A victory for financial sense in Swift -v- Carpenter

I started advising personal injury claimants in 1997. My colleague, Ian Gunn, in 1998.

Whilst Ian has recently retired, I continue to be authorised and regulated to advise claimants, both pre and post-settlement.

Even before the discount rate was changed to an appropriately negative number (if not the most appropriate negative number), the Roberts -v- Johnstone approach to accommodation was a significant frustration to both myself and Ian Gunn. The change to a negative discount rate simply made the position untenable.

In a ‘full compensation’ system, we were constantly unsatisfied that every claimant who required additional accommodation as a result of someone else’s negligence, started their post-settlement journey with insufficient funds to meet their needs for life.

The shorter the duration and the bigger the need, the greater the capital shortfall.

Over the years we have been advising claimants, as residential property prices surged, the position simply got worse and worse.

In 2010 I was invited to join a clinical negligence working group to consider viable alternatives. The other members of that group were Steve Walker and Sally Chapman (NHSLA), Senior Judge Denzil Lush, Robert Francis QC, Paul Rees QC, Simon Readhead QC, Janet Sayers (Kennedys), Adrian Desmond (Boyes Turner), David Cowan (Cowan Architects) and Claire Fazan (Leigh Day & Co).

We produced a paper on 6^th July 2010, just as the Civil Justice Counsel were instructed to do the same (the CJC reported on 29^th October 2010).

Whilst the majority view of the Civil Justice Counsel was that periodical payments-funded mortgages were the best solution, the minority view informed by reports from our group concluded:

The clinical negligence working group discounted this as an option as “not viable” after detailed consideration by a wide ranging market group.

It is interesting that ten years on, this view has been confirmed by the Court of Appeal, having had the benefit of expert mortgage compliance evidence.

That said, the alternative solutions put forward by our group also didn’t solve the problem either.

We could all see the problem;

• If the defendant is required to provide the claimant with all of the capital, there will be an asset in the claimant’s estate upon death that will represent a windfall;
• If the claimant is awarded nothing, as the assumed value of the asset is growing, even though it is of no use to the claimant during life, then there will be under-compensation during life; and
• If the only alternative is to turn the parties into joint owners or create a landlord tenant relationship, this is never going to easy or acceptable over the long-term.

But there seemed to be no solution.

That is, until Charlotte Swift had the courage to take a stand. Because of her, so many future claimants will have at least one less obstacle put in their way to achieving restitution.

That said, until the hearing at the Court of Appeal on 23^rdJuly 2019 and the intervention of Lord Justice Irwin, I have to confess that I had never considered that the market for reversionary interests would provide the fairest solution. In the days and weeks that followed that hearing and after significant research and discussions with as many actuaries as we knew, it became clear that Mr Brian Watson of Foster and Cranfield was about to become one of the most sought-after people in the civil litigation world.

Clearly, his evidence was crucial to the outcome. An outcome, that for the vast majority of claimants will make the need to have to buy a bigger or single storey property manageable. It will also speed up the process of putting the claimant in the most suitable home, as Eeles is less likely to be an issue now.

The Swift approach is no panacea, particularly in short life cases; but it does at least make sense from a financial viewpoint.

For my part, it is with great personal pride that I was able to use the skills, knowledge and documentation obtained over the past 23 years to help the Court of Appeal reach its decision. In that regard, I would like to thank all of those who work alongside me at PFP, particularly Ian Gunn, and each and every one of our clients who entrust their financial futures to us, as they are the inspiration for us to continue to work hard to help overturn financial injustice.