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Barry (A Minor) -v- National Maternity Hospital
Neutral Citation:
[2016] IESC 41
Supreme Court Record Number:
High Court Record Number:
2007 8367 P
Date of Delivery:
Supreme Court
Composition of Court:
Denham C.J., O'Donnell Donal J., Clarke J., MacMenamin J.
Judgment by:
Clarke J.
Appeal dismissed
Judgments by
Link to Judgment
Clarke J.
Denham C.J., O'Donnell Donal J., MacMenamin J.
MacMenamin J.
Denham C.J., O'Donnell Donal J., Clarke J.

[Appeal No: 307/2012]

Denham C.J.
O’Donnell J.
Clarke J.
MacMenamin J.
Charlotte Barry (a minor) suing by her mother and next friend, Aisling Campbell

The National Maternity Hospital and Peter Lenehan


Judgment of Mr. Justice Clarke delivered the 13th July, 2016.

1. Introduction
1.1 I should start this judgment by indicating that I am in complete agreement with the judgment of MacMenamin J. both as to the result of this appeal and as to his reasoning in concluding that the appeal should be dismissed.

1.2 On the basis of the evidence which was before the High Court, the arguments presented to that Court and the arguments made on this appeal, I am satisfied that no other result would be appropriate. However, it seems to me that there is, potentially, another and more satisfactory basis on which to approach the question of damages arising out of a need for enhanced accommodation. As that approach was not the subject of any evidence in the High Court and was not really the subject of any argument either before that Court or this Court, the views which follow are necessarily tentatively expressed. I would leave it to a case in which there was appropriate evidence and in which the issue was fully debated, to reach a definitive conclusion. For the reasons already noted this case is clearly not suitable in that regard. I should turn first to the problem which has been identified in the case law fully analysed in the judgment of MacMenamin J.

2. The Problem
2.1 It is important to start by recalling that the issue with which the Court is faced relates to the proper way in which a court should, in the context of accommodation needs, implement the undoubted principle that a plaintiff is entitled to full compensation for all losses suffered as a result of an established wrongdoing on the part of a defendant but is not entitled to be over-compensated. The fundamental principle of almost all damages claims is that a court should attempt to put the plaintiff back into the position, insofar as money can do it, in which the plaintiff concerned would have been had the relevant wrongdoing not occurred. In cases such as this, one of the heads of damage stems from the fact that a plaintiff may, as a result of serious or catastrophic injuries suffered, require adapted accommodation so as to enable them to live a reasonable lifestyle. Given that the problems which give rise to the need for such adapted accommodation stem from the established wrongdoing of the defendant then it is not disputed that the reasonable cost of providing suitably adapted accommodation forms a legitimate part of a relevant claim.

2.2 The problem is as to how it is appropriate at the level of principle to go about measuring that cost. In a very simple case a plaintiff might already own accommodation which can simply be adapted by the expenditure of money. In such a case the measure of damages will be the cost of the adaptation together with any continuing costs associated with maintaining the property in a suitably adapted form. While there may always be a debate about the details of the calculation in such a case that assessment is unlikely to throw up any significant issues of principle.

2.3 A more difficult question emerges in cases where it is necessary to provide new accommodation because the existing accommodation available to the plaintiff (either the plaintiff’s own property, whether owned or rented, or the property of parents or other relatives, again whether owned or rented) may not be capable of suitable adaption. The issue which emerges in such cases has been fully analysed in the case law which has been dealt with by MacMenamin J. in his judgment.

2.4 On the one hand the cost of buying and adapting suitable premises might be seen as an appropriate starting point for a consideration of the correct amount of compensation. Of course, the fact that a cost would have to have been incurred in providing ordinary accommodation in any event would need to be taken into account as a deduction. But it is likely, at least in many cases, that providing compensation on the basis of purchase (even with such a deduction) may give rise to the possibility of a windfall gain for the estate of the relevant plaintiff. This is so because the property concerned will still be owned after it is no longer required as accommodation for the plaintiff in question and its value will, therefore, be available to increase the size of the plaintiff’s estate beyond that which it might have been had the plaintiff not been injured. On that basis it is argued by defendants that the straightforward solution of assessing compensation by reference to the additional costs (above that which would have existed anyway if there had been no injury) of providing accommodation by buying and adapting a suitable premises amounts to over-compensation.

