The much-anticipated judgment in Swift v Carpenter [2020] EWCA Civ 1295 provided a neat and just approach to the valuation of capital costs in accommodation damages claims. Helpfully the Court of Appeal provided an easy to apply formula for accommodation claims where claimants have longer life expectancies thereby providing much needed litigation certainty – and also substantially reducing potential expert costs in future cases. Whilst the most usual type of claims were addressed, the Court could not provide answers to all of the more complex capital accommodation claims which may come before trial judges in the years ahead.
Irwin LJ noted that the Court of Appeal’s guidance should not be regarded as a “straitjacket to be applied universally and rigidly”. One area in which the jacket may not fit is short life expectancy cases. The simple application of the Court’s reversionary interest formula to such claimants appears to be one area where the direct application of the guidance may be inappropriate. As stated by Irwin LJ:
“There may be cases where this guidance is inappropriate. However, for longer lives, during conditions of negative or low positive discount rates, and subject to particular circumstances, this guidance should be regarded as enduring.” [§210]