Financial Loss in Fatal Accident Claims

Tuesday, January 19, 2016

It is a sad occurrence when anyone is killed in an accident, but when that accident was avoidable and caused by someone’s actions or omissions, often a claim in damages can be pursued. This is an area of law which requires expert assistance and which has to be handled extremely delicately and with the utmost sympathy. To try and value someone’s loss by an award of damages is impossible and quite understandably can in itself cause additional grief and trauma to the surviving relatives. However, the award of damages is the means the law provides to compensate for a loss of life, where the death has arisen by an act or omission of someone else and part of that award is to provide a financial sum to compensate for the loss of both the financial dependency (often earned or pension income) that the deceased provided but also the non financial dependency (assistance with gardening, DIY and household chores for example) that was provided.

This article will not examine the extent of potential Claimants following a loved ones death or the extent to which the law can compensate for bereavement as both are complicated issue and matters upon which legal advice should always be sought. This article instead will look at the issue of the calculation of loss in the light of the case of Knauer (Widower and Administrator of the Estate of Sally Ann Knauer) (Appellant) v Ministry of Justice (Respondent). This case is taking a very important issue to the Supreme court on the calculation of loss under a Fatal Accident Claim and is due to be heard on the 28th January 2016 by a panel of 7 judges. The case was held to be so important that its procedure from the High Court to the Supreme Court bypassed the Court off Appeal as it is seeking to change the law which is currently in force.

The significance of this case is that under the current law, the courts will always calculate loss arising from someone’s death by calculating all losses from the date of the death. This means that if someone would have survived for say 20 years but for the fatal accident, the loss will be calculated for that 20 year period but, the 20 years will be discounted to reflect the fact that the loss is being paid as a lump sum and can be invested over the 20 year period and achieve a return of interest. For example, a 20 year loss of say £10000 per annum could be awarded at around 15.7 years x £10,000 to reflect the early receipt of the damages. However, quite often the assessment of Fatal Accident Damages takes place many years after the death but the loss is still calculated from death. Therefore, losses which have now occurred and which have passed are still calculated by the multiplier from the date of death. In short this approach means that a Claimant claiming under the Fatal Accident Act is receiving potentially less damages than they should receive based on the deceased life expectancy and the period of time past since the death. It is also an approach which is arguably inconsistent with the approach used in personal injury claims were no death has occurred but losses continue to occur into the future.

The issue the Supreme Court needs to decide in Knauer is whether the correct approach to calculating Fatal Accident Damages should be to allow all losses since death to the date of the assessment of the claim in full, without applying any discount and only discount for early receipt the losses occurring after the assessment, using the above approach, until what would have been the deceased assumed date of death if the accident had not occurred. This will then only discount for early receipt the dependency claim which, but for the Fatal accident, would not have at that time been received.

The approach being contended for in the case of Knauer has been a view expressed as more appropriate by many lawyers and legal commentators for many years and if applied would likely increase the overall value of Fatal Accident claims. As such lawyers will be looking for the outcome of this case as it may well effect many Fatal Accident Claims which are currently being investigated and it will be interesting to see if the Supreme Court take this opportunity to change the law on this issue.

Whilst the Supreme Court hearing is on the 28^th January 2016, the final judgement may take a while to be handed down but this is a judgement which all personal injury lawyers will be looking out for with great interest.

Mark Hambling is a Director of Rogers & Norton, a Senior Litigator with the Association of Personal Injury Lawyers and handles Fatal Accident and Personal Injury Claims within the Rogers & Norton Personal Injury team in Norwich and Attleborough

For more information please contact Mark Hambling on 01603 675611 or email mbh@rogers-norton.co.uk.