It is frequently the case that clients who have sustained
a spinal cord injury cannot return to their home following injury because it is
no longer suitable.
Instead, often clients need accommodation on one level,
suitable for wheelchair use and with extra space for their equipment and
therapy needs. Some clients need carers and space needs to be provided to
preserve family life and privacy.
Invariably, the new home will cost more because of the
need for more space and most homes require adaptation to make them suitable for
wheelchair use which could include increasing door width, adapting kitchens and
bathrooms and sometimes building extensions for therapy areas and making
outside space accessible.
In practice, most houses require substantial adaptation works
to make their new home suitable. Many clients are surprised to learn that
whilst the law allows them to claim the full cost of adapting their new home
only a proportion of the extra purchase costs are recoverable in their
compensation claim.
The legal principles that govern additional accommodation
costs are set out in the 1988 case of Roberts
v Johnstone. In a nutshell, only the cost of borrowing the
additional money needed to buy the larger house (calculated at the measly rate
of 2.5% per year) for the remainder of the Claimant’s life is
recoverable. Not only can’t you borrow money at 2.5% but life
expectancy is based on actuarial tables rather than the actual number of
years. For older clients, or any client with a shortened life expectancy
or where clients live in areas where property prices are high, the way this part
of their claim is calculated results in a significant shortfall in the amount
of funds that are needed to buy the new house.
A key part of our job is to find a solution to this
problem. Ways of getting round this issue are to use other parts of the
Claimant’s compensation to meet the accommodation shortfall, for example by
using the pain and suffering damages to plug the gap or part of the Claimant’s
loss of earnings.
There are also alternatives to the conventional Roberts
v Johnstone calculation which can put the Claimant in a far better
financial position. These include renting but only if you can find a
landlord willing to allow the necessary adaptations, or an interest only
mortgage. Both of these options can potentially be funded by index linked
annual payments for life (periodical payments) from the defendant to cover the
expense involved. Another option is an interest free loan from the defendant
who in exchange are given a charge over the new home which is not realisable
until after the Claimant has died. However, many Claimants are not
attracted to the idea of renting or living in a home that someone else owns.
Where the Claimant has a family to provide for this solution can be
unattractive.
At Leigh Day we have extensive experience of dealing with
this issue and a track record of successfully obtaining large interim payments
to enable clients to buy and adapt a new home during the course of their
claims. The advantages of doing so are that the Claimant is then moved
before a case is settled and the actual costs of buying and adapting a home are
known and can be claimed as part of the case. It also enables the care
and therapy regimes to be fully established and costed and equipment trialled
and bought. This means that the Claimant’s damages claim reflects the
actual rather than anticipated costs which is invariably preferable.
One of the most satisfying parts of our job is seeing our
clients and their families move into a new home which has been adapted to
maximise their independence. It can make a huge difference to a client’s
life and often provides the platform from which they can build their future.
Sally Moore, Partner & Head of
Personal Injury Team & Lorna Bidston, Solicitor - Leigh Day
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