Knauer v Ministry of Justice
The decision on this case was handed down on 24 February 2016. The Supreme Court unanimously allowed Mrs Knauer’s appeal, changing the landscape for all future fatal accident claims. Now damages for loss of dependency in fatal accident claims will be calculated from the date of trial, not the date of death.
This ruling is a welcome decision for claimant solicitors who have long argued that the previous law resulted in under compensating the dependents of those wrongfully killed. The old method resulted in a portion of the claim for past loss of dependency (between the date of death and the date of trial) being discounted as if the compensation had been received at the date of death. This is, of course, a fair approach to future losses: it reflects the fact that a claimant can invest their compensation for such losses until they occur and in the meantime receive a return on their investment.
The old law for three decades had been as laid down in the House of Lords by Cookson v Knowles [1979] and Graham v Dodds [1983]. This saw the dependent being treated as though the loss since death was a future loss: they received the money after the loss had been incurred but the lump sum was being discounted as if the loss was to be incurred in the future.
The question for the Supreme Court was whether this case was one in which the Court should apply the 1996 Practice Statement and depart from precedent. The Justices had no hesitation in unanimously concluding that it was.
The Court highlighted that most important reason for coming to their view was that there had been a material change in the relevant legal landscape. Calculating damages for personal injury and death was a far more sophisticated process in today’s climate and the use of the actuarial tables removed the uncertainties that had concerned the Court when both Cookson and Dodds were decided.
In Dodds, Lord Bridge had identified two concerns which justified the old approach. Firstly, if the date of death were adopted as the date from which damages were to be calculated, there would be less need to deal with the uncertainties around what would have happened to the deceased if he had not been killed between the date of his actual death and the date of trial. Secondly, if the date of trial were adopted, the anomaly would arise that the longer a trial was delayed, the more a dependant would be able to recover.
Both Cookson and Dodds were decided before the introduction of the Ogden Tables in 1984. The Court in Knauer considered that, as the Odgen Tables include fatal accident calculations based on the recommendations of the Law Commission, Lord Bridge’s first concern could be adequately addressed by their application. Secondly, the introduction of the Civil Procedure Rules in 1998 had transformed the legal landscape so that courts were now in a position to set timetables and require the parties keep to them, reducing the likelihood of long delays before trial. In any event, the Court highlighted that proper use of the Odgen Tables made this second concern irrelevant.
Lastly, the Supreme Court commented that there had been a number of decisions where the unfair effect of the rule as set out in Cookson and Dodds had led the court to distinguish those cases on inadequate grounds. Their decision here would bring certainty and consistency to this area of law.
The difference this decision will make in awards of compensation will often be substantial. At a time when bereavement awards continue to be fixed at a very low level, this is a very welcome development for the families of those killed by negligence or breach of statutory duty.