Russell -v - The Health Service Executive

JudgeO'Donnell J.,McKechnie J.,O'Malley J.
Judgment Date01 February 2017
Neutral Citation[2017] IESCDET 10
CourtSupreme Court
Date01 February 2017

[2017] IESCDET 10



O'Donnell J.

McKechnie J.

O'Malley J.

RESULT: The Court does not grant leave to the Applicant to appeal to this Court from the Court of Appeal.

This determination, which is somewhat more detailed than normal, relates to an application by the Health Service Executive (‘the HSE’ or ‘the applicant’), which seeks leave to appeal to this Court from a judgment of the Court of Appeal delivered on the 5th November, 2015, and from an Order of that Court made on the 21st January, 2016, and perfected on the 12th February, 2016.


Gill Russell (‘the plaintiff’ or ‘the respondent’) sustained catastrophic injuries at the time of his birth on the 12th July, 2006, due to the admitted negligence of the applicant. The plaintiff suffers from Dyskinetic Cerebral Palsy affecting all four of his limbs. He further suffers from respiratory issues and epileptic seizures. He is also doubly incontinent, and it is not in dispute but that he is totally dependent for every need on a 24-hour basis, and will be for the rest of his life. The plaintiff's life expectancy has been agreed as being 45 years.


The HSE wishes to challenge the Court of Appeal's decision in relation to the estimated interest rate used in calculating the appropriate multiplier so as to arrive at the lump sum figure for the plaintiff's future pecuniary needs: this interest return is known as the Real Rate of Return (‘the RRR’, or ‘the Discount Rate’). The findings in question are referred to in paragraphs (i) and (ii) of the Order so made and are expressed in declaratory form as follows:-

‘(i) The Plaintiff is entitled to have his claim for future care calculated by reference to a real rate of return of 1%’


‘(ii) The Plaintiff is entitled to have all of his other outstanding claims for future pecuniary loss calculated by reference to a real rate of return of 1.5%.’


The jurisdiction of the Supreme Court to hear appeals is set out in the Constitution.


Article 34 of the Constitution provides for the public administration of justice; describes the courts established by the Constitution and those which may be established by law; invests full original jurisdiction in the High Court; establishes the Court of Appeal under Article 34.2; and sets out its appellate jurisdiction under Article 34.4.1°. This states that:-

‘1° The Court of Appeal shall—

i save as otherwise provided by this Article, and

ii with such exceptions and subject to such regulations as may be prescribed by law,

have appellate jurisdiction from all decisions of the High Court, and shall also have appellate jurisdiction from such decisions of other courts as may be prescribed by law.’


Article 34.4.3° of the Constitution provides for the finality of decisions of the Court of Appeal, save for appeals that may be taken to the Supreme Court from its decisions under Article 34.5.3°.


Under Article 34.5.4° it is possible for a decision of the High Court to be directly appealed to the Supreme Court, bypassing the Court of Appeal. This type of appeal is sometimes referred to colloquially as a ‘leap-frog’ appeal. It does not feature on this application.


The Article relevant to this appeal, where the Court of Appeal has already given judgment in a matter, is Article 34.5.3°, which states:-

‘3° The Supreme Court shall, subject to such regulations as may be prescribed by law, have appellate jurisdiction from a decision of the Court of Appeal if the Supreme Court is satisfied that—

i the decision involves a matter of general public importance, or

ii in the interests of justice it is necessary that there be an appeal to the Supreme Court.’


Article 34.5.6° states that the decision of the Supreme Court shall in all cases be ‘final and conclusive’.


Primarily, this Court is now, ‘subject to such regulations as may be prescribed by law’, an appellate jurisdiction from the Court of Appeal. Such an appeal may only be exercised provided that this Court is satisfied either that the relevant decision of the Court of Appeal ‘involves a matter of general public importance’, or, alternatively, that ‘in the interests of justice’ it is necessary that there be an appeal to this Court. Thus, in order for a party to be entitled to appeal to this Court from a decision of the Court of Appeal, it must demonstrate that either or both of these pre-conditions exist.


