A Train & Sons Ltd v Fletcher

In a fatal-accident dependency claim, the discretion to award interest under section 69 of the County Courts Act 1984 is constrained by binding principles. Damages should ordinarily be divided into pre-trial loss and future loss. Interest is normally allowed on pre-trial loss at half the applicable short-term rate, but not on future loss. A judge cannot avoid those principles merely because the statutory discretion is expressed broadly or because the conventional multiplier may under-compensate dependants. Revising the rule that the multiplier is selected at death, rather than at trial, is a matter for the House of Lords. The Court of Appeal allowed the appeal and substituted the conventional interest award.

This was an appeal by the defendant company against an order of His Honour Judge Holman in the Manchester County Court dated 2 April 2007. The respondent, the executrix and widow of Carl Fletcher, claimed damages for financial dependency following his death from mesothelioma caused by asbestos exposure during his employment.

The dependency damages were agreed at £197,087.30. Applying the conventional approach, interest would have been £2,594.83. The judge instead awarded £29,070.37, applying full-rate interest from death to trial to the whole dependency award, including future loss.

The central issues were whether that departure exceeded the discretion under section 69 of the County Courts Act 1984, and whether the Court of Appeal could revise the established fatal-accident multiplier and interest guidelines.

The appeal was unanimously allowed. The Court of Appeal substituted the conventional interest award of £2,594.83 for the trial judge’s award of £29,070.37.

1. Statutory discretion. Section 69 of the County Courts Act 1984 gives the court discretion as to the rate and part of the damages on which interest may be awarded. That discretion must nevertheless be exercised consistently with binding legal principles. Interest compensates a claimant for being kept out of money that ought to have been paid, rather than for the underlying damage itself, reflecting the principle in Jefford v Gee [1970] 2 QB 130.
2. Fatal-accident interest. Cookson v Knowles [1979] AC 556 required the dependency loss ordinarily to be divided into pre-trial and future loss. Interest was payable on pre-trial loss at half the short-term rate, while future loss attracted no interest. The trial judge had misunderstood Cookson: the fact that the multiplier was calculated from death did not justify full-rate interest on the whole capital sum. Such an award over-compensated the claimant.
3. Multiplier and proposed reform. The Court of Appeal remained bound by the date-of-death multiplier rule reaffirmed in Graham v Dodds [1983] 1 WLR 808. Wright v British Railways Board [1983] 2 AC 773 and Wells v Wells [1999] 1 AC 345 concerned the flexibility of rate guidelines and personal-injury assessment, and did not alter the fatal-accident rule. Although the court considered reconsideration desirable, that was a matter for the House of Lords.

Lord Justice Hooper agreed and separately expressed concern about the logic of the existing approach. Lord Justice Moses agreed with both judgments.

1. Court of Appeal (Civil Division) — In [2008] EWCA Civ 413, the appeal was allowed and the interest award was reduced to £2,594.83.
2. Manchester County Court — His Honour Judge Holman, on 2 April 2007, awarded £29,070.37 interest on the whole dependency award at the full rate.