Central to the award of damages to a Plaintiff who has been negligently injured, is the attempt by the Court to put the injured person back in the position (insofar as is possible in monetary terms) that they would have been in, but for the injury. This is a legal principle known as resitutio in integrum. It is a long standing and generally approved and cited principle that has been restated through numerous legal authorities and text books. In this way, particularly in catastrophic injuries cases such as claims for injured children who suffer from cerebral palsy, the Plaintiff has been entitled to claim the full costs of vital heads of special damage such as nursing care, aids and appliances, assistive technology and, until very recently, the cost of purchasing suitable accommodation for the child’s many and complicated needs. Clearly, but for the negligence of the Defendant, none of these requirements would have arisen. The child ought to be entitled to recover damages for these special requirements in order that he or she can lead as comfortable and fulfilling a life as possible given their injuries putting them in the position they would have enjoyed but for the Defendant’s negligence.
However a point has arisen in relation to the cost of purchasing suitable accommodation in a recent case handled by Augustus Cullen Law which concerned the admitted negligence of a Dublin Maternity Hospital which resulted in catastrophic injuries being suffered by a baby girl during her birth which has rendered her a spastic quadriplegic and suffering from severe cerebral palsy. The Defendant in this case has challenged the Plaintiff’s entitlement to be awarded the full capital cost of the required accommodation. The Defendant i.e. the State has raised a technical legal argument inviting the Court to enter into a mathematical calculation involving the value of the minor Plaintiff’s parents’ current home resulting in a fraction of the cost of the house required by the Plaintiff to purchase suitable long term accommodation. The rationale behind the Defence argument is that the Court must strive above all to prevent a future windfall accruing to the estate of the injured Plaintiff upon his/her death.
In this case the Defendant submitted to the Court that the relevant authority for their proposition is a UK decision of Roberts v. Johnstone  1 Q.B. 878. The basis of this decision is the argument that a house is not a wasting asset and that in allowing the full cost of this house to be awarded to a minor Plaintiff, a Court will be in effect be granting an unexpected future windfall to the estate of the Plaintiff whenever they die. This, it was argued, led to an injustice to the Defendant and the Courts duty is always to balance the interests of the parties so that justice is done to both sides insofar as is possible. Whilst this might seem like a somewhat distasteful argument, the English Court in Roberts v Johnstone accepted this premise and reduced the damages awarded for future housing needs, and indeed the decision of the Court has, until recently, been heartily endorsed in all subsequent decisions in the UK including the House of Lords decision of Wells v. Wells  3 All ER 481. It has been decided in the UK decisions that what the Court is awarding compensation for is in fact the additional cost of purchasing a house over and above what the Plaintiff might ordinarily require. The calculation that the Court relies upon actuarial tables that provide multipliers based upon the assumed life expectancy of the Plaintiff. What it does is take the value of the proposed house that is required to be purchased together with the capital cost of altering a new house and deducts the value of the Plaintiff’s parents existing house. This cost is then multiplied by the appropriate rate of return (3%) and has the appropriate multiplier applied to it based on life expectancy. The cost of the alterations are then added back into the final figure less any enhancement value that it is agreed that the alterations add to a house. A complex calculation certainly and one that results in far less than the required purchase price being awarded to the Plaintiff.
The Defendant argued that the full market value of the parents’ house should be deducted (not just their equity) as well as a substantial figure representing the enhancement value from the alterations. On the basis of their arguments it was contended by the Defendant that the Plaintiff should only be awarded a total sum amounting to €343,000 in circumstances where the agreed evidence was that the new accommodation in fact would cost €1.2million including alterations and stamp duty. Clearly this shortfall of over €850,000 would render a huge injustice to the negligently injured child whose parents would be forced to try and meet the shortfall by selling their own house and trying to raise a huge additional mortgage.
It was argued on behalf of the Plaintiff that such a proposal would put this and other injured Plaintiffs in a position where they would be unable to purchase suitable accommodation without recourse to other heads of damages (e.g. general damages, loss of earnings). The Plaintiff’s lawyers argued that the only just way of approaching the case was to award the full costs of the housing but, in the event that the Court felt that some contribution towards the increased cost was required, then only the value of the parents’ equity ought to be taken into account.
A decision in the case is expected in early October but it will clearly have a huge impact on future catastrophic injuries claims, particularly where the parents of the Plaintiff are homeowners and the cost of finding alternative suitable accommodation is high.
08 September 2010