William Audland KC and Isaac Hogarth of 12KBW, instructed by Victoria Williams of Stewarts acted for the Claimant (‘C’) in her claim against Imperial College Healthcare NHS Trust (‘D’). Settlement was reached days before the start of an 8-day quantum trial, and approved by Alison Morgan KC, sitting as a Deputy Judge of the High Court on 19 June 2025.

The facts

C was in her mid-thirties when she attended St Mary’s Hospital (‘SMH’) with a complaint of diarrhoea and stomach pain against a background of suspected Crohn’s disease. She had a raised temperature and having undergone blood tests, a very high CRP, indicative of acute infection or inflammation. The A&E team made a referral to general surgery, who agreed to a review only, but did not accept the referral. The Claimant was reviewed and the surgical doctor concluded that the problem was not surgical in nature. C was discharged without any further investigations.

The next day, she had very severe stomach pain, and collapsed in her husband’s arms, having suffered cardiac arrest. He summoned an ambulance, who arrived 15 minutes later. On examination, her airway was obstructed with vomit. She required three cycles of CPR before return of spontaneous circulation was achieved. She was then conveyed to SMH where investigations revealed significant consolidation in the chest in keeping with aspiration and evidence of a bowel perforation.

She underwent a small bowel resection with appendicectomy and double barrel de-functioning ileostomy. She was transferred to ITU and required tracheostomy.

She suffered a very severe hypoxic brain injury and entered a prolonged disorder of consciousness (‘PDOC’), which the experts on both sides agreed was between vegetative state (‘VS’) and minimally conscious minus (‘MCS-‘).

Liability was admitted early in the case, with D accepting that C ought not to have been discharged and had she been admitted, the care that she would and should have received would have avoided the hypoxic brain injury that occurred.

Quantum arguments

This was a complex claim involving 11 disciplines of experts.

C is now aged 40 years, and following experts’ joint statements, there was a significant measure of agreement between the parties as to her state and needs. The key points of agreement were:

  1. As a result of the admitted negligence, C suffered a hypoxic brain injury on 5 June 2019, leading to her falling into a PDOC on which she falls within a range between VS and MCS-.
  2. As a result of her injuries, she lacked capacity for all purposes.
  3. She required the care of two, 24 hours a day. Given her high level of medical complexity, she required 24/7 nursing care (with waking night care), such that of the two carers one must be a registered nurse, and the other an HCA.
  4. As a result of the negligence, she suffered intra-abdominal sepsis, four quadrant peritonitis and required bowel resection and appendectomy with double barrel refunctioning ileostomy. She now suffered from short bowel syndrome.
  5. She has a significantly reduced life expectancy, although there was a dispute over the precise extent of the reduction.
  6. She required adapted single-level accommodation.
  7. All decisions in relation to medical care, health and welfare were to be made by a multi-disciplinary team of healthcare professionals acting in C’s best interests.
  8. She had significant needs in respect of medical care, therapies and aids and equipment, although there are several outstanding issues in dispute in respect of the specifics.

The main issues between the parties centred on:

  1. C’s residual life expectancy. The neuro-rehabilitation experts disagreed, with C’s expert opining that she was expected to live until the age of 53 to 55 years (a further 12.94 to 14.94 years), and D’s expert opining that she was expected to live to 50 years of age (a further 9.94 years).
  2. The employment model for future care. C’s care expert said that for various reasons including staffing issues and clinical governance, an agency model (which was currently in place) was required. D’s OT/care expert argued for a directly employed or hybrid model of care.
  3. The extent of C’s but for earnings (which impact on the claims for both future loss of earnings and lost years).
  4. The correct measure of loss in respect of C’s future accommodation needs, and whether the methodology set out by the Court of Appeal in the case of Swift v Carpenter [2020] EWCA Civ 1295 applies in this case.
  5. The extent of C’s future medical and therapy needs.
  6. Whether C is entitled to recover the cost of her husband’s psychological therapy, given his importance in maintaining her stability.

Settlement

A joint settlement meeting took place in April, which did not resolve in settlement, although offers were exchanged.

The parties finally came to terms, subject to approval, less than a week before an 8-day quantum trial was due to commence.

The settlement was on the following basis:

  1. A gross lump sum of approximately £8 million.
  2. A periodical payment order (‘PPO’) for care and case management of approximately £880,000 linked to ASHE 6115 80th
  3. PPO for deputyship of approximately £20,000 indexed to RPI.
  4. A reverse indemnity in respect of future care and case management, but with provision for a release clause in accordance with that considered within the BJB judgment (see below).

Approval

On 19 June 2025, before Alison Morgan KC sitting as a DHCJ, the settlement was approved.

The reverse indemnity and release clause

It was agreed that C had very high care needs including the need for two carers at all times, one of whom must be a registered nurse.

Given that C received CHC funding worth over £200,000 annually, all D’s offers were contingent on C agreeing to a reverse indemnity, whereby any state funding in respect of care and case management would be deducted from the PPO for care and case management annually.

C was willing to agree to a reverse indemnity subject to the figures on the sum and PPO being at an appropriate level. However, C insisted on the inclusion of a release clause in accordance with the Court of Protection judgment of HHJ Hilder in BJB v (1) Barnsley Hospital NHS FT (2) NHS Resolution [2024] EWCOP 59 (T2).

The terms of that release clause in that case were as follows:

“The Claimant and Defendant are agreed that the Claimant may be released from any of the undertakings given within this schedule at the discretion of the Master of the Court of Protection or his successor in the event that he is satisfied that the Claimant does not have sufficient resources to meet his (sic) reasonable needs, provided that:-

(a)  The Claimant, or those acting on his (sic) behalf, gives the Defendant 3 months’ notice in writing that he (sic) intends to ask the Master of the Court of Protection or his successor so to exercise his discretion and gives the Defendant the information which will be considered by the Master before any exercise of his discretion: and

(b)  The Master of the Court of Protection or his successor has given the Defendant the opportunity to make representations as to the appropriateness of such an exercise of his discretion;”

D ultimately agreed to an order incorporating that clause.

Within her judgment Alison Morgan KC (sitting as a DHCJ) specifically approved the reverse indemnity in this case subject to the BJB release clause, which gave C protection in the event that her reasonable needs were no longer met by the agreed annual sum for care and case management.

Comment:

This was a desperately sad case with a number of interesting issues.

From our perspective, the arguments and outcome surrounding the terms of the reverse indemnity are of some general application.

While the Court cannot order a reverse indemnity, it may approve one as part of the terms of settlement, subject to being persuaded it is a claimant’s best interests to do so. It will often be the case that such an arrangement benefits both parties as it allows a claimant to recover full compensation without a risk of double recovery, and the reverse indemnity has such value to defendants that in exchange for one, they will make more generous offers than they otherwise would, resulting in the claimant recovering more damages.

For a claimant in a stable condition (as EAC was), whose care package is already premised on the highest levels of need, and where the PPO in respect of care and case management is appropriately indexed, there will be a very low risk of a change in circumstances which would lead to her reasonable needs not being met.

However, in the very unlikely event that that does happen, the inclusion of the BJB release clause provides a simple mechanism for her to apply to be discharged from the reverse indemnity, such that she could potentially recover the agreed PPO in addition to state funding, if that meant that her reasonable needs would be met.

We would suggest that such a clause should be included in any reverse indemnity agreement to provide the claimant with the highest level of protection in the event of a future change in circumstances not envisioned at the time of settlement.

Isaac Hogarth