Landmark case brings welcome news to injured persons needing alternative property
Swift v Carpenter is a landmark case and brings welcome news for Claimants who have to purchase alternative accommodation as a result of an accident.
Those who have been involved in accidents and suffered life-changing injuries may be forced to move home to a more suitable property.
Individuals may find they now require a home with wheelchair access or on ground level, such as a bungalow. Additional rooms may also be required for carers, with larger spaces to allow for equipment, such as hoists.
This new property is likely to be more expensive than the value of the individual’s current property, and a shortfall is likely to arise.
Injured parties, who were pursuing claims for compensation (Claimants), were historically limited in terms of the sums that could be claimed in these types of claims. The Courts were keen to avoid a situation whereby the Claimant’s Estate would be profiting upon the Claimant’s demise if the Claimant was simply allowed to claim the additional sums required in order to purchase a more suitable property.
The objective of any personal injury claim is, wherever possible, to put the Claimant in the position they would have been, had the accident not occurred, but to do no more than that.
This is of course, extremely difficult when it comes to people who have suffered debilitating and life-changing injuries. However, it was felt that by allowing Claimants to claim for a more suitable property, they would be ‘better off’ than before the accident.
The calculation by the Courts in Roberts v Johnstone to avoid a windfall situation meant the sums awarded would usually be significantly less than the sums required to purchase the property.
This was problematic as severely injured people could be left under-compensated.
How has the decision in Swift v Carpenter impacted claims for accommodation?
In the Swift case, the Courts decided that the previous method “no longer achieves fair and reasonable compensation for an injured claimant”.
The Courts came up with a new calculation that still takes into account the windfall issue but recognises that a provision was needed for injured people to make a claim for their additional accommodation needs.
The measure of the award is the difference between the value of the new accommodation and the current accommodation cost, less the reversionary interest. The calculation for the award is as follows, applying a discount rate of 5%:
(A (new accommodation cost) – B (current accommodation cost)) – C (reversionary interest) = Award
The reversionary interest is calculated by taking the net value of the accommodation (the value of the new property minus the value of the Claimant’s pre-accident property) multiplied by 1.05% to the negative power of the Claimant’s life expectancy. The court applied 1.05% as the equivalent of the property value plus 5%.
This new method will mean it is much more likely that the award given for accommodation will cover more of the shortfall than the previous method, adopted by the Courts in Roberts v Johnstone.
Blanche McDade, who is a trainee solicitor at Ashtons Legal, states: “This is good news for Claimants who have had to purchase alternative accommodation as a result of an incident that was not their fault”.
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