The Court of Appeal has looked at fatal accidents law twice recently making useful observations which can assist our understanding of the proper approach in two tricky areas.

In Rix v Paramount [2021] EWCA Civ 1172, on appeal by a Defendant, the Court revisited the proper approach to quantification in so-called “wealth creator” cases. This is another case where the Courts have had to grapple with where to draw the line between a compensatable loss of dependency based on income earned by a Deceased’s entrepreneurial acumen and hard work and a situation where no loss is proven as the dependants have inherited an income generating and/or valuable capital asset not reliant upon the Deceased’s continued work. The Court of Appeal dismissed an appeal against the trial judge’s determination that in that case. There was a loss of dependency as it was based on an income stream generated by the Deceased’s skill and dedication, not an asset which the dependants would inherit. This was not undermined by the business continuing to thrive after the Deceased’s death. The Court looks at the position on dependency as fixed as at the Deceased’s death and the success or failure of the business thereafter does not alter the loss. The Court observed that: “Post death events are irrelevant, save for those which affect the continuance of the dependency and the rise or fall in earnings to reflect the effects of inflation.” This confirms a previous line of cases including Wood v Bentall Simplex Limited [1992] PIQR 332 (CA), Cape Distribution v O’Loughlin [2001] EWCA Civ 178, and Williams v Welsh Ambulance [2008] EWCA Civ 81. In Rix, the Court of Appeal underlined that, “Income is only derived from capital if it is identifiable as having been received without the labour and services of the deceased. In short, it is passive. On the facts of this case, there was no identifiable element of the profits which was not touched by the management of Mr Rix.” The Court also recognised what had been observed in previous cases that, “there will be cases in which the valuation of the loss of dependency is greater than any financial loss sustained, that is what Parliament decided.”

Another recent appeal decision in Steve Hill Ltd v Witham [2021] EWCA Civ 1312 is a really valuable insight into an example of a rare situation where the Court will take into account events after the Deceased’s death in assessing the loss of dependency. This was even more unusual as it involved events taking place after the first instance trial and only before the Court because the Court of Appeal exercised the limited jurisdiction to allow a party to adduce fresh evidence on appeal. The trial judge had assessed and awarded damages for loss of dependency on the basis that the Deceased would have continued to look after the couple’s two foster children but the widowed Claimant had given up work to care for them in the light of his death. After the trial it transpired that the foster children no longer remained in the Claimant widow’s care and might never be returned to her, meaning that the whole basis for the dependency had altered. The Court of Appeal admitted the evidence relating to the local authority’s decision no longer to place the foster children with the Claimant. It applied observations of Smith LJ in Williams that, “The dependency is fixed at the moment of death; it is what the dependants would probably have received as benefit from the deceased, had the deceased not died. What decisions people make afterwards is irrelevant. The only post death events which are relevant are those which affect the continuance of the dependency (such as the death of a dependant before trial) and the rise (or fall) in earnings to reflect the effects of inflation.” Here the new evidence was directly relevant to the continuance of the dependency. As the children were no longer in the care of the claimant, the dependency could not be said to be continuing as the premise upon which it was based no longer existed.

The Court of Appeal remitted the case to the trial judge to reconsider the appropriate dependency award in the light of this development. Appeals against other factual findings made by the Judge were dismissed.