When a fatal accident claim solicitor calculates the ‘future compensation’ for the family, this will be based upon, say, the deceased’s loss of earnings. Had the deceased not died and continued to work, he or she would have provided income for the family, the deceased’s dependents, who are generally the spouse and children. So when that income stops coming into the household, there is that loss to the dependants from the date of death until when they cease to become a dependant upon the deceased.
Every case will be decided on its own facts, but if a spouse was dependent upon the deceased, the future loss can be for a lifetime, or at least until working age, say 70-75 years. If that deceased died at an early age, say 45, that would mean a future loss of annual wages over some 25-30 years. The dependent can claim other losses in addition to any wage loss. The issue, then, is how the courts calculate future losses, which can extend 40 or 50 years into the future.
Calculating Compensation for Further Losses
Nowadays, courts generally use statistical information known as the ‘Ogden Tables,’ which can provide greater precision in calculating future compensation awards. The Ogden Tables account for the age of the deceased at death and estimate life expectancy. Applying a discount to the future compensation award results in a compensation amount that is said not to overcompensate or undercompensate the dependents. The Ogden Tables are still open to criticism from fatal accident solicitors and personal injury solicitors, as the discount is considered too high.
The Multiplicand and Multiplier
The multiplicand is an arithmetical exercise that determines the annual financial loss resulting from the loss of dependency due to a fatal accident. There are three ways to calculate this figure:
- Add each item of expenditure by the deceased on the dependants to provide a net figure
- Assess the deceased’s net income and deduct their estimated expenditure on themselves – don’t forget to factor in fringe benefits, such as a company car or free accommodation provided by their employer
- Deduct a percentage from the deceased’s income to represent what they would exclusively spend on themselves – the courts are favouring this method
Other losses in a fatal accident claim include a loss of pension, gratuitous services and fringe benefits, among others. They are recoverable provided there was a realistic expectation of the benefit, regardless of whether 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, they would have returned to work in the future.
The multiplier involves the courts assessing the future award of compensation following a fatal accident claim. It is usually easy to calculate losses up to the date of the fatal accident, but less precise when assessing future losses. It depends on factors such as life expectancy, age, occupation type, and benefit acceleration. Actuarial figures are used to aid the court in calculating an award for future losses.
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 lost from death to trial – multiplicand = special damages
- Stage 2 – overall multiplier (less number of years lost from death to trial) – multiplier = general damages
Well v Wells and others [1998] 3 All ER 481 HL should be considered when assessing multipliers. In Worrall v Powergen PLC QBD, it was held that, when using the Ogden Tables, multipliers should be based on the projected mortality tables rather than the historical tables – potentially increasing the quantum.
