This case is an important landmark case in Guernsey and concerns the assessment of long-term future damages in personal injury actions. This case is the latest case in a very long matter which commenced in 1999. In late 1998, Manuel Helmot was hit by a car whilst cycling. He was, at the time, a young, healthy cyclist. Following the accident, Helmot was left severely brain damaged and suffered a personality change and partial loss of vision and limb movement. His life expectancy was shortened by five years and he now requires adapted accommodation and 24 hour care.
The defendant having admitted liability, the action proceeded on the basis of damages alone. The Guernsey court turned to the English law position for guidance and noted that, at common law, damages could only be awarded in a lump sum payment calculated by a certain means to assess the necessary damages that will put the injured in a position financially equivalent to that which they would have been in had they not been injured.
Throughout the case there was disagreement as to the discount rate that should be applied when calculating the lump sum.
The Guernsey court confirmed that in future, the Guernsey courts will take as their starting point the assumption in the English case of Wells v Wells [1999] 1 AC 345 that the injured will invest any lump sum in UK index-linked gilts, whether they actually do or not. An adjustment should then be made in the case of a Guernsey resident to yield for (i) taxation at Guernsey rates and (ii) the difference between UK and Guernsey rates of inflation.
The result should then be adjusted to ensure the injured is compensated for the excess of the rate of inflation of average earning over the rate of price inflation. As a result, Helmot was awarded the largest lump-sum payment in a personal injury case in Guernsey, receiving £9,337,852.27.
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