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Fraser J approves combined PPO and lump sum settlement following the introduction of the new discount rate in a case involving the MIB.

23rd March 2017

Marcus Grant, instructed by Alexander Wormald of Clarkson, Wright & Jakes, represented a 17 year old pillion passenger on a motorcycle who sustained a severe brain injury in a road accident with an uninsured driver.

The Claimant, who was a Protected Party under the Mental Capacity Act 2005, was aged 27 at the date of settlement. The case was controversial because it was alleged that he had participated in an armed robbery using the stolen motorcycle shortly before the accident. A firearm was found at the accident scene. Notwithstanding an ex turpi causa defence, liability was apportioned 90%:10% in the Claimant’s favour. An agreement was reached that provided for a combined lump sum / PPO settlement with the heads of care and case management and deputy costs paid on a periodical payment order basis.

The settlement came for approval two days after the new –0.75% discount rate came into force. The Parties renegotiated the terms of the lump sum settlement following the Lord Chancellor’s announcement, but opted to retain the PPO elements of the settlement. Fraser J approved the terms of the settlement, taking into account the interests of both the Claimant and the paying party (the MIB). He was satisfied that notwithstanding the reduction in the discount rate, a PPO for the two heads of claim identified was the appropriate mechanism to properly protect this Claimant’s interests over the remaining estimated c. 50 years of his life (the brain injury had reduced his life expectancy) in the face of an uncertain future in the money markets due to the economic and political turmoil across the world.

The total value of the settlement was between £3m and £4m, depending on future RPI and life expectancy. An anonymity order protecting the Claimant’s identity was made.

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Marcus Grant

Marcus Grant
Year of Call: 1993