Russell (A Minor) v Health Service Executive

• Jurisdiction: Ireland
• Judge: Ms Justice Irvine
• Judgment Date: 05 November 2015
• Neutral Citation: [2015] IECA 236
• Date: 05 November 2015
• Court: Court of Appeal (Ireland)
• Docket Number: [2009 No. 1918 P]

Gill Russell (a minor) v Health Service Executive

GILL RUSSELL (A MINOR) SUING BY HIS MOTHER AND NEXT FRIEND KAREN RUSSELL

PLAINTIFF/RESPONDENT

AND

HEALTH SERVICE EXECUTIVE

DEFENDANT/APPELLANT

[2015] IECA 236

Ryan P.

Finlay Geoghegan J.

Irvine J.

Appeal No. 49/2015

THE COURT OF APPEAL

Damages – Negligence – Injury – Appellant seeking to challenge the annual sum which the respondent was likely to require in order to meet his ongoing care – Whether grounds had been advanced to explain why the Court of Appeal should draw different inferences to those drawn by the High Court

Facts: The plaintiff/respondent, Gill, sustained catastrophic injuries at the time of his birth on 12th July, 2006, due to the admitted negligence on the part of the defendant/appellant, the Health Service Executive. Gill suffers from Dyskinetic Cerebral Palsy affecting all four of his limbs. He suffers from respiratory issues and epileptic seizures. He is also doubly incontinent, and it was not in dispute that he will require 24 hour care for the rest of his life. The High Court"s approach and conclusions when assessing the damages due to the plaintiff were challenged by the defendant. The defendant"s appeal to the Court of Appeal challenged firstly the findings of the High Court judge as to the annual sum, often referred to as the multiplicand, which Gill is likely to require throughout his lifetime in order to meet his ongoing care and other ancillary needs. Secondly, it challenged the legal and factual conclusions underpinning the High Court"s finding that the appropriate multiplier to be used to assess the lump sum of damages, to which Gill is entitled in respect of all of his future pecuniary loss, is one which is based on him obtaining a real rate of return, that being the nominal rate less the rate of inflation, of 1.5% per annum on the investment of his award. The plaintiff submitted that the High Court judge"s conclusions were not all based on inferences drawn from the facts and that in any event no grounds had been advanced to explain why the Court of Appeal should draw different inferences to those drawn by the High Court judge; it was not, he contended, open to the Court of Appeal to jettison the restrictions imposed upon an appellate court as per the decision in Hay v O"Grady [1992] 1 IR 210.

Held by Irvine J that, in calculating damages for future pecuniary loss, the Court must pursue the policy of providing the plaintiff with compensation on a 100% basis. The Court was satisfied that the trial judge was entitled to conclude that the appropriate discount rate to be used for the purposes of calculating all of the plaintiff"s outstanding claims for future pecuniary loss is 1.5%, with the exception of his claim for future care where the rate should be reduced by 0.5% to 1% to take account of the extent to which wage inflation is likely to exceed CPI over the course of his lifetime. It followed that the Court was satisfied that the trial judge"s conclusion that the plaintiff"s lump sum should be calculated by reference to ILGS, was well founded on the evidence as was his conclusion that wage inflation in the health care sector is likely to outstrip general inflation in early course and is likely to continue in that vein over his lifetime. The Court acknowledged that the award to which the plaintiff will be entitled as a result of the adjustment in the real rate of return will undoubtedly appear high in comparison to what it would have been if calculated by reference to the rate of 3% which has been used for a number of years. However, Irvine J stressed that the discount rate only applies to claims for future pecuniary loss; it does not herald any change in the approach of the courts to compensation for the pain and suffering caused by the injury the subject matter of any claim. The alteration of the rate was, Irvine J believed, necessary to enable the plaintiff to meet his future needs without him having to take unnecessary risks with the fund provided to achieve that end. To expect and indeed oblige a plaintiff, by the manner in which the Court approaches the calculation of their lump sum, to take such risks is, in the unanimous view of the Court, both unjust and unacceptable.

Irvine J held that the appeal should be dismissed.

Appeal dismissed.