2.5 On the other hand it is said that to require an injured plaintiff to expend some of their own money (whether obtained from their own pre-accident resources, in the case of a plaintiff who happens to have such resources, or by allocating damages awarded under another heading, in other cases), in order to meet some of the additional costs of a purchase of a property suitable for adaptation, might be said to under-compensate the plaintiff concerned. The logic behind that argument is that a plaintiff who has their own resources should not be required to put those resources into the purchase of a property which they would not otherwise have had to have purchased. This is said to be so because so doing would be to place the plaintiff concerned in a less advantageous position than they would have been had they not been injured. Such a course of action can easily be seen to potentially infringe the principle that the plaintiff should be put back, insofar as it may be possible, into the position in which they were prior to being injured.

2.6 Likewise, if the additional resources required to purchase a suitable property come, not from the plaintiff’s own resources, but from other damages awarded in the case in question, then it is equally said that this amounts to an under-compensation of the plaintiff. This is so, it is said, for those other damages, it must be assumed, will be properly calculated to compensate the plaintiff concerned under each other legitimate head of damages. If, for example, damages are awarded for future loss of earnings then those damages are designed to provide an income for the plaintiff broadly commensurate with the income which the plaintiff might have had if they had not suffered catastrophic injuries. Some of that income might, of course, have been used to provide for accommodation in any event. There could be no problem with making an appropriate deduction to reflect that fact. But to require such a plaintiff to divert an additional part of such damages into the purchase of suitable property, required so that they may enjoy appropriately adapted accommodation, can be argued to reduce the damages in question below that which places a plaintiff in the position in which such a plaintiff could be said to be fully compensated for their injuries.

2.7 From the perspective of a defendant the problem can, therefore, be seen as an over-compensation of the plaintiff but likewise, from the perspective of a plaintiff, the same problem can be seen as an under-compensation. It seems to me that there is a strong argument to suggest that the reason for that problem, and thus the reason for the difficulty encountered in much of the case law, is a failure to properly recognise the distinction between the current (in the accountancy sense of that term) cost of accommodation, on the one hand, and the element of the cost of the provision of purchased accommodation which can be said to amount to a capital investment, on the other. It is in recognition of that difficulty that I tentatively put forward the suggestion set out in the next section of this judgment which is to the effect that the principal focus for the award of damages in respect of accommodation needs should, at least in the vast majority of cases, be on the rental cost of suitable accommodation rather than the cost of purchase. For the reasons already noted I would wish to reemphasise that, because this matter was not fully debated, the suggestions made must remain, at this stage, purely tentative.

3. The True Cost of Providing Accommodation
3.1 The first point to make is that there may not necessarily be a “one size fits all” solution to the problem. Different cases may turn up unusual facts or circumstances which require the court to approach the application of the general principle of attempting to put the plaintiff back in the position in which they would have been had there been no wrongdoing in a manner which may not be suitable in other cases and other circumstances. However, it seems to me that the appropriate starting point for a consideration of the calculation of damages in cases involving a requirement to provide new accommodation (because existing accommodation, even with appropriate adaption, would not be suitable) lies in considering the cost of renting the accommodation concerned.

3.2 The backdrop to that observation is the fact that, at least so far as persons who have sufficient resources are concerned, a decision on whether to rent or buy a home is not an essential part of the provision of accommodation. A rented home is every bit as much a home as a purchased home. There may, from the perspective of one individual or another, be all sorts of reasons which may inform a decision as to which means of providing for a home is preferred. Ownership may be perceived to give greater security into the future. Ownership may be seen as providing a means of acquiring an asset which it might be hoped might appreciate in value (although the recent experience in this jurisdiction has, perhaps, dispelled the previously held view that investment in a family home is necessarily one of the best ways of accumulating capital). There may be issues concerning the respective tax treatments of rent or interest incurred on mortgages which may affect the equation. Many other factors, personal or financial, may also be relevant.

3.3 It must also be acknowledged that there will undoubtedly be persons who do not have that choice to make at all. The current market for private rented accommodation in Ireland has placed the renting of suitable accommodation outside the reach of quite a number of persons. Many cannot now rent at all unless they are lucky enough to secure rent supported local authority housing or have available a sufficient level of State support to be able to meet rental payments. Some, who have greater income, can afford to rent but may not be in a position to purchase either because their income might not be considered sufficient to sustain the level of mortgage which would be required to purchase a suitable property or because they do not have sufficient assets to meet the requirement to put up some of the equity themselves. Doubtless other reasons of that type might arise in the particular circumstances of individual cases.

