risk. He considered Mr. Hogg’s assertion concerning higher rates of tax simplistic. He did not accept that the cost of care increases much faster than general inflation because he did not accept that there was a reliable measure of the change in the hourly rates of the domiciliary carers. Mr. Hall also considered contributory negligence to be irrelevant to the selection of a lump sum award or periodical payments.[35]Mr. Hogg set out in his report a series of illustrated calculations comparing the likely effect of an award of a lump sum or periodical payments in the present case. The conclusions, to which I have come on various issues including life expectancy, differ from the assumptions made by Mr. Hogg. Nevertheless, his assumptions are sufficiently close to my conclusions to make his calculations a valuable indication.[36]Mr. Hogg’s assumptions are as follows. He has assumed a life expectancy of 53 further years to age 76. He has applied a lifetime multiplier of 29.5 and a working life multiplier of 25. He has assumed that periodical payments on a full liability basis would be £150,000 for care, £40,000 for earnings and £83,000 for other heads. These are reduced to £112,500, £30,000 and £62,250 respectively due to contributory negligence. The sum in respect of other items is reduced to £38,347, the damages available for future losses having been reduced to about £5,200,000 because of interim payments. He has assumed that average earnings would increase at a rate of 1.75% per annum faster than inflation, stating that “this is less than the long term average of 1.9% but is the mid point of assumptions made by the Government Actuary”. He has calculated income tax in full in each year taking account of a full personal allowance and lower rate tax bands. He has assumed alternative before tax gross investment returns of 1.5% (to represent the return from minimum risk investment) and 3.75% (to represent the return from a mixed portfolio comprising mainly equities). He has reduced the estimated damages to take account of the 25% reduction for contributory negligence. I consider that this is correct. The factors to which the court is required to have regard under CPR Rule 41.7 include the scale of the annual payments taking into account any deduction for contributory negligence. (PD 41B 1(1).)[37]The results are summarized in the following tables. <P></P> <P><IMG alt="Image 1" src="1255(image1).png" align=center border=0></P>

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[38]It can be seen, therefore, that:(1) If the award were in the form of periodical payments linked to an earnings index there would be a shortfall of £2,214,585 if the Claimant lived for a further 53 years. If the award were in the form of periodical payments linked to RPI that shortfall would rise to £5,258, 205.(2) If the award were in the form of a lump sum and a gross investment return of 1.5% were achieved, the fund would run out in year 24 and the shortfall after 53 years would be £7,297,625. If the award were in the form of a lump sum and a gross investment return of 3.75% were achieved, the fund would run out in year 29 and the shortfall after 53 years would be £6,024,082.[39]Mr. Hogg has produced an alternative calculation assuming a combination of periodical payments and a lump sum. He has assumed that damages for care and loss of earnings are paid as periodical payments but damages for other costs are paid as lump sum of £1,131,250 (£38,347 x 29.5).[40]The results are set out in the following table. <P></P> <P><IMG alt="Image 2" src="1255(image2).png" align=center border=0></P>

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[41]It can be seen that the shortfalls now fall between those where all the damages are paid as periodical payments or as lump sums. However the results also show the lump sum running out after between 14 to 20 years leaving the Claimant to rely on periodical payments. However, Mr. Hogg concludes that if periodical payments for the cost of future care and loss of future earnings are indexed in line with earnings this could be the Claimant’s best option. The combined periodical payments would, on his assumptions, come close to covering the full cost of care up to the age of 65 and thereafter welfare benefits would help to supplement income.[42]While the Second Defendant’s experts took issue with the Claimant’s experts on the relative merits of periodical payments linked to RPI and periodical payments linked to an earnings index or measure, they did not challenge Mr. Hogg’s evidence in relation to the comparison of periodical payments and lump sums. In his cross examination of Mr. Hogg, Mr. Methuen did not challenge any of Mr. Hogg’s conclusions as to the relative merits of lump sums and periodical payments. Nor did he challenge the assumptions on which Mr. Hogg’s illustrations were based. Indeed, the Second Defendant’s case (at least by the time of final submissions) was that the award in respect of the future cost of care and case management and loss of future earnings should be in the form of periodical payments but that they should be linked to RPI and not to an earnings index or measure. INDEXATION: DIFFERENT INDICES.[43]Before considering the submissions in relation to indexation it is necessary to say something about the various indices and measures which have been referred to in the evidence.[44]The Retail Price Index (RPI) is published by the Office for National Statistics (ONS), the Government’s Statistical Service, on the basis of official statistics. It measures a typical basket of goods and services. The average cost of the basket is weighted to reflect household consumption patterns and weightings are revised annually. It is available as a consistent series from 1956 onwards. It was replaced by HCIP in 1988 as the key indicator of inflation and again by CPI in 1998. However, the Government continues to use RPI for indexation of Index-Linked Gilts and it is therefore likely to continue to be available in its existing form.[45]The Annual Earnings Index (AEI) is also published by the ONS on the basis of official statistics. It is the companion earnings series to RPI. It is a short-term indicator of average earnings growth based on data from a survey of some 8,400 employers covering some 9,000,000 employees. Data are collected monthly. Growth rates are published monthly, quarterly and as an annual average. It is an aggregate mean measure of earnings. It is periodically reweighed to reflect changes in the composition in the labour force. The earnings charted include allowances such as overtime and unsocial hours. It is the ONS preferred measure for earnings growth. It is available from 1963 as a broadly consistent series and is likely to continue in its existing format. AEI is to be used as a means of increasing the state pension.[46]The Annual Survey of Hours and Earnings (ASHE) is also published by the ONS on the basis of official statistics. It is available in aggregated and disaggregated forms. In its aggregated form it is a measure of the average earnings of employees. It is based on an annual survey of 1% of all PAYE employees based on National Insurance numbers. The information is collected in April. The statistics are published in October and confirmed in the October of the following year. ASHE aggregate is available as a mean and in percentiles. ASHE is the ONS preferred measure for the level of earnings for full time employees. The data is available (as NES) from 1974. ASHE fully replaced NES in 2004. ASHE is likely to continue for the required period of time.[47]ASHE is also available in disaggregated forms as a measure of the earnings of employees in particular occupational groups. It employs a 4 digit standard occupational classification (SOC). The statistics published include the mean, median and percentiles within each occupational classification.[48]NJC spine point 8 shows the agreed rates of pay for home carers working in “contracted-in” local authorities. The figures are available from 1991 onwards.[49]British Nursing Association (BNA) pay rates for home carers and nurses are recommended rates of pay for carers and nurses employed in the private sector. The figures are available from 1982 onwards. The figures are disaggregated by region and by occupation. INDEXATION: LOSS OF FUTURE EARNINGS.[50]Earlier in this judgment I came to the conclusion that, had he not suffered this accident, the Claimant would have obtained a professional qualification and would have obtained employment in the field of finance, economics or accountancy. Having regard to the regional variations and taking account of the range of gross salaries in these occupational groups, I came to the conclusion that £55,000 gross per annum represents the most likely average of the Claimant’s life long earnings. The parties have agreed that, whatever the form of the award, there should be a reduction of 10% in the award for loss of future earnings to make allowance for future contingencies other than mortality.[51]Until the closing stages of the hearing, the Claimant sought to persuade me that the appropriate form of the award in respect of loss of future earnings was periodical payments linked to an earnings related index. It was only at the stage of final submissions that the Claimant indicated that a lump sum award was preferable. In support of his original case the Claimant called the evidence of Dr. Wass and Mr. Hogg both of whom were extremely supportive of his case in favour of periodical payments linked to an earnings based index. The position of the Second Defendant, at least by the close of the hearing, was that damages for loss of future earnings should be in the form of periodical payments linked to RPI.