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Supreme Court Changes Rules on Timing of Compensation Calculations

When a woman who had previously been employed by the Prison Service died of mesothelioma, her husband made a dependency claim under the Fatal Accidents Act 1976 for future loss of income.

The Ministry of Justice admitted liability for the woman's death and agreement was reached with regard to the value of the income and services lost as a result of her death. However, whilst agreeing the principle that compensation was payable, a dispute arose which took a visit to the Supreme Court to resolve.

The dispute was whether the compensation should be calculated from the date of the woman's death or the date of the trial.

In the High Court, the judge felt bound to follow earlier precedent and calculate the compensation from the date of death. Under that approach, a discount is applied for the early receipt of the money, which nonetheless is not received until after the trial. In practice, this results in under-compensation in most cases.

The judge gave the woman's widower leave to appeal against that decision and, because of its importance, permission was granted for the appeal to be made directly to the Supreme Court.

The Court took the view that the existing precedent was set in a time in which there was a great deal less sophistication than now in calculating compensation payments in such circumstances. The use of the date of death gave a certainty then which is no longer necessary, and its use is now illogical and can produce unfair outcomes.

Accordingly, the appeal was upheld and compensation ordered to be calculated from the date of trial.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.