Should you always disclose the value of awards of compensation to the recipient?

When acting for a person who has been injured, securing the best possible outcome for them in terms of an award of damages that represents their loss and the future costs of their care is the primary objective. Whilst money can never undo the injury someone has sustained, it is, unfortunately, all that can be provided by a defendant to pay for care and rehabilitation and meet someone’s post-injury needs.

With such a focus on the monetary outcome of a claim, have you ever stopped to think whether you should, in fact, disclose the total figure of compensation to your injured party (‘P’) where they have suffered a brain injury and lack capacity to manage their finances?

Where a brain injury has occurred (particularly a frontal lobe injury affecting impulse control, judgement, the ability to analyse risks etc), knowing that there is a significant award of damages but being unable to appreciate the need for that to last for the rest of their life (and how this, therefore, requires careful planning and management) often presents significant problems for those managing such an award of damages.  The deputy is often left to ‘unpick’ situations P has gotten themselves into – such as repaying loans from ‘friends’.

The case of EXB (EXB v FDZ [2018] EWHC 3456 (QB)

The recent case of EXB v FDZ considered whether there could be justification not to tell P what their award of damages is and decided, on the facts of this case, should not tell P the value of their award.

This is a landmark decision for personal injury (PI) lawyers and deputies up and down the country as cases approach settlement, and provides a key opportunity to consider the long-term consequences of P knowing award of damages – but not appreciating the consequences or need to manage such an award for the long term.

In this case, the Court provided authority for the appointed deputy to withhold the total value of the award from P – and the ability to present a copy of the Court Order confirming the total value of the award should not be disclosed to P, to anyone with knowledge of the settlement.

The hope, in this case, is that the protection of this information would limit some of the likely extremes of behaviour of P.  In turn, this enables the deputy to work with P based on smaller-scale budgets and decisions, without the distraction of the total figure of the award of damages that he could not properly understand.

On first reading, this decision is surprising, taking what might be considered a paternalistic approach to information sharing – and preventing P having access to information such that he simply cannot have the capacity to make decisions about his award of damages.

However, a closer analysis of the case and the balanced and considered judgement of Foskett J shows a careful implementation of the key tenets of the MCA 2005 – that where someone lacks capacity a personalised analysis of best interests must determine the outcome.

In so many cases, a careful and timely analysis of whether the injured party has the capacity to understand the totality and consequences of their award of damages could provide a real opportunity to better support P, their family – and ultimately their future. It would also best ensure damages awards can be spent on the care and rehabilitation they are intended for and provide some limitation on P’s presentation of themselves as ‘rich’ to new ‘friends’, which is often a cause of significant concern and poor influences arising.

The future   

For PI Lawyers, there is now a need to consider whether an injured party has the capacity to understand the totality of their award of damages and if it is appropriate for them to know this. In conjunction with the deputy, there is a need to consider if information about the total award should be withheld, with Court approval.

The case of EXB held that the defendants were liable for the costs of the Court of Protection application to consider whether to disclose the total amount of damages P – so ensuring such an application is included in the schedule of loss as a head of damage (if needed) will be vital.

Additionally, ensuring appropriate timing and consideration of an application to the Court of Protection will be key to avoid untimely disclosure to the injured party.

Further information

If you need assistance in considering whether an injured party in a case you are dealing with should have information withheld from them, or require support with Court of Protection costs assessment for your schedule of loss, please contact Donna Holmes, Professional Deputy and member of the Office of the Public Guardian’s Panel of Deputies.