Page v Plymouth Hospitals NHS Trust

In a lump-sum personal injury award assessed by reference to the prescribed discount rate, investment advice, fund management and related transaction costs fall within the territory of that rate. They are not separately recoverable where the rate is based on a low-risk investment benchmark. A claimant cannot reintroduce such costs indirectly through the multiplicand. Nor can the prescribed rate be displaced under section 1(2) of the Damages Act 1996 unless the case falls outside the category considered by the Lord Chancellor or contains special features not taken into account.

The claimant, a child with severe cerebral palsy caused by admitted clinical negligence, raised a preliminary issue before the quantum trial. He sought to recover the projected costs of investment advice, fund management and transaction charges incurred in managing a substantial future lump-sum award. The defendant argued that the claim was inconsistent with the prescribed discount rate under section 1(1) of the Damages Act 1996.

The central questions were whether those costs were separately recoverable, whether the prescribed rate could be challenged indirectly, and whether section 1(2) permitted a different rate.

1. Disposition. The claimant was precluded from recovering the costs of investment advice and fund management charges incurred in managing the prospective award. The preliminary issue was decided in favour of the defendant.
2. Discount rate. Following Wells v Wells [1999] 1 AC 345 and the Lord Chancellor's Order prescribing a 2.5 per cent rate, the rate was fixed by reference to index-linked government stock, not a mixed portfolio carrying investment risk. References to mixed-asset investment were points of reassurance about practical returns, rather than a requirement that claimants invest in equities.
3. Investment costs. The reasoning in Wells v Wells treated investment-advice costs as included in the award assessed by applying the relevant discount rate. Separate recovery of those costs, including transaction and management costs, would risk double recovery.
4. Indirect challenge. Presenting investment costs as an annual item in the multiplicand did not remove them from the territory of the discount rate. The courts could not depart from the prescribed rate by direct or indirect means, save where section 1(2) applied.
5. Section 1(2). A different rate may be more appropriate only where the case falls into a category not considered by the Lord Chancellor, or where special features material to the rate were shown not to have been taken into account. The probability that a claimant would obtain investment advice and incur related costs had been taken into account.
6. Alternative evidential point. The claimant had not shown that, after investment costs, he would probably fail to achieve a 2.5 per cent net real return, or that compensation for those costs was necessary to achieve it. The court did not decide the issue on that ground alone.