AB v ROYAL Devon & Exeter NHS Foundation Trust

Capacity is decision-specific and must be assessed at the relevant material time. A person may have capacity to conduct litigation but lack capacity to manage a substantial damages award involving complex and difficult decisions. Where incapacity is caused by illegal drug use, consequential costs may be excluded under the wider principle of ex turpi causa. That principle does not exclude costs attributable to incapacity arising independently of unlawful conduct. A claimant may therefore recover reasonable costs of managing an award during an initial period of complex implementation, even where later incapacity would result from a relapse into illegal drug use.

The claimant suffered paraplegia after the defendant admitted breach of duty in failing to diagnose and treat a spinal abscess in time. Liability had been compromised at 60 per cent of assessed damages. The claimant was subsequently declared a protected party because of concerns about capacity to conduct litigation and manage financial affairs.

The principal issues were the claimant’s past and future capacity, the application of ex turpi causa to costs associated with incapacity caused by drug abuse, life expectancy, and the assessment of damages, including deputyship and trust costs.

1. Capacity. Applying Dunhill v Burgin (Nos 1 and 2) [2014] 1 WLR 933, capacity to conduct litigation and manage financial affairs had to be assessed by reference to the particular activity and material time, rather than globally. The claimant had capacity to conduct the trial while abstinent, but would probably lack capacity to make the complex decisions required to organise and spend the substantial award during its first year.
2. The claimant had lacked capacity when the protected-party order was made. His incapacity was attributable principally to his personality disorder, impulsivity, mild head injury and historic drug abuse, rather than to the spinal injury. The legal team had been entitled to continue under the existing order pending clarification of the expert evidence.
3. Illegality. The wider principle identified in Gray v Thames Trains Ltd [2009] 1 AC 1339 applied where the claimed loss was caused by, or inextricably bound up with, the claimant’s criminal conduct. Costs associated with past incapacity caused by drug abuse were excluded. The same applied to costs attributable to future incapacity after the first year if that incapacity resulted from renewed serious illegal drug use.
4. The principle did not exclude costs during the initial year. The claimant would lack capacity during that period even if he remained abstinent, because the incapacity arose from the complexity of implementing the award rather than from unlawful conduct. One year’s deputyship costs and the cost of a statutory will were therefore recoverable. Trust costs were refused because the trust could be broken once capacity returned.
5. Damages were assessed on the basis of a 20 per cent reduction in life expectancy for spinal cord injury, a combined 25 per cent reduction for diabetes and smoking, and a further 30 per cent reduction for probable renewed serious drug abuse. The resulting life expectancy was rounded to 15 years. General damages were £192,500 and the parties were directed to finalise the remaining figures.