WNA v NDP

Where damages for future care are awarded by annual periodical payments, the payments ordinarily relate to care and case-management costs incurred during the particular accounting year. An underspend in one year need not be accumulated to meet care costs in later years. This year-by-year approach can prevent double recovery where public funding is available, provided that unused public funding is repaid. The court should remain alert to double recovery and intervene actively where necessary, but should avoid imposing a lifetime running account when the structure of the periodical payments permits more accurate annual accounting.

The claimant suffered catastrophic spinal injuries in a road accident for which the defendant was liable. The parties agreed a lump sum of £6.25 million and annual periodical payments of £325,000 for care and case management.

The remaining issue concerned the treatment of any annual underspend. The claimant argued that each year should be accounted for separately. The defendant argued that the payments formed a running account, so that accumulated surplus had to be used before the claimant sought public funding in a later year.

1. The court held that double recovery must be avoided wherever possible. The usual mechanisms include reducing a lump-sum award, requiring repayment of public funding, or imposing arrangements restricting applications for statutory funding. The appropriate mechanism depends on the evidence and the structure of the award.

2. The statutory schemes considered in the judgment operate through regular review and repayment provisions. Local-authority and NHS direct payments are therefore compatible with an annual accounting approach, particularly where unused public funding is repaid.

3. The decisive question was whether the annual periodical payment represented damages for care generally, or damages for care provided during the year for which the payment was made. The court held that, in this case, the payment was referrable to care and case-management costs within the relevant annual accounting period.

4. It would be too simplistic to require every underspend to be ring-fenced indefinitely. That approach would create uncertainty about trivial surpluses, record-keeping, interest, the cause of an underspend and the interaction between care and case-management costs.

5. Accordingly, if the annual payment is not wholly spent on care and case management during that year, the claimant is not obliged to accumulate the surplus for later years and may deal with it as she sees fit. If public funding is obtained for a shortfall, unused public funding must be repaid under the agreed mechanism. Counsel were directed to formulate the appropriate order and consider whether an undertaking was required.

On 20 February 2020, the same court determined liability and found the defendant liable for the claimant’s injuries. This judgment determined the outstanding issue concerning the structure and accounting of the agreed quantum award.