Fatal Accident Claim Assessments
Simply put, compensation following a fatal accident can be brought by the “estate” of the deceased and the dependants of the deceased. Often these groups of people are the same, that is the Wife, husband, children and/or parents of the deceased.
A Claim on Behalf of The Estate of the Deceased
The “estate” of the deceased are those persons (usually close family members) who would be entitiled to the deceased’s assets on death. The law governs entitlement by reference to the wishes in the deceased Will or if there is no will, on the rules of intestacy or what is commonly known as “next of kin.”
The “estate” can claim the following compensation in the event of a fatal accident:
· financial loss suffered before death, including cost of voluntary care of wife’s services
· pain and suffering of the deceased
· funeral expenses.
Damages for loss of expectation of life was abolished by s1 of the Administration of Justice Act 1982. Section 4 of the Act amends the 1934 Act so as to exclude the survival of any damages for loss of earnings during the lost years for the benefit of the estate. Where death is instantaneous following a fatal accident, there will be no award for pain and suffering.
Below are three cases which list the award of compensation for the deceased “estate” where death was not instantaneous:
Robertson v Lestrange [1985] 1 All ER 950, 4 days = £150;
Lawrence v John Laing [1982] CLY 880, 2.5 days after 90% burns = £200;
Prior v Hastie [1987] CYL 1219, 11 weeks suffering from a malignant peritoneal Mesothelioma £7000.
The damages payable to the estate, which then pass onto the dependants as beneficiaries are not deducted from the FAA claim.
The Fatal Accident Act 1976 (Dependancy Claim)
This provides an independent cause of action for near relatives of the deceased who have been deprived of his support and services. It is a claim for damages not for the deceased himself but for his family after death. As one judge put it:
It is not a claim which the deceased could have pursued in his own lifetime because it is for damages suffered not by himself, but by his family after death.”
To be awarded compensation following a fatal accident the dependants would have to show that had the deceased survived from his injuries, he would have been able to recover compensation in his own right. If his claim would have inevitably failed due to limitation problems then no claim can be found. Any damages awarded is subject to reduction for contributory negligence. If the death of the deceased was caused by the negligence of one of his dependants, that negligence does not affect the claims of the other dependants, Dodds v Dodds [1978] QB 543.
Bereavement Award
Only the wife or husband of the deceased, and, where the deceased was a minor (under the age of 18 years) who was never married, for the benefit of his parents, if he was legitimate and of his mother if he was illegitimate. Award has increased from £3,500 to £7,500 after 1 April 1991 and from 1 April 2002 £10,000. Interest can also be claimed in respect of a fatal accident case on the award running from the date of death.
The Three Stage Test of a Fatal Accident Award
Assessment of a fatal accident award can be very complicated which is why you should always instruct a specialist fatal accident solicitor.
The assessment, simply put is a 3 stage test:
1 establish the earnings of the deceased, less living expenses – this gives what the court’s the annual dependency or what is called the “multiplicand”;
2 the multiplicand is then multiplied by the number of years purchase, the “multiplier”;
3 the resultant figure is then subject to the element of reasonable future probability which is reflected in the multiplier in 2 above.
The Award of Compensation to Dependants
The Court’s will look at the purpose of the award of compensation to the dependants following a fatal accident and ensure that they will not be financially worse off. To demonstrate the point, a judge considered the quantum of damages in a fatal accident case:
“The purpose of an award of damages under the Fatal Accidents Act is to provide the widow and other dependants of the deceased with a capital sum, which, with prudent management, will be sufficient to supply them with material benefits of the same standards and duration as would have been provided for them out of the earnings of the deceased had he not been killed by the tortious act of the defendant, credit be given for the value of any material benefits which will accrue to them…”
The capital sum (similar to an award for lost future earnings) will not remain intact as it will be used up over the relevant period. The dependant will be withdrawing income and capital from the fund.
The Multiplicand
This is valuing the dependency following a fatal accident, the multiplicand, which is an arithmetical exercise. There are 3 ways to calculate this figure;
1 Add each item of expenditure by the deceased on the dependants to provide a net figure;
2 Assess the deceased net income and deduct his estimated expenditure on himself. Do not forget to add into the calculation fringe benefits such as a company car or free accommodation provided by his employers;
3 To deduct a percentage from the deceased income to represent what he would exclusively spend on himself. The court’s are favouring this method.
