In a shock move by the Lord Chancellor it was recently announced that the ‘discount rate’ that is applied to serious and fatal accident claims is to be decreased from 2.5% to 0.75%. The end result is that for further awards of compensation (that is money that is used to compensation victims for fatal accidents and serious non-fatal accidents) for a term in the future or a life time award will obtain more money.
Insurers argue the increase in compensation award for serious injuries and fatalities will cost the industry £6 Billion.
How the Discount Rate Works to Calculate Future Awards
In simple terms, when an award for compensation is made, it is designed to put the injured victim (or in a fatality) the victim’s estate and dependents back into the same financial position as they would have been had the accident not taken place. No more and no less.
Where, for instance in a life changing injuries or serious injuries case the employee can no longer work, it would mean that the injured victim would lose out on his/her wages for years to come up to the usual retirement age. See how this is calculated below:
To take a simple example, a man sustained serious non-fatal accident claims: say he was earning £20,000 net per year in wages and had 10 years working life left but the accident has put a stop to him ever working again.
What the court will do is not say that he would the worker will be entitled to 10 years x £20,000 and provide a lump sum award for his future of £200,000. The court and the non-fatal accident claim solicitors will have to ‘discount’ the £200,000 to reflect that if the worker was to receive compensation he would have had to work 10 years, but he is getting it immediately.
Thus if the worker invested £200,000 today, over a period of 10 years it is likely that £200,000 would be worth more due to interest and investment returns. Remember the worker cannot be ‘over -compensated.’ So a discount is applied depending on the age and how long the future award will last which has been applied by the courts for many years at 2.5%. So rather than received £200,000, the worker may only get say £185,000, a discount of £15,000.
But the assumption made by the court were back in the day where the UK Banks and investments had much better returned than they do today. This means the since the financial crash in in 2007 in particular the discount applied to future lump sum awards in non-fatal accident claims and fatal injuries where too much and therefore under-compensating the victim.
The new suggested discount rate has been reduced to reflect the reduced returns on investments and interest rates to as to re-balance the compensation award for victims of fatal accident claims.
Where a driver has caused a fatal accident claim and has no insurance a claim for compensation can still be made.
Despite the fact that the vehicle or driver is uninsured does not bar a claim for compensation providing that the accident has been reported to the police as soon as possible. Obviously due to the seriousness of a fatal collision this not usually a problem.
Assuming that the relevant reporting and requirements have been made a claim for fatal accident compensation can be made via the Motor Insurance Bureau.
What Happens Next?
Your fatal accident claim solicitors will investigate the claim in the usual way. The relevant steps would be:
Liaise the MIB regrading procedural aspects of the fatal accident claim
Reach a settlement for fatal injury compensation
Why the MIB?
The MIB was set up to compensate victims of road accidents where the cause of the accident was due to an uninsured driver or untraced driver. The MIB is known a fund of last resort so that the MIB will only step in if there is no other insured person liable in respect of the accident.
The MIB scheme is not limited to fatal injury, it also covers general personal injury and losses.
Untraced drivers are also covered, ‘hit and run’ claim.
Claim for Uninsured Fatal Accidents/Personal Injury?
Anyone considering make a claim for a fatal accident or personal injury against either:
In this blog by the fatal accident solicitors we come to mention the unjust award of compensation in England & Wales when a person loses his or her life following a fatal accident.
Most fatal injury claim arise due to motor accidents for fatal injury at work claims.
In some detail we have discussed the inadequacies of the Fatal Accident Act 1976 to compensation close family members who lose a loved on following an untimely death to the negligence of another or due to an act of violence.
Value of Life?
The value of life ranges from what most members of the public consider a human being is worth, that is ‘priceless’ and from the law’s point of view ‘value-less.’
The compensation for a loss of life in a fatal accident if death occurs instantly is £NOTHING. However if the victim suffers some pain then some compensation is payable. The amounts are once again derisory and unfair.
Thus in when considering fatal accident claims on decided cases in the past, the following compensation is awarded where:
If the victim is fully aware of pending death, suffers severe burns and lung damage, fluctuating levels of consciousness between 4-5 weeks, the compensation to the victims estate is worth in the region of £14,000 to £18,000.
The price of an average SUV motor vehicle.
Its not enough but that is what we are faced with at the moment as the law currently stands. However there are many other aspects to making additional compensation payments for dependents of the deceased and a bereavement award.
If the Council fails to re-install a missing road sign warning for road users that there is a sharp bend ahead, for example, will that mean that the Council can be held to blame in whole or in part for a fatal road accident claim or indeed any road traffic accident involving a vehicle, lorry or bike?
