The Multiplier
In 2016, the case of Knauer v MOJ by the Supreme Court increased compensation following the unlawful killing of a person in an accident.
Increased Compensation Following a Fatal Accident
In a remarkable case in the in the Supreme Court before 7 Judges decided in January 2016, a small but important step forward was made to compensate those families who have lost a loved one following a fatal accident in a road traffic accident or fatal work accident. There are other tragic circumstances where this judgement will also help bereaved families. The judgement of the Supreme Court means that in one case involving the Widower whose wife died following exposure to asbestos dust, a condition known as mesothelioma at the age of 46 years, during the course of her work. The change in how the Court will assess compensation levels means that bereaved families will receive more compensation, in this case valued over £50,000.
Compensation for Fatal Accident Claims
So how did the law change the way it calculated compensation for fatal accidents? The starting point is that no amount of compensation can ever replace the death of a loved one following a wrongful death in a road traffic accident or fatal accident at work for instance. However the court has to start somewhere. Whilst there is a long way to go (despite this case) to provide justice to families, here the court restated the facts that compensation for a wrongful death, so far as possible, is to place the person who has been harmed by the wrongful act back into the same position he or she would have been had it not been for the harm.
As we are dealing with a fatal accident, the principle of the compensation in law is flawed. The law, in fact makes no award for compensation for the death of a person following a fatal accident if killed instantaneously. Whilst we would like to change the law this law is still stands.
So the law under the Fatal Accidents Act 1976 draws up rules as to who is financially dependent on the deceased and thus a only a limited number of family members can claim. Those who can claim for dependency will benefit from this case.
How the Judgement Increases the Compensation for a Fatal Accident
Going back many years under older Court make decisions called ‘legal precedents’ there were three important earlier decisions: White v ESAB Group (UK) Ltd [2002] PIQR Q6 where the Judges were forced to follow an older case adopted by the House of Lords (now called The Supreme Court) in Cookson v Knowles [1979] AC 556 and Graham v Dodds [1983] 1 WLR 808.
Those important older decisions ordered the lower courts (County Court and High Court) that when it was to made a compensation award for the death of a family member to the ‘dependants’ the future award for losses had to be calculated from the date of death not the date of the trial.
To explain, when a fatal accident claim solicitor calculates the ‘future compensation’ for the family, this will be based upon, say the deceased loss of earnings. Had the deceased not died and continued to work, he or she would have provided income for the family, the deceased dependants who are generally spouse & 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, that future loss can be for a life time, or at least until working age of say 70 – 75 years say. If that deceased died at an early age, say 45, that would mean a future loss of annual wages of some 25 – 30 years. The dependent can claim other losses in addition to any loss of wages. The issue then is how the courts calculate the future losses which can be 40 o r50 years into the future. See next.
Calculate Compensation for Further Losses in a Fatal Accident Claim
In the 3 older cases above, there was an very unscientific way to calculate the compensation for the future loss, it was almost as if the Judges stuck a finger in the air to assess where the wind blows and come up with a figure. However for the past 20 years or more the Courts have been provided with statistical information known as the “Ogden Tables” which can provide more precision on how to calculate future compensation awards.
The Ogden Tables take into account the age of the deceased at the time of death and calculate the possible life expectancy. Applying a discount to the future compensation award results in a compensation amount that is said not to over or under compensate the dependants. The Ogden Tables are still open to criticism from fatal accident solicitors and personal injury solicitors as the discount is considered too high (but that is another story).
Armed with this information the Judges were still bound by the older higher courts decisions that when a future compensation award is calculated for the death following a fatal accident claim, the future calculation for the dependants compensation lump sum was to start from the date of death not from the date of trial. What is meant was that in some cases, it can take several years from the date of the fatal accident to come to court and therefore the dependants were suffering a discount in the compensation amount as the future award was calculated back to the date of death. As no compensation was physically paid to the dependants until after the Court case, it meant that they received less money as the Ogden Tables applied the discount upon receipt of the compensation. The net result was that bereaved family dependants received less money for the future calculations by the courts.
Change in Compensation Claims is Welcomed
The Practice Statement (Judicial Precedent) [1966] 1 WLR 1234, is authority for a Court to depart from an earlier decision. The courts will always strive to create certainly in its decision and apply the law to the facts of the case as best as possible. However over time, the law may become too rigid to the extent that to apply it in a given case may result to injustice. The Judges in certain cases such as this where it is plane to see that the current law was outdated and unjust, can youse the Practice Statement to depart from its own decisions. The Supreme Court put it this way:
However, as Lord Bingham said in the same passage, while “former decisions of the House are normally binding … too rigid adherence to precedent may lead to injustice in a particular case and unduly restrict the development of the law”.
If, however the law is made by statute, that is made by the Government like the Fatal Accidents Acts 1976, whilst the Judges have to interpret the law, it cannot change it. Sometimes only the Government can change the law, the judges can only apply it but if there is room to manoeuvre, the Judges can use their skill and judgement to apply the facts to the case to achieve justice.
The Multiplier Used in Fatal Accident Claims
This involves the courts assessing the future award of compensation following a fatal accident claim. 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.
