Current Financial Turmoil... Is It Relevant To Clinical Neglience Claimants?
Financial markets across the world have fallen, wiping millions of pounds off the value of shares owned by individuals and institutions such as pension funds and insurance companies. The FTSE 100 share index has now fallen to values last seen five years ago. These dramatic falls could seriously affect an injured person relying on their award to meet the cost of their care, purchase and conversion of their home and the provision of much needed therapies.
Whilst over the long term financial advisors are advising against panic, Jason Butler of Bloomsbury Financial Planning quoted on the BBC’s website said “Unsettling as it is, the world is not going back to living in mud huts”. Nonetheless, claimants with an excessive exposure to stock market investments who, in the near future, find it necessary to cash in investments to purchase equipment, meet additional unforeseen care costs, etc. may find themselves considerably worse off.
Independent financial advice is, these days, considered as essential as securing a good quality care or equipment report in ensuring that a claimant not only maximises their claim at the time of settlement but also maximises the value of their award.
Whilst the importance of independent financial advice remains crucial, the options open for successful claimants have been considerably widened as a result of the Court of Appeal decision in the case of Thompstone v Thameside Hospital NHS Foundation Trust. The headline impact of the Thompstone case was to allow for damages paid by way of periodical payments to be linked to an appropriate earnings based index as opposed to the previous link with the Retail Prices Index. The problem with the previous link was that care costs (largely driven by the wages of the carers) were increasing at a rate well ahead of the Retail Prices Index. Future payments linked to the Retail Prices Index were therefore falling behind the amount required to meet the cost of care with the shortfall increasing year-on-year.
One of the Judges in the Court of Appeal, Lord Justice Waller, emphasised the ongoing importance of financial advice by stating that “I see the Court’s role as ensuring that the allocation between periodical payments and lump sum has proceeded on the basis of suitably qualified advice which appeared to have taken all relevant matters into account …”. This is particularly important where the claimant, as is often the case in cerebral palsy claims, is a protected party as defined by the Mental Capacity Act. At the heart of the Act lies the principal that the parties must act in the best interests of the party at all times and will need to be able to demonstrate adherence to this principle, particularly in relation to major financial decisions.
The importance of good quality financial advice as part and parcel of the litigation process is just one of the issues to be addressed at an Information Fair being hosted by Scope, Cerebral Palsy Plus, No 5 Chambers and Foot Anstey. The event is being held at Ashton Gate Bristol on on Saturday, 22 November 2008. For further details please click here. Or contact Andrew Hannam, on 01823 625642 or email andrew.hannam@footanstey.com
Published 03/11/2008