[52]In considering this aspect of the case I am assisted by the fact that there is near unanimity on the part of the experts in relation to certain of the issues. Dr. Wass, Mr. Hogg, Mr. Cooper and Mr. Hall all agree that average earnings generally increase at a faster rate than prices, that on the balance of probabilities average earnings growth is likely to exceed growth in prices in future and that, on the basis of historical data, linking periodical payments for loss of earnings to RPI would be very likely to under-compensate the Claimant. In her report Dr. Wass concluded that loss of earnings should be linked to an earnings based index. On the other hand, Mr. Cooper in his report concluded that “it is not clear that there is a more appropriate index than the RPI for up-rating compensation for the loss of earnings.” (Paragraph 5.1.) However, by the time of the joint meeting of the experts Mr. Cooper had changed his position. While still maintaining that the RPI will be closely related to the price of labour, Mr. Cooper nevertheless accepted that “an earnings measure is more appropriate for indexation for loss of earnings (again provided suitable allowance is made for likely periods of unemployment and likely age of retirement).”[53]There was therefore, eventually, a consensus among all four of the experts that RPI is not an appropriate index for periodical payments in respect of future loss of earnings and that an earnings based index or measure should be applied.[54]Notwithstanding this consensus on the part of the experts, Mr. Methuen on behalf of the Second Defendant argues that the method by which the court arrives at the annual figure for loss of future earnings will inevitably be highly speculative, in particular in view of the Claimant’s track record prior to the accident and in view of the fact that the accident occurred before he had taken up any occupation. On this basis he submits that it would be artificial and inappropriate to consider that a periodical payment reached by that speculative route should be varied by reference to any particular substitute index. He therefore submits that the court should decline to grant the application to modify subsection 2(8) in respect of the periodical payment for loss of future earnings. I am unable to accept this submission for a number of reasons. First, I consider that Mr. Methuen overstates the difficulties inherent in predicting this Claimant’s likely future earnings. While I accept that there is necessarily a measure of speculation in determining the nature and course of his future career, there is here compelling evidence which persuades me that there is an overwhelming likelihood that but for the accident the Claimant would have obtained a degree and then established a career in the field of finance, economics or accountancy. Secondly, the process which the court is required to undertake in assessing the likely future income is the same whatever the form of the award. Thirdly, it would be possible to link periodical payments for loss of future earnings to an earnings based index or measure without the need for a firm conclusion as to the precise occupation which he would have pursued.[55]I accept the evidence of Dr. Wass that in selecting an appropriate index it is necessary to consider the Claimant’s gross earnings before deductions for contingencies or contributory negligence. She demonstrated that higher earnings tend to increase at a faster rate than lower earnings. Accordingly, if the appropriate index were selected only after deductions had been made for contingencies and contributory negligence, it is likely that a less favorable index would be applied and the Claimant would not receive the benefit of the earnings growth he would otherwise have enjoyed. This approach was not challenged by the Second Defendant.[56]Which earnings based index should be applied? The experts identified the following candidates. If an aggregated index is to be applied the options are AEI, ASHE (mean), ASHE (median) or ASHE at the appropriate percentile of earnings corresponding with the multiplicand found by the court. If a disaggregated index is to be used, the options would be ASHE SOC 1 or SOC 2.[57]Dr. Wass declined to adopt a single preference but pointed to the advantages and disadvantages of each, an approach which I found helpful. She indicated that if the court wished to adopt a broad-brush approach AEI or aggregate ASHE median would be preferable. Such an approach might be considered appropriate in view of the fact that the Claimant had not yet entered the labour market. The choice between these two would be appropriately based on the Claimant’s predicted annual loss of earnings. If these were at or above the level of mean earnings, AEI would be preferred over ASHE median and vice versa. The explanation for this was that AEI was based on the mean which is higher than the median. Since higher wages tend to grow at a higher rate, the mean is preferable in the case of higher earner. Another option she identified was the use of the appropriate decile in aggregate ASHE. However, if the court felt able to determine the occupation of the Claimant, she suggested that a particular ASHE SOC could be used to arrive at a more accurate assessment.[58]Mr. Hogg expressed no preference, simply emphasising that the main consideration is for periodical payments for future earnings to be indexed to an earnings index or measure.[59]Mr. Cooper and Mr. Hall, on behalf of the Second Defendant, recommended ASHE median, because in their view, it is a better measure of typical earnings growth, avoiding distortions caused to measures of mean earnings growth such as AEI by the behaviour of earnings of the most highly paid.[60]I consider that the use of AEI or aggregate ASHE would bring certain advantages. They would be easy to apply. They would avoid complications arising from future reclassification of ASHE occupational groups. It is likely that the final order would be less complicated. However, I have concluded that the Claimant’s earnings would have been considerably higher than AEI, ASHE mean or ASHE median. (ASHE mean for full time adult males was £32,774 in 2006. ASHE median for full time adult males was £25,769 in 2006.) Since higher wages tend to rise at a faster rate the use of these indices would be likely to result in under-compensation of the Claimant.[61]On the other hand, I do not feel able to make a precise prediction as to the occupation that the Claimant would have entered. There is insufficient evidence to enable me to go further than my conclusion that he would have obtained a professional qualification and obtained employment in the field of finance, economics or accountancy. It would, to my mind, be inappropriate to seek to link this head of compensation to ASHE SOC 1 or ASHE SOC 2 or any of their sub-divisions. In these circumstances, I consider that the most appropriate course would be to link any award of periodical payments to the Claimant in respect of loss of future earnings to the appropriate decile of aggregated ASHE male full time earnings. In 2006 the gross earnings for full time adult males at the 90th percentile of ASHE was £52,070. Accordingly, the appropriate measure would be aggregate ASHE (90). The suitability of the appropriate percentile of aggregate ASHE is further supported by the evidence of Dr. Wass, which was not disputed, that in general there is stability in the distribution of occupational earnings across the aggregate earnings distribution.[62]For these reasons I conclude that if an award of periodical payments is to be made in respect of loss future earnings the index most likely to secure that the periodical payments maintain their value is ASHE aggregate for male full-time employees at the 90th percentile. Accordingly, if the award in this case in respect of loss of future earnings is to be in the form of periodical payments, section 2(8), Damages Act 1996 should be modified to the extent that such periodical payments should be linked not to RPI but to ASHE aggregate for male full-time employees at the 90th percentile. INDEXATION: COST OF CARE AND CASE MANAGEMENT.[63]If damages in respect of the future cost of care and case management are to be awarded in the form of periodical payments it will be necessary to consider which basis of indexation is most likely to secure that the real value of the annual payments is retained over the whole period during which they will be payable. As it is likely that any order for periodical payments will remain in force some 50 years or more the court would also need to be confident that whatever means of indexation is adopted would be robust and practicable and would be available throughout that period. The Claimant will be cared for in his own home. It is common ground that there is no earnings, series or measure which specifically relates to the earnings of employees who provide home care in the private sector, let alone in the locality where the Claimant lives. In these circumstances I consider that it is necessary to seek to identify the index or measure which is most likely to match future movements in the cost of future home care likely to be incurred by the Claimant while at the same time satisfying the other criteria which I have identified.[64]On behalf of the Claimant it is said that good quality care is vital to the Claimant’s health and to maximizing his life expectancy. Historically, the growth in earnings has been significantly greater than the growth in prices. Accordingly, if the Claimant’s future care costs are awarded by way of periodical payments but linked to the RPI and the discrepancy between earnings and prices continued, this would inevitably lead to massive under compensation and therefore the purpose of indexation, namely to ensure as far as possible that the real value of the annual payments is retained, would not be met. The Claimant also points to the fact that the problem is exacerbated in this case by the reduction for contributory negligence. It is said, at least at the outset of these proceedings, that the Claimant does not even have the option available to a lump sum recipient of increasing the risk profile of his investments in hope of meeting the shortfall. As a result, it is said that any award of periodical payments must be linked to an earnings based index. The Claimant points to a number of possible candidates including ASHE 6115.