In a husband and wife situation 1/3 is the usual deduction. The rationale was that one-third would be for the benefit of each and the remaining third would be for their joint benefit. Clothing is an example of a several benefit, rent an example of joint benefit. No deduction is made for a joint benefit because one cannot drive half a car! Where there are children the deduction is reduced to 25% .
However in one fatal accident case, the conventional percentage may be unsuitable if the wife had been earning a considerable sum herself before her husband’s death.
The fact that a deceased widow would have given up work to start a family but for the deceased death, will not increase her dependency on the deceased from the date when she would have given up work.
Other losses in a fatal accident claim, include a loss of pension, gratuitous services and fringe benefits, amounts others. They are recoverable provided that there was a realistic expectation of the benefit, regardless of whether or not it was previously enjoyed. Thus a separated spouse must show a significant prospect of reconciliation; if the deceased was not working at the time of death, he would have returned to work in the future.
State Benefits
Benefits paid to the deceased must be considered in the context as to whether the dependent has suffered loss. No loss was suffered in Cox v Hockenhull (1999) The Times 17 June 17 CA. There is no recoupment of benefits. Benefits accruing as a result of death following a fatal accident claim, eg, insurance policies or inherited money, shall be disregarded s 4 FAA.
Settling a claim against one defendant following a fatal accident, before death was a bar to fatal accident claim against another defendant Jamesson v CEGB [1999] PIQR.
The Multiplier
This involves the courts assessing the future award of compensation following a fatal accident. It is usually easy to calculate the losses to the date of the fatal accident but it is a less precise computation when assessing a future loss.
It depends on life expectancy, age, type of occupation, acceleration of benefit etc. Actuarial figures are used to aid the court on how to calculate an award for future losses following a fatal accident.
The calculation of a fatal accident award is on the basis of an overall multiplier which is applied from the date of death. If, for example, it takes 4 years to get to trial where the multiplier is 16, then the pre-trial multiplier will be 4 and the post-trial multiplier will be 12.
Alternatively;
Stage 1 – actual number of years loss from death to trial * multiplicand = special damages;
Stage 2 – overall multiplier (less number of years loss from death to trial) * multiplier = general damages; see Graham v Dodds [1993] 2 All ER 853.
Well v Wells and others [1998] 3 All ER 481 HL should be considered when assessing multipliers. In Worrall v Powergen PLC QBD when using the Ogden Tables, it was held that multipliers should be based on the projected mortality Tables and not the historical Tables – potentially increasing quantum.
Death of a Wife/Mother
Most of the above has concentrated on the principal breadwinner of the dependants following a fatal accident claim. The wife is normally a second source of income for the family, so this loss of income must be taken into account and more importantly, the loss of services the wife has gratuitously rendered the family.
The husband’s claim for dependency following a fatal accident is similar to the wife, in that an annual net money loss is calculated, taking into account the wife’s earnings and the cost of employing a housekeeper or other helper. This would include a sum, if necessary for any board and lodgings, additional school costs, etc. The next stage is to deduct any pecuniary gain that the husband might receive as a result of her death, such as those costs necessary in supporting his wife. The final stage is then to apply the multiplier.
However, the services of a mother to her children cannot simply be compensated by the employment of a housekeeper, a leading legal acedemic states:
“It may be argued that the benefit of the mother’s personal attention to a child’s upbringing, morals, education and psychology, which the services of a housekeeper, nurse or governess could never provide has, in the long run, a financial value for the child difficult as it is to assess.”
This statement has been approved in court in a fatal accident claim where it was said that the wife does not work fixed hours, she is on call constantly. The judge raised the value of the wife’s services from £12.50 to £20.00 per week (this was an old case decided in 1976). Guidance on the assessment of a mother’s services to a young infant can be found in the Court of Appeal’s decision 1988. In this fatal accident case a three year old girl was awarded £25,000 for the loss of her mother’s services following a fatal road traffic accident in 1979. Today this award willbe significantly higher.
In 1988 a Judge awarded a 12.5 year old child at the time of the accident £22,500 pa with a mulitplier of 5 a total of £112,500. A significant increase in the court’s award compared with the previous fatal accident cases at the time but one which appears to be the current trend.
