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Swift v Carpenter: Court of Appeal confirms reversionary interest model appropriate for future accommodation claims

  • Legal Development 09 October 2020 09 October 2020
  • UK & Europe

  • Insurance & Reinsurance

In a long-awaited decision, the Court of Appeal has concluded that the Roberts v Johnstone formula no longer remains the most appropriate methodology for the calculation of claims for future accommodation.

Swift v Carpenter: Court of Appeal confirms reversionary interest model appropriate for future accommodation claims

Swift v Carpenter [2020] EWCA Civ 1295

Accommodation claims are now to be assessed using a life interest/reversionary interest model. The value of the reversionary interest is to be based upon a “market valuation” adopting an investment return of 5% per annum across a claimant’s lifetime. This was a “deliberately cautious view” on the part of the Court.

The Court of Appeal held that whilst Roberts v Johnstone did apply to this case in the form of authoritative guidance, such guidance was “given in the specific conditions prevailing at the time of the decision". As Roberts is now ineffective in achieving “full compensation without over-compensation, then [the] court can revisit and alter such guidance". In those circumstances, having considered the expert evidence and submissions, “the formula in Roberts v Johnstone no longer achieves fair and reasonable compensation for an injured claimant,” and that it should no longer apply.

The Court of Appeal did accept the submissions of the intervener, the Personal Injuries Bar Association, that “this guidance should not be regarded as a straitjacket to be applied rigidly and universally”, and that in some instances, such as cases with short life expectancy, then a different approach may be justified.

The Court of Appeal overturned the first instance decision in Swift v Carpenter, awarding the Claimant £801,913 for accommodation costs having applied the new reversionary interest model.

This decision will be welcomed by claimant representatives, who argued that the Roberts methodology was no longer appropriate and was ultimately unfair to claimants.

Our further detailed analysis of the decision will be issued in the coming days.



Prior to this landmark decision, the Roberts method calculated future accommodation costs 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.

The introduction in 2017 of a negative discount rate of -0.75% followed by the retention of a negative rate of -0.25% after the review in 2019 meant that it was inevitable that the issue of accommodation costs would require further judicial consideration. The case which required that judicial consideration was determined to be Swift v Carpenter, in which the Claimant had suffered serious lower limb injuries, the consequence of which was the amputation of her left leg below the knee.

At first instance, it was held that the cost of suitable accommodation was likely to be in the region of £2.35 million, approximately £900,000 more than the value of the property she owned prior to her injuries.

Applying the Roberts methodology, the Claimant would recover a nil award for accommodation – due to the negative discount rate. The Claimant therefore submitted that Roberts was no longer fit for purpose. The Defendant argued that Roberts remained the appropriate method and that the Court was bound by it.

The High Court reaffirmed Roberts, finding that whilst it was not flawless, it remained good law and should continue to form the basis upon which future accommodation claims are calculated. The Claimant therefore received no award for the accommodation to be purchased.

The Claimant appealed. The Court of Appeal made clear that the appeal was to be considered a test case allowing a ‘fuller review of all possible alternatives’ for calculating accommodation claims, which by extension would consider whether Roberts v Johnstone remains the most appropriate methodology.


Court of Appeal

The Court of Appeal was asked to consider the following issues:

Can the Court of Appeal depart from Roberts v Johnstone?

Unsurprisingly, the Claimant submitted that the Court should depart from Roberts because the circumstances in which it operated were no longer applicable – specifically the change from a positive to negative discount rate.

The Defendant, in response, argued that Roberts remains binding on the Court of Appeal, specifically that the “methodology is not a mere judicial guideline - has been approved, adopted and developed by the House of Lords as part of the decision in Thomas [v Brighton Health Authority]”.

Is Roberts v Johnstone fit for purpose?

The Claimant submitted that if the Court accepts that the injury resulted in her suffering a loss through the purchase of the new accommodation, then a methodology which results in her not receiving compensation for that loss was defective. Furthermore, it was argued that “It was illogical to say that the Appellant had no loss when the judge had found as a fact that she would have to pay £900,000 more than would otherwise have been the case for her accommodation”.

 The Defendant argued that even if the Court could depart from Roberts - which it acknowledged may be “imperfect” - “it would not be right to do so because [the Claimant] cannot prove that she is likely to suffer any net loss”.

What are the possible alternatives to the Roberts v Johnstone methodology?

Various alternatives were advanced by both parties including:

  • The award of the full capital costs of the property; and
  • Differing applications of reversionary interest.

There were several methods proposed for valuing that reversionary interest, and it was clear that if Roberts v Johnstone  were to be abandoned, then a reversionary interest model of some form would be the most likely outcome. This has been borne out by the judgment.


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