3.4 A person who might not reasonably be expected to ever own their own house will not necessarily always be entitled to compensation which would put them in the position of owning a house. A similar analysis applies, however, in the case of a person for whom the choice of renting and ownership does exist. Such persons may choose to rent but equally may choose to pay whatever additional costs may be required to become the owners of residential property. While the relative cost of renting and purchase as and between themselves may vary over time, dependent on short term movements in matters such as the rental market, prevailing interest rates and the supply and demand for purchased houses or the like, over time it is almost inevitable that there will be some additional cost in purchasing. This will be so because of the fact that a purchaser not only gets to occupy the purchased house (as will be the case in the event of renting) but also gets to acquire a capital interest in owning it. That extra cost may be in the form of having to put up some money in advance (such as a minimum deposit to secure a mortgage) in circumstances where that money could otherwise be invested. The additional cost may also involve any difference between mortgage repayments (which obviously include a capital element) and rental costs. To the extent that a person may have significant independent assets which they can apply to the purchase of a house then the cost may involve the income foregone in not being able to apply those assets in some other beneficial way. Whichever may be the cost, it is, at the level of principle, appropriate to regard the cost of the purchase of a house intended for owner occupation as involving partly the cost of providing accommodation but also partly the additional cost involved in acquiring an asset.

3.5 The second element of that equation is, for those who have sufficient resources to be able to exercise the choice, an elective element. A person may choose to rent. They may choose to allocate additional resources above and beyond that which it would cost to rent so that they may own. But the allocation of those additional resources is a decision which each person who has the resources to make it can determine in the light of their own view of their own best advantage.

3.6 Viewed in that way the true cost of providing for accommodation is the cost that would be required to rent what ever type of accommodation might be considered necessary. Any additional cost involved in purchase is not truly the cost of providing accommodation but rather is the cost of acquiring an asset. It is for that reason that I consider there to be strong arguments in favour of the proposition that at least the starting point for a consideration of the appropriate damages to be awarded in respect of accommodation needs should be based on the cost of renting appropriate premises. However, it is necessary to take into account the fact that there may be further practical issues which will need to be addressed in the circumstances of many cases. Obviously the precise way in which those considerations might impact on an individual case would require a consideration of the evidence in such a case. However, at this stage it may be useful to indicate some of the general considerations which I consider might arise at a practical level. Those considerations are by no means intended to be exhaustive.

4. Some Practical Considerations
4.1 I should, therefore, start by pointing out that these observations are made very much in the abstract. To the extent that issues such as those which I mention may arise in the circumstances of any particular case then it will be necessary to give full weight to any relevant expert evidence called and the arguments addressed by the parties. This section of this judgment is not designed, therefore, to suggest solutions but rather to identify at least some of the issues which may arise.

4.2 The first, and perhaps most important, question which may arise stems from the fact that there is not, as such, a market for specially adapted accommodation. While it is relatively easy to see how a requirement to compensate by reference to an accommodation need can be dealt with on the basis of providing for rent where ordinary accommodation which is readily available is all that is needed, an undoubted complication arises given that the basis for the assessment of compensation in cases such as this stems from the need to provide suitably adapted accommodation.

4.3 However, there is no reason in principle why it should not be possible to obtain long-term rented accommodation with an agreement either that the landlord carry out suitable adaptions and reflect that fact in the rent or that the tenant carry out the adaptions at their own expense with the landlord reflecting in the rent the fact that the premises may, to some extent, need to be reconverted at the end of the tenancy. Precisely how it would, in such circumstances, be appropriate for a court to conduct a rent-based assessment of damages would necessarily depend on the evidence in the case in question.

4.4 Next there is the problem that any assessment based on rent will necessarily involve an actuarial calculation based on the life expectancy of the plaintiff in question. That gives rise to the unfortunate but common problem that the single assessment of damages model which has, heretofore, operated in this jurisdiction can give rise to injustice for either plaintiffs or defendants where the actual life of the plaintiff in question turns out to be either significantly shorter or significantly longer than the life expectancy estimated at the time of the trial. It is now quite some time since a judge-led working group put forward proposals for periodic payments to remedy that potential injustice. The implementation of those proposals has long been promised and it has been intimated that relevant legislative measures will be introduced in early course. However, the solution to the life expectancy issue lies in such legislation and should not present a barrier to an otherwise appropriate rent-based approach to the cost of accommodation.