[65]In particular Mr. Burton makes the following submissions:(1) RPI is not a close match for the indexation of carers’ earnings and is fundamentally unsuited as a measure to vary periodical payments in respect of future costs of care and case management because it relates to growth in prices and not earnings.(2) Historically, average earnings have increased at a faster rate than prices.(3) Average carers’ earnings are likely to continue to increase at a faster rate than prices in the future.(4) Were the Claimant to be awarded periodical payments for care and case management linked to RPI there would be a substantial risk of under-compensation in the longer term and over time it is likely that the rise in the Claimant’s payments would not keep pace with the increase in costs he has to pay.(5) In the circumstances it is necessary to carry out an assessment of the best match for indexation for periodical payments for future care and case management in order to displace the RPI and give the Claimant the best chance of meeting his needs in the future.[66]Although in its closing submissions the Second Defendant maintained that the court should make an award for the future cost of care and case management in the form of periodical payments linked to RPI, this had not been its position throughout. I have already referred to its statement in the Counter Schedule that it would be happy to consider an award of periodical payments but that such an award should be linked to RPI in conformity with section 2(8). Similarly, the reports and oral evidence of its experts, Mr. Cooper and Mr. Hall, did not seem to me to go so far as to advance a positive case in favour of periodical payments linked to RPI. Thus, so far as the suitability of RPI as an index in this context is concerned Mr. Cooper concluded in his report: “I therefore believe that the RPI should not be dismissed as a basis on which to update care costs.” (Section 4.3).[67]However, the Second Defendant’s experts, in particular Mr. Hall, did point to a number of disadvantages and problems which they maintain would arise if an earnings based index were used for this purpose. They were particularly critical of ASHE 6115.[68]Before turning to consider the competing strengths and weaknesses of the different indices it is necessary to say something about the nature of the future costs for which the Claimant is to be compensated. As a tetraplegic he will require 24 hour care in his own home for the rest of his life. The head of damages with which we are concerned relates principally to the cost of employing carers. However this is not the entirety of the future costs under this head: these will also include the cost of case management, employer’s National Insurance, cleaning, food and other expenses, recruitment advertising costs, insurance and training. So far as the costs of case management are concerned, it can be seen from the number of hours I have allowed each year that this bears a very small proportion to the hours of care. Moreover, since the cost of case management is so closely related to earnings of the case manager I consider that an earnings based index is appropriate. Employer’s National Insurance contributions are charged as a percentage of earnings and it was the uncontested opinion of Mr. Hogg that these should be indexed at the same rate as carers’ pay. Mr. Hogg’s quantification of the remaining elements of this head of claim came to 4% of the total. I agree with his conclusion (again not opposed) that this was too small to justify separate indexation and should be disregarded. In any event, a substantial part of the 4% is the cost of cleaning which, once again, is preponderantly earnings related. Accordingly, I proceed on the basis that we are here concerned with the future cost of paying carers’ wages. RPI[69]RPI is an index which tracks changes in the cost of a basket of goods and services which are intended to reflect typical household consumption. The Claimant points to the evidence that “domestic services” including home care account for only 0.12% of the basket. This leads Mr. Burton to submit that in this regard the Claimant has a very atypical basket of goods involving purchasing approximately £160,000 of care and that, accordingly, RPI is a wholly inappropriate basis of indexation. However, Mr. Cooper, on behalf of the Second Defendant, contends that it is important not to overlook the indirect influence of labour costs on RPI. The goods and services in the basket are made up of a number of components which include labour. Mr. Cooper estimates that labour costs in the United Kingdom account directly or indirectly for about two thirds of the price of goods and services in the RPI basket. As a result he submits that RPI will be closely related to the price of labour and that there are clear similarities between the provision of care and the provision of other services whose prices are recorded in the measurement of the RPI.[70]It is nevertheless the case that, historically, average earnings have increased at a faster rate than prices. Understandably, Mr. Burton places this fact at the forefront of his submission. Before me it was common ground among the four experts that this is indeed the case. It was the evidence of Dr. Wass and Mr. Hogg that, as measured by the AEI, the average above-RPI annual growth rate between 1963 and 2006 is 1.91%. It was the evidence of Mr. Cooper that between 1984 and 2005 the excess of earnings growth (as measured by the AEI) over price inflation was 1.79% per annum. Mr. Hall inferred that the long term differential between the past trend in the AEI and the RPI is approximately 1.75%. This is consistent with the Government Actuary’s assumption that real earnings growth is between 1.5% and 2%.[71]Dr. Wass describes in her report the difference in earnings and prices growth using different indices and over different periods of time. She concludes that all the measures of earnings growth which she examines exceed the corresponding measures of growth in prices. Using a measure of earnings inflation based upon official earnings statistics across the aggregate earnings distribution (AEI and ASHE) the annual average difference between the growth in prices and the growth in earnings is in the range of 1.34 to 1.82% per annum. She has also measured inflation using occupational earnings data. On her analysis the average above-RPI growth in earnings at ASHE 6115 (90) was 2.48% per annum over the period of 1998-2005 and 2.19% per annum over the period 1998-2006. The average above-RPI growth in earnings shown by AEI Health Social Work sector over the period 2000-2005 (the only period for which it is available as a constant series) is 3.29% per annum. She concludes that measures of earnings growth in the care sector have consistently exceeded the growth in aggregate earnings over the period 1998-2005. Dr. Wass considers that because the difference between earnings and prices growth varies year on year the annual average difference between earnings and prices growth depends upon the time period over which it is measured and the measure used. Therefore it is not possible to predict the level of any future differential between prices and earnings growth.[72]Similarly, Mr. Hogg agrees that the historical trend is that average earnings have grown significantly faster than prices. For the whole period 1963-2006 earnings (AEI) increased on average at 1.9% per annum faster than prices (RPI) but over the last 20 years the rate of increase has been lower at 1.53% above price inflation as measured by RPI.[73]Mr. Cooper and Mr. Hall agree that there is a long standing pattern showing average earnings rising faster than price inflation. In their opinion, the extent of the difference depends on the time period and the measures of earnings and price inflation chosen. They also agreed that they would expect earnings growth at a national level to continue to be faster than price inflation. Furthermore, in his report Mr. Hall accepted that it would only be appropriate to apply increases in the RPI to heads of future loss where such heads of loss are equal in composition to the baskets of goods and services within the RPI. He accepted that the composition of the various heads of loss within the Schedule does not match the weighting within the basket of goods and services which comprise the RPI and that, therefore, changes in the RPI are unlikely to match the future inflation for such losses.[74]On this basis it would appear that to link periodical payments for the cost of future care and case management to RPI would be likely to result in substantial under-compensation to the Claimant. In his oral evidence Mr. Cooper accepted that earnings of private paid home carers are likely to increase at a rate above RPI although he considered that this was likely to be at a lower rate than has been observed historically. However, it was the opinion of Mr. Cooper that in the case of the Claimant’s future exposure to the increased costs of care and case management, this effect would be mitigated to a considerable extent by two further factors: the potential for improved productivity in the provision of care and the fact that the Claimant would not be exposed to pay drift. On this basis he favoured indexation of the cost of future care and case management by reference to the RPI. Each of these factors must now be considered in turn.

