Continuing our series on the implications of catastrophic accidents, Andrew Clayton considers the position for those facing an accommodation crisis because of life-changing injuries.
Serious injuries can have wide-ranging effects on many different aspects of daily life for the person affected and those closest to them. Many serious injuries – including spinal cord injuries, serious brain injuries and other major neurological damage, or limb amputations –give rise to real challenges in adapting to life, often affecting personal care, relationships, work, domestic chores, leisure, and so on.
Among those challenges, many people with life changing injuries find their home is no longer suitable for their needs. For instance, someone who sustains a spinal cord injury in a road accident may become a full-time wheelchair user because they can no longer walk. One of the more obvious and immediate problems is the barrier that stairs now present. Accessing a property via a flight of steps is no longer possible. Adaptations such as installing a lift may be feasible, but most properties lack the space, or have a layout that means modifications are impractical. There are also safety risks to consider, for example, how long it would take to evacuate a property in the event of an emergency, like a fire.
Those who can access their home in a wheelchair may still face potentially insurmountable difficulties coping with daily life. From our experience handling these cases, we know that many adaptations are needed to make a home suitable. These include:
In most cases, the injured person’s existing property is too small, and even with adaptations or an extension it may not be possible to provide for all their reasonable accommodation needs. Often, the best solution is to move to a more suitable property if one can be found, with fewer or easier necessary adaptations, or alternatively, to move to a purpose-built property, depending on the circumstances. No property can ever make up for the significant limitations that serious injuries cause but having a suitably adapted property can help improve an injured person’s situation.
Inevitably, finding appropriate accommodation and making necessary adaptations is costly. As a result, the cost of suitable accommodation and adaptations is very often a substantial element of claims where serious injury has been caused by someone else’s negligence.
In English law, the principle in any claim for personal injury compensation is that the injured person should be restored to the position they would have been in had the negligent events never happened – at least so far as a financial award can ever achieve that end. The law does not allow the injured person to benefit or gain from their injury, only to be put back in the position they should have been in.
When it comes to accommodation, this principle creates a difficulty. The costs of reasonable adaptations are usually recoverable, but the purchase price of a property presents a conundrum. If an injured person were simply paid damages (compensation) to cover the full purchase price of a suitable property, the law says they would be likely to end up better off financially than if the accident had not happened, and it would be unfair for them to gain in this way.
Take the following example: Miss A owns her flat, which is worth £200,000. She is involved in an accident in which she sustains a spinal cord injury. Consequently, she is paralysed from the waist down and now relies on a wheelchair. Her old flat is unsuitable. She needs a single-storey, ground floor home with space for her to move around in her wheelchair, and at least three bedrooms to accommodate the storage of the aids and equipment she needs, a room for her to have therapy, and space for someone to live in as and when she is ill and as she gets older, and so on.
Assuming a suitable property can be bought for £500,000, Miss A therefore wants to claim the additional £300,000 she needs. But, over time, the two properties will increase in value. If, say, both double in value over her lifetime, then her old flat will be worth £400,000, but the new home would be worth £1 million. Her assets would be worth £600,000 more than would have been the case had she not been injured, and she would have made a financial gain.
This example simplifies a complex series of principles, but in essence, if Miss A were to receive the full £300,000 she needs to buy a suitable home, then the legal position is that she is likely to benefit from a substantial windfall over the long-term. She would have gained from the accident, beyond being put back in the position she would have been had it not happened. But if she does not receive £300,000, then she will not be able to afford a home that is suitable for her – and the only reason she needs to move at all is because of the injuries caused by the accident.
Over the years, various attempts have been made by the courts to grapple with this dilemma.
For a long time, claims were based on a 1989 court decision. To avoid the windfall of giving an injured person the money they needed to buy a suitable property, the court limited the claim to the amount of (theoretical) interest that an injured person would lose by tying up money in a property, that they could otherwise have invested and made a return on.
But this approach presented claimants with a very real practical difficulty. The loss they could then claim usually fell far short of the funds they actually needed to buy a suitable property. So, an injured person would end up having to take some of the compensation that had been claimed to pay for their other needs – like care, or equipment – and instead use this to make up the funding gap to enable them to buy a property. This often left them with insufficient funds remaining to meet their wider needs in later life.
In 2017, the position was made worse for claimants with a change in the prescribed calculation of long-term interest. Instead of a positive rate of return, the presumption became a negative one – in effect, that investments would be eroded over time so there was no longer any basis to claim a loss of theoretical interest over a claimant’s lifetime. While adaptations could still be claimed, there was no basis to argue for any loss related to the purchase price of a suitable home. This was an absurd situation, where a person with obvious life-changing injuries in need of a more expensive home to accommodate their physical needs was unable to claim any loss for buying a more suitable property.
In 2020, the issue came before the Court of Appeal in the case of Swift v Carpenter. This landmark judgment concluded that an injured person should be entitled to claim the extra funds needed to buy a suitable property, but not in full. A deduction must be made to reflect the value of that additional capital to the injured person’s assets over their lifetime (at an assumed rate of 5%). We provided a detailed commentary on the decision at the time.
The resulting calculation of accommodation claims can be complicated and depends inherently on the expected life expectancy of the injured person. The approach is more favourable for those with longer life expectancy. For those facing short life expectancy, the court recognised its approach may not always be appropriate or correct and that some divergence may then be appropriate. Nevertheless, the decision has added clarity to the legal position and puts many seriously injured claimants in a far better position when it comes to the increased costs of buying somewhere appropriate for them to live.