The Supreme Court has overturned two House of Lords judgments in ruling that the multiplier in assessing damages for fatal accident claims should be calculated from the date of the trial, not the date of death.
The court, made up of seven justices, described the reasoning in the House of Lords decisions as “illogical” in the current legal climate and said it “results in unfair outcomes”.
Delivering the judgment of the court, Lord Neuberger and Lady Hale said the current system, based on the date of death, led to “under-compensation in most cases”.
They said that, in the case before them, the claimant would receive over £58,000 less if the date of death was used.
The justices said the Law Commission had recommended in its report Claims for Wrongful Death that, as in personal injury cases, multipliers should be used in calculating future losses in fatal accident cases from the date of trial.
The court heard in Knauer v Ministry of Justice  UKSC 9 that Mrs Knauer died from mesothelioma at the age of 46, while working as an administrative assistant at a prison. Her husband made a claim for future loss of dependency under the Fatal Accidents Act 1976.
The ministry admitted liability in December 2013, and a damages hearing took place before Mr Justice Bean in July 2014.
Bean J held that he was “bound to follow” the approach of the House of Lords in Cookson v Knowles  AC 556 and Graham v Dodds  1 WLR 808 and to calculate the multiplier from the date of death.
However, Bean J said that if he had been “freed from that authority” he would have preferred to take the approach taken by the Law Commission. The judge granted a certificate enabling an appeal against his decision to go directly to the Supreme Court.
Lord Neuberger and Lady Hale said the House of Lords cases were decided in a “different era” when the calculation of damages for personal injury and death was “nothing like as sophisticated as it now is” and courts discouraged the use of actuarial tables.
The justices said the old approach relied on the “intuition of barristers and judges” and was “wholly unscientific”. In particular they said the Ogden Tables, which first appeared in 1984, did not exist when the House of Lords rulings were delivered.
The Supreme Court said it “should be very circumspect” in invoking the 1966 Practice Statement (Judicial Precedent) to overrule previous House of Lords decisions, but in this case it had “no hesitation” in doing so.
The court accepted that there were “examples of over-compensation” in the operation of the Fatal Accidents Act, where for instance the claimant remarried, but the “solutions must lie with parliament”.
The Supreme Court allowed Mr Knauer’s appeal and ruled that “the correct date as at which to assess the multiplier when fixing damages for future loss in claims under the Fatal Accidents Act 1976 should be the date of trial and not the date of death”.
Lords Mance, Clarke, Reed, Toulson and Hodge contributed to the judgment.