Jonathan France MCIAT, accommodation expert witness and architectural professional, has been appointed on a landmark case to assist the Claimant (JR v Sheffield Teaching Hospitals) and their family to successfully adapt a property to be fully inclusive of their needs.
On consideration of the landmark case, JR v Sheffield Teaching Hospitals appears to be the first decision on the application of the Roberts v Johnson formula since the discount rate was reduced to minus 0.75% in February 2017. At the time of writing, it is also the largest court award of compensation to a disabled claimant, recovering an award that had a capitalised value of at least £24.3 million.
The claim was made on behalf of 24-year-old JR, who sustained a catastrophic brain injury at birth. In respect of accommodation, it was agreed as part of the case, that the current accommodation of JR was wholly unsuited to his needs and that a new property must be either purchased and adapted or constructed.
Roberts v Johnstone explained
When someone has significant injury for no fault of their own, the house they lived in before their injury will often be unsuitable for their needs.
Accordingly, there will be a claim for new accommodation which will usually be more expensive than the value of their pre-injury accommodation. The way in which accommodation claims are calculated is not to compensate for the capital value of the required accommodation but the annual loss incurred by the Claimant due to the loss of income from the capital spent on the property.
A calculation known as a Roberts v Johnstone calculation (so called from the case in which the calculation was established) is used to calculate the accommodation claim. The calculation takes the difference in the price of the current property and the price of the new property that is required as a consequence of the Claimant’s injury. Investing in a new property means that the Claimant has to use part of their capital and to reflect this a discount of minus 0.75% is applied (representing the annual loss of investment). Prior to February 2017, the discount rate was set at a rate of 2.5%, and had remained so since 2001.
This figure is then multiplied by the “life multiplier”, accorded based on the Claimants present age and life expectancy, adding the cost of adaptation, increased utility bills and moving costs.
How did it affect the case JR v Sheffield Teaching Hospitals?
When calculating the appropriate award for accommodation, it was clear that using the established rule of the Roberts v Johnstone would award the Claimant with nil loss.
The Judge in this case recognised that there had been numerous criticisms and attacks on the Roberts v Johnstone approach. However, he was bound by Roberts v Johnstone and, given the negative discount rate, he had to consider the return on a risk free investment as representing JR’s loss. On the evidence (and discount rates) there was thus no loss. The Judge did however go on to add that there was an urgent need to “find a proper solution to the accommodation conundrum“.
As a result of the present discount rate, the Judge’s hands were tied and a nil loss was awarded, despite the Judge recognising that the Claimant has very high care needs, is reliant on motorised wheelchairs to mobilise, and requires a suitable adapted property for a home. Despite awarding a nil loss, the Judge had assessed the appropriate purchase price for the Claimant’s accommodation at £900,000.
Following a later appeals process, an offer was made 3 days before the Appeal was due to be heard and JR accepted an offer of £800,000. This figure is the cost of accommodation as determined by the Trial Judge, minus a reasonable valuation for the accommodation that the Claimant would have purchased or rented uninjured.
Now the case has settled, our role is to assist the Claimant and their family with adapting the property to make it fully wheelchair accessible. The property in question has, like all of our client’s properties, numerous challenges in terms of levels, access, layout and use of spaces. As with all of our clients properties, the main challenge is to make the home both accessible and a beautiful, enjoyable space. This will allow the Claimant unimpeded access along with the enjoyment and comfort you should expect to benefit from in your own home.
The next steps in the process are to complete the various surveys the property, then manage the design once approved by the Claimant, OT’s and various healthcare professionals, through the statutory approval process and the later tender and construction process. A challenge, no doubt, but one we are certainly looking forward to!