Brian Fitzpatrick: Insult added to catastrophic injury

RESTITUTIO in integrum: an injured party is entitled to be restored to their original position. That maxim is inscribed at an early stage on to the memories of most lawyers. Yet, as we work through the demands of caseload, turnover and clients, we can often forget those three little words.

Working out how to secure proper restitution, as far as money permits, lies at the core of what personal injury lawyers do. That task weighs especially hard on us in relation to clients who are the victims of serious, often catastrophic, injuries. We have no magic wand. Our clients are never going to be restored to what they once were.

But making proper provision for their future, especially under our system of full and final settlement, is a task that can keep conscientious lawyers awake at night. Get assessments wrong and highly vulnerable clients at some point may find themselves out of funds to meet expensive care needs.

The theory is straightforward. Its straightforwardness has caused some of our judiciary to wrinkle their noses at the very notion of personal injury law as a specialism. You simply work out the costs of that restitution for your client, annualise those costs and arrive at a lump-sum figure calculated by reference to annual costs headings (multiplicands) and a figure reflecting the likely lifespan of your client’s needs for those costs (the multiplier). In an ideal legal world the sum produced should exhaust itself at the close of the day on which your unfortunate client expires. Arithmetic, not law! Would that real life were so simple.

One complexity is settling on the multiplier. Not long ago the selection of the correct multiplier was a marriage of case law and the prejudices and experience of the presiding judge. Some measure of certainty and stability arrived in 1999 with the landmark House of Lords decision in Wells v Wells. Severely injured litigants were no longer expected somehow to turn themselves into stock market savants (remember them?) to secure an income from a broadly spread investment portfolio.

Their lordships agreed that such litigants, needing regular guaranteed cash to pay for carers, aids and equipment, and to run their homes, would be compensated by awards calculated under reference to the rate of return on sound investments in government-backed stock (“gilts”).

Subsequently, that judicial settling of the discount rate, underpinning the selection of the appropriate multiplier, was passed by statute to the Lord Chancellor. In July 2001, Lord Irvine used his delegated powers to fix at 2.5% the deemed rate of return on gilts, thereby indicating the appropriate multipliers to be derived and applied by reference to actuarial tables.

That 2.5% figure has remained despite the economic landscape having dramatically changed since the 2008 global financial crash.

To date, Scottish ministers, whatever their thoughts on Mr Osborne’s economic performance, have been content to “wrap a kilt” round the English arrangements. Justice, north and south of the border, it seems, has turned a blind eye to the consequences of the crash in the markets. Victims of catastrophic injury relying on a decent return on gilts to fund their living and care costs instead can expect only minus returns. Left unchanged, the outcome of that is as inevitable as it is unjust: injury victims are undercompensated, as a matter of fact and of law.

Lord Brodie faced those issues in the Court of Session on 10 October. In Anthony Stephen Tortolano v Ogilvie Group Limited, he felt himself required, by the terms of legislation, to exclude from proof pleadings by the 23-year-old pursuer demonstrating that the 2.5% multiplier rate is bound to leave him substantially out-of-pocket. The UK government, under threat of judicial review, has begun a review of the “methodology” of the selection of multipliers, scheduled to report in February. But His Lordship also granted Mr Tortolano leave to reclaim and the Scottish appeal court now has the case on its docket.

For good or ill, the search for a measure of stability and certainty (and hopefully some justice) should feature in its decision. That “kilt” may also come unwound at some point. If a harried Chancellor of the Exchequer (whose input into the Lord Chancellor’s decision-making will be critical) should prove reluctant to admit what is obvious about the UK’s likely economic prospects, will the same reticence be accepted here? Securing proper restitution may prove a somewhat more complex task than previously thought.

• Brian Fitzpatrick is an advocate and personal injury lawyer with Ampersand Stable.