1 1. The issues to be decided on this appeal concern the approach and conclusions reached by the High Court, (Cross J.), when assessing the damages due to the plaintiff, Gill Russell, ("Gill") who sustained catastrophic injuries at the time of his birth on 12 ^th July, 2006, due to the admitted negligence on the part of the defendants. Gill suffers from Dyskinetic Cerebral Palsy affecting all four of his limbs. He suffers from respiratory issues and epileptic seizures. He is also doubly incontinent, and it is not in dispute that he will require 24 hour care for the rest of his life.

2 2. The defendant's appeal challenges firstly the findings of the High Court judge as to the annual sum, often referred to as the multiplicand, which Gill is likely to require throughout his lifetime in order to meet his ongoing care and other ancillary needs. Secondly, it challenges the legal and factual conclusions underpinning his finding that the appropriate multiplier to be used to assess the lump sum of damages, to which Gill is entitled in respect of all of his future pecuniary loss, is one which is based on him obtaining a real rate of return, (that being the nominal rate less the rate of inflation), of 1.5% per annum on the investment of his award. The parties are agreed that the hearing of the appeal on the first of these issues should await the Court's determination on the latter.

3 3. Before moving to consider the issues raised for the Court's consideration on this appeal, it is apposite to state that there is a major structural flaw in the present system which requires the court to assess, on a once off basis, the sum of money required to compensate a plaintiff with catastrophic/life long injuries for all of their future pecuniary loss. It is highly regrettable that, regardless of the outcome of this appeal, it is absolutely certain that whatever award is made will visit an injustice on one or other party. The only issue will be extent of that injustice.

4 4. While it is helpful that for the purposes of this litigation that the plaintiff's life expectancy has been agreed i.e. to the age of 45 years, it is inevitable that the parties' prediction in this regard will be wrong. The system will prove itself enormously wasteful should Gill not achieve his anticipated life expectancy as in such circumstances he will have been over compensated. Regrettably, the converse scenario will also produce an injustice in that, if he outlives the agreed life expectancy, he will run out of money in the course of his lifetime, assuming that the annual sum awarded in respect of his care is spent each year. The greater the inaccuracy of the agreed predicted life expectancy, the greater the potential injustice.

5 5. To state that the current law in this jurisdiction, which requires the court to award a lump sum intended to compensate a plaintiff for all past and future losses, and in particular future pecuniary loss, is inherently fallible and unjust cannot be disputed. It is also grossly outdated by reference to the approach now adopted by the courts in other Common Law and Civil Law jurisdictions. The reasons why this approach to the assessment of damages should be abandoned have been advanced and discussed in many reports published in this jurisdiction and elsewhere, going back many decades. Likewise, there is a substantial body of case law lamenting incorrect mortality and other predictions which result, at times, in either excessively generous awards to plaintiffs with the corresponding short changing of defendant or the opposite.

6 6. The report of the Working Group on Medical Negligence and Periodic Payments ("the Working Group") chaired by Mr. Justice John Quirke, published on 29 ^th October, 2010, is one which explores in significant detail the difficulties of achieving the objective of compensation within our law, having regard to matters such as the degree of uncertainty affecting the estimation of life expectancy, the future fluctuation in inflation levels likely to effect the accurate calculation of future pecuniary loss and the risks to which the investment of lump sums may be exposed.

7 7. The Working Group unanimously urged the government to legislate so as to enable the courts to move away from the assessment of damages by way of a once off lump sum and instead award damages by way of Periodic Payment Orders ("PPOs"), whether consensual or otherwise, in catastrophic injury cases where long term permanent care would be required.

8 8. As far back as 1972, the Committee of Inquiry into the Insurance Industry, in its interim report, observed the injustice meted out to a plaintiff who lives longer than expected under the present system. The shortcomings of the system also attracted the attention of the Law Reform Commission. In its report on Personal Injuries' Periodical Payments and Structured Settlements (LRC 54-1996), it referred to an additional concern, namely the ability of certain plaintiffs to deal with large sums of money in a manner that would ensure that their fund was not dissipated quicker than intended.

9 9. Nicolas Bevan, in The New Periodical Payments Regime [2005] 2 Civil Court News 36, summarised the position extremely well when he stated as follows:-

"The inherent fallibility of the 'snapshot' approach to valuing a plaintiff's future loss has been widely considered. It is generally accepted that the multiplier/multiplicand approach is almost guaranteed to miss the mark of fair and just compensation; it is...