The Depedency Claim
The court following a fatal accident claim agreed that the child was dependent on the her mother’s income and in once case awarded £5074 pa with a multiplier of 7 = £35,520). It is the damage to the dependent herself resulting from the death which must be assessed for which damages are to be awarded and not to anyone else. The judge dismissed the defendant’s argument in the fatal accident claim, that the a discount should be made since the husband was better off as a result of his wife’s death as he did not have to support two households. The child had a dependency of 57.5% of the joint family purse. The father’s contribution continued following the fatal accident of his wife, she was entitled to be compensated for that part which originated from her mother and has ceased. To the extent that her father has made good the loss caused by the death of the mother, it was a benefit which had to be disregarded.
The services Dependency
The child’s loss following a fatal accident of the mother, was to be measured by the loss of earnings incurred on behalf of the husband’s partner or a commercial cost of employing a housekeeper, which was assessed by a child expert. Damages under the Fatal Accidents Act is to be treated as a jury question. The judge considered that the jury in a fatal accident claim, would not assess damages on the basis that the commercial cost of employing a housekeeper had been incurred but they would “have had an eye to” to the cost.
If a husband gave up work to look after the children following the fatal accident of his wife, the value of the mother’s services may be that of the lost wage of the husband, (where the husband’s wage was greater than the cost of employing a housekeeper) or in the case of Bailey v Barking & Havering Area HA [1979] Law Society Gazette, the actual loss which the husband incurred, (where his wage was less than the cost of employing a housekeeper).
Parents
Parents who lose an adult child in a fatal accident who has contributed to the maintenance of his parents is relatively easy to calculate especially if the contribution was for a regular sum. When calculating the multiplier, the principal factor is the expected remarriage of the child. The rationale is that on remarriage the contribution will cease or be reduced.
For an infant child, in a fatal accident case, there might be a prospective loss to found a claim for parents, the expectation of which is an inference of fact; the parents of an infant child in a fatal accident claim do have a claim for bereavement.
Dependant Children
Claims for the death of their parent(s) following a fatal accident will usually be assessed with the surviving parent’s claim but there can be occasions where separate assessments of the child’s claim is desirable. As the fact of remarriage does not appear to be relevant consideration .
Apportionment Between Dependants
There is no authority for apportionment in a fatal accident claim. In widow’s claims the award is a greater part of the total compensation on the assumption that she will maintain the children as long as they are dependent and to award comparatively small sums to the children themselves. Usually a younger child is awarded more than the older child because the period of expected dependency is greater.
The court will also take into account in a fatal accident claim, the fact that deceased parents, but for their death, may have had further children thereby reducing the amount apportioned to the existing dependants at the time of death.
In a fatal accident claim the court calculated the loss of dependency on different assessments but all came up with a figure which was virtually identical. The principles will be applied but there is no rule-of-thumb as to the correct methods to adopt.
In Standard of Proof of Dependency
In a fatal accident claim decided in 1996, a wife and the deceased’s mother where jointly sued. Their son was educationally disadvantaged who was living with them and, it was argued, would have contributed to the household through his wages. At first instance, the trial judge held that they were not dependant on the son at the time of death and it was conjecture as to what would have happened in the future. However on appeal, the dependant(s) would be required to show that there was a substantial rather than a speculative possibility of maintenance. There was a real prospect that the son would have moved in, and a lump sum of £5000 was awarded.
Practical Advice on a Fatal Accident Case
1 Investigate all losses, including pension entitlements, benefits and lost earnings.
2 Attend any inquest
3 All dependants must be included and come forward to claim a fatal accident award
4 Assess if the deceased left a will. You need to find out whether the PRs have been appointed. PRs will bring actions on behalf of the estate and dependant together.
5 If administrators are appointed, your solicitors in a fatal accident case need to wait until the letters of administration are approved. An action commenced before this is a nullity
6 Cost of attending the inquest and obtaining the grant of probate or letters of administration are recoverable from the defendant in a fatal accident case.
7 A dependant may bring an action if there is no PR or if the PR does not bring an action within 6 months (Fatal Accident Act s 2(2))
8 Apportionment of damages with the dependants following a fatal accident, can be done by agreement between them, unless there are dependant children under 18 when court approval will be needed. Apportionment to children will be governed by the level of maintenance costs required and providing a lump sum for the child at the age of 18. It may be necessary to protect the children by seeking a higher apportionment than is usually the case.
Lost Years
This is where a living claimant following a serious injury (or a “fatal accident” that was not instantaneous) has had his life shortened by injuries and who seeks damages for the pecuniary benefit he would have received during the span of life of which he has been deprived – the “lost years.” This is valid claim Pickett v British Rail Engineering [1980] AC (HL).