4.5 It must also be recognised that it is possible that there will be cases where, for one reason or another, a rent-based approach, actuarially calculated, may give rise to a figure which is equal to or even greater than the cost of actually acquiring and adapting appropriate accommodation deducting, where appropriate, for the costs which would have been incurred in providing ordinary accommodation in the first place had there been no injury. In such a case there could, however, be no injustice to a defendant in requiring the cost of acquisition and adaptation (with appropriate deduction) to form the basis of any award for in such a case the plaintiff would be no better off than they would have been had they simply rented and adapted suitable accommodation. It follows that in such cases any residual capital value in the estate of the plaintiff after death simply results from the fact that it is as cheap or cheaper to buy rather than rent in all the circumstances of the case. There can be no injustice in such a situation.

4.6 Finally, there is the question of plaintiffs where it is reasonable to require that any suitably adapted accommodation also provide for other family members who might reasonably be expected to live with the plaintiff concerned. This may be because of age, of the need to provide regular care, or, in cases of catastrophic injury at birth or in early age, because it is appropriate that the plaintiff concerned should, to the greatest extent possible, be able to enjoy a family life as close as can be achieved to that which would have occurred had they not been injured by the negligence of a defendant. There may, of course, in such circumstances be an additional cost involved resulting from the requirement to obtain suitable rented accommodation which could be adapted but which could also accommodate the other family members who might reasonably be expected to reside there. But such an additional cost is an inevitable and foreseeable consequence of wrongdoing which leads to the kind of catastrophic injuries with which the Court is concerned in this case. The provision of such accommodation is necessary to put the plaintiff in the closest possible position to that in which the plaintiff would have been had there been no injury. That means living in the ordinary way with the plaintiff’s family. Indeed if that situation continues for longer than might ordinarily be expected to be the case precisely because of the level of disability from which the plaintiff suffers then that too is a direct and foreseeable consequence of the wrongdoing.

4.7 Importantly it should also be pointed out that the fact that the proper approach to the calculation of damages may use as a starting point a consideration of the actuarial valuation of the additional cost of renting suitably adapted accommodation does not necessarily mean that a relevant plaintiff actually has to live in rented accommodation. Where a catastrophically injured plaintiff is in a position to make their own decisions then they can, like any other person, make a decision as to whether they wish to allocate additional resources (if they have them) to owning as opposed to renting. But the allocation of those additional resources is, in that context, entirely voluntary.

4.8 In like manner, a person who is not in a position to make such decisions for themselves ought be able to rely on those in whom decision-making power is vested to reach a similar decision about whether it is in the best interests of the plaintiff concerned to allocate additional resources to purchase above and beyond that which might be needed to rent. But in such a case the allocation of those additional resources cannot be said to diminish the resources available to the plaintiff concerned (whether in the form of the plaintiff’s own resources or damages awarded under some other heading) because the decision to purchase rather than rent is again voluntary (even if taken by a person acting on behalf and in the interests of the plaintiff).

4.9 For the reasons which I have sought to analyse I am, therefore, of the view that it would at least be appropriate in a subsequent case to consider, provided the necessary evidence had been led and the necessary arguments made, whether a rental based approach is preferable. If it should transpire, on the evidence, that a rental based approach does not significantly diminish the amount which requires to be provided to secure appropriate accommodation below that which would be needed in the event of a purchase of similar accommodation, then it may well be that defendants cannot be said to have any legitimate complaint about having to provide such a sum. If, on the evidence generally or in the circumstances of a particular case, there is a significant saving achieved by adopting a rental based approach then that would be no injustice to the plaintiff concerned for any decision to purchase, using resources above and beyond those required to rent, will be an elective decision made either by the plaintiff (should the plaintiff have appropriate capacity) or by those acting on the plaintiff’s behalf.

4.10 Such an approach seems to me to potentially be more appropriate as a matter of principle reflecting the fact that the true cost of providing accommodation is the cost of renting same rather than purchasing. The approach also has the potential to provide a practical solution to the problems which have bedevilled the assessment of damages in cases such as this which difficulties are fully set out and analysed in the case law referred to and discussed by MacMenamin J. in his judgment.

5. Conclusions
5.1 I reiterate that I fully agree with the judgment of MacMenamin J. as to the proper disposition of the appeal in this case.

5.2 I have given this concurring judgment for the purposes of tentatively suggesting that, in a case in which the issue was fully explored both in evidence and in argument, it may well be more appropriate to at least consider whether a rental rather than a purchase based method of assessment of the costs of providing suitable adapted accommodation may be more appropriate. Obviously a final decision on whether such an approach was appropriate either in general or in the circumstances of any particular case, would have to await proceedings in which the issues touched on in this judgment (and, doubtless others) were fully debated in the light of appropriate expert evidence.

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