Supreme Court Considers Calculation of Damages in Providing Adapted Accommodation

Facts
In Barry (A Minor) v National Maternity Hospital [2016] IESC 41, Supreme Court, 13 July 2016 the plaintiff brought an action for injuries at birth. The only issue in the appeal were the special accommodation expenses. The High Court awarded €735,000 under this heading. The question before the Supreme Court was the approach of a trial judge in calculating accommodation expenses into the future.

Supreme Court
In particular the Supreme Court considered:

(a) whether the value of a family home should be deducted;

(b) whether such deduction should be gross or net of any mortgage;

(c) how to address the question of potential benefits accruing to a plaintiff’s family, thereby giving rise to a potential windfall gain; or

(d) how to avoid creating serious detriment to a young plaintiff, because of a shortfall in the damages, making it necessary to take part of the purchase price of new accommodation from sums awarded for damages under other headings?

The arguments in the High Court centred on over compensating or under compensating the plaintiff. The Supreme Court noted, following an extensive review of the case law, that there is no, one, exclusive method of assessment appropriate to every circumstance. What is important is whether the result of the assessment fairly makes good the financial loss incurred. The actual process of assessment can only then be a matter for reasoned estimation and computation.

In the High Court, the defendant took the view that €350k would amount to adequate compensation under the accommodation heading. The plaintiff asserted the sum required was €1.16 million. The award of €735,000 fell just short of a mid-point between those two figures. However, at the appeal hearing, the defendant’s position was that an award of €692k would not have been unjust.

The Supreme Court held that it was impossible to conclude that any injustice was done. It further held that the decision did not, and could not create any new paradigm for calculation of damages in these cases. The Court was of the view that although the approach of the trial judge was unusual, the outcome achieved proper compensation without injustice to either party.  Accordingly, the Court affirmed the decision and dismissed the appeal.

Concurring Judgment of Clarke J
Clarke J delivered a concurring judgment but was of the view that there potentially was a more satisfactory basis on which to approach the question of damages arising out of a need for enhanced accommodation. He noted that little difficulty arose in such cases where a plaintiff already owns accommodation which can simply be adapted by the expenditure of money. However, he noted that more difficult issues arose where it was necessary to provide new accommodation. He noted that compensating on the basis of purchase might give rise to the possibility of a windfall gain for the estate of the plaintiff. On the other hand, requiring an injured plaintiff to spend their own money in meeting some of the additional costs of a purchase of a property, might be said to under-compensate the plaintiff and infringe the principle that the plaintiff should be put back, insofar as possible, into the position they were prior to being injured.

Accordingly, Clarke J tentatively put forward the suggestion the Courts should consider whether the award of damages in respect of accommodation needs should, at least in the vast majority of cases, be on the rental cost of suitable accommodation rather than the cost of purchase. He noted that the true cost of providing for accommodation is in fact the rental cost. Any additional cost involved in purchase is not truly the cost of providing accommodation but rather is the cost of acquiring an asset. However, Clarke J accepted that it would be necessary to take into account the fact that there may be further practical issues to be addressed in the circumstances of many cases. One practical issue was the fact that there is not a market for specially adapted accommodation. Furthermore any assessment based on rent would necessarily involve an actuarial calculation based on the life expectancy of the plaintiff. In this context Clarke J criticised the continuing failure to introduce periodic payments in catastrophic injury cases.

Clarke J also noted that it was possible that there would be cases where a rent-based approach, actuarially calculated, might give rise to a figure equal to or even greater than the cost of purchasing and adapting appropriate accommodation.

For further information please contact Paula Mullooly.

Date published: 20 December 2016