There may be injustice to the defendant where compensation may have to be paid twice to beneficiaries of the deceased estate whose claim do not coincide with the dependants claim under the LRMPA and FAA. The claim for lost years under the former Act was abolished under s 4(2) of the Administration of Justice Act 1982 in the case of deaths after 31 December 1982.
A lost years claim under following a fatal accident is mainly in relation to loss of earnings but it can extend to any pecuniary loss providing it is not too remote.
Assessment
The principle laid down is that the claim should be assessed after deduction of the estimated sum to represent the victim’s probable living expenses following a fatal accident, during the lost years, but it gave little guidance.
There were differing assessments by the courts when calculating the lost years since the two leading authorities, but guidance was provided by the CA in a combined judgement in Harris v Empress Motors Ltd and Cole v Crown Poultry Packers Ltd [1984] 1 WLR 212.
The general principle is in 3 stages;
1 assess the living expenses of the deceased, (the ingredients of the expenses are the same if the victim is old, young, single or married);
2 the sum to be deducted as living expenses is the proportion of the victim’s net earnings that he spends to maintain himself at the standard of life appropriate to his case;
3 any sums expended to maintain or benefit others do not form part of the victim’s living expenses and are not to be deducted from the net earnings.
The assessment is similar to the calculation under the FAA. However, where there is a shared benefit eg. rent, utility bills, television licence or running a car, which are undoubtedly living expenses a deduction will be made referable to each persons share. Thus the victim’s living expenses shall be deducted save that sums expended for the joint benefit of the victim and others should only be regarded as the victim’s living expenses to the extent of his share of the joint expenditure.
Under a Fatal Aaccident claim no deduction is made for the shared living expenses as one cannot drive half a car or live in half a house as the person is dependant on the whole benefit. In contrast, the whole cost of the shared expenses should not be deductible from the victim’s living expenses as this in incompatible with the third principle, above.
As the number of persons provided for out of the victim’s net earnings increase, so must the amount to be allocated as being his share of those items fall. Thus in a fatal accident claim, a household of four will result in one-quarter of the cost of joint items to be deducted. In practice the total deductions may not be that much greater than a dependency claim under the Fatal Accident Act but by way of a general observation, the proportion will be greater than the percentage under the Fatal Accident Act dependency claim. One-third is usually deducted in a fatal accident claim in a husband and wife case and one-quarter if there are children, (typical husband and wife with two children).
Some Examples
Married man with no children
Fatal Accident Act dependency would be about 66% of net earnings, including, 33% for joint expenditure, (33% spent exclusively on each other and 33% on joint expenditure). For a lost years claim, deduct half the value of joint expenditure (say 16%) will provide estimated living expenses circa 50% (66% - 16%).
Married man with two children
Fatal Accident Act dependency claim is 75% of net earnings or put it in another way, deductions represent 25% of net earnings where children are involved. The items of joint expenditure such as rent and utility bills would not significantly increase with the family unit and therefore will remain at about 33% of net earnings.
For a lost years claim, one-quarter (ie family of four) of the joint expenditure is to be added to living expenses solely attributable to the victim, say 8%. The resulting deduction for living expenses would be 25% + 8% ie 33% off the net earnings.
Married man with four children plus
Add two or more children and the victims share of the joint expenses will be reduced pro rata.
Young single man
Under a Fatal Accident Act claim, if living at home with his parents 33% deduction of net earnings. If he gets a flat of his own, it will be a 25% . When he marries, it will increase to 50% since one-half of the joint expenditure will not count as part of his living expenses. As the family increases, the available surplus will increase pro rata. A young unmarried victim at the date of trial or death will not normally be treated as an eternally single man.
Very young victim
A fatal accidenet claim for loss of earnings for the lost years is so far distant and so speculative that no award under this head may be awarded, except, unless the victim is a child star cut off in his prime.
Recent Fatal Accident Case Decided 2001
The Claimant made a claim under the Fatal Accident Act. She was able to claim the a loss for her deceased husband’s “flair” and business acumen in property investments. He died of asbestos related disease at the age of 50. The Claimant, in fact suffered no actual loss, but she tried to run the business. The Court of Appeal decided that there was a loss for his service, as she would have had to employ a manager to run the business valued at about£23k pa. The court approved dependency of 75% for past loss, 72% for future loss and an agreed multiplier of 6.92%. Whilst they considered it was an unusual calculation in a fatal accident claim, the question of damages was a jury question, to try to be fair where the quantum of damages was not precise.
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