Knauer v Ministry of Justice

In claims under the Fatal Accidents Act 1976, damages for dependency suffered before trial should be calculated separately from damages for future loss. An actuarial multiplier discounted for accelerated receipt applies only to post-trial loss and must be assessed at the date of trial.

Pre-trial loss remains subject to an appropriate deduction for contingencies, including the possibility that the deceased would have died, ceased working or stopped providing support before trial. This approach avoids the under-compensation caused by applying a discount for receipt of damages before they are actually received.

The appellant's wife died from mesothelioma contracted through asbestos exposure during her employment by the respondent. Liability was admitted and judgment was entered, leaving damages to be assessed.

Bean J determined the outstanding heads of damage but held that [1979] AC 556 and [1983] 1 WLR 808 required the dependency multiplier to be calculated from the date of death. He would otherwise have selected the date of trial. The difference was £52,808.

Bean J certified a direct appeal under section 12 of the Administration of Justice Act 1969. The Supreme Court considered whether the multiplier should be assessed at death or trial and, if trial was correct, whether it should depart from the two House of Lords decisions.

1. The appeal was allowed unanimously. The correct date for assessing the multiplier for future dependency loss under the Fatal Accidents Act 1976 is the date of trial, not the date of death. Cookson v Knowles [1979] AC 556 and Graham v Dodds [1983] 1 WLR 808 were not to be followed on that point.

2. Lord Neuberger and Lady Hale, with whom the other members of the court agreed, held that tort damages aim to provide full compensation without profit. An actuarial multiplier incorporates both the contingencies affecting the duration of loss and a discount for receiving a lump sum before future losses arise. Calculating that multiplier at death applies the accelerated-receipt discount to losses already suffered by trial. It therefore causes substantial under-compensation.

3. Losses incurred before trial should be calculated separately. They may require a deduction for the possibility that the deceased would otherwise have died, ceased working or stopped providing support before trial. An actuarially discounted multiplier should be used only for post-trial loss. The Ogden Tables permit both fatal and non-fatal claims to be assessed consistently by reference to facts known at trial.

4. The court departed from the earlier House of Lords decisions under the Practice Statement (Judicial Precedent) [1966] 1 WLR 1234. A final appellate court should not depart from precedent merely because it would have decided the earlier case differently. Certainty and consistency remain important. Departure was nevertheless justified because the former rule had become illogical and unfair, encouraged artificial distinctions, and rested on an assessment method predating the adoption of the Ogden Tables and Wells v Wells [1999] 1 AC 345.

5. Sections 3(3) and 4 of the Fatal Accidents Act 1976 embody legislative choices that can produce over-compensation. Those provisions did not justify retaining a judicial rule that under-compensated other claimants. The multiplier rule was judge-made, damages assessment ordinarily belongs to the courts, and the change was neither so complex nor so wide-ranging that it should be left to Parliament.

1. United Kingdom Supreme Court: The appeal was allowed unanimously. The court departed from the governing House of Lords authorities and held that the future-loss multiplier must be assessed at trial.
2. High Court of Justice, Queen's Bench Division: Bean J, in [2014] EWHC 2553 (QB), assessed damages but held himself bound to calculate the multiplier from death. He certified a direct appeal under section 12 of the Administration of Justice Act 1969, bypassing the Court of Appeal.