Productivity

[75]In his report Mr. Cooper concludes that the principal reason why, historically, RPI inflation has been less than the rate of growth of average earnings is that firms have been able to offset some of the increased labour costs through improvement in their productivity. Such productivity can be driven by a number of factors such as technical innovations that provide a better solution at lower costs, development of skills in the workforce that allow individuals to do more work in the same time and development of management techniques that results in more and better quality services for the same or fewer inputs. Mr. Cooper accepts that the scope for such productivity improvements in the case of provision for care is likely to be much less than for the economy as a whole. Nevertheless, he maintains that it should not be ignored. Thus he maintains that, for example, gains may in principle come from training of less highly paid staff to take over responsibilities previously undertaken by more senior colleagues, by improved home care equipment that allows family members to undertake more care themselves or better management techniques that reduce the need for inputs from a case manager. In this regard he points to the fact that individual roles in health care are not static and that the opportunity for rethinking demarcation has been extended by certain policies such as a new pay system, which is being developed, aimed at tailoring rewards more appropriately to roles. He maintains that there may be opportunities for greater productivity which should be taken into account in considering the likely future cost of providing care services. On this basis be believes that RPI should not be dismissed as a basis on which to up-rate care costs.[76]I am wholly unpersuaded by Mr. Cooper’s arguments based on the possibility of improved productivity in the provision of care for the Claimant in the future.(1) His opinion proceeds at a very theoretical level. He points to the possibility of increased productivity in future but his suggested improvements are largely hypothetical. Thus, for example, he points to the possibility that in future it might be possible to reduce the number of hours of double-up care while providing the same quality of care in a different way. However, he was unable to give any indication as to how that might be achieved. Similarly, in his oral evidence he could not point to any particular concrete examples of productivity gains which had occurred over the last five years since the Claimant’s accident, nor to any specific gains from which the Claimant might benefit in the future which had not already been taken into consideration.(2) Mr. Cooper is an economist who has no particular experience or expertise in relation to the provision of care. He had not considered the evidence of the care experts nor had he taken account of the evidence of the experts in relation to the provision of equipment.(3) Mr. Cooper’s suggested approach is not supported in any way by the care experts. Mrs. Sergent and Mr. Taylor have expressed their opinions on the future long-term care needs of the Claimant and how they can best and most efficiently be met. While they are, obviously, unable to foresee all possible future developments in relation to equipment and means of delivering care, neither has suggested that future developments may increase productivity which could have an effect of the significance which Mr. Cooper suggests. Mr. Cooper’s opinions were not supported by Mr. Taylor and were not put to Mrs. Sergent.(4) Should such gains in productivity be achievable in future, they could not, in any event, be considered in isolation. For example, Mr. Cooper suggests that a less-skilled worker might be trained to perform tasks which require greater skills or that a particular carer might be able to take over case management at a lower cost than a professional case manager. If any such future improvements in productivity are not to be at the cost of the quality of the care provided, which I consider to be a fundamental consideration, the skills of workers will have to be improved. In that event, it is probable that those workers will require increased remuneration by the Claimant or will find other employment elsewhere at rates which reflect their increased skills. The Claimant will have to pay the market rate for the quality of services which he receives.[77]The historic difference between RPI and the rate of increase in earnings, revealed by the evidence of Dr. Wass and Mr. Hogg, is so substantial that I am unable to accept that the likely short-fall, if an award of periodical payments in respect of the cost of care and case management were linked to RPI, can be substantially mitigated let alone eradicated by improved productivity in future. Indeed, Mr. Cooper accepted in his oral evidence that if there were no changes in productivity then the overall cost of the care package would be expected to rise faster than RPI and there would be massive under-compensation if periodical payments were linked to RPI. For the reasons given above, I do not accept that such changes in productivity are attainable. Pay Drift.[78]The second factor identified by Mr. Cooper as having an important bearing on his conclusion that RPI should not be dismissed as a basis on which to up-rate care costs is his opinion that the historical difference between the rates of increase of prices and earnings reflects, in substantial part, the effect of “pay drift” or “wage drift” from which, he maintains, the Claimant will be insulated.[79]The experts were in substantial agreement as to the nature of pay drift or wage drift. Dr. Wass referred to the following definition in The Penguin Dictionary of Economics, (Baxter and Rees) 2nd Ed., 458:
“Wage drift. The tendency for wage earnings to exceed wage rates gives rise to wage drift, measured as the difference between wage earnings and wage rates. The difference will consist of overtime earnings and special bonuses not provided for in the general agreement which establishes the wage rate for a particular class of workers. …”
Dr. Wass defined pay drift as the difference between pay settlement increases and earnings increases. As such, it is a feature of labour markets in which pay rates are determined through an annual settlement and is a particular, but not exclusive, feature of a public sector labour market. Pay drift can only be identified in labour markets where employees’ pay rates are determined by some form of collective bargaining arrangement. Where they are not, there is no separate agreed pay rate from which to identify pay drift. Mr. Hall offered the following definition of pay drift:
“Pay cost inflation tends to be higher than pay settlement inflation, because of an element of pay drift within each staff group. Pay drift is the tendency for there to be a general shift up the incremental scales, and is additional to settlement inflation.”
[80]In the context of compensation for future earnings, the experts agreed that the Claimant’s earnings would have been affected by pay drift. This was a factor in their agreement that, in the case of periodical payments for loss of earnings, indexation to RPI would, on the basis of historical empirical evidence, be very likely to under-compensate the Claimant. However, the Second Defendant’s experts take a different view in the context of future care and case management. In particular, they maintain that because we are here concerned with home care in the private sector, pay drift has no effect. They also contend that domiciliary carers typically do not have the career structure that allows them to benefit from grade or service increments.[81]In his report Mr. Cooper contends that the AEI reflects increases in average earnings that result not only from pay settlements but also from pay drift. He refers to a recent article by Sarah Miller, The Difference between Pay Settlements and Earnings Growth, Labour Market Trends, February 2005, which estimates that in the period 1998-2004 average earnings as measured by the AEI have outpaced pay settlements by 1 to 1.5 % per year. Mr. Cooper contends that if this pay drift is a long term phenomenon, it would account for most, if not all, of the gap observed between the RPI and AEI. Mr. Cooper says it is debatable whether increases in earnings caused by pay drift should necessarily be assumed to be reflected in the wages that have to be paid to carers in a particular case and whether they lead to an increase in the cost of care. Mr. Cooper also considers that ASHE estimates of average earnings growth are affected by and can be distorted by pay drift and bonus payments in much the same way as the AEI.[82]Similarly, it is Mr Hall’s view that once the court has assessed the Claimant’s needs, by way of a care package structure that assesses staff at various grades working various hours at current rates, whilst the Claimant may have to respond to market related adjustments, the other factors identified by Sarah Miller, although possibly factors in the employment market, would be irrelevant to the future inflationary pressures on the specific care package.[83]On the other hand, both Dr. Wass and Mr. Hogg consider that although there may not be different salary scales, increments or bonus payments in the private sector, the private sector must keep up with the level of earnings actually being paid in the public sector. It is this which leads Mr. Hogg to describe the issue of pay drift as a “red herring” in the present case. I am entirely persuaded that this is correct. The Claimant’s care package does not exist in a bubble and is not protected from market forces. The nature of care work is such that it is open to care workers to transfer between public and private sectors. Their skills and the services which they provide are readily transferable between these sectors. There is one pool of labour for care workers and the Claimant, in securing carers, will be in competition not only with other private employers but also with other employers in the public sector. He will have to pay whatever is the going market rate for care services. If remuneration is higher in the public sector individual carers will be free to transfer their skills to that sector. Employers in the private sector, including the Claimant, will have to pay higher wages to recruit or retain carers. In this way individuals in the Claimant’s position are exposed to the operation of market forces. Indeed, I note that this is expressly accepted by Mr. Cooper in another section of his report: “Although carers work for a mix of private, public and not for profit organisations…, the level of spending will influence labour demand and potentially wages across the whole sector as all care organisations, no matter their ownership, are ultimately competing for the same pool of labour.” (Cooper Report, paragraph 6.7) Similarly, I note that Mr. Hall in his contributions to the joint statement, is careful to qualify his view with the statement that the Claimant may have to respond to market-related adjustments.