The claimant, when a passenger in a car driven by the defendant driver, sustained catastrophic injuries in a road traffic accident. Following judgment on liability in which the driver was found to be at least partially to blame for the accident, the parties agreed a lump sum of £6.25m and an annual periodical payment of £325,000 to be paid to the claimant as damages, in a personal injury trust, for costs of future care and case management. As such, those sums would not be considered when assessing the claimant’s entitlement to state funding for future costs of care. An issue arose as to the possibility of double recovery by the claimant if the costs of care exceeded £325,000 in any particular year as the claimant would be entitled to state funding to meet the shortfall. The claimant’s position was that she was free to deal with any surplus amount from the annual periodical payment in any year as she saw fit. The driver’s position was that the claimant was required to ringfence any surplus amount from the annual periodical payment, in a running account, to meet any shortfall between the annual periodical payment and actual costs of care of any particular year, and therefore, the claimant was only entitled to state funding to meet any shortfall in costs of care in any particular year after applying the annual periodical payment for that year and any ringfenced surplus amount to meet such costs.

On the issue—