Fatal Accident Multipliers – the law finally changes

News

24/02/2016

In a unanimous judgment handed down this morning (Knauer v Ministry of Justice [2016] UKSC 9), the Supreme Court has overruled the principle established by the case of Cookson v Knowles [1979] AC 556 and held that multipliers for future losses in a claim under the Fatal Accidents Act 1976 should be calculated at the date of trial rather than the date of death.

In a single judgment written by Lord Neuberger and Lady Hale (with whom Lord Mance, Lord Clarke, Lord Reed, Lord Toulson and Lord Hodge all agreed) the Court had “no hesitation” in invoking the Practice Statement (Judicial Precedent) [1966] 1 WLR 1234 that allows them to depart from precedent in order to achieve justice. In doing so, they fully endorsed the conclusions of the Law Commission in their report on Claims for Wrongful Death (1999) that actuarially calculated multipliers should be used for calculating future losses from the date of trial.

The Court highlighted that the existing approach, whereby multipliers were chosen at the date of death, meant that a claimant was suffering a discount for early receipt of the money when in fact that money was not received until after trial or settlement. This resulted in an “illogical” and “unfair outcome”. The Court went on to conclude that:

“The fact that there has been a material change in the relevant legal landscape since the earlier decisions, namely the decision in Wells v Wells and the adoption of the Ogden Tables, when taken with the other factors just mentioned, gives rise to an overwhelming case for changing the law.”

The Supreme Court rejected the respondent’s contention that the system of calculating fatal accident claims needed to viewed as a whole, with any disadvantage caused by the adoption of multipliers at death being counter-balanced by aspects of current legislation leading to over-compensation (such as the disregard of financial benefits accruing under section 4 of the Fatal Accidents Act 1976). The Court held that any such over-compensation resulted from “legislative choices” and not judicial decisions and that “it would be wrong to preserve what is now known to be a flawed practice affecting most claimants in order to counteract those choices”.

Reflection

This is a very welcome and long overdue decision that corrects a well-recognized unfairness in the law and will lead to claimants in fatal accident cases receiving higher damages in line with the overriding principle of full compensation. It should also encourage defendants to engage with and settle cases at an earlier stage, thereby reducing the inevitable distress that is associated with such litigation post death.

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