When we refer to an accident it can mean where injuries are from minor, to serious or fatal injury claims.
A claim of this kind can be challenging because it is not merely enough to show that there were some problems with the road but that they were causative of the accident. Ordinarily where a vehicle leaves the road without the intervention of another party and without an obvious alternative cause, the presumption will be that it is the driver’s fault. There will therefore be a heavy practical burden upon a claimant seeking to prove that there were alternative factors allowing legal blame to lie elsewhere.
Gorringe v. Calderdale MBC  UKHL 15 (a decision of the House of Lords and thus unbreakable authority) holds that a local authority has no duty of care under the Highways Act or at common law for omission to provide a road sign. The House of Lords firmly stated that it was the road user’s responsibility to travel at an appropriate speed. I should note that even if there was a duty to provide or ensure for warning signs, the allegation would be problematic in terms of causation ie. whether the lack of warning chevron made a difference.
No Claim for a Fatal Road Accident Therefore?
That would appear to be the general view as the law stands today. However, every case will be dependent upon its own particular facts so it is still important that you obtain legal advice in the circumstances.
Generally it is relatively easy to calculate the compensation awards to dependants of the deceased prior to trial or settlement of the claim. This is because what has happened in the past can be evaluated with precision. There is no assumptions or what ifs?
Some complex calculations for fatal accident compensation which arise when the claims comes to be settled can give rise to uncertainty.
Some examples where uncertainly will arise and difficult questions have to be determined by the Courts and the solicitors acting in the compensation claim for a fatal accident:
The deceased had recently started his own business (so there is no past record on how well the business would have done).
The deceased was only 16 years old so there is little work experience or examination results to establish a clear future career path.
The deceased was destined to be a sporting great…but for the fatal accident.
There are many other examples where a future calculation for possible fatal accident compensation awards can give rise to difficult assessments and calculations. The fatal accident compensation solicitor will have to consider all the evidence and present the best possible case to the Courts. Once this evidence has been produced the Solicitors dealing with the fatal injury claim will then use what is called ‘The Ogden Tables‘ to consider the future calculation of compensation awarded.
Calculation of Future Fatal Accident Compensation – Ogden Tables
The Ogden Tables are designed not by solicitors as such but by accountants or actuaries who use various data such as age, discounts rates, life tables etc to establish how much a lump sum compensation award for a fatal accident would be worth if the dependent a received all the money ‘today’ at once rather than over a period of years had the deceased lived. This is important as the dependants of the deceased should not be ‘over-compensated’ and importantly ‘under-compensated.’
So if, say, the dependants of the deceased had a future award of compensation for a fatal accident of a loved one assessed at £100,000 and that amount is the equivalent of say 10 years future award. If the dependant received £100,000 today rather than over a period of 10 years, the law of compensation (the Defendant insurance company) would be up in arms as the dependants would have been over-compensated. Why? Fatal accident solicitors call this ‘accelerated payment’ the dependants have received all the money in advance in one lump sum rather than over the 10 year period. Therefore that £100,000 could be invested in stock and shares or put in a bank account gaining interest and any investment returns would result in an additional award to the dependants which is prohibited i.e. the dependants have been over-compensated.
Therefore what the courts will do is apply a discount to the compensation so that the dependants are not over-compensated. Therefore rather than receive £100,000 today, the compensation will be reduced by a complex calculation so that the award may be £95,000 or £90,000 and so on. The longer the award in years terms into the future, the greater the compensation discount.
The actual scheme and philosophy of making dependants of the deceased who receive compensation for a fatal accident claim has been under attack by many fatal accident solicitors and personal injury practitioners well before the stock-market crash of 2007. This is because the dependants or the injured victim is forced to invest the compensation in stock and shares or if the dependants or injured victim are more risk adverse, to keep the compensation in a bank account.
However, as all savers are aware, the interest on bank accounts are quite pitiful and in some cases we here are of negative benefit. The compensation award is there for a purpose and should not be put at risk in stocks and shares. Further the discount applied to the future awards are still very high meaning that in real terms the compensation for fatal accident claims and personal injury claims are consistently over many years under valued. The fault of the to Government once again slow to react help victims but quick to protect insurance companies.
It may be hard to comprehend but it was not until 1846 that the law recognised that close family members could make a claim if a loved one had died due to the negligence of another person.
That the Fatal Accidents Act 1976, is law passed by the Government that is outdated and unfair to the bereaved families and to the Deceased.
It is hard to comprehend that the value of life in England and Wales can be worth absolutely £NOTHING if killed in a road accident or at work.
