FATAL ACCIDENT DAMAGES: A CLAIM FOR SERVICES CAN BE BASED ON THE COSTS OF COMMERCIAL REPLACEMENT – WITHOUT DISCOUNT

The Court of Appeal decision in Steve Hill Ltd v Witham [2021] EWCA Civ 1312    contains an important consideration of the basis upon which claims for loss of services are calculated in a fatal accident case.

FATAL ACCIDENT – DAY COURSE (ONLINE) 12th NOVEMBER 2021

Alongside solicitor Hilary Wetherell I am presenting a day long course: Fatal Accidents: Law, Practice, Procedure and Compassion 2021.  It is an online course on the 12th November 2021. The implications of this case will be considered in detail. Booking details are available here.

THE CASE

The claimant widow brought an action under the Fatal Accidents Act. At the time of her husband’s death the widow worked and the husband cared for their foster children who had special needs.  The widow then gave up work to look after the children.

THE JUDGMENT AT FIRST INSTANCE

At first instance the judge did not accept a claim based on the widow’s loss of earnings, because she had given up work.

“I agree with the Claimant that replacement care is the appropriate measure of loss to be adopted and it is therefore necessary to express a view on which expert’s evidence I preferred in relation to the figures to be adopted for the future given that the parties’ experts agreed figures in relation to care to date.”

THE COMMERCIAL RATE WAS THE APPROPRIATE RATE TO CALCULATE THE LOSS – WITHOUT DISCOUNT

The judge then held that the appropriate means of calculating this loss was by reference to the commercial rate of hiring a replacement. Without discount.

“I find that it is not simply the commercial rate that should be applied but it would also therefore follow that no discount of 25% would be appropriate.”

A total of £585,904 was awarded under this head.

THE DEFENDANT’S APPEAL

Some time after the trial the children were taken to respite care and not returned by the Council to the claimant. At the time of the appeal it was not clear whether the children would be returned.

The Court of Appeal allowed the appeal on this issue. Holding that the judge would have to re-evaluate this aspect of the claim and making findings of fact.

THE DEFENDANT’S UNSUCCESSFUL APPEAL ON THE ISSUE OF QUANTIFICATION

It is important to note, however, that the appeal was not successful on the other issues.  The method of quantification is important.

THE COURT OF APPEAL JUDGMENT ON QUANTIFICATION OF THE CLAIM FOR CARE

Ground 1

1. 1. The essence of this ground of appeal is that the true loss of the deceased’s services was to the foster children who do not fall within the category of dependants as set out in section 1(3) FAA. It was the children who lost the benefit of the services of the deceased, not his wife. The defendant accepts that had the services been provided by the deceased to the claimant it would not be an objection to an award that such services might also have benefited third parties who are not eligible to claim as dependants.

1. 1. The defendant contends that the only loss suffered by the claimant was that resulting from her lost opportunity to return to work but this was, as the judge held, not a loss which she could recover under the FAA. Further, it was a loss which arose from a business relationship (fostering) not that of husband and wife.

1. 1. The claimant relies upon the findings of fact made by the judge. The judge identified and assessed the loss which had truly been suffered, it was the loss of the claimant. The reality is that the claimant lost her career as a consequence of her loss of her husband’s services, it is immaterial whether A and B also suffered a loss.

1. 1. The loss was within the defined relationship of husband and wife rather than being a business decision. That was the evidence before the court accepted by the judge. The judge correctly identified the nature and value of the loss. It was the claimant’s dependency on her husband which had been lost, in that she had a reasonable expectation of pecuniary advantage from the continuance of his life. The judge chose to measure the loss with reference to childcare costs, he was entitled so to do.

Discussion and conclusion

1. 1. Permission was granted by Coulson LJ upon the basis that the appeal proceeds upon the findings of fact made by the judge. The judge’s finding that the claimant had sustained a loss was premised upon other findings of fact, in particular that her husband would have been the primary carer for A and B, so as to enable her to return to work and pursue her career.

1. 1. The judge’s findings at [52] that “… the Claimant has lost her full-time career as a result of [her husband’s] death. She was dependent upon him as the principal carer for A and B to allow her to pursue a career for the benefit of the whole family in the knowledge that their … foster children, would be properly cared for” were founded upon the evidence and are not open to challenge in this appeal.

