Wells v Wells (Page v Sheerness Steel Co Plc, Thomas v Brighton Health Authority)

Damages for future pecuniary loss must achieve full compensation as nearly as possible without over-compensation. A claimant is not entitled to have the award assessed on the basis of minimum-risk or risk-free investment. The court should assume prudent investment and consider the probabilities affecting both the multiplicand and multiplier. For long-term awards, the conventional discount rate of 4.5% remained applicable; index-linked government securities did not justify replacing it with an ILGS-based rate. The Roberts v Johnstone approach to additional housing costs applied to past as well as future loss, but its conventional rate remained 2%. Reasonable Court of Protection and related legal-management costs may be recoverable where they flow from the injury and award. The three appeals therefore succeeded on the principal multiplier issue, with the individual awards recalculated.

Three appeals concerned the assessment of damages for serious personal injuries. In Wells v Wells, Judge Wilcox awarded approximately £1.619 million; in Thomas v Brighton Health Authority, Collins J awarded approximately £1.285 million; and in Page v Sheerness Steel, Dyson J awarded approximately £906,000. Liability was admitted in each case.

The trial judges used multipliers based on a 3% return from index-linked government securities, departing from the conventional 4–5% approach. The Court of Appeal considered whether ILGS should replace the conventional guideline, how contingencies should be reflected, and various case-specific challenges to the quantification of future losses and expenses.

1. General principle. The court allowed the appeals on the principal issue. Damages remain compensatory and must achieve full compensation as nearly as possible without placing the injured person in a better financial position. The claimant is in no special investment category and is not entitled to have the award assessed on the assumption of minimum-risk or risk-free investment.
2. Multiplier and investment. Both the multiplicand and multiplier involve probabilities. The multiplier is not a purely mathematical exercise. It must reflect accelerated receipt of capital, the availability of capital and income, mortality, working-life contingencies and, where relevant, the risk that a child may never become an earner. The court should assume that the claimant will adopt a prudent investment strategy. A balanced portfolio containing a substantial proportion of equities was accepted as prudent for long-term awards. ILGS, although less risk-prone, were not risk-free and could be rigid because of gaps in maturity dates, the 2030 cut-off then apparent, market-value fluctuations and limited flexibility.
3. The conventional discount rate of 4.5% remained applicable. The court declined to replace it with an ILGS rate. The Ogden Tables were useful as a check and their admissibility was favoured under section 10 of the Civil Evidence Act 1995, but the ILGS recommendations in their explanatory notes were not endorsed.
4. Housing costs. The Roberts v Johnstone formula applied to past as well as future additional housing costs. The 2% rate was a broad conventional rate, not tied to current ILGS returns. No firm and lasting economic change justified increasing it to 3%.
5. Individual appeals. In Wells, the court reduced the life expectancy, general damages, future-loss multipliers and care-related awards, but allowed reasonable future legal costs associated with the Court of Protection. In Thomas, the court recalculated the whole-life and working-life multipliers, reduced the housing-cost award and rejected the cross-appeal. In Page, the court reduced the relevant multipliers and the enabler provision, while otherwise leaving the material care findings intact. The cross-appeals of Thomas and Page failed.

• Court of Appeal: Appeals from the High Court decisions of Judge Wilcox in Wells, Collins J in Thomas and Dyson J in Page. The Court of Appeal allowed all three appeals to the extent stated, varied the Wells award, set aside the Thomas and Page orders for recalculation, and dismissed the Thomas and Page cross-appeals.