On 24 February, the Supreme Court decided that in fatal accident cases, multipliers for dependency loss claims (such as income and services) under the Fatal Accidents Act 1976 should be fixed from the date of trial rather than the date of death. This was the judgement in the case of Knauer v Ministry of Justice.

This sounds all rather uninteresting and technical, but it was seen as such an important decision that not only did the case "leapfrog" the Court of Appeal after the first instance decision in 2014, but a court comprising 7 Justices rather than the usual 5 sat to deliver a unanimous judgement.

The issues

The court was asked whether it was appropriate to depart from longstanding House of Lords authority in the form of Cookson v Knowles (1979) and Graham v Dodds (1983) and assess the multipliers from the date of trial rather than the date of death. That is what happens in non-fatal personal injury claims involving future loss claims, but not in fatalities. It is widely accepted that the approach in fatalities more often than not leads to lower damages.

There was a side issue whether it was appropriate for the court to depart from these earlier precedents, even if it thought they were wrong.

Factual background

Mrs Knauer worked as an administration assistant for the Ministry of Justice at Guy's Marsh prison. She was diagnosed as suffering from asbestos induced mesothelioma in March 2009. She died in August that year. Her husband and 3 sons claimed damages, including claims for income and services dependency (in the form of household, gardening and other domestic services).

Initially, liability was denied, but it was conceded in December 2013, and the matter came before the High Court for damages to be assessed in July 2014.

Multipliers and the historic legal backdrop

Multipliers for future losses are fixed in order to discount the number of future years for which there is a claim, on 2 bases:

  • The normal risks of life, ie would someone have died or become infirm earlier than anticipated even without the accident? (often referred to as the vicissitudes of life)
  • To reflect the fact that damages are being received earlier than the loss that they are replacing (accelerated receipt).

The cases of Cookson and Graham have been criticised in a number of cases, and in 1999 the Law Commission in its report Claims for Wrongful Death recommended that multipliers should be set from the date of trial.  Also in 1999, the Wells v Wells decision dictated that the Ogden actuarial tables should be used as a starting point for determining multipliers. Accordingly, fixing a multiplier in more recent years has been based upon solid actuarial evidence, rather than legal and judicial gut instinct.

The decision in Knauer

The court found that setting a multiplier at the date of death was illogical, unfair and in most cases lead to under compensating the families of those killed in accidents.

It had no hesitation in allowing a multiplier at the date of trial, rather than death.

When tasked with whether the court should unusually depart from prior House of Lords authorities, it again had no hesitation in doing so.

Comment

Mrs Knauer died at an age of only 46, and the income and service dependency claims were substantial, amounting to £522,719 at first instance – based upon multipliers applied at the date of death. It was agreed that using a multiplier at the date of trial increased those claims by £52,808, just over 10%.

Each case will be slightly different, but if this percentage increase applied broadly across all fatal accident claims involving dependency claims, that is a large sum collectively for Defendants and insurers..

Two things are certain: all existing fatal accident claims need reassessing for reserve, and future claims are likely to cost more.