Court of Appeal ruling ensures that compensation will keep pace with inflation
John suffered serious brain injuries at birth, when the doctors responsible for his mother’s care decided to deliver him by caesarean section too early. As a result of his prematurity, he suffers from cerebral palsy, learning difficulties and epilepsy and requires twenty-four hour care. The NHS Trust admitted negligence and agreed to pay damages to John. The main purpose of the damages was to put in place a care regime for the rest of his life.
John’s parents were anxious that the compensation should not run out and so wanted him to receive “periodical payments”, which means that a sum of money is paid to John each year. However, they also wanted to make sure that the payments would increase by enough each year to keep pace with wage increases.
The usual practice at the time was for periodical payments to increase by a percentage each year which was linked to the Retail Price Index (“RPI”). The RPI is a “basket” of goods and services which, crucially, does not include the salaries of care workers, which usually increase more rapidly than the RPI. Jennifer Cawthorne, on behalf of John and his family, argued that the compensation for John’s future care should increase each year by a percentage equivalent to the rise in the salaries of his carers. This would ensure that his compensation payments would keep pace with the cost of his care. The NHS Trust argued that the Court had no legal power to order this.
The High Court preferred the argument put forward on behalf of John that he would be more fully compensated if the care element of his annual payments was linked to care workers’ salaries. The NHS Trust appealed to the Court of Appeal, who upheld the High Court’s decision. A further appeal by the Trust to the House of Lords was later withdrawn. The outcome of this case is a legal breakthrough, which will reassure claimants and their families that they will not be left with a shortfall between the cost of their care and their compensation.
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