[84]Furthermore, I accept the evidence of Dr. Wass that some of the factors which give rise to pay drift are not reflected in indices or measures such as AEI or ASHE. In his contribution to the joint statement of experts, Mr. Cooper states his understanding that domiciliary carers typically do not have the career structure that allows them to benefit from grade or service increments. However, as Dr. Wass explained, the figures which appear in these tables are averages and they do not state the rates of pay of individual carers. Dr. Wass referred to the escalator effect: as an individual moves up the pay scales another person will be falling off at the top and yet another will be joining at the bottom. These indices and measures provide a cross-section of earnings and do not reflect career progression or service increments.[85]Finally in this regard, I am unable to agree with the reliance of the Second Defendant’s experts on NJC rates as a reliable indicator of inflationary pressures in the care industry without pay drift. First, as Dr. Wass and Mr. Hogg point out, the Claimant cannot find carers to work at or even close to NJC rates. This is apparent from his current care costs. Secondly, as Mr Hogg pointed out, NJC rates for local authority staff have no direct relevance to the provision of care at home on a commercial basis. Similarly Mr. Cooper accepted in his report that NJC rates were not an appropriate measure because the nature of the jobs may differ. Thirdly, Mr. Cooper’s own calculations established that there was an average differential of 2% between RPI and NJC aggregate rates for the period 1990 to 2005.[86]For these reasons, I conclude that while earnings indices and measures such as AEI and ASHE reflect certain, but not all, of the factors which give rise to pay drift, these are factors to which the Claimant will be exposed in the future when recruiting and retaining care workers. Accordingly, I consider that this does not make such earnings indices and measures inappropriate for the present purpose. On the contrary, it is a positive advantage that they reflect these factors. Conclusion on Suitability of RPI as an Index for the Future Cost of Care and Case Management.[87]For the reasons set out above, I am unable to accept the opinion of Mr. Cooper that possible increases in productivity and insulation from pay drift might justify the use of RPI for the indexation of future costs of care. On the contrary, I conclude that an earnings based index or measure is likely to reflect with considerably greater accuracy future increases in the cost of care and case management. EARNINGS BASED INDICES AND MEASURES.[88]I have referred above to the agreement of all the relevant experts that there is no single earnings based index or measure which precisely reflects the increase in cost of the provision of domiciliary care in the private sector. Different views have been expressed by these experts as to the relative strengths and weaknesses of the use of the various earnings based indices and measures which are available for the purpose of indexation of the future costs of care.[89]The views of Dr. Wass can be summarised as follows:(1) Dr. Wass considers that AEI is the preferred index for a simple, consistent, generic approach to the escalation of salary based costs of home care. AEI shares the same qualities of authority, reliability, accessibility and continuance as the RPI. The use of AEI would be a broad-brush approach and would involve the potential for imprecision in individual cases. It would also involve a potential for systematic imprecision or bias because carers’ earnings are generally below the average aggregate earnings. As higher earnings increase in the long term at a faster rate than lower earnings the expectation is that over the long term indexation to the AEI would overstate the earnings growth for carers, although the risk of overcompensation would be relatively small compared to the likely under-compensation which would result from indexation to the RPI.(2) Aggregate ASHE 50 (median) is also a broad-brush approach but by indexing carers’ earnings to a lower level of aggregate earnings (£9.95 pence per hour) the potential for systematic imprecision (bias) is avoided. In this case indexation to ASHE median would be likely to undercompensate the Claimant over the long term because the weighted hourly pay for his carers is greater than ASHE median for hourly earnings (£9.95 in 2006). ASHE like AEI is accessible, consistent, reliable, authoritative and is likely to continue into the future. The particular disadvantage of ASHE for present purposes is the time lag between collection, publication and verification of information.(3) An alternative, individual approach would be to use the appropriate centile estimate within ASHE 6115, which is the occupational earnings distribution for the care assistants and home carers. This would result in greater precision on a case by case basis. (Dr. Wass provides a method by which the parties can establish the appropriate centile within the ASHE 6115 earnings distribution for the indexation of future care costs. However, she points out that the spline function approach is not required where, as in the present case, the aggregate hourly rate is greater than the 90th centile of ASHE 6115 (£10.58 in 2006).) Dr. Wass draws attention to the fact that although ASHE 6115 includes private sector home carers, the statistics are also influenced by the earnings of carers employed in the public sector and in institutional settings where pay rates are lower. However, she points out that while this is particularly apparent at the lower end of the ASHE 6115 earnings distribution, it is much less likely to be so at the upper end. Dr. Wass calculates that the average above-RPI growth rates in 1998-2006 for the 90th centile of ASHE care assistants is 2.19% per annum. She considers that the differential in earnings growth between private sector domiciliary care assistants and the growth of average earnings is consistent with the professionalisation and employment reforms particularly associated with this group of carers in recent years.[90]In accordance with her view that it would be unusual for an occupational group to move across the aggregate earnings distribution, Dr. Wass does not anticipate continued above-average earnings growth. However, she points to the fact that this demonstrates the advantage to the Claimant of an occupation-specific index which would allow him to meet any short term above average increases in his care costs.[91]In this regard Dr. Wass also demonstrates that the indexation of care costs to an aggregate earnings series as opposed to a care-based earnings series would have understated the likely increase in the Claimant’s care costs over the last seven years. However, she very fairly points out that, for the reasons just given, she would not expect that this would continue over the long term.[92]Mr. Hogg is also strongly of the view that an earnings based index or measure should be used to index link future care costs.(1) He considers that if the court wishes to use the same index in all cases without consideration of specific facts, the appropriate index would be AEI. It is a generic index specifically intended for the measurement of increases in earnings. In Mr. Hogg’s view it is readily accessible and likely to remain so; it is authoritative and should provide the parties and the courts with a maximum degree of certainty even if this resulted in some loss of precision.(2) If the court wishes to arrive at a more precise answer in the individual case Mr. Hogg considers ASHE 6115 to be appropriate. SOC 6115 comprises care assistants and home carers. No distinction is drawn between carers in residential homes and home carers, between local authority carers and those providing care on a commercial basis, between those caring for the elderly and those with catastrophic disabilities. Mr. Hogg refers to Dr. Wass’s conclusion that the higher end of the ASHE 6115 earnings distribution is less likely to be influenced by carers employed in the public sector or in institutionalized settings and on that basis he agrees that ASHE 6115 offers greater precision than AEI or ASHE 50. However, Mr. Hogg has some concerns about the complications which may arise in the application of indexation based on ASHE 6115. In this regard he refers to the necessity of making subsidiary decisions in choosing the appropriate table, to the time lag before results become available, and to the risk that the court may choose the wrong table. He also considers that the use of ASHE would make the order of the court more complicated. In these circumstances, his personal preference is for AEI, notwithstanding the risk of imprecision.[93]Mr. Cooper’s view may be summarized as follows.(1) He considers that AEI has a number of significant limitations. AEI covers less than 72% of jobs, missing out those in firms employing less that 20 people. It is affected by changes in average hours of work, the composition of the workforce and pay drift. As a measure of mean earnings it is also affected by earnings growth for the highest paid. Only broad sectored rate bands are available. It does not provide the occupational, regional or distribution detail required for reliable up-rating of care costs for a particular case. No data is published for care workers or related activities. It is affected by pay drift and does not make any allowance for potential improvements in productivity.(2) Similarly, Mr. Cooper is critical of ASHE mean and ASHE median. ASHE is less frequently available than AEI and RPI. ASHE mean can be distorted by the behaviour of earnings of the highest paid. ASHE is affected by pay drift and makes no allowance for potential improvements in productivity. Here again he considers that aggregate measures for the country as a whole are not necessarily a good measure of what is happening to the hourly pay of carers at a regional or local level.[94]This might suggest that Mr. Cooper would favour a disaggregated measure such as ASHE 6115. However, Mr. Cooper and Mr. Hall make a number of specific criticisms of ASHE 6115 which are considered in detail below.[95]Mr. Hall’s views on the competing earnings based measures may be summarized as follows.(1) Mr. Hall considers that a key feature of AEI is that it covers a range of sectors and that the change in the headline AEI is an average of diverse changes in individual sectors. Accordingly he considers that annual changes in the headline AEI are unlikely to be a reliable indicator of annual wage inflation in a specific sector. He considers that AEI is widely used, easily accessible, relatively reliable and likely to continue to be available. However, he concludes that AEI is too broad a measure of wage inflation across the United Kingdom to be a reliable measure of wage inflation for those engaged in the provision of care. It is not an accurate match to the earnings of carers. It measures wages inflation across all sectors in the United Kingdom economy.