Even when liability has been determined in personal injury claims, further disputes can remain in regard to the nature of compensation payments. In these instances, expert legal advice can prove invaluable.
In a case on point, arguments arose as to how compensation payments should be administered in the future, following a successful road traffic accident claim. A woman who was left paraplegic after a car crash in which she was a front-seat passenger had been successful in her claim for damages. Her award was settled at a lump sum of £6.25 million, along with annual periodical payments of £325,000 in respect of care and case management.
The woman agreed that, in relation to her care costs, she would not apply for state funding in any one year until her annual periodical payments in that year had been used up. She accepted that, if they had been used up, she would need to apply for a statutory top-up but said she had no desire to keep any statutory funding that was not needed for her care and that she had not used up.
She asserted that the periodical payment accounting process should be conducted on an annual basis. If, in any particular year, she did not spend all of the £325,000, the surplus should be hers to do with as she pleased. The defendant contested this, requiring that any surplus from the annual payment be held and utilised the following year, before any application was made by the woman for state funding.
Having considered the arguments and relevant case law, the High Court found that the periodical payments were to be treated solely as damages relating to care and case management provided during the relevant year for which those services were provided. If the money was not wholly spent to meet the cost of care and case management provided during that year, there was no obligation to accumulate the surplus to pay for care and case management in subsequent years. It ruled that the woman was at liberty to deal with any surplus as she saw fit.