The Supreme Court decided that, when damages are assessed for financial dependency after a wrongful death, the multiplier for future losses should be taken from the date of trial rather than the date of death. Calculating it from death discounts the award for money the dependant has not yet received and therefore under-compensates. The Court departed from earlier House of Lords authority so that the award would give full compensation.
Mrs Sally Ann Knauer died of mesothelioma in August 2009, aged 46. She had contracted the disease through exposure to asbestos while employed by the Ministry of Justice as an administrative assistant at HM Prison Guy’s Marsh. Liability was admitted in December 2013, and judgment was entered for her widower, with damages to be assessed.
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At the damages hearing before Bean J in July 2014, the annual value of the lost income and services, the multiplicand, was settled. The dispute was whether the multiplier, the number of years by which that figure is multiplied, should run from the date of death or the date of trial. The parties agreed that the difference was £52,808. Bean J held that Cookson v Knowles and Graham v Dodds required him to use the date of death, although he would have preferred the date of trial, as the Law Commission had recommended. He certified a leapfrog appeal to the Supreme Court.
Full compensation
Damages in tort aim, so far as money can, to put the person harmed in the position they would have occupied had the wrong not been done: full compensation, no more and no less. Losses up to trial are normally awarded as a lump sum. Future losses use a multiplier and multiplicand. The multiplier reflects life expectancy, including the risk of earlier death, and is also discounted because the claimant receives a lump sum now for losses that would have arisen over future years. Without that discount there would be over-compensation.
Using the date of death in a dependency claim applies that discount even though the money is not received until after trial. The claimant accepted that the pre-trial sum should still allow for the risk that the deceased might anyway have died, or that support might have reduced or ended, before trial. In most cases that discount would be modest. The discount for early receipt that never occurred is not modest, and it under-compensates. Taking an actuarial multiplier at death and then deducting the years to trial also mixes a principled calculation with an arbitrary arithmetical deduction. The Ogden Tables, treated in Wells v Wells as the starting point rather than a check, make a more accurate method available. The Law Commission recommended that a multiplier discounted for early receipt be used only for post-trial losses.
The earlier authorities
Cookson v Knowles and Graham v Dodds were decided before this actuarial approach. Courts then discouraged actuarial tables as giving a false appearance of precision, and multipliers were chosen largely by professional intuition. Lord Fraser treated the multiplier as having to be selected once and for all at death because later events remained uncertain. Lord Bridge agreed and added that the later date would reward delay in bringing the claim to trial. Those reasons addressed uncertainty and delay, not accelerated receipt. Uncertainty can now be dealt with on the facts known at trial, so that a person injured and a person killed in the same accident can be treated consistently. Case management under the Civil Procedure Rules also answers the concern about delay, and proper use of the Ogden Tables means the dependants recover the actuarial value of their probable loss.
Whether the Court could change the law
The Court rejected the argument that adopting the trial date would merely alter a guideline. Lord Bridge had decided the point as a matter of principle. Precedent should not be undermined lightly: litigants need to know the law, and the Supreme Court does not depart from a House of Lords decision merely because it would have decided the case differently. The 1966 Practice Statement is therefore to be used circumspectly. Here, however, the earlier reasoning is illogical in current practice, produces unfair results, and has encouraged artificial distinctions. Together with the material change brought by Wells v Wells and the Ogden Tables, that made an overwhelming case for departing from the decisions.
Provisions such as sections 3(3) and 4 of the Fatal Accidents Act 1976 can over-compensate by requiring the court to disregard remarriage or benefits resulting from the death. Those are legislative choices, not an answer to a flawed judicial rule affecting most claimants. The solutions to those statutory provisions lie with Parliament. The date-of-death rule itself was judicially created and could properly be corrected by the courts. The Law Commission had considered legislation neither necessary nor appropriate.
Verdict: The Court unanimously allowed Mr Knauer’s appeal. For future dependency losses under the Fatal Accidents Act 1976, the multiplier is assessed at trial. The Court departed from Cookson v Knowles and Graham v Dodds.