(2) For similar reasons, Mr. Hall concludes that ASHE median would be an unreliable measure of salary related care cost inflation to apply in the future.[96]Mr. Hall makes a number of specific criticisms of the disaggregated versions of ASHE and, in particular ASHE 6115. These criticisms are considered in the following paragraphs. ASHE 6115.[97]Mr. Hall expressed concern over the difficulties of calculating the weighted average hourly rate which forms the basis of the calculation by reference to ASHE 6115. However, I consider that these difficulties are over-stated. In the present case, the remaining questions in relation to the number of hours of care to be provided, in particular the number of hours of double-up care and the arrangements for night-time care, have now been decided in this judgment. It will therefore be relatively straightforward to calculate a weighted hourly average rate. Dr. Wass has provided, in an appendix to her report, a method which the parties can use to establish the appropriate centile within ASHE 6115 earnings distribution for the indexation of future care costs. However, this spline function approach will not be required in the present case because the aggregate hourly rate will fall within the 90th centile within ASHE 6115 (£10.58 in 2006).[98]Mr. Cooper is critical of the coverage of samples used for ASHE. He points to the fact that ASHE does not include the self-employed so, although its coverage of workers in different categories is more extensive than for AEI, it is still not complete. ASHE uses a 1% sample size. Mr. Cooper considers that this is reduced because of non-responses and by returns that fail validation tests. He considers that this opens the possibility of sampling errors. In particular he considers that the quality of estimates becomes an issue when examining the disaggregated data, particularly at the level of individual occupations as published at a national level or on earnings by sex or full-time or part-time work at a regional level, where samples sizes are small. The same point was made by Mr. Hall in his evidence. I would accept that there clearly is a limit beyond which disaggregating may result in inaccurate results, unless the sample base is sufficiently large. However, this is a matter of which the Office of National Statistics is obviously well aware. It is for this reason, for example, that ONS only publishes median and mean data for care assistants and home carers at a regional level. Nevertheless, the results for care assistants and home carers was based on a sample of 6,630 across the United Kingdom in 2006 and I accept the evidence of Dr. Wass that this is a reliable sample of sufficient size for analysis.[99]Mr. Cooper then criticizes ASHE 6115 because it provides only mean and median figures on a regional basis. The reason for this has been explained above. This is undoubtedly a limitation of ASHE 6115.[100]The point is made on behalf of the Second Defendant that ASHE 6115 is not limited to the private provision of domiciliary care but also includes the provision of care in institutions and domiciliary care provided by public bodies such as local authorities. Moreover, we do not know the precise proportion of the sample base which is engaged in the private provision of domiciliary care. However I do not consider that this would invalidate the use of ASHE 6115 for the indexation of future care costs in cases such as the present. The reason for this, as explained by Dr. Wass in her report, is that carers at around the 90th centile of this ASHE occupational group are those for whom the Claimant is competing with other employers in the care services market. Because the Claimant and the arrangements for the provision of care to him do not exist in a bubble, the Claimant will be in competition with other employers such as local authorities when recruiting and retaining carers. He will have to pay the market determined wage in order to recruit and retain carers. The market in which he is competing is not limited to domiciliary carers under private arrangements because such workers can readily transfer to publicly funded care or institutional care if the rewards are greater. Similarly, in this regard I note Mr. Cooper’s acceptance in his report that employers of carers are ultimately competing for the same pool of labour.[101]The Second Defendant’s experts point to the performance of ASHE 6115 which they described as volatile. There is no doubt that it reveals marked fluctuations in the levels of earnings of workers in this occupational group. However, it was explained by Dr. Wass that such volatility is an established feature of disaggregated indices and measures and that this becomes more pronounced the further the process of disaggregation is carried. Thus, similar volatility is to be observed if RPI is disaggregated to portray the rates of increase in the costs of individual component elements in its basket of goods and services. To my mind, this volatility in ASHE 6115 is not, in itself, a defect provided that the measure provides an accurate picture of what is occurring in the market. Indeed, Dr. Wass characterises this feature of ASHE 6115 as “sensitivity” to movements in the market and she considers it to be a positive advantage of this measure.[102]Linked with the previous criticism are Mr. Hall’s concerns that economists are unable to explain the causes of such volatility in annual growth rates. Dr. Wass and Mr. Cooper have put forward a number of possible explanations such as the increased demand for care, the effect the minimum wage legislation, the Working Time Directive, immigration resulting in an increase in the number of available care workers, changes in skill and qualifications for care workers. However Mr. Hall rejected all of these possible explanations and stated that until he understood the causes he doubted the validity of ASHE 6115. The factors identified by Dr. Wass and Mr. Cooper may well explain these movements. However, I do not find this inability to explain the volatility in the measure troubling nor do I consider that it is necessary to understand the precise causes of the variations provided that the measure is reliable. Such a degree of volatility, whatever its causes may be, is an acknowledged characteristic of disaggregated indices and measures. Moreover, as Dr. Wass points out, economists do not fully understand the causes of price inflation but this does not undermine the reliability of RPI as an index.[103]At a very late stage in the proceeding Mr. Hall produced further material not included in his report and which had not been discussed at the joint meeting of experts. This new material was intended to demonstrate that compositional changes in the cohort of care workers within ASHE 6115 could result in compensation to the Claimant being adjusted even though he was not incurring any additional costs. Mr. Hall considered that the hourly rate for a given percentile within ASHE 6115 could vary not only because the hourly rate for the worker at that level varied but also because the composition of the total population of workers within that cohort could change. In this regard, he pointed to the variations in the number of workers in SOC 6115 (and its predecessor SOC 644 which applied until 2001), increasing by as much as 15.7% (in 2005) and decreasing by as much as 5.6% (in 2000). He produced a calculation summarizing the effect of adding an additional 10% of workers at hourly rates either above or below the 90th percentile of the original population. On his calculation, if the 10% increase were all above the 90th percentile, the rate of earnings at the 90th percentile of ASHE 6115 would increase by 12.2%. When the 10% increase was at hourly rates lower than the original 90th percentile rates, the 70th percentile decreased by 1.4%. This, he claimed, demonstrated that a percentile hourly rate higher than the median would be more sensitive to the addition of workers at hourly rates above that rate than it is sensitive to the addition of workers at hourly rates below that rate. He concluded that future compositional changes in the population of workers within ASHE 6115 would therefore be irrelevant to the future cost of the labour element of the Claimant’s care package and yet, were periodical payments to compensate the Claimant to be adjusted in accordance with the movement in hourly rates at a given percentile within ASHE 6115, the periodical payments would be adjusted as a result of such compositional changes. In his oral evidence Mr. Hall explained that he suspects that ASHE 6115 may not be measuring what we want to measure. He considers that this needs to be examined further on the basis of empirical evidence. He doubts that ASHE 6115 is empirical evidence.[104]Dr. Wass responded to these criticisms in the course her oral evidence. First, at a technical level, she raised a number of objections to Mr. Hall’s calculations which she considered rendered them statistically invalid. Mr. Hall accepted that there were statistical errors in his methodology but nevertheless maintained that his basic hypothesis remained valid. In view of my conclusions in relation to Dr. Wass’s other objections, I do not need to address this matter. Secondly, Dr. Wass criticises the factual assumption on which the hypothesis is based as unrealistic. I agree that while it is possible to imagine a new group of care workers entering the care market, for example an influx of central European workers, it is highly improbable that they would all be at the same level, let alone above the 90th percentile. Thirdly, and most fundamentally, Dr. Wass demonstrates that if such an influx at a given level were to occur it would have an effect on the level of wages which the Claimant would have to pay and which, in turn, ASHE 6115 would reflect. Before there could be such an increase of 10% of care workers all at the 90th percentile or above, there would have to be a demand for carers at the top 10% of the market. If there were, such jobs would be attractive to the Claimant’s carers. We come back, once again, to the fact that the Claimant is not insulated from changes in the market. If, as seems more likely, such an influx were for lower wages this would be likely to bring down the level of earnings at the 90th percentile of ASHE 6115. That would benefit the Claimant but it would also be reflected in ASHE 6115 and would result in the reduction of periodical payments if they were linked to that measure. For these reasons, I was not persuaded that Mr. Hall’s hypothesis was in any way damaging to the suitability of ASHE 6115 for the indexation of periodical payments for the cost of future care.