The House described the approach to the calculation of damages for a dependency under the Fatal Accidents Acts.
Held: The multipliers in Fatal Accidents Act cases should be calculated from the date of death.
Sections 3 and 4 mark a departure from the ordinary principles of assessment in English law, which can fairly be described as anomalous, providing for what Lord Diplock called an ‘artificial and conjectural exercise’ whose ‘purpose is no longer to put dependants, particularly widows, in the same economic position as they would have been in had their late husband lived.’
Lord Fraser of Tullybelton said: ‘The court has to make the best estimates that it can having regard to the deceased’s age and state of health and to his actual earnings immediately before his death, as well as to the prospects of any increases in his earnings due to promotion or other reasons.’
and . . ‘In a personal injury case, if the injured person has survived until the date of trial, that is a known fact and the multiplier appropriate to the length of his future working life has to be ascertained as at the date of trial. But in a fatal accident case the multiplier must be selected once and for all as at the date of death, because everything that might have happened to the deceased after that date remains uncertain.’
Lord Diplock said: ‘When the first Fatal Accidents Act was passed in 1846, its purpose was to put the dependants of the deceased, who had been the bread-winner of the family, in the same position financially as if he had lived his natural span of life. In times of steady money values, wages levels and interest rates this could be achieved in the case of the ordinary working man by awarding to his dependants the capital sum required to purchase an annuity of an amount equal to the annual value of the benefits with which he had provided them while he lived, and for such period as it could reasonably be estimated they would have continued to enjoy them but for his premature death. Although this does not represent the way in which it is calculated such a capital sum may be expressed as the product of multiplying an annual sum which represents the ‘dependency’ by a number of years’ purchase. This latter figure is less than the number of years which represents the period for which it is estimated that the dependants would have continued to enjoy the benefit of the dependency, since the capital sum will not be exhausted until the end of that period and in the meantime so much of it as it not yet exhausted in each year will earn interest from which the dependency for that year could in part be met. The number of years’ purchase to be used in order to calculate the capital value of an annuity for a given period of years thus depends upon the rate of interest which it is assumed that money would earn, during the period. The higher the rate of interest, the lower the number of years’ purchase . . ”
Lord Diplock, Lord Fraser of Tullybelton
[1979] AC 556, [1978] UKHL 3, [1978] 2 WLR 978, [1978] 2 All ER 604
Bailii
Fatal Accidents Act 1976 4
England and Wales
Citing:
Appeal from – Cookson v Knowles CA 1977
Lord Denning MR said: ‘In Jefford v Gee . . we said that, in personal injury cases, when a lump sum is awarded for pain and suffering and loss of amenities, interest should run ‘ from the date of service of the ‘writ to the date of trial’. At that . .
Cited by:
Cited – Cooke, Sheppard, Page v United Bristol Health Care, Stibbe and Another, Lee CA 16-Oct-2003
The claimant appealed against his damages award, saying that it should have allowed for the anticipated rises in the cost of providing his care in the future.
Held: Rises in future costs were already factored into the tables used for . .
Cited – A Train and Sons Ltd v Fletcher CA 24-Apr-2008
Appeal re award of interest on claim under Fatal Accidents Act.
Hooper LJ confessed: ‘I do not understand why chronological years are deducted from the multiplier’. . .
Cited – Cox v Ergo Versicherung Ag CA 25-Jun-2012
The deceased member of the armed forces had died in a road traffic accident in Germany. The parties didputed whether the principles governing the calculation of damages were those in the 1976 Act and UK law, or under German law.
Held: ‘There . .
Not followed – Knauer v Ministry of Justice SC 24-Feb-2016
The court was asked: ‘whether the current approach to assessing the financial losses suffered by the dependant of a person who is wrongfully killed properly reflects the fundamental principle of full compensation, and if it does not whether we . .
Lists of cited by and citing cases may be incomplete.
Damages, Personal Injury
Leading Case
Updated: 02 November 2021; Ref: scu.187194