Russell v HSE – Court Of Appeal Upholds High Court Decision Regarding The Real Rate Of Return

On 5 November 2015, the Court of Appeal delivered its much anticipated judgment in Russell v HSE1, a case which considered the "real rate of return" discount which would be applied to an injured plaintiff's future care costs. The HSE had appealed the High Court decision2 of Mr Justice Cross in which he held the real rate of return discount to be applied in respect of the plaintiff's future care costs should be reduced from 3% to 1%, in light of the prevailing economic climate. The Appeal was heard by a three-judge Court of Appeal in July 2015. Judgment was delivered by Ms Justice Irvine and upheld the High Court decision. It is understood that the Court of Appeal's decision is to be appealed by the HSE to the Supreme Court. In coming to its decision, the Court of Appeal decided that the plaintiff, a nine year old boy who suffered brain damage at birth, was entitled to have his damages calculated on the basis that the lump sum award could be invested in the most risk averse manner reasonably available. The Court also held that public policy has no part to play in the assessment of damages for injured plaintiffs. On that basis, the Court must consider the calculation of a future financial loss to the plaintiff, regardless of the economic consequences that the award may have on the defendant, the insurance industry or the public finances. Ms Justice Irvine also used the opportunity when delivering judgment to remind the Government that a system to allow for periodic payment orders3 was long overdue and must now be implemented. The Court...

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