It’s time the law is changed to stop the injustice. Please sign our Government online E-Petition to change the law for Bereavement awards and the Fatal Accidents Act 1976 to help innocent victims.
Fatal Accidents Act 1976 & Bereavement Award
The Fatal Accidents Act 1846 was passed and over a period of time there are now two main statutes that govern fatal accident claims.
Under the Fatal Accidents Act 1976, compensation claim is for the benefit of the dependents of the deceased and those who are entitled to a bereavement award. Those limited amount of family members that can claim has been extended to include a Civil Partnership of the deceased. Further the definition of a “wife or husband” has been expanded to include any person (not being a child of the deceased) if that child was treated by the deceased as a child of the family.
What can be claimed under the Fatal Accidents Act 1976?
The Law Reform (Miscellaneous Provisions) Act 1934
Here the law is for the benefit of the Deceased’s estate. That is, what the deceased could have claimed had he or she had not unfortunately died.
Did the Deceased Leave A Will?
The deceased’s “estate” is the value of what the Deceased owned at the time of death including taking into account any debts. As fatal accident solicitors we are often asked who can represent the estate of the deceased? Usually this is the same person(s) under the Fatal Accidents Act 1976. The first thing fatal accident solicitors will ask is whether the deceased left a will, if so, then the person(s) named in the Will have authority to look after the affairs of the deceased, that person(s) is/are called the “Executor” (if male) or “Executrix” (if female). Once this has been established, the fatal accident claim solicitors will then apply to the local Probate Court with the necessary documents including the Will to confirm officially that the person(s) named in the Will have authority to instruct the fatal accident solicitors to pursue the fatal compensation claim.
Deceased Left No Will – Died Intestate
If there is no Will, the deceased is said to have died “intestate” which means there is a strict line of close family members who have authority to claim. Thus, in most cases, if the husband is killed, then the wife will be next entitled; if there is no wife then the children will be next entitled and so on. Once it is established who is entitled to claim on behalf of the deceased, the documents will be lodged at the Probate Court so that the necessary legal documents can be obtained to authorise instruction of the fatal claim solicitors to pursue the action. This person is called the administrator.
It must be remembered that an executor or executrix named in a will has authority to instruct a fatal accident lawyer immediately upon the death of the deceased. However without a Will, the person entitled is called the administrator and has no authority to sue until a grant of administration by the court has been obtained.
What can be claimed under the 1934 Act?
• Compensation for pain, suffering and loss: suffered by the Deceased before death. Thus if the death was instantaneous, surprisingly there is no compensation payable. An insult to bereaved families to think that such a fatal blow to the deceased to kill him or her instantly deserved no compensation at all is frankly a joke in our respectful view. Likewise, if prior to death the deceased was in a “coma” there may be no compensation as the deceased did not experience any “pain or suffering”. Difficult to take in but that is the law for now.
“An insult to bereaved families to think that such a fatal blow to the deceased to kill him or her instantly deserved no compensation at all is frankly a unjust, in our respectful view.”
It is Cheap to Kill
Unfortunately as alluded to above, the Fatal Accident Act 1976 and the 1934 Act (which is law made by the Government not Judges) does not provide for any compensation for the unlawful taking of a life. Thus the life of a child, husband, wife, brother, sister, partner, grandad, ‘nanny’ in England and Wales is ‘worthless.’
How can that be? The Fatal Accidents Act 1976 is:
But if it can be established that before death a loved one suffered from pain and mental anguish, the Courts may award some pitiful compensation for the suffering. Here, the fatal accident claim solicitor will have to discuss with the bereaved family if they want to claim compensation, that a medical expert will be needed to review the hospital records of their loved one to prove the hurt and pain. The greater the suffering the greater compensation. But this is not a discussion by the solicitor and bereaved family that can be taken lightly, it is a very sensitive area.
If child loses a parent(s), no bereavement award is paid, it is not right, not just and cruel
In a Coroner’s Court where experts may be called to confirm the cause of death, the Coroner may leave out the amount of pain and suffering the deceased endured before death so as not to unnecessarily distress the surviving family members. But the family has a right to know if they wish to to make an enqury. Once again to make a claim for compensation under the Fatal Accidents Act 1976 the family have to be forced to hear how their loved one suffered before death. An unnecessary torture for the bereaved family.
Below are some examples of ‘pre-death‘ pain and suffering where fatal accident compensation has been awarded or not as the case may be.
