Gordon Exall, Zenith Chambers & Hardwicke

04/12/17. In  Smith v Lancashire Teaching Hospitals NHS Foundation Trust & Ors [2017] EWCA Civ 1916 the Court of Appeal declared that the exclusion of cohabitees was incompatible with the Act. The practical consequence of this is that the government will have to look at this section and take steps to ensure it is compatible. Presumably by including cohabitees who have been living together for two years in the list of those entitled to the bereavement payment.

THE ACT

The Fatal Accidents Act 1976 provides for a bereavement award for married couples and couples in a civil partnership.

Whilst a cohabitee can be a dependent under the Act, if they have been living with the deceased for two years or more prior to death, they are not included in the Act as being entitled to a bereavement payment.

SECTION 1A OF THE FATAL ACCIDENTS ACT 1976

1A. — Bereavement.

(1) An action under this Act may consist of or include a claim for damages for bereavement.(2) A claim for damages for bereavement shall only be for the benefit—(a) of the wife or husband or civil partner of the deceased; and(b) where the deceased was a minor who was never married or a civil partner —(i) of his parents, if he was legitimate; and(ii) of his mother, if he was illegitimate.(3) Subject to subsection (5) below, the sum to be awarded as damages under this section shall be £12,980.(4) Where there is a claim for damages under this section for the benefit of both the parents of the deceased, the sum awarded shall be divided equally between them (subject to any deduction falling to be made in respect of costs not recovered from the defendant).(5) The Lord Chancellor may by order made by statutory instrument … amend this section by varying the sum for the time being specified in subsection (3) above.”

THE DECISION OF THE COURT OF APPEAL

The Court held:

• “the current scheme for bereavement damages in section 1A of the FAA, with its exclusion of unmarried cohabitees like Ms Smith, falls within the ambit of Article 8. I do so on the ground of the link with the core value of respect for family life in Article 8.”

• It should make a declaration that this provision is incompatible with Section 4 of the Human Rights Act.

DAMAGES

The appellant claimed damages, these were not pursued.

1. As I have said earlier, the claim form includes a claim for damages of £11,800 pursuant to section 8 of the HRA. That amount is equivalent to the statutory amount of bereavement damages applicable at the date of the deceased’s death.

2. The Secretary of State has always maintained that damages are not recoverable under section 8 in the present case if the court makes a declaration of incompatibility. The reasoning of the Secretary of State is that damages under section 8 may only be made if the public authority has acted unlawfully. Section 6(1) of the HRA provides that it is unlawful for a public authority to act in a way which is incompatible with a Convention right. That is qualified by section 6(2), which provides that subsection (1) does not apply to an act if, as the result of one or more provisions of primary legislation, the authority could not have acted differently.

3. At the hearing of the appeal, Mr Sachdeva, on behalf of Ms Smith, abandoned the claim to damages in the light of section 6 but reserved the right to attack the validity of section 6 in any subsequent proceedings before the ECrtHR.

OBSERVATIONS IN RELATION TO COHABITEES

1. Finally, on this aspect of the appeal it is relevant to note the decline in popularity of the institution of marriage and the increase in the number of cohabiting couples, as recorded by the Judge in paragraph [29] of his judgment. He pointed out that, in its report on “Families and Households” published in 2015, the Office of National Statistics found that the cohabiting couple continues to be the fastest growing family type in the UK, reaching 3.2 million cohabiting couple families. The number of cohabiting couple families grew by 29.7% between 2005 and 2015. Marriage (same and opposite sex) and civil partnership also increased but less sharply. In 1996 cohabiting couples comprised 9% of all families. In 2015 the proportion was 17%. These figures indicate that, for a significant and increasing proportion of the population of the United Kingdom, there is, in terms of social acceptance, no material difference between marriage and civil partnership, on the one hand, and living together as an unmarried and non-civil partnered couple, on the other hand.

Gordon Exall
Zenith Chambers & Hardwicke

Image ©iStockphoto.com/Muenz

Editorial: Abolition of Personal Injuries Law – Aidan Ellis, Temple Garden Chambers

30/11/17. Earlier this month, Lord Sumption delivered a provocative lecture to the Personal Injuries Bar Association entitled “Abolishing Personal Injuries Law: A Project”. Taking inspiration from Atiyah’s Accidents, Compensation and the Law, he argued that our fault-based system leads to anomalous results and is inefficient in its attempt to allocate resources to those who need or deserve it.

