Arnup v MW White Ltd.

Under section 4 of the Fatal Accidents Act 1976, all benefits accruing to a dependant as a result of the death are disregarded when assessing damages. The provision is not confined to benefits received as of right, or to benefits from a source independent of the tortfeasor.

The statutory scheme requires the loss of dependency to be quantified, but does not permit benefits resulting from the death to be deducted. A person who makes an ex gratia payment and wants it credited against any future damages must make it a conditional payment on account, rather than a benefit. Where causation matters, it is approached as a question of common sense. On the facts, the payments were closely related to the death, although that issue was ultimately immaterial.

Mrs Melanie Jane Arnup claimed damages under the Fatal Accidents Act 1976 following the workplace death of her husband, Kevin Arnup. His employer had paid her £129,600 under a death-in-service scheme and £100,000 from an employee benefit trust.

Primary liability was admitted. On preliminary issues, His Honour Judge Seymour QC held that the first payment was deductible but the second fell within the common-law benevolence exception and was not deductible. Mrs Arnup appealed against the first ruling, and the employer cross-appealed against the second.

The central questions were whether the payments were benefits accruing as a result of the death under sections 3 and 4, and whether payments made following the death but at the discretion of the employer or trustees had to be brought into account.

1. Appeal allowed and cross-appeal dismissed. The judge reached the correct practical result, but for the wrong reasons. Neither payment was deductible from the loss of dependency.
2. Section 3 of the Fatal Accidents Act 1976 requires recovery of the net loss resulting from the death. Section 4 requires benefits accruing to any person from the estate or otherwise as a result of the death to be disregarded. The expression “accrued to” does not introduce a requirement of legal entitlement.
3. The 1982 amendment continued and completed the legislative trend towards disregarding benefits. The general words “or otherwise as a result of the death” subsumed the earlier categories of insurance money, pensions, statutory benefits and gratuities, and also covered benefits in kind and other benefits resulting from the death. The former second stage of assessment, involving deduction of benefits, was therefore abolished in substance.
4. If a benefit did not result from the death, it was irrelevant to the assessment and could not be deducted. If it did result from the death, section 4 required it to be disregarded. An ex gratia payment intended to be credited against future damages must be made expressly conditional on that treatment; it will then be a payment on account, not a benefit within section 4.
5. Causation was consequently immaterial. If it had mattered, the court would have held, applying the common-sense approach identified in Hay v Hughes [1975] QB 790, that both payments accrued as a result of the death. Their availability and payment were closely related to the death, and neither sum would have become available without it.
6. Lord Justice Dyson and Lord Justice Ward agreed with Lady Justice Smith.

• Court of Appeal (Civil Division): Appeal allowed and cross-appeal dismissed. The preliminary-issue decision was upheld in result, but its reasoning was rejected.
• Queen’s Bench Division: His Honour Judge Seymour QC, sitting as a deputy High Court Judge, held that £129,600 was deductible and £100,000 was not deductible.