[105]Mr. Cooper and Mr. Hall were critical of ASHE 6115 on the ground that it failed to take account of the fact that the Claimant will be protected from the affects of pay drifts. For reasons which I have set out earlier in this judgment, I have come to the conclusion that the Claimant will not be insulated from all of the causes of pay drift and, to the extent that he is exposed to this phenomenon, its causes are fairly reflected by ASHE 6115 measures.[106]Mr. Cooper and Mr. Hall also consider that periodical payments linked to ASHE 6115 would be likely to over-compensate the Claimant because they would fail to take account of savings of improved productivity. For reasons set out earlier in this judgment, I consider that there is little, if any, scope for further improved productivity, beyond those measures already incorporated in the Claimant’s care package.[107]The Second Defendant’s experts point to the fact that the occupational category that is employed by ASHE 6115 is subject to reclassification every ten years. It is proposed that the reclassification in 2010 will include a new occupational category of home based carers. Accordingly, they suggest that if an award of periodical payments were linked to ASHE 6115 difficulties may be encountered in future as a result of changes in the composition of occupational categories. These concerns were shared by Mr. Hogg. I am very conscious that any order I make in this case is likely to remain in force for some 50 years or more. I therefore have to be confident that any machinery for indexation upon which I decide, will be available long into the future with the purpose of the calculation of sums which will then be due. The reclassification of occupational categories within ASHE is, undoubtedly, a disadvantage in this regard. However, the evidence before me is that the Office of National Statistics, when reclassifying occupational groups, provides two sets of data in reclassification years. Dr. Wass explained that on the basis of these two sets of data it is possible to translate from one occupational category to another and it is also possible to remove any distortions which may have occurred as a result of a reclassification. It seems clear that the Office of National Statistics would be bound to provide two sets of data to permit translation in this way for otherwise the utility of statistics from earlier years would be substantially diminished. In the light of Dr. Wass’s evidence on this point, which I accept, I am satisfied that the ONS will, in future, continue to facilitate the translation of data in reclassification years in the manner indicated. Furthermore, I am satisfied on the basis of her evidence that a professional will readily be able to perform the calculation by using two spline functions. Accordingly, I consider that if indexation linked to ASHE 6115 were otherwise considered appropriate, the difficulties arising from reclassification would not be insurmountable.[108]I have referred earlier in this judgment, to the fact that ASHE statistics are based on the data for earnings for the first full week in April each year. The statistics are collected over the summer and published in October. However, those statistics are provisional and they are confirmed in October of the following year. The Second Defendant suggests that this is a further complicating factor in the use of ASHE 6115 for the purposes of indexation of periodical payments. I accept that if any ASHE measure is used for this purpose it will be necessary to make provision in the order for adjustment of the periodical payments in the light of the corrected statistics This is, undoubtedly, a further complicating factor. However, I consider that such adjustments can be made relatively easily.[109]On behalf of the Second Defendant it was submitted that the use of ASHE 6115 will result in an extremely complex order and that this should, therefore, be avoided. In this regard I have been shown a copy of the order made by Swift J. in Thompstone. There, the judge concluded that periodical payments for future cost of care should be linked to ASHE 6115. I do not consider the order in that case unduly complex. In particular, given the importance of securing the value of future payments for the cost of care, I consider that the form of the order is entirely proportionate to the achievement of this important objective. Furthermore, in this regard I derive considerable comfort from the opinion of Mr. Hogg, who is immensely experienced in this field, that the steps laid out in the order in Thompstone are perfectly manageable. Indexation of periodical payments in respect of future cost of care and case management: Conclusions.[110]In approaching this issue I am not seeking to identify a general approach which would be suitable for all cases or for a category of cases. Rather, I am seeking to identify the machinery which can best do justice by achieving the stated objectives in the specific case before me.[111]For the reasons set out above, I consider that indexation on the basis of RPI would fail to meet the objective of ensuring, so far as possible, that periodical payments would meet the Claimant’s costs of future care.[112]While the use of AEI would have a number of advantages, not least in the simplicity and ease of its application, I consider that the risk of imprecision acknowledged by both Dr. Wass and Mr. Hogg is a major disadvantage. I am persuaded that there is a real danger that if AEI were used it would result in an increase in periodical payments beyond that required to meet actual earnings growth for carers. This substantial risk of over-compensation, were AEI to be employed is, to my mind, inconsistent with the 100% principle. On the other hand, indexation to aggregate ASHE median is likely, in the particular circumstances of this case, to result in undercompensation to the Claimant in the long term for the reasons given by Dr. Wass.[113]However I consider that a more accurate approach based on movements in earnings in a specific occupational group is both desirable and achievable without undue complications.[114]I consider that there are a number of real advantages in the use of ASHE 6115 (90) for indexation for periodical payments in respect of cost of care in the present case.(1) The evidence before me demonstrates that ASHE 6115 is a very sensitive tool which accurately reflects movements in earnings in this occupational category. In particular, it seems to have been sufficiently sensitive to reflect changes brought about by the introduction and modification of the minimum wage, the introduction of the Working Time Directive and recent influxes of foreign care workers.(2) This approach achieves greater precision. The availability of point estimates across the entire occupational earnings distribution makes it possible to match both the occupational group and the level of earnings.[115]For the reasons set out in detail earlier in this judgment I consider that the practical difficulties arising from the use of ASHE 6115 can be over-stated. In my judgement, the increased complexity arising from the use of ASHE 6115 is entirely justified by the achievement of greater precision which is in the interests of both the Claimant and the Second Defendant.[116]For these reasons I conclude that if the award in this case in respect of the cost of future care and case management is to be in the form of periodical payments, section 2(8), Damages Act 1996 should be modified to the extent that such periodical payments should be linked not to RPI but to the 90th percentile of ASHE 6115. INDEXATION: OTHER HEADS OF LOSS.[117]The only other head of loss that has been considered for payment by way of periodical payments is the future cost of the Claimant’s medical treatment. However, a lump sum has now been agreed by the parties in relation to this item. So far as other heads of loss, other than loss of future earnings and the cost of future care, are concerned, it is common ground that such heads of loss would be more suited to a lump sum award of damages. OFFSETTING.[118]It is necessary to refer to the issue of offsetting which was dealt with by certain of the experts, notably Mr. Hall and Mr. Hogg, in their evidence. However, it was barely touched upon by Mr. Methuen in his closing submissions and in view of the limited reliance which he now places on this matter I can deal with it relatively briefly. Mr. Hall suggested that it may not be inappropriate to use RPI as an index for increasing periodical payments because of, as he put it, “the swings and roundabouts” involved in the calculation of damages. In particular, he pointed to the gains which he considers the Claimant is likely to make from his house purchase. He suggested there should be an offset in respect of accommodation costs because house prices are likely to continue to grow at a rate substantially above the general rate of inflation and this would otherwise result in a windfall to the Claimant or his heirs. In his final submissions Mr. Methuen acknowledged the difficulties in this approach and limited himself to the submission that the Claimant has been awarded the money to buy his house and the capital value of that house will significantly outstrip RPI. Accordingly, he submits that this is a factor which should be taken into account in the exercise of discretion when the court is considering the applications to modify section 2(8) by substituting a different index for RPI.[119]I consider that there are insuperable objections to such an approach.(1) The argument lacks a factual basis. It rests on an assumption that a historic trend which shows house prices rising at substantially above the general rate of inflation will continue throughout the Claimant’s life. I am not prepared to make such an assumption. Indeed there was evidence before me that many commentators consider that house prices are currently too high and there may be a fall in the market by as much as 30%. Mr. Hogg cautioned that it may be dangerous to read too much into any perceived windfall arising from house prices at a time in the future when the Claimant is able to realise any equity or on his death as house prices can go up as well as down. Moreover, there was no satisfactory evidence before me as to the circumstances in which the Claimant may in future be able to take advantage of any equity release scheme or the likely cost of using such a scheme should it be employed some 30 or 40 years in the future. Any such release would, moreover, be more complicated, if not prevented, were the Claimant to marry and have children or were his partner to have an interest in the property. Mr. Hogg also pointed to the absence of any evidence as to how commercial bodies would respond to a case like the Claimant’s where there is doubt as to his life expectancy and the property would probably need reinstatement before it could be resold.