Bushra Bibi & Anor (Co-administrators) v Method Building & Engineering Works Ltd [06.03.15]

The Court of First Instance awarded interest on damages for bereavement at the full judgment rate of 8% per annum from the date of death until the date of judgment.

Implications 

Pursuant to section 48(2) of the High Court Ordinance (Cap. 4), the Court ought to award interest on damages for personal injuries or death which exceed HK$30,000 unless it is satisfied that there are special reasons why it should not do so. 

Here, Mr Justice Bharwaney awarded interest for bereavement at the full judgement rate of 8% per annum, as opposed to the usual rate of 2% per annum, from the date of death to the date of judgment. 

Following this decision, the Court also awarded interest for bereavement at the full judgment rate in Lee Wah v Lok Wai Wa [06.07.15] (see our separate case note discussing the implications of this case on claims for secondary victims). This approach will have the effect of increasing total damages in all fatal accident claims where a bereavement award is made, both in a medical negligence or personal injury setting. 

Background 

This was a fatal accident claim brought by co-administrators of the estate of the Deceased. Both liability and quantum were agreed between the parties out of court although when the case came before the Court of First Instance for approval of settlement and apportionment of damages, there remained a dispute between the parties as to the rate of interest payable on the award for bereavement. 

Since the statutory award for bereavement was enacted in 1986, Courts have awarded interest on bereavement at different rates at different times. From about 1986 to 1995, the Courts used to adopt the rate of 2% per annum on the basis that bereavement was a non-pecuniary award and ought to attract interest at the same rate as general damages; In about 1995, the Courts followed the UK decision in Khan v Duncan [1989] and adopted the full special investment account rate which stood at 12% per annum at the time; In 1998, the rate payable on suitor’s funds was adopted (the suitor’s funds rate stood at 7.79% per annum in 1998 and continued to drop over the years); Since 2002 and prior to this decision, in view of the decreasing suitor’s funds rate (which stood at 1.74% per annum in 2002 and fell as low as 0.33% per annum in 2010), the Courts had been adopting 2% per annum as the usual rate for interest on bereavement. 

Decision 

In this decision, Mr Justice Bharwaney made reference to the practice in England, where continuing past loss and expenses attract interest at half the special investment account rate, while both one-off past loss and expenses and bereavement attract interest at the full special investment account rate. On the ground that (i) one-off expenses such as funeral expenses attract interest at the full judgment rate; (ii) the governing principle in the award of damages for personal injuries or death is that interest is paid to a claimant for being kept out of money which ought to have been paid to him; and (iii) the entitlement to damages for bereavement accrues at the time of death, his Lordship awarded interest for bereavement at the full judgment rate at 8% per annum from the date of death to the date of judgment.