July 26, 2019

Accommodation claims: Roberts v Johnstone challenge to be handled as test case

The Court of Appeal has adjourned the appeal hearing of Swift v Carpenter to allow the parties to file additional expert evidence. The Personal Injury Bar Association was also granted permission to intervene as an interested party.

Further directions have been made granting all parties permission to obtain expert evidence and to lodge further written submissions. Indications are that the appeal hearing will be heard in early 2020.

First instance

Since the decision in Roberts v Johnstone [1989] Q.B. 878, the cost of future accommodation has been calculated on the basis of compensation for the loss of use of capital used to purchase a more expensive property.

Whilst the claimant retains an appreciating asset in the property, the capital tied up would not have produced any return of investment and so a claimant is compensated for this loss. Until 2017, these calculations involved a positive discount rate.

At first instance, the Claimant argued that where there was a negative discount rate, the calculation of accommodation claims using Roberts v Johnstone would result in no loss, and that this was unfair.

Nonetheless, the High Court reaffirmed Roberts v Johnstone, finding that whilst it is not flawless, it remained good law and should continue to form the basis upon which future accommodation claims are calculated.

Appeal

The Court of Appeal judges have made clear that this appeal should be considered a test case allowing a "fuller review of all possible alternatives" for calculating accommodation claims, which by extension will determine whether Roberts v Johnstone remains the most appropriate methodology.

The decision to allow further expert evidence and designate this matter a test case will be of great interest to both claimants and defendants, particularly in light of the recent change to the discount rate, which retained a negative figure of -0.25%

We will continue to keep track of the progression of this appeal, and will report further.