In a consultation paper issued in July 2007 the Department for Constitutional Affairs invited comments on proposed changes to damages awards for:
- fatal accidents (in particular claims for wrongful death and bereavement awards)
- psychiatric illness
- collateral benefits (payments in kind)
- costs of private care
- accommodation expenses
- aggravated, exemplary and restitutionary damages
The Ministry of Justice (MOJ) has finally published its 70-page response to this consultation paper. This article summarises the main recommendations, which will be incorporated into the Civil Law Reform Bill, and highlights the possible effects on NHS Trusts.
The Ministry of Justice has made no recommendations for change in the way psychiatric damages, private care and accommodation expenses are assessed, indicating no consensus on the way forward could be distilled from the 103 responses received. However, the Civil Justice Council’s Serious Injury Committee will further examine the issues and problems associated with accommodation expenses and put forward recommendations in due course.
The main focus of the MOJ’s Response is on extending the categories of people eligible to claim under the Fatal Accidents Act 1976 as well as making changes to gratuitous care claims.
Wrongful Death (Dependency) Claims
Currently only a deceased’s spouse or co-habitee (who has lived with the deceased as equivalent to a spouse for at least two years), ascendants (i.e. parents, siblings, uncles/aunts) or descendents (children) can bring a dependency claim under the Fatal Accidents Act. The consultation paper proposed an additional category be added to include “any person being wholly or partly maintained by the deceased immediately before death,” and this has been supported by the Response subject to a two year qualifying period, which the Government hopes will rule out dependency claims of a very short duration. The Government has also confirmed children in utero or already conceived through IVF will not be affected and will be eligible to claim.
The proposals also recommend that “the fact but not the prospects, of remarriage/entry into a new civil partnership, or financially supportive cohabitation of at least two years duration” can be considered when assessing damages to prevent a potential double recovery, as can the “prospects of divorce, dissolution or breakdown” of a relationship. The defendant however may struggle to obtain evidence to advance such arguments without causing offence and distress to a claimant.
Whilst the Response confirms, “there is a need to keep the bereavement award within finite limits to avoid diluting the award to those who are closest linked to the deceased,” it has recommended extending the class of eligible beneficiaries to include:
- children under 18 for the death of a parent;
- cohabitants of at least two years duration for the death of a partner; and,
- unmarried fathers with parental responsibility for the death of a child under 18.
The Response rejected suggestions to allow brothers and sisters to claim as well as raising the age to children up to 21 or 25, preferring to keep the criteria in line with the age of majority.
The recommendations propose that the Bereavement Award, which currently stands at £11,800 for actions arising after 01.01.08, and £10,000 for actions prior to this should be subject to a regular three yearly increase in line with inflation.
The proposals also recommend a payment of £5,900 be awarded to each eligible child on the death of their parent, rather than splitting the bereavement award between them.
These two changes will therefore inevitably mean an increase in damages awarded. The Response suggests further consideration be given to the possible reduction of any award for contributory negligence and this will be considered as the draft Bill goes thorough the legislative process.
The consultation paper posed a number of questions in relation to specific benefits, which included: gratuitous care; pension and redundancy payments; insurance payments; and sick pay.
It was proposed that the requirement for claimants to place damages for gratuitous care in trust for the carer should be replaced with a personal obligation. Calls for gratuitous care to be made a legal obligation which could be paid directly to carers were rejected as it was considered too “rigid and a personal obligation would give greater flexibility” and the Government supports this position.
The Government does not propose making any changes to the law on pension and redundancy payments, or sick pay, specifically as to whether they should be disregarded in the assessment of damages. The Government did indicate it would prefer to disregard sick pay when assessing damages, but “given the lack of any consensus and the range of opposition,” they would not legislate on this issue at present.
It seems likely that it will be some time before any of the above proposals will come into effect. When and if they do, there will be an inevitable increase in damages awards. The Government’s own calculations suggest the costs of these reforms to the NHS will be a further £2,319,000 per annum in damages payments. Ultimately if the proposals reach the statute book the cost of claims will inevitably rise.