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Reform of accommodation claims

The Ministry of Justice asked the Civil Justice Council to carry out a review of how accommodation claims are valued within personal injury claims. It was argued that the environment within which such claims are assessed has changed with the introduction of periodical payments.  In certain cases, especially those involving short life expectancy, claimants are unable to meet the cost of purchase using the Roberts v Johnstone model (2.5% of the differential capital cost x the multiplier).

The CJC Injury Committee were asked to carry out this review on behalf of the Council.

Unable to reach a consensus, two reports were published by the Committee and referred to the Master of the Rolls. The “majority” report made firm recommendation for a PPO model to meet the cost of an interest-only loan funded by the compensating insurer or the alternative of an interest-free loan, again funded by the insurer who would retain a charge over the property.   

Andrew Underwood, head of Complex Injury at Keoghs and Jon Ramsay, an RBSI Technical Manager, sat on this Committee, and drafted a dissenting paper, disagreeing with the majority report.  They argued in essence that whilst the current system has its deficiencies, it represents the most effective and efficient means of resolving an otherwise very difficult area with competing needs of the measure of loss, and how to avoid “windfall” benefit to the claimant through property value rises over time in the usual economic cycle.

They conceded that there are extreme cases involving short life expectancy where reform is indeed required to prevent injustice, but this does not warrant wholesale change which could have unforeseen inflationary consequences. Such cases might be resolved by means of a loan and charge mechanism; however these are the extreme examples and in the majority of cases RvJ represents imperfect perfection!

The Council has referred both papers to the Ministry of Justice and their decision is awaited over what, if any, reform is to be supported.