(2) In its application to the costs of accommodation, the argument assumes that the application of the Robertsv Johnstone calculation results in over-compensation and breaches the 100% principle. However, that calculation and the underlying principles have been endorsed by the Court of Appeal and approved in Wells v Wells [1999] AC 345 as according with the 100% principle. As a result, the premise of the Second Defendant’s argument, namely that the application of Robert v Johnstone results in over-compensation, is simply not made out.(3) Where, as in the present case, compensation in respect of accommodation is paid by way of a lump sum, under section 1, Damages Act 1996 the court is required, in the absence of exceptional circumstances, to assume that inflation will be at the discount rate of 2.5% above RPI. (The power to adopt a different rate under section 1(2) Damages Act 1996 has been limited to exceptional circumstances: Warriner v Warriner [2002] EWCA Civ. 81.) Accordingly, it is not open to the court to reduce the award of compensation based upon a concern that inflation will actually increase at a faster rate under certain heads of loss.(4) Such an approach would be inconsistent with the principle that a benefit under one head of loss cannot be set off against a loss in another, a principle which Mr. Methuen accepted. (Parry v Cleaver [1970] AC 1; Longen v British Coal Corporation [1998] AC 653.)(5) The proposed approach is inconsistent with the principle that the court does not look at how a Claimant spends his award of damages. (Lim Poh Choo v Camden and Islington AHA [1980] AC 174 per Lord Scarman at p.181; Stringman v McArdle [1994] 1 WLR 1653; Wells v Wells [1999] AC 345 per Lord Clyde at p394H; Heil v Rankin [2001] PIQR Q 187.)[120]Finally in this context, I should refer to the evidence of Mr. Hall that if an award of damages is made in the form of periodical payments the Claimant should be required to give credit for the benefit of receiving the payment at the start of each year. This was not pursued in Mr. Methuen’s closing submissions. It seems to me that the ability of the Claimant to invest a periodical payment paid at the start of each year could result in over-compensation. On the other hand, it is important that the Claimant should be placed in sufficient funds to enable him to meet his needs as they arise. It is also important that the form of any order for the payment of periodical payments should not be made over-complicated and that the costs of administration of the order should be kept as low as possible. In all the circumstances, I consider that it would be appropriate to order that periodical payments, while calculated on an annual basis, should be paid quarterly. CONCLUSION: THE FORM OF THE AWARD.[121]It is now common ground that all of the heads of damages should be in the form of a lump sum, with the exception of damages for loss of future earnings and the future cost of care and case management. I am in entire agreement with the parties that the most appropriate form of award, with the exception of these two heads, is a lump sum.[122]In considering whether to make an award under section 2(1)(a) of the 1996 Act I am required by CPR Rule 41.7 to have regard to all the circumstances of the case and in particular the form of award which best meets the claimant’s needs, having regard to the factors set out in the practice direction. Those factors are the scale of the annual payments, taking into account any deduction for contributory negligence, the form of award preferred by the Claimant (including the reasons for the Claimant’s preference and the nature of any financial advice received by the Claimant when considering the form of award) and the form of award preferred by the Defendant including the reasons for the defendant’s preference.[123]The Second Defendant submits that compensation under those two heads should be in the form of periodical payments. In this regard Mr. Methuen relies on two matters in particular. First, he points to the fact that periodical payments are payable for so long as the Claimant lives and it is therefore likely to ensure an accurate award, resulting in neither under-compensation nor over-compensation. Secondly, he refers to the particular position of the Second Defendant whose members contribute to an annual levy to meet claims which are not covered by insurance. Mr. Methuen argues that if the court were to award periodical payments the costs of meeting the claim would be spread over a longer period and therefore the immediate cost to the insurer members, and through them the insurance paying members of the public, would be lower. I accept that this would, initially, be the case although it seems that over the years as the number of awards in the form of periodical payments increases, this effect would be significantly reduced if not removed altogether. Nevertheless, these are to my mind entirely legitimate considerations which point in favour of periodical payments as opposed to a lump sum. Mr. Methuen further submits that an award of periodical payments in respect of these two heads should be linked to RPI.[124]The whole thrust of the Claimant’s case had been in favour of an award for loss of future earnings and the future cost of care and case management in the form of periodical payments linked to an earnings index, until the Claimant changed his instructions immediately prior to closing submissions. The Claimant now seeks a lump sum. Mr. Burton was true to his new instructions and has sought to persuade me that the entire award should now be a lump sum award. However, he has not been able to contradict the evidence of the Claimant’s experts, in particular the evidence of Mr. Hogg on the inadequacy and shortcomings of a lump sum award for these two heads of claim.[125]There is no evidence before me of any advice received by the Claimant which favours a lump sum award as opposed to periodical payments in respect of these two heads of claim. On the contrary, the evidence of the Claimant’s expert, Mr. Hogg, is to the contrary.[126]Mr. Burton has advanced the following arguments in favour of a lump sum.(1) First, he says that the Claimant wishes to bring this litigation to an end and to avoid the risk of appeals with their attendant delay, cost and uncertainty. I sympathise very strongly with this concern. However, I very much doubt that this outcome can be achieved by the award of a lump sum. The position of the Second Defendant is that the award should be in the form of periodical payments linked to RPI. It has been made clear by both parties from the outset of this case that, whatever my decision, there is likely to be an appeal. Moreover, Mr. Methuen has expressly reserved his position in relation to certain arguments that are not open to him below the level of the House of Lords.(2) It is said that now that the question of life expectancy has been decided there is less uncertainty in the award of a lump sum. While that is undoubtedly the case, I consider this to be of limited significance.(3) It is said that the Claimant wants more control over his life.[127]However, these considerations do not, to my mind, outweigh the case in favour of periodical payments. In my judgement, the expert evidence called by the Claimant has established a compelling case in favour of an award of periodical payments as opposed to a lump sum award. Mr. Hogg has demonstrated that a lump sum award will in all likelihood result in a massive shortfall and leave the Claimant unable to meet the costs of his future care needs. In his closing submissions Mr. Burton was forced to accept that the difference in this regard between a lump sum and periodical payments is “absolutely astronomic”. Moreover, he accepted the force of Mr. Hogg’s evidence and the fact that the character of the advice given by Mr. Hogg had not altered. This position is further exacerbated by the reduction of the award of damages on account of contributory negligence. By contrast, an award of periodical payments will be much more likely to secure the Claimant’s position in this regard. In particular I have in mind Mr. Hogg’s evidence, which was not challenged, that when one makes an allowance for contributory negligence an award of periodical payments for cost of future care and loss of future earnings would come close to covering the full cost of care to the age of 65 and that, thereafter, the periodical payments would be supplemented to a certain extent by welfare benefits. Furthermore, Dr. Wass’s evidence has persuaded me that it is possible to devise a workable and efficient machinery for indexation linked to earnings measures which will secure, so far as is possible, the future value of periodical payments without prejudicing the position of the Second Defendant. Accordingly, I conclude that an award in the form of periodical payments in respect of loss of future earnings and the future cost of care and case management best meets the criteria to which I am required to have regard.[128]With regard to the precise measures of indexation to be applied, I have concluded, for the reasons stated above, as follows:(1) Periodical payments in respect of loss of future earnings should be indexed by reference to ASHE aggregate for male full-time employees at the 90th percentile;(2) Periodical payments in respect of the future cost of care and case management should be indexed by reference to ASHE 6115 at the 90th percentile. Section 2(8), Damages Act 1996 will be modified to that extent. 241. SUMMARY OF JUDGMENT LUMP SUM (£) 1. PSLA incl interest 227,384 2. Past losses incl interest 1,100,000 3. Past losses from 18/1/07 to judgment 79,254 4. Pension - lost years 18,390 5. Care 2,234 6. Medical treatment 375,000 7. Mobility / exercise 275,000 8. Transport 507,068 9. Household 250,000 10. IT & entertainment 224,000 11. Holidays 285,800 12. Accommodation 500,722 13 Trust 40,000 Total: 3,884,852 75% of total: 2,913,639 Less interims: -1,660,000 Less CRU: -37,310 Net lump sum: 1,216,329 242. * capitalised additional case management costs for Year 1 and Year 47 Periodical payments: Earnings/pension Care & case management Gross at 75% Gross at 75% To age 47: £ 40,494 £ 30,370 £ 159,651 £ 119,738 From age 47 to 67: £ 40,494 £ 30,370 £ 175,246 £ 131,435 From age 68: nil nil £ 175,246 £ 131,435 SUMMARY OF JUDGMENT* LUMP SUM EQUIVALENT (£) 1. PSLA incl interest 227,384 2. Past losses incl interest 1,100,000 3. Past losses from 18/1/07 to judgment 79,254 4. Future earnings 980,100 5. Future care 4,700,300 6. Medical treatment 375,000 7. Mobility / exercise 275,000 8. Transport 507,068 9. Household 250,000 10. IT & entertainment 224,000 11. Holidays 285,800 12. Accommodation 500,722 13. Trust 40,000 Total: 9,544,628 75% of total: 7,158,471 Less interims: -1,660,000 Less CRU: -37,310 Net lump sum: 5,461,161 * In the event of any appeal court awarding a lump sum only award.

Cited in 5 later judgments