Tameside & Glossop Acute Services NHS Trust v Thompstone & Ors

A periodical payment order for future pecuniary loss must, so far as possible, preserve full compensation throughout its duration. The retail prices index is a default measure, not an exceptional-circumstances threshold. The court may substitute a wage-related measure where that measure more accurately tracks the relevant loss.

For future care and case-management costs, ASHE occupational group 6115 is an appropriate measure. Its suitability has been established following exhaustive scrutiny. The court should not permit the issue to be reopened without significantly different and more persuasive evidence.

The form of an award is determined objectively by what best meets the claimant’s broadly understood needs. Allocation between a lump sum and periodical payments must be considered together with indexation.

These were four conjoined appeals concerning young claimants who had sustained catastrophic injuries at birth through admitted negligence. The disputed damages principally concerned future care and case-management costs.

In Thompstone, Corbett and RH, the courts below concluded that the retail prices index would not adequately track carers’ earnings. They selected the 75th percentile, or another appropriate percentile, of the Annual Survey of Hours and Earnings occupational group 6115. In De Haas, the judge adjourned the related allocation and indexation questions pending the appellate outcome in Thompstone.

The appellants challenged the construction of section 2 of the Damages Act 1996, the suitability of ASHE 6115, the approach to evidential burdens, and the principles governing the form of periodical payment orders. The central questions were when the statutory RPI default could be modified, which replacement measure could be used, and how the court should determine the form of an award.

1. All four appeals were dismissed. Section 2(8) of the Damages Act 1996 establishes RPI indexation as a default. Section 2(9) permits its effect to be modified whenever that is appropriate and fair. Exceptional circumstances are not required. Flora v Wakom (Heathrow) Ltd [2006] EWCA Civ 1103 was binding and had not been decided per incuriam.

2. The power to modify the effect of section 2(8) is not confined to adjusting RPI itself. It includes substituting another index or measure. Periodical payments and lump-sum awards are materially different mechanisms. A rule devised for fixing a lump-sum discount rate does not restrict the statutory power to select an appropriate index for annual payments.

3. The governing objective is the full-compensation or 100% principle. Once liability has been established and financial loss is assessed, corrective justice applies. Affordability and distributive justice cannot justify reducing compensation for future pecuniary loss.

4. Selecting an index is an evaluative and comparative exercise. A claimant bears any evidential burden necessary to establish relevant facts, but there is no overriding legal burden requiring a proposed alternative to be proved independently of RPI. An alternative must be sufficiently reliable and reproducible. The court should then compare suitable measures by reference to accuracy of match, authority, statistical reliability, accessibility, consistency, reproducibility, and simplicity and consistency in application.

5. ASHE occupational group 6115 was markedly superior to RPI for care and case-management costs. Its conversion into an index through a weighted average of carers’ current wage rates was legitimate. Reclassification, compositional change, movement within the earnings distribution, pay drift, volatility and workability did not disqualify it. Future challenges should be struck out unless supported by significantly different and more persuasive evidence.

6. When deciding the form of an award under section 2(1), the court must objectively choose the arrangement which best meets the claimant’s needs. Needs extend beyond proved heads of damage to practical organisation, security, flexibility, immediate capital requirements and contingencies. The parties’ preferences must be considered, but neither preference is legally paramount. Allocation between a lump sum and periodical payments and the applicable index are interrelated.

7. A decision under section 2(1) is distinct from approving an agreed compromise and is primarily adversarial. Privileged material belonging to one party cannot be considered for a disputed section 2(1) issue without disclosure to the other party. The judge may use an inquisitorial process for approval issues or, exceptionally, appoint an assessor where both parties’ proposals are inadequate.

• Court of Appeal (Civil Division): By [2008] EWCA Civ 5, dismissed all four conjoined appeals.
• High Court, Queen’s Bench Division: In Thompstone, Swift J held in [2006] EWHC 2904 (QB) that future care and case-management payments should be indexed by reference to the 75th percentile of ASHE occupational group 6115.
• Sheffield District Registry: In Corbett, HH Judge Bullimore, sitting as a High Court judge, selected ASHE 6115 for future care costs.
• High Court, Queen’s Bench Division: In RH, Mackay J held in [2007] EWHC 1441 (QB) that ASHE 6115 was the appropriate measure and determined the allocation between capital and periodical payments.
• Liverpool Law Courts: In De Haas, Nelson J approved the agreed heads of damage, determined the immediate lump-sum allocation, and adjourned the remaining allocation and indexation questions pending the appellate outcome in Thompstone.