Supreme Court

Knauer v Ministry of Justice

[2016] UKSC 9

[2016] WLR (D) 103

2016 Jan 28; Feb 24

Lord Neuberger of Abbotsbury PSC, Baroness Hale of Richmon DPSC, Lord Mance, Lord Clarke of Stone-cum-Ebony, Lord Reed, Lord Toulson, Lord Hodge JJSC

Fatal Accidents Acts — Damages — Multiplier for future loss — Claimant’s wife dying due to exposure to asbestos during employment — Claimant bring claim for loss of dependency — Employer admitting liability over four years later — Date from which multiplier for future loss to be calculated — Fatal Accidents Act 1976 (c 30), s 1 (as substituted by Administration of Justice Act 1982 (c 53), s 3)

Judicial precedent — House of Lords decisions — How far binding — House of Lords decisions resulting in under-compensation in fatal accident cases — Whether justification to depart from decisions

Facts

The claimant, whose wife died in August 2009 from mesothelioma as a result of exposure to asbestos during the course of her employment by the defendant, sought damages from the defendant under section 1 of the Fatal Accidents Act 1976, as substituted, for, inter alia, future loss of dependency. The defendant eventually admitted liability and judgment was entered for the claimant in December 2013. The assessment of damages hearing took place in July 2014. Holding himself bound to do so by two House of Lords decisions the judge calculated the sum to be awarded by multiplying the annual figure for the value of the income and services lost as a result of the wife’s death by a number of years starting at the date of death. The effect of so doing was to discount the damages for early receipt of the money by £52,808 more than would have been the case had a multiplier been applied from the date of trial, since it treated the damages as if they had been paid at the date of death. The judge granted a certificate for appeal direct to the Supreme Court on the issue of whether the appropriate date for the assessment of multipliers in claims for future loss under the Fatal Accidents Act 1976 was the date of death or the date of trial.

On the claimant’s appeal—

Held

Held, appeal allowed. It was the aim of an award of damages in the law of tort to place the person who had been harmed by the wrongful acts of another, so far as possible, in the position in which he would have been had the harm not been done. Calculating the multiplier in fatal accident cases, in accordance with the two House of Lords decisions, from the date of death meant that the claimant was suffering a discount for early receipt of the money when that money would not be received until after trial. As the claimant accepted, the sum calculated to reflect the loss which had been suffered up to the date of trial should contain a discount, which in most cases would be modest, to reflect the risk that, had there been no tort, the deceased might have died between her actual date of death and the date of trial, and any risk that the support or services provided for a dependant might have stopped or reduced. However the effect of the discount for the non-existent early receipt of the money was far from negligible and resulted in under-compensation in most cases. The Supreme Court should be very circumspect before exercising its power to depart from previous decisions of the House of Lords or the Supreme Court. However, the application of the reasoning in the two House of Lords decisions was illogical and resulted in unfair outcomes. Above all, the fact that there had been a material change in the relevant legal landscape since the earlier decisions, namely the acceptance of the use of actuarial tables to calculate future losses in personal injury and fatal accident cases, gave rise to an overwhelming case for changing the law. Accordingly, the Supreme Court would exercise its power to depart from those decisions on the basis that the correct date as at which to assess the multiplier when fixing damages for future loss in fatal accident claims should be the date of trial (paras 1, 7, 12, 22–23, 27).

Practice Statement (Judicial Precedent) [1966] 1 WLR 1234, HL(E) applied.

Wells v Wells [1999] 1 AC 345, HL(E) considered.

Cookson v Knowles [1979] AC 556, HL(E) and Graham v Dodds [1983] 1 WLR 808, HL(NI) departed from.

Per curiam

It is important not to undermine the role of precedent in the common law. Particularly at a time when the cost of litigating can be very substantial, certainty and consistency are very precious commodities in the law. If it is too easy for lower courts to depart from the reasoning of more senior courts, then certainty of outcome and consistency of treatment will be diminished, which would be detrimental to the rule of law (para 21).

Decision of Bean J [2014] EWHC 2553 (QB) reversed.

Appearances

Frank Burton QC, Harry Steinberg and Niall Maclean (instructed by Charles Lucas & Marshall, Swindon) for the claimant.

Gerard McDermott QC and Tom Poole (instructed by Treasury Solicitor) for the defendant.

Reported by: Jill Sutherland, Barrister