Martin v Salford Royal – Double recovery?

February 25, 2022

Gerard Martin QC

Gerard Martin QC provides a case report on the interesting decision of HHJ Bird in Martin v Salford Royal NHS Foundation Trust [2021] EWHC 3058 (QB), judgment handed down 12/11/21.

Liability was determined against the Defendant at an earlier hearing.

The Claimant had a pre-existing mental health condition EUPD (emotionally unstable personality disorder) plus schizophrenia, she had been made the subject of a hospital order in the criminal jurisdiction and pursuant to section 117 of the MHA 1983 she had a statutory funding payment from the local authority. The Defendant trust by their negligence had caused a severe brain injury.

The Defendant argued as care needs were provided for already via statutory funding they were not liable to pay her for her future care. Court found as a matter of fact that the state care package was inadequate to return her to her pre-accident condition, therefore the Defendant was liable to fund her future care. It also found that re double recovery as a matter of fact the Claimant would not rely on state funding if awarded PI damages for her care.

The judge found that the risk that she might at some future date apply for state funding was small and counterbalanced by the risk that the award for future care might prove to be under compensation.

Double recovery and the interplay between a damages award and statutory funding is an issue which has concerned the courts on numerous occasions, though the writer opines with no clear outcome as to how it is managed.

If one looks at one of the lead decisions, Crofton 2007 1 WLR 923 it is clear that the Court of Appeal repeated the principle that the law would not allow double recovery, but the mechanism for so doing remains unclear. The court expressed its obiter opinion that the tortfeasor insurer should not benefit at the expense of the public purse, but went on to say that how the burden would be placed solely on the tortfeasor was a matter for Parliament.

In that case the court thought that to prevent double recovery the life multiplier for future care should be discounted, but then in the light of concern over the lack of evidence as to the amount of direct payments and their uncertain continuity over the Claimant’s lifetime they quashed the judge’s decision to discount the full amount of the direct payments over the Claimant’s life, and remitted the matter to the first instance judge for further consideration. In my experience in practice since 2007 that practice advocated by the court has not happened. How can a court speculate as to what the level of direct payments will be from year to year and for how long that will continue? These were some of the concerns that had persuaded Tomlinson J in Freeman v Lockett in 2006 not to make any discount at all for statutory funding.

When one considers next Peters v East Midlands [2010] QB 48 the principle was there emphasised that the Claimant could choose which remedy against more than one Defendant he wished to pursue e.g., the tortfeasor or some other right against another party, see The Liverpool (No2) 1963 P 64. Thus, the Claimant could pursue the PI tortfeasor and choose not to enforce his rights against the statutory funder, be it local authority or state provider and that would be a reasonable decision that could not be impugned. That does not however remove the problem of double recovery in the future in an individual case where a deputy might need to make application for statutory funding as the damages award diminishes. The fact that damages have been awarded to a protected party has to be ignored both as to capital and income (as fully set out in Crofton) and thus a statutory funding payment will be made.

In Peters, at paragraph 65 the court thought an effective remedy against double recovery was for a deputy to give an undertaking to seek a limit on his powers given to him by the Court of Protection on appointment, such that the deputy could not make application for public funding without leave of the Court of Protection.

The problem with this approach is that it is costly, who funds the application for leave to apply for statutory funding to the court? The need for such application is caused by the receipt of damages and the fact of ongoing needs arising from the accident such that the insurer should be responsible for funding any such application. Secondly doubt has been raised that the Court of Protection is the appropriate jurisdiction to determine such issues. In R(Tinsley) v Manchester City Council [2018] QB 767 at paragraph 31/32 Longmore LJ doubted that the Court of Protection was the right jurisdiction – that court usually not making substantive decisions on a protected parties rights against third parties and agreeing with Senior Judge Lush in his decision in re Reeves 2010 WTLR 509 that the Administrative Court was the more suitable court for such applications.

In conclusion, it seems to me that whilst no one doubts the rule against double recovery, the courts have not proceeded down the route of discounted multipliers for future care as the way to deal with double recovery, there being real concern over the ability of a court to determine the longevity of any such state payment. The proposal that the issue of any future application should be reserved to the Administrative Court does not appear in practice to be widely taken up, no doubt for the reason that such application would have to be funded by the insurer with an uncertain outcome in that court. A deputy would not contemplate such application unless funds were running out, and in those circumstances, what are the prospects for a court hearing a valid argument that the applicant has a right to statutory funding in any event, depriving the applicant of that right. How would any such refusal benefit the insurer and thus why would he fund the application.

It seems to me that the approach of Tomlinson J in Freeman v Lockett in 2006 to make no deduction for statutory funding and to award the full future care award was and is the fair reasonable and just approach to this issue. This approach was taken by HHJ Bird in the above decision.