The fundamental and long-debated approach to awarding compensation for special accommodation today arrived at the Court of Appeal.

Personal injury lawyers tuned in to the live feed of Swift v Carpenter in what has been identified as a test case for calculating damages in serious injury cases. The outcome of the case will potentially be worth millions when lump sums are awarded to claimants and has been a subject of much debate in the PI sector for years.

The claimant sustained serious leg injuries leading to a below-knee amputation following a road traffic accident seven years ago. She was awarded more than £4m damages but received nothing for the capital costs of accommodation.

In the High Court, Mrs Justice Lambert assessed the required additional capital required for a new property as £900,000, but she awarded no extra damages as she was bound by the decision in Roberts v Johnstone. Permission was then granted to challenge the decision in the Court of Appeal.

Part of the current difficulty is that Roberts was a ruling made when the discount rate for personal injury awards was 2.5%. It has since changed to -0.25%, leading to calls that an alternative approach should be considered.

This week’s three-day hearing was due to start in March but postponed due to the coronavirus pandemic. For the Court of Appeal proceedings, Lord Justice Underhill and Lord Justice Irwin appeared remotely, with Lady Justice Nicola Davies appearing from court.

The court heard evidence this morning from actuarial experts who came to different conclusions about what the claimant should receive.

Chris Daykin submitted that each head of damages should be calculated separately and it ‘muddies the issue’ if you assume one head of damages could pay for another. It was a ‘fundamental principle’ that the court should look at separate elements of the damages, he said, and it was wrong to assess damages based on assumptions about the future value of the claimant’s accommodation.

Kate Angell told the court it could be assumed that at some point the claimant would run out of money, depending on how long they live, but in that case she could borrow against the property and its extra accumulated value.

‘This is additional uncertainty but it is whether [the uncertainties] are acceptable to get a fair compensation amount,’ added Angell.

The hearing continues.