Calls to modernise the antiquated Fatal Accidents Act

‘Anomalous’ is the word chosen by Lord Sumption on 2 April
to describe the effective overcompensation that can result under the Fatal Accidents Act 1976 (FAA).

This is important for injury and clinical negligence practitioners and is likely to hasten reform to the FAA, especially as the other Supreme Court justices agreed with him.

Lord Sumption expressed the view that: “What is clear is that sections 3 and 4 [of the FAA] mark a departure from the ordinary principles of assessment in English law, which can fairly be described as anomalous.”

The issue was whether in
a foreign accident case to
apply German principles of damages assessment or the English FAA. The case concerned was Cox v Ergo Versicherung AG (formerly known as Victoria) [2014] UKSC 22.

Ironically, the German principle was identical to the English law principle of damages, i.e. to put the claimant in the same financial position, neither better nor worse, as she would have been in if, in that case, her husband had not been fatally injured by the defendant’s negligence.

This takes account of (rather than ignoring to the claimant’s benefit) any mitigation of loss and credit must be given for receipts referable to the
original loss.

However, the FAA expressly excludes from consideration the potential financial consequences of (or prospects of) remarriage from consideration when assessing damages (section 3) and also excludes from consideration any financial benefits flowing from the death (section 4).

The effect of the FAA may be seen as reflecting the obvious sympathy for and desire to be generous towards those who have been bereaved, even if this results in overcompensation. They are living with the loss of
a loved one as a result of a tortfeasor’s negligence.

This is perhaps, however, reflective of more traditional family arrangements and finances than those seen in today’s society. Indeed, the terminology of section 3 referring only to a widow’s remarriage (and not a widower’s) harks back to a different era.

Lord Sumption is not the first senior judge to question the effect of the FAA. As long ago as Cookson v Knowles [1979] AC 556, on the calculation of fatal accident multipliers, Lord Diplock called sections 3 and 4 “an artificial and conjectural exercise…[whose] purpose is
no longer to put dependants, particularly widows, in the same economic position as they would have been in had their late husband lived.”

As Lord Sumption notes
in Cox, others have gone further. Atiyah’s Accidents, Compensation and the Law, 8th edition (2013), described damages for bereavement as “highly objectionable” (p89) and the exclusion of maintenance from a subsequent remarriage being taken into account when assessing damages as “one of
the most irrational pieces of
law ‘reform’ ever passed by parliament” (p133).

The Supreme Court’s observations may strike a chord with those in government and the civil service looking to reduce the level of compensation generally. Reversing sections 3 and 4 of the FAA may be unpalatable as the effect would be to reduce the compensation for grieving relatives.

Recent reforms have shown that such qualms are unlikely to dissuade those looking for ways to reduce the level of awards, costs or volume of claims, though. This is especially so in areas where the public purse is affected and fatal accident (including fatal clinical negligence) compensation is certainly one of those areas.

I anticipate reform in this area. I am not referring to the long-called for expansion in
the range of dependants able to claim or (substantially) increasing bereavement damages and those entitled to them as pressed for by the Law Commission (see, for instance, the Law Commission’s report Claims for Wrongful Death almost 15 years ago in November 1999) and others. Proposed reform was abandoned by the coalition government in January 2011.

What I anticipate are moves to bring the calculation of fatal accident damages in line with the assessment of restitutionary damages under common law generally by the abolition of sections 3 and or 4.

So the award of damages
to Mrs Cox of no less than,
but also no more than she
had lost, arising out of the
death of her husband in Germany, may become the
rule rather than the exception
in all fatals claims. SJ

Charles Bagot is a personal injury and clinical negligence barrister practising from Hardwicke