Warriner v Warriner

Where the Lord Chancellor has prescribed a discount rate under the Damages Act 1996, a court may adopt a different rate under section 1(2) only where the case falls outside a category considered by the Lord Chancellor or has special features material to the rate which his reasons show were not taken into account. The phrase more appropriate must be read in that statutory and policy context. Certainty, settlement and avoidance of costly expert evidence remain important. A long life expectancy and a large award, without more, do not establish such a case where those features were expressly considered in fixing the prescribed rate.

The claimant sustained serious brain damage in a road accident. Liability was admitted, but quantum remained disputed. At a case management conference in the Queen’s Bench Division, Deputy High Court Judge Murphy permitted the claimant to rely on forensic accountancy evidence seeking a 2% discount rate instead of the 2.5% rate prescribed by the Damages (Personal Injury) Order 2001. The claim involved a life expectancy of 46 years and damages exceeding £3 million. The defendant appealed, arguing that the evidence was late and disclosed no real prospect of showing that a different rate was more appropriate under section 1(2) of the Damages Act 1996. The central issue was whether the evidence should be admitted.

Dyson LJ gave the first judgment. Latham LJ agreed with him, and Mummery LJ agreed with both judgments. The appeal was therefore allowed unanimously.

1. Case management. The court will not ordinarily interfere with a case management decision unless it was plainly wrong. However, expert evidence may and should be restricted where there is no real prospect that it will affect the issues to be tried. The Court of Appeal was entitled to reconsider the order because the first-instance judge had not been shown the Lord Chancellor’s reasons and had not received the detailed submissions made on the statutory issue.
2. Construction of section 1(2). The phrase more appropriate in the case in question must be construed in the context of the rate prescribed under section 1(1) of the Damages Act 1996 and the reasons given for selecting it. A different rate may be adopted where the case falls within a category not considered by the Lord Chancellor, or has special features material to the choice of rate which his reasons show were not taken into account.
3. The Lord Chancellor’s reference to exceptional circumstances was understood as referring to special circumstances not taken into account when fixing the 2.5% rate. Section 1(2) would consequently apply in comparatively few cases. An open-ended approach would undermine certainty, settlement and the saving of expert costs.
4. The claimant’s 46-year life expectancy and claim exceeding £3 million did not identify any special feature outside the category of large, long-term awards which the Lord Chancellor had particularly considered. The report focused on the yield from index-linked government securities and did not engage with the Lord Chancellor’s other reasons, including prudent investment in a wider portfolio. It therefore disclosed no real prospect of showing that 2% was more appropriate than 2.5%.

The case management order permitting the forensic accountancy evidence was set aside. The respondent was ordered to pay the costs of the appeal, set off against the damages awarded, subject to public funding assessment.

• Court of Appeal (Civil Division): Appeal from the Queen’s Bench Division allowed. The order permitting forensic accountancy evidence on the discount rate was set aside.
• Queen’s Bench Division: Deputy High Court Judge Murphy permitted evidence addressing whether a 2% discount rate should replace the prescribed 2.5% rate.