Landmark Decision on Compensation for Care Needs of Seriously Injured

Compensation and long-term care for serious injury

17/01/2008

In a landmark court judgment, the Court of Appeal has today ensured that seriously injured people relying on compensation payments for their long term care no longer face critical funding shortfalls when paying for care staff.

The current system of calculating compensation had left many people who had been catastrophically injured, through no fault of their own, unable to meet the steep rises in the cost of hiring carers, support workers and personal assistants.

Law firm Irwin Mitchell has been at the centre of the fight for fair and just compensation for future care needs and acted for one of the claimants in the group of cases that went before the Appeals Court.

Compensation for future care needs is either awarded as a lump sum or in annual periodical payments. The Government, when setting up the periodical payments legislation, decided that they would usually be linked to the retail price index (RPI).

Irwin Mitchell has long argued that indexing these payments to RPI (which is designed to measure the cost of living) would mean that claimants would lose out as historically RPI has been much lower than the annual rise in earnings in the care sector. Therefore the increases in periodical payments would fall behind the increasing cost of their care.

As a consequence they are not able to afford to maintain their essential care arrangements leading either to the risk that they will be forced to cut their care or seek to maintain it with the prospect of running out of money later in life.

Irwin Mitchell proposed that compensation payments be calculated against the Annual Survey of Hours and Earnings (ASHE) instead, which offers a far more accurate guide of the cost of care. The defendants had argued that the court did not have the power to use any alternative index, other than RPI.

On the basis of today’s decision it will be possible for claimants needing future care to opt for periodic payments and for the court to link those payments to an index relevant to the cost of care (ASHE 6115).

Irwin Mitchell solicitor Jennifer Cawthorne who represented one of the clients in this landmark case said: “I am delighted with the Court of Appeal decision which will mean that seriously injured people, who rely on good quality care to survive, will be able to fund it without the awful fear that the money will run out.”

“People injured through no fault of their own  have a fundamental right to receive good quality care and our case has all along  been about providing peace of mind for our client and his family”

John Pickering the Head of Personal Injury at Irwin Mitchell said: “This is the most important decision for decades on the assessment of damages for future care. It ensures that those who require long term care can afford to provide for themselves a good quality of life and as much independence as can be achieved within the limits of their injuries”

13-year-old Daniel Groves from Evesham in Worcestershire has cerebral palsy after a series of failures during his mother’s pregnancy and his birth left him severely disabled.

In December 2006 he was awarded a compensation package of more than £4.75 million but the way the annual payments are paid to Daniel had been placed in abeyance until today’s ruling.

Mrs Groves commented: "Danny's injuries mean that he needs very expensive care and support for the rest of his life. When Danny's case settled just over a year ago, we were advised by Irwin Mitchell to put on hold the decision of which index Danny's annual payments would be linked to until the Court of Appeal had made a decision in this case. This is the decision we have been waiting for and we are delighted by it as it means that Danny's future is now much more secure. We know that his annual payments for care will last as long as he lives but also that they will increase year on year in line with earnings of his care workers. This is a great relief to us"

A full copy of the judgement can be obtained by clicking here.

If you are seeking injury compensation for long term care costs, we can help. Fill in our online claims form for free advice.