Special accommodation costs in catastrophic cases

The recent decision of Charlotte Barry¹ in the Supreme Court shed light on what was previously an unclear topic in Irish law: the calculation of special accommodation costs in catastrophic cases.

Background

Charlotte Barry, the plaintiff/respondent in these proceedings, was born in the National Maternity Hospital, Dublin on the 9th September, 2005. As the result of negligence during the course of labour and delivery, Charlotte sustained a severe hypoxic-ischemic insult. She became severely asphyxiated during her birth. She developed acute hypoxic-ischemic encephalopathy. She now suffers a severe syndrome of Cerebral Palsy, with marked neuro-developmental difficulties.

The Law as it Was

Prior to this judgment, Doherty v. Bowaters Irish Wallboard Mills Ltd² was the only decision from the Irish Courts on this topic. The plaintiff in Doherty sustained catastrophic injuries, as a result of which it was necessary for him to obtain special accommodation. Walsh J. appeared to rule out the possibility that an award of compensation might leave intact any enduring or appreciating asset in the hands of a plaintiff at the end of the period for which compensation was calculated.

Charlotte Barry (A Minor) suing by her Mother and Next Friend Aisling Campbell -v- The National Maternity Hospital - The High Court Decision

In the High Court, O’ Neill J. concluded that the plaintiff was entitled to compensation for the additional cost of accommodation beyond that which she would, in the ordinary course, herself have incurred in the course of her life, had the capacity to provide her own accommodation not been destroyed by the injuries suffered.

However, the judge also took the view that the assessment of compensation for future accommodation needs should exclude an award which might leave intact an appreciating asset in the hands of the respondent at the end of the period for which compensation was calculated. He considered his duty was to carry out an actuarial calculation as to the capital sum which, if spent at the rate envisaged, would be fully exhausted at the expiry of the period in question.

The judge concluded that Charlotte (the plaintiff) was entitled to the entirety of the additional cost of accommodation for the adult portion of her lifespan, but, insofar as the period of her minority was concerned, credit had to go to the defendants (the hospital) for the value of the benefit of accommodation provided by her parents during that period. The extent of that credit was to be limited, in order to reflect the value of that benefit and no more. What mattered was that there was a house which the family as a whole, and individual members of it, enjoyed to a certain extent. He considered that the existence of a mortgage on the house was immaterial. He concluded it would be wholly unjust to ascribe to Charlotte the entire value of the property, as if this was for her exclusive benefit. He was satisfied that a just apportionment of the value of the property, to reflect the Charlotte’s occupation of it during her minority, should be a 1/6th share, for which credit was to be given to hospital.

The judge took the view that the parents’ obligations to provide accommodation would, in all probability, end at the expiration of Charlotte’s minority, or soon afterwards. This corresponded to approximately one-half of her total life expectancy of 35 years. Thus, he concluded, there must be apportionment of that value also. The judge found that in order to reflect the fact that the family home would, but for her injuries, only be available to the respondent for approximately half of her current expected lifespan, the benefit to her of her share in the accommodation should be reduced by one-half. He concluded that the benefit in that regard was equivalent to one-twelfth of the value of the house.

The English decision of Roberts v. Johnstone³ was considered. The basis of this decision is the argument that a house is not a wasting asset and in that in allowing the full cost of this house to be awarded to a minor Plaintiff, a Court will in effect be granting an unexpected future windfall to the estate of the Plaintiff whenever they die. This, it was argued, led to an injustice to the Defendant and the Courts duty is always to balance the interests of the parties so that justice is done to both sides insofar as is possible. The Court in Roberts v Johnstone accepted this premise.

O’Neill J. also referred to a subsequent English High Court decision of Willett v. North Bedfordshire Health Authority4 where the cost of alterations was regarded as part of the capital cost of the property. In the instant case, O’Neill J. concluded, as did the Law Commission in the United Kingdom, that the approach adopted by the High Court in Willett to the cost of alterations was preferable. The Defendant hospital then appealed O’ Neill J’s High Court decision to the Supreme Court.

The Supreme Court Decision

MacMenamin J. in delivering the judgment of the Supreme Court noted, that while O’ Neill J.s’ approach was “unorthodox”, he found that “the outcome achieved proper compensation without injustice to either party”. It did not “create any new paradigm for calculation of damages in these cases, [nor] does it create any further burden on indemnifiers.”

The ruling has given us a clearer idea of what the Irish Courts will consider when calculating a claim for special accommodation costs in catastrophic cases, and it can be considered “a modified Roberts v. Johnstone approach”.

An Alternative View?

Clarke J. in the Supreme Court made interesting comments in his judgment. He agreed with McMenamin J. and also spoke about finding the true cost of accommodation. He noted that:

“the true cost of providing for accommodation is the cost that would be required to rent whatever type of accommodation might be considered necessary. Any additional cost involved in purchase is not truly the cost of providing accommodation but rather is the cost of acquiring an asset.”

He noted this was all said in abstract, and that “it is necessary to take into account the fact that there may be further practical issues which will need to be addressed in the circumstances of many cases.”

Seeing as this was said in obiter, it is not strictly Irish law as of now. It is, however, something that may be considered in any future cases on this topic of the law.

Concluding Remarks

The law as it stands is contained in MacMenamin J.’s judgment in the Charlotte Barry case. Taking his judgment into consideration with Clarke J.’s remarks, it seems considerable efforts are being made to follow Roberts v Johnstone and avoid a future windfall to the plaintiff’s estate which should result in a smaller award to the plaintiff. The judgment also allows for proportionate credit to be given to the defendants for the value of the benefit provided to a minor plaintiff during her minority. It will be interesting to see how this is applied by High Court judges in future catastrophic cases.

For more information on the content of this article, please contact:
Fergal Dennehy, Partner, fergal.dennehy@rdj.ie, +353 21 4802715

1Barry (A Minor) -v- National Maternity Hospital [2016] IESC 41
2Doherty v. Bowaters Irish Wallboard Mills Ltd [1968] IR 277
3Roberts v. Johnstone [1989] QB 878
4Willett v. North Bedfordshire Health Authority [1993] PIQR Q166