A Judicial Balancing Act Between Over And Under Compensation

• Published date: 17 March 2022
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation, Personal Injury
• Law Firm: BLM
• Author: Mr Andrew Williamson

We have to remind ourselves from time to time that the purpose of compensation is to put the injured party in the position that they would have been but for the accident, so far as money can do so. They are entitled to no more and no less, sometimes known as the 100% principle. A recent clinical negligence case covers various issues which are relevant when considering these broad principles, including issues around double recovery (of both compensation and state funding), the form of award (particularly the approach to a periodical payment order) and claims that are not recoverable (in this case, financial management through a personal injury trust).

We previously reported on the judgment in Martin v Salford Royal NHS Trust [2021] EWHC 3058 which was passed down in late 2021. The original High Court ruling dealt with damages and, in doing so, grappled with a situation where, potentially, the claimant might find himself in receipt of damages to cover his care needs whilst also still being able to claim statutory funding (and which might therefore offend the 100% principle by allowing double recovery for the same loss). Parties regularly resolve such issues in negotiation, either through a periodical payment mechanism which allows for any excess funds to be repaid to the paying party or through a reduction in the award whilst allowing the claimant to recover what they can from state funds. In this case, the court accepted that the claimant was receiving s.117 Mental Health Act state funding, and that if the claimant continued to do so in the future then this might lead to double recovery, but determined that the claimant was entitled to a fuller care package and that, even if the continued receipt of s.117 funding could not be excluded, that 'possibility' of a risk of double recovery was not sufficient to make any adjustment to the award. As such no 'credit' was given, or is required to be given going forwards, for the claimant's entitlement to state funding. This is concerning to compensators but it is important to note that the court recognised the risk that this would provide over-compensation because of the 'possibility' that the claimant could seek s.117 funding in the future. The court balanced this with the risk of the claimant's care needs in future increasing due to physical decline. By keeping the allowance for care static for life, the court said the award for care was 'appropriate' across the claimant's lifetime.

Last Friday, 11 March 2022, the...