A Paddington train crash survivor who claimed he was turned into a killer by post-traumatic stress disorder stands to receive thousands in compensation after a landmark Appeal Court ruling today.

Judges ruled that Kerrie Gray, 48, is due damages from rail firms after he was incarcarated in a mental hospital for stabbing a pedestrian to death with a kitchen knife in August 2001, two years after the horrific crash in which 31 people died.

The High Court, which had previously rejected the claim, must now decide the level of his payout.

The court heard that Gray was "perfectly normal" until the Ladbroke Grove crash in October 1999 but afterwards underwent a significant personality change, suffering depression, anxiety and uncontrollable anger.

Gray, who suffered minor cuts in the crash, admitted killing 42-year-old welder, John Boultwood, after he wandered drunkenly into the path of his car.

When Mr Boultwood then banged on his window, Gray leapt out and kicked and punched his victim before driving to a friend's house to fetch a kitchen knife. He then stabbed Mr Boultwood seven times.

After pleading guilty to manslaughter on the basis of diminished responsibiltiy, he was ordered to be detained indefinitely at Runwell Hospital in Essex. He can only be released on the Home Secretary's orders.

Gray’s lawyer, Anthony Scrivener QC, told the nation’s top civil judge, Sir Anthony Clarke, that “the homicide would not have taken place, but for the original accident”. The court heard that the medical evidence showed conclusively that Gray had suffered PTSD as a direct result of the crash and that the manslaughter was a consequence of the disorder.

But lawyers for Thames Trains Ltd and Network Rail Infrastructure Ltd, whilst acknowledging that Gray was due compensation for the immediate effects of the accident, denied that they were liable for his lost earnings as a result of his incarcaration.

The rail firms were relying on the historic legal principle of “ex turpi causa” - that a right to sue in court cannot arise out of an evil cause, in this case the act of manslaughter.

But in a ruling that has effectively transformed the law, Sir Anthony judged that the “traditional harsh” effects of the ex turpi causa principle “should be revisited” in a case where Gray’s crime was itself “caused” by the trauma he suffered in the rail crash.

With medical science’s unanimous recognition of post traumatic stress disorder, it was “no longer inconceivable” that an act of murder or manslaughter might be triggered by such an event and it was time the law was reformed to meet “the ends of justice”, he said.

He said the evidence clearly showed that depressive symptoms, “including uncontrollable rage and aggression”, are well known symptoms of PTSD “and are thus reasonably forseeable”.

Sir Anthony, the Master of the Rolls, said that, although the law did not allow compensation for Gray's incarcaration, there was no reason he could not claim for loss of earnings.

The High Court will now consider remaining issues in the case - such as whether the killing was "caused" by the rail firms' negligence - before making a final decision on the damages due. Gray also faces claims that his payout should be reduced because of his own "contributory fault".

Gray, said to be of previous good character, had been continually employed in administration and sales jobs until the crash. He argues that upon his release, his prospects will be much diminished.

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