A second look at Knauer v MoJ

On 28 January we reported that the appellant’s arguments were far better received by the Supreme Court than those of the respondent defendant in this case about the appropriate date for the assessment of multipliers in claims for future loss of dependency under the Fatal Accidents Act 1976. It was implicit in our piece that the law looked set to change, as it now has done.

As Alistair Kinley reported on this blog yesterday, the court unanimously allowed the appeal and held that future multipliers should be assessed from the date of trial rather than the date of death.

Mrs Knauer died of mesothelioma in 2009 after being negligently exposed to asbestos during her employment at Guy’s Marsh Prison in Dorset. Her widower brought an employers’ liability claim against the MoJ seeking damages under various heads. Although the parties agreed on the annual income figure and the services lost, a dispute arose as to whether the future multiplier to apply to these should be calculated from the date of death or from the date of trial. The difference between the multipliers using both dates was 2.69 and amounted to over £50,000 (about 10% of the total value of the case).

The trial judge allowed the appeal to proceed straight to the Supreme Court, after having held that he was bound to follow the approach adopted by the House of Lords in the cases of Cookson v Knowles [1979] AC 556 and Graham v Dodds [1983] 1 WLR 808 and was therefore obliged to calculate the multiplier from the date of death. However he made it clear that he would have preferred to proceed from the date of trial, in line with the approach recommended by the Law Commission in its report Claims for Wrongful Death (1999, Law Com No 263).

The Law Commission had recommended that, as in personal injury cases, actuarial multipliers should be used for calculating future losses in fatal accident cases from the date of trial. For pre-trial losses the only difference from non-fatal cases would be that there would have to be a small deduction to take account of the possibility that the deceased might in any event have died or given up work before trial.

In giving the joint lead judgment, Lord Neuberger and Lady Hale explained that a ruling that damages should be assessed from the date of trial would involve departing from earlier House of Lords’ cases and therefore the court had to decide whether to apply its 1966 Practice Statement and depart from precedent – which, 50 years on, is still a very rare occurrence. They stated that the court had no hesitation in doing so in the present case, but nevertheless added it is important not to undermine the role of precedent in the common law.

The overriding reason for the unanimous ruling was that there had been a material change in the relevant legal landscape. Cookson and Dodds were decided in a different era, when the calculation of damages for personal injury and death was not as sophisticated and the use of actuarial evidence or tables was in fact discouraged. That old landscape had changed dramatically.

Finally, the court dealt with the suggestion that rather than changing the law, it should leave that to the legislature, as had happened in Scotland (the Scottish Parliament has enacted section 7(1)(d) of the Damages (Scotland) Act 2011.) The Supreme Court concluded that because the law it was examining was made by judges it should be corrected or brought up to date by judges if shown to be defective, unless there is a good reason to the contrary.

The judgment reduces the questions in this case to “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 should depart from previous decisions of the House of Lords.”

In answering these ‘no’ and ‘yes’ respectively, the effect of the decision is that claims brought under the Fatal Accident Act 1976 have become a little more expensive. The price of ensuring – and insuring – full compensation has increased.

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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