Harries v Stevenson

Section 1(2) of the Damages Act 1996 permits a different discount rate only where the case falls outside the category considered by the Lord Chancellor, or has special features material to the rate which his reasons show were not taken into account. A general change in economic conditions, or criticism of the prescribed rate, is insufficient. The inability or unwillingness of a defendant or insurer to provide a reasonably secure periodical payments order does not, without more, create a qualifying exception. Such an argument may amount to a direct attack on the prescribed rate. The court may also refuse to order a preliminary issue where the relevant facts, including the form and security of any future award, remain uncertain.

The claimant brought a clinical negligence claim arising from catastrophic brain injury suffered shortly after birth. Liability and causation had been compromised, and the remaining quantum claim was due to proceed to trial.

The claimant sought an order for a preliminary issue concerning whether a discount rate different from the Lord Chancellor’s prescribed rate could be used under section 1(2) of the Damages Act 1996. He argued that a periodical payments order would be appropriate but could not be made because the defendant’s insurer could not provide reasonably secure payments. The central issues were whether the proposed section 1(2) case was arguable and whether it was procedurally appropriate to determine it before the quantum trial.

1. The application was for an order that a preliminary issue be tried, not for unilateral determination of the issue identified by the claimant. A party cannot create or define a preliminary issue without the court’s approval.

2. Under section 1(2) of the Damages Act 1996, the approach in Warriner v Warriner [2002] 1 WLR 1703, applied in Cooke v United Bristol Healthcare NHS Trust [2004] 1 WLR 251, remained applicable notwithstanding the later replacement of section 2 of the Act. The court must ask whether the case falls into a category not considered by the Lord Chancellor, or contains special features material to the choice of rate which his reasons show were not considered.

3. Changes in economic conditions did not, by themselves, make the issue arguable. Permitting a different rate merely because the prescribed rate was said to be unfair would constitute an impermissible attack on that rate. Helmot v Simon [2012] UKPC 5 did not assist because it concerned the common law position in Guernsey and did not construe the 1996 Act.

4. The defendant’s inability to provide a reasonably secure periodical payments order did not place the case in a category outside the Lord Chancellor’s contemplation. In 2001 a claimant might wish for periodical payments but be unable to obtain them because the defendant refused consent or could not provide security.

5. It was also premature to determine the proposed issue. It was not yet known whether the trial judge would make a lump sum award, whether a periodical payments order would be sought or considered appropriate, or whether continuity of payment would lack reasonable security.

The application was dismissed.

First-instance decision. No prior appellate decision in the same proceedings was stated.