Cookson v Knowles

In a normal fatal accident claim, dependency damages should be divided into pre-trial loss and future loss. Pre-trial loss carries interest for the period from death to trial at half the prevailing short-term investment rate. Future loss carries no pre-judgment interest, because its value is assessed at trial and an additional award would duplicate interest.

Future dependency uses the annual dependency estimated at trial, but the overall multiplier is selected at death and reduced by the elapsed pre-trial period. No separate allowance should normally be made for post-trial inflation, since conventional multipliers and higher investment returns provide a rough offset. These are judicial guidelines for a statutory discretion and may yield to special facts or materially changed financial conditions.

The appellant widow claimed dependency damages following her husband's death in a motor accident. The trial judge used the dependency estimated at trial, applied a multiplier of 11 and awarded interest on the whole sum from death to judgment at 9 per cent.

The Court of Appeal divided the award into pre-trial and future loss. It awarded interest on the former at half the short-term investment rate and none on the latter. It used the dependency at trial for future loss and reduced the multiplier by the period between death and trial.

The widow appealed and the respondent cross-appealed. The central questions were how damages under the Fatal Accidents Act 1976 should be divided and calculated, whether post-trial inflation required a separate allowance, and how the statutory discretion to award interest should be exercised.

1. Disposition. Lord Diplock and Lord Fraser of Tullybelton delivered the principal speeches. Viscount Dilhorne and Lord Scarman agreed with both; Lord Salmon agreed broadly with Lord Diplock and completely with Lord Fraser. The House unanimously dismissed the appeal and the cross-appeal.
2. Division and assessment of dependency loss. Per Lord Diplock and Lord Fraser, normal fatal accident damages should be divided into the pecuniary loss sustained between death and trial and the future loss beginning at trial. Events known by trial, including actual wage increases, should replace conjecture where relevant. The future multiplicand is the dependency estimated at trial. The multiplier remains one selected by reference to the deceased's circumstances at death and is reduced by the period already used for pre-trial loss.
3. Future inflation. Per Lord Diplock and Lord Fraser, no separate allowance should normally be made for inflation after trial. Conventional multipliers assume investment returns associated with stable currency, while inflation ordinarily produces higher fixed-interest returns. The two effects provide a rough practical offset. The reasoning in Mallett v McMonagle [1970] AC 166 was reaffirmed, and the conclusion in Young v Percival [1975] 1 WLR 17 was approved. Lord Fraser reserved exceptional cases involving a large, highly taxed annuity, where expert evidence and an adjustment might be appropriate.
4. Interest. Per Lord Diplock and Lord Fraser, interest compensates a claimant for being kept out of money already due. Pre-trial dependency loss should therefore carry interest for the whole period from death to trial at half the prevailing short-term rate. That approximates the staggered dates on which the lost instalments would have been received. No interest should be awarded on future loss. Its value is calculated at trial, and an additional award would duplicate interest and include interest upon interest.
5. Status of the guidance. Per Lord Diplock, the statutory discretion must be exercised judicially rather than arbitrarily. Appellate guidance promotes consistency but is not an immutable rule of law. A judge may depart from it where special circumstances justify doing so, and an appellate court should not substitute its preference where reasonable judicial views may differ. Lord Salmon and Lord Scarman emphasised that changed economic conditions could make the present guidance inappropriate.
6. Personal injury claims. Lord Diplock observed that the reasoning about inflation and the division of pecuniary loss applied correspondingly to past and future earnings in personal injury claims. He expressed no view on interest upon damages for pain, suffering or loss of amenity because that issue did not arise or receive argument.

1. House of Lords: In Cookson v Knowles [1978] UKHL 3, the House unanimously dismissed both the widow's appeal and the respondent's cross-appeal, leaving the Court of Appeal's order standing.
2. Court of Appeal: The court divided the damages into pre-trial and future loss. It awarded interest at half the short-term rate on pre-trial loss, awarded none on future loss, used the dependency at trial as the future multiplicand and reduced the multiplier by the elapsed pre-trial period. No citation is stated in the judgment.
3. Trial: The judge applied a multiplier of 11 to the dependency estimated at trial and awarded interest at 9 per cent on the whole resulting sum from death to judgment.