Crushed to Death – Court Valuation £NOTHING
In a disappointing case to say the least, a Hillsborough disaster case called Hicks v Chief Constable of South Yorkshire Police 1992, the trial judge was of the view that because, according to experts, being crushed to death only took a matter of seconds (lost of consciousness followed by dying shortly afterwards) there was no evidence of injury prior to the fatal crushing injury and no pre-death pain and suffering. As a result no award of fatal injury compensation. Indeed, the barrister representing the parents of Sarah and Victoria Hicks had the Claimant’s evidence rejected by the Court. The Judge referred to the barrister’s submission before in the lower court in these terms:
The Highest Court in England and Wales rejected that there could have been this build up of pressure causing increased breathlessness over a period of time. The Judge decided to award nothing.
This is what one top judge said about why no compensation is payable:
Lord Templeman whilst appreciating that the being crushed to death was no doubt terrifying for those that died on that fateful day was persuaded not to order payment of any compensation:
‘…fear of impending death felt by the victim of a fatal injury before that injury is inflicted cannot by itself give rise to a cause of act…’
In layman’s terms, under the 1934 Act and the Fatal Accidents Actc 1976, the fear of impending death and death itself does not give rise to any compensation for the loss of life. The Goverment makes the law and as such there is no power by the Courts in England and Wales make an award. If death is instantaneous or almost instantaneous as in the tragic fatal crushings at Hillsborough, no compensation is payable (that is even if liability or blame could have been established).
In order for there to by any compensation ‘fear alone’ is not enough. The victim has to experience pain and suffering before death. For the bereaved families who will have to hear this evidence, to be worthwhile to claim compensation it probably has to me more than a few days and weeks. This is because the Court’s valuation for the fatal injury (which is unjust in any event) will be further reduced by solicitors costs and court fees. Both the Courts and the Government have ruled recently that such costs must now be deducted from bereaved families and not paid by the insurance company. Where is the Justice? Look at more examples below where compensation for pre-death pain and suffering is not worth much, in our respectful view.
A Parent(s) will receive a bereavement award if a child is unlawfully killed if under 18 years but £NOTHING if the child is over 18 years. Why? It is unjust, does not make any sense. The law needs to be changed. Do it now and sign our Bereavement E-Petition
£3,500 Late Diagnosis of Cancer
Where there is pre-death pain and suffering, the compensation under the Fatal Accidents Act 1976 is an insult. Thus in the case of Kadir v Mistry a case decided in 2014 the NHS failed to spot early stomach cancer in a young woman with four young children. Regrettably she died a few months after diagnosis. Her solicitors in this medical negligence case had to obtain evidence of her ‘mental anguish‘ and torment about how she felt about discovering the misdiagnosis. The award of compensation? A misley £3,500.
Due to cut backs by the Conservative Gonverment in April 2013, today, the bereaved family may lose 25% of the compensation to the fatal injury solicitors. In addition, in a recent case called Mosson v Spousal 2015, the costs of obtaining “Probate” that is the legal work to proved that the family member(s) has authority to act on behalf of the Deceased to claim compensation, will have to further pay out of any award of compensation for the deceased (remember the pain and unimaginable mental anguish before death) the costs of the court fees and probate document. Therefore, the fatal accident solicitor will have to think carefully with the family to decide whether it is worth putting the family though all of this anguish for the paltry sums on offer for the fatal injury compensation by the Courts in England and Wales.
Another insulting example to bereaved families following the loss a loved one following an unlawful killing due to a fatal accident or criminal activity. In the case of Brown v Hamid, decided by the Courts in 2013, where a medical specialist failed to diagnose ‘pulmonary hypertension’ correctly which resulted in the deceased dying 12 months quicker. Life curtained by 12 months worth £8,500. Again take out fatal injury solicitors costs and probate court fees you are not left with much at all.
Losses/expenses as a result of the death payable to the estate. This will include cost of care, medical expenses, aid & appliances used to help care for the deceased between the fatal accident and death.
Funeral expenses (if paid by the Deceased’s estate)
The Fatal Accidents Act 1976
Therefore the main difference between the Fatal Accidents At 1976 and the 1934 Act is the former applies for the benefit of the close family members ‘dependants’ that does not form part of the deceased estate. Thus under the Fatal Accidents Act 1976, only the dependents can claim for the bereavement award and dependency. But under the Fatal Accidents Act 1976 Act and the 1934 Act, both have provision to recover funeral expenses. If there is a duplication of recoverability, only one claim can be made however.
The Fatal Accidents Act 1976 has been described as an ‘oddity’ and the fatal injury solicitor refer to a quote below that has been recently reported in the case of Mosson v Spousal at paragraph 76 of the Judgement.
Please contact us if you have any questions either if you are a dependant, close family member or even a friend who is worried about the bereaved family and want to help. We will always be here to help you under our No Win, No Fee, Solicitorr Service.
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