It is difficult to deny the merit in some of these arguments. If I were to design an ideal system, starting from scratch with no reference to legal history, I doubt I would come up with anything like the current fault-based system. I might start from the economic premise that the financial losses suffered by those who are seriously injured are so great that they cannot simply be absorbed by that individual. There needs to be a mechanism to spread the cost across society. With very little imagination, solutions might be suggested in the form of compulsory insurance or a state compensation scheme. But our fault-based system is ill-equipped to carry out that re-allocation of resources. There is no correlation between those claimants able to prove fault (which focuses on the defendant’s conduct) and those claimants who really need the law’s assistance. The highly technical nature of some liability disputes, for instance the statutory defence available to highways authorities, only illustrates how a fault-based system diverts attention away from the Claimant’s needs.

Lord Sumption explained that regions that have moved away from fault-based liability have tended to be motivated by economic concerns such as dramatically increased insurance premiums. Interestingly, Lord Sumption linked increased insurance premiums not only to the increasing number of dishonest claims but also to the increasing number of genuine claims (largely driven by increased numbers of road traffic accidents). Additionally, more people seem inclined to make claims, though whether that is an unhealthy sign of compensation culture or a healthy sign that more people are aware of their rights depends on your perspective. If premiums continue to rise, we may yet reach a tipping point, particularly once the burden of compensation claims on the NHS is taken into consideration.

But I doubt that we should be preparing for the end of personal injuries law. Culturally, our notion of compensation for personal injury is not wholly based on an ideal economic model to redistribute resources to those who need them. The law of negligence grew out of the law of trespass to the person. Its origins are in principles of personal autonomy and the idea that if someone trespasses against you, they should pay for it in damages. Those principles are sufficiently entrenched that it is difficult to imagine a dramatic paradigm shift towards compulsory insurance. Further, at least to some extent, the right to bodily integrity is a protected component of the right to privacy contained in article 8 of the European Convention on Human Rights, making it even harder to abolish personal injury law.

As a result, it may be that Lord Sumption’s title was correct to describe the abolition of personal injury law as a “project” rather than something that is likely to happen imminently. That does not mean that we should anticipate the status quo continuing indefinitely. Concern about increased insurance premiums and the liability of public bodies is not going to go away. There remains scope for other reforms which stop short of abolition. Such reforms could include greater use of tariffs for general damages; the expansion of fixed costs into the multi-track and limiting the scope for claims involving minor injuries. Whilst reforms of this nature would not abolish personal injuries law, they would have a substantial effect on practitioners and on injured claimants. Not for the first time, personal injury lawyers would be justified in looking to the future with a measure of trepidation.

Aidan Ellis
Temple Garden Chambers

Image ©iStockphoto.com/shironosov

Getting Started With the Ogden Tables - Simon Levene, 12 King’s Bench Walk

21/11/17. The MOJ’s announcement on 27th February 2017 that the discount rate for calculating future losses was to be reduced from 2.50% to –0.75% caused more excitement than personal injury litigants are used to. The following guide to the basics of the Tables might be useful.

By way of example, we will take a woman aged 35 who has been seriously injured in an accident. She has A-levels but no degree, and would have worked to the age of 65, earning £25,000 a year net. Because of her injuries she is only able to earn £10,000 a year net, she will have to retire at 60, and she will need care costing £2,700 a year.

The first thing to note about this scenario is the discount rate itself. This is designed to ensure that when a Claimant gets her damages in a lump sum, that sum will keep track with inflation. The problem goes like this:

• Inflation is running at about 3% a year

• On 2nd November 2017 the Bank of England announced that the Base Rate was now 0.5%

• Assume that wages rise in line with inflation

• If the Claimant invests her damages, she will gain 0.5% from the Bank, and lose 3% in inflation – a net loss of purchasing power of 2.5%. So, for example, the cost of next year’s care will rise from £2,000 to £2,060.

In theory, the discount rate compensates for the gap between (i) inflation and (ii) the rate of return on invested money. In practice, it doesn’t, but that is another matter. The Ogden Tables set out the multipliers to be used when calculating future losses. There are...

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