Knauer v MoJ (Supreme Court 28 January 2016): the assessment multipliers in fatal claims

On 28 January seven Justices of the Supreme Court heard the case of Knauer v Ministry of Justice (MoJ). The case has been covered previously on this blog and turns on the date for the assessment of multipliers in claims for future loss of dependency under the Fatal Accidents Act 1976. The sole question for the Supreme Court is whether the appropriate date for the calculation is the date of death or the date of trial? The former represents the current common law which the appellant is seeking to overturn.

Mrs Knauer died of mesothelioma in 2009 after being negligently exposed to asbestos during employment at Guy’s Marsh Prison in Dorset. Her widower brought an employers’ liability claim against the MoJ seeking damages under various heads. The claimant argued at trial that the multiplier should be assessed using the date of trial, as recommended by the Law Commission in 1999, rather than following current authority and using the date of death. The trial judge held that he was bound by the House of Lords decision in Cookson v Knowles [1979] AC 556 to calculate the multiplier from the date of death (albeit that Cookson was pre-Ogden Tables), but stated that he would have done otherwise if that path had been open to him. Accordingly, the claimant secured a ‘leapfrog’ certificate to appeal directly to the Supreme Court.

Frank Burton QC for Mr Knauer repeated these arguments in the Supreme Court and submitted that fixing the multiplier from the date of death necessarily involves a deduction for accelerated receipt of past losses (those arising between death and date of trial) which, in his view, was illogical. Furthermore, using the date of death in conjunction with the Ogden Tables produces less, not more, precision and proceeds from an inbuilt actuarial flaw. He said it produces lower multipliers for future losses and therefore severely hinders the principle of full compensation. In Knauer the difference between multipliers calculated using the current and proposed approach was 2.69, which a amounted to over £50,000 (or around 10% of the total value of the case). He did however acknowledge if a date of trial approach was accepted, then a discount should be applied to past losses so as to allow for the hypothetical possibility death before trial in accordance with Table E of the Ogden Tables. The Court seemed to take this on board. [This is necessarily a hypothetical possibility because of the person who would have provided the dependency was killed in the accident giving rise to the claim.]

Supreme Court President Lord Neuberger, possibly giving an indication of the Court’s views, said that “fuzzy thinking” had been evident in the previous practice of calculating future losses in fatal claims, whereas a more rigorous intellectual approach was available now. Frank Burton QC agreed and said that lawyers were far better equipped with tools such as actuarial tables to produce accurate figures to achieve full compensation when compared to past methodologies. He added that the Supreme Court now had the opportunity to create a fair system that would ensure full compensation was paid.

A number of previous cases was cited and in particular A Train & Sons v Fletcher EWCA Civ413 [2008] in which Sir Mark Potter, in the Court of Appeal, commented that the time is ripe for a reconsideration of the position and endorsed criticisms by others of the date of death approach. It should be noted that Train was compromised before it could reach the Supreme Court.

Gerard McDermott QC for the MoJ said that in isolated cases the date of trial approach might well be correct, but questioned why a different approach in the vast majority of fatal cases from that adopted in personal injury cases should be considered. His main objection was simply that changing to a date of trial approach could put the whole system of calculating damages in fatal cases out of kilter. He mentioned sections 3 (Assessment of Damages) and 4 (Disregard of Benefits) of the Fatal Accident Act. His submissions for the defence were short in comparison to those of the claimant/appellant.

The hearing lasted only two hours but was accompanied by hefty bundles, which were described by Lord Neuberger as being of excellent quality and enormously helpful. The fact that seven rather than five justices heard this case is an indication that the Supreme Court will give very careful consideration to this important matter.

Having observed the hearing today, it would be my view that that the appellant’s arguments were much better received by the bench than those of the respondent defendant. Obviously, it doesn’t follow from this that judgment – which was reserved – will be in the appellant’s favour, but it does feel like the momentum lies in that camp.

We shall update you as soon as possible after judgment has been given.

About the Author

Jef Mitchell is a consultant at BLM and former Chief Claims Officer at the Ministry of Defence where he regularly briefed Ministers on claims issues and risk management. He now helps to lead the firm’s Policy and Government Affairs work with Alistair Kinley preparing submissions and supporting evidence for consultations and reform proposals, in addition to liaising with government departments and regulators on key issues and consultations affecting the firm and its clients. Jef is also an accredited mediator.

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