‘De-risking’ and financial exclusion
At Kingsley Napley we specialise in high value claims. Any life changing condition, such as a spinal injury or cerebral palsy, may mean that the Claimant’s home is not suitable for their needs. As part of the case we will look very carefully at the Claimant’s current home situation and with the help of experts, evaluate whether it is appropriate for the needs of the Claimant.
Experience has taught us that this issue must be grappled with as soon as possible in the claim. Acting for a child with cerebral palsy whose parents live in a wonderful flat with spectacular views but with several flights of stairs to their front door and no lift will leave the parents developing back injuries quickly as a result of lifting an increasingly heavy child, wheelchair and other equipment. Ideally purchase of a new home should be achieved as soon as possible (and if the claim is admitted by way of interim payment) but it is not always straightforward.
It is now very common to include the need for suitable accommodation in a claim. However, it is not as simple as claiming the value of a new property. A complicated calculation, set out in the case of Roberts v. Johnstone is used. The underlying principle is that to simply buy a property straight off would over compensate. Case law has evolved so that deductions are made from the purchase price to reach a figure that was, in 1989, considered to be fair.
Roberts v Johnstone established that the Claimant can recover the capital cost of new accommodation, along with adaption, moving and increased running costs, less the capital value of a claimant’s existing home (or home that the Claimant would have bought). This figure is multiplied by 2.5% to arrive at the multiplicand (to reflect the projected annual appreciation had the money been invested) and a multiplier (based on the Claimant’s life expectancy) is applied. As an aside, a projected annual return of 2.5% is totally unrealistic unless the Claimant embarks upon a high risk investment strategy, which gambles their much needed damages.
As stated above, Roberts v. Johnstone was decided in 1989. Since then the economic climate has completely changed and property prices, particularly in the South East, have rocketed. This has forced Claimants into increasingly creative ways of approaching this element of the claim to try and ensure that there is a sufficient pot of money to purchase the desired property.
Claimants should not have to “borrow” significant amounts from other parts of their claim, in order to live in a property which meets their needs. Nor should they be forced to move away from family and friends (often their support network) to find cheaper housing.
We think it is time for Roberts v Johnstone to be revisited and are pleased that APIL are looking into alternatives to this longstanding conundrum. The current situation does not meet Claimants needs in a society which still values home ownership as the ultimate security and in an economic climate where the increase in property prices is unmatched by earnings.
Life changing injuries cause economic hardship and uncertainty. Ensuring that an injured Claimant has a suitable roof over their head is essential in ensuring that Claimants and their families can move forwards securely in their lives.
If you or anyone you know are considering making a claim please contact us on 020 7814 1200.
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