The statutory framework for the moving of an application seeking leave to appeal to this Court is to be found in the Court of Appeal Act 2014, and, in particular, the provisions of s. 44 of that Act, which amends, by insertion, s.7 of the Courts (Supplemental Provisions) Act 1961.


The Rules of Court are set out in the amended Order 58 of the Rules of the Superior Courts.


In summary, the Constitution has retained an entitlement to one appeal as of right from the High Court to the Court of Appeal, subject to any express statutory exception or regulation that may provide otherwise. What is sought in this case is a second appeal. As pointed out by this court in Brennan v. Thomas Flannery and Ors [2015] IESC DET 32, ‘… it is a general principle that, save in exceptional circumstances [such as those] outlined in Fox v. Mahon and Ors [2015] IESC DET 2, the Court of Appeal is to provide the avenue for appeals from the High Court, and that its decision is to be final, save where there is a point of general public importance, or it is in the public interest that it should be determined further by this Court.’

Background: At Trial and Appellate Level:

The plaintiff's claim for compensation in respect of the injuries suffered (para. 2, supra) initially came on for hearing in 2012, when an interim periodic payment of €1.4m to cover a period of two years was agreed by the parties and approved by the court. It was a term of the settlement that the matter would be listed in October, 2014, and that if by then a new statutory regime had been put in place for periodic payments, the case would be dealt with in that way; otherwise, and if a further settlement could not be reached, the plaintiff would be entitled to proceed by seeking a lump sum payment in respect of the outstanding balance of his claim, on an agreed full compensation basis (100%). As no such legislation had been enacted by then or even now, the case proceeded thus.


With liability not being in issue and with life expectancy having been agreed, there were only two live issues before the trial court, namely, fixing the annual cost of care and of aids and appliances (‘the multiplicand’) and determining the RRR aspect of the multiplier, by which the lump sum could be arrived at. The findings on both of these issues were the subject matter of a Notice of Appeal by the HSE. It was agreed, however, that the annual cost calculation would be deferred pending the final outcome on the discount rate. It is solely on that point that a further appeal is now sought to be made to this Court.


This issue of concern was fully argued in the High Court via a number of component factors upon which both sides called expert evidence from economists, an accountant, an actuary and a stockbroker. As had previously been agreed between the parties, the assessment proceeded on a full compensation basis (100%) for the injuries suffered, with the principal contest being as to the type of investment fund which the court should use for return purposes. The plaintiff submitted that he should be regarded as a risk averse investor and that, as such, his lump sum should be invested in Index Linked Government Securities (‘ILGS’): to do otherwise, and in particular to do what the defendant suggested, would be for him to carry an unacceptable risk. On the other hand, the HSE's suggestion was to invest in a mixed type fund, probably 70% equities and 30% gilts, which if utilised would in its submission yield a net annual return of 3% over Gill Russell's lifetime.


Cross J., in his judgment of the 18th December, 2014, adopted an approach consistent with that of the House of Lords in Wells v. Wells [1999] 1 A.C. 345, a decision which he considered to be good law in this jurisdiction, and one supported by Dylan Simon v. Manuel Paul Helmot [2012] UKPC 5. Critical to his conclusion was that the plaintiff was not to be treated as an ‘ordinary prudent investor’ when it came to determining the likely RRR which might be obtained on the investment of his lump sum. This was because the funds to be invested were principally required for his essential future needs, namely, nursing care and aids and appliances. If this level of care is not provided the plaintiff will suffer a great diminution in his enjoyment of life and may well die prematurely as a result. This finding has not been appealed. According to the trial judge, therefore, the plaintiff was thus entitled to act in the most risk averse manner that was reasonable and to pursue a non-negligible risk strategy: the option of a mixed fund as advocated by the HSE, whose witnesses in any event did not did not agree on the precise percentage division of such fund, did not offer this. Rather, in the judge's view, the best option was that provided for by investing, essentially, in ILGS.


Cross J. also accepted that the Office of Wards of Court of the High Court had historically invested the damages awarded to plaintiffs such as Gill Russell in mixed portfolios containing a substantial percentage of equities and had achieved a 3% RRR on such investments. This type of investment was heavily influenced by the necessity to obtain such a return, as damages were calculated on this...

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