1. 1. The assessment of the dependency valuation is fact specific. In approaching such an assessment, the court should identify and assess the loss which is truly suffered. The reality of the claim before the judge was that the claimant lost her career as a result of her husband’s death and her loss of his services. She was dependent upon him taking the role of househusband and principal carer for the children so that she was able to pursue a career in the knowledge that the children would be properly cared for. This was the finding by the judge, it reflected the evidence and provided a sound basis for his determination that the loss was that of the claimant. The fact that the children also benefitted from the deceased’s care does not detract from, still less undermine, the claim of Mrs Witham.

1. 1. Undisputed was the evidence that the claimant and her husband had a stable and long-term relationship. The decision they made to foster A and B was properly described on behalf of the claimant as having “at its core” a decision to have a family, one of the most fundamental decisions a husband and wife can make as a couple. Flowing from that decision, the manner in which they approached the issue of family commitments and their respective employment was clearly a decision between a husband and wife in respect of children and properly so found by the judge. His finding of fact on that issue is unassailable. There was nothing “incidental” to the husband/wife relationship in this decision, it was its core.

1. 1. In assessing the measure of the loss, the words of Latham LJ at [11] of O’Loughlin are relevant, namely that there is no “prescriptive method by which such damage is to be identified, or calculated …”. What the claimant has lost is the benefit of the service which her husband provided in caring for the children. That being so, she can legitimately claim the cost of securing those services to enable her to place herself in the position she was prior to her husband’s death. The value of his service is not affected by the fact that the claimant is required to care for the children pursuant to the fostering arrangements.

1. 1. Accordingly, for the reasons given and subject to the views of their Lordships, I would dismiss this ground of appeal.

Ground 2

1. 1. The defendant contends that the claimant suffered no loss because she took over the care of the children and continued to be paid for foster care by the Council. The judge failed to take account of events after the death (Williams [50]). As the claimant received the full fostering allowance, no loss was suffered.

1. 1. It is the claimant’s case that this point was not taken at trial. The claim was not for lost income provided by the state to care for A and B, it was for the recovery of the separate income and additional income which the claimant and her family would have received had she not had to give up her career. The judge so found at [53].

Discussion and conclusion

1. 1. At [38] the judge found that the decision to foster was not a business decision “or a choice to maximise their finances”, he found that the foster care payment was helpful but “was not the motivation behind the decision to foster”.

1. 1. Prior to her husband’s death, the claimant, jointly with him, had the benefit of the foster care payment plus the benefit of his services. After his death she had the benefit of the foster care payment but had lost the benefit of his services. The fact that she had sole responsibility for fostering after the death, as opposed to joint responsibility before it, is neither here nor there. The foster care payment is and was a constant, before and after the death. It does not affect the claimant’s lost of dependency upon her husband’s services.

Ground 3

1. 1. The essence of this ground is that as the claimant was accepted to be the person who would care for A and B, the judge should have looked at the reality of the situation and should not have costed care at the commercial rate.

1. 1. The claimant contends that it is for the trial judge to identify the appropriate measure of loss, there is no prescriptive methodology to be adopted. It is immaterial whether or how replacement care is provided and wrong in principle to attempt to value damages by reference to the replacement which is in fact provided. The judge was entitled to find that the commercial cost was the appropriate measure of damages, it was an evaluative judgment which fell within a range of decisions which a reasonable judge could make.

Discussion and conclusion

1. 1. It was open to the judge to find the measure of loss appropriate to the facts of the case. The loss which would in fact have provided the highest level of damages would have been the claimant’s loss of earnings. What is in issue in a dependency claim under the FAA is the value of the services which the deceased would have provided had he not died. In Daly at p.127 Bridge LJ stated:

“… it was entirely reasonable and entirely in accordance with principle in assessing damages, to say that the estimated cost of employing labour for that time … was the proper measure of her damages under this heading. It is really quite immaterial, in my judgment, whether having received those damages, the plaintiff chooses to alleviate her own housekeeping burden, … by employing the labour … or whether she chooses to continue to struggle with the housekeeping on her own and to spend the damages which have been awarded to her on other luxuries ….”

1. 1. It is the value of the services lost which requires assessment and compensation, not the value of how the dependant manages following the death. The decision of the judge to value care, not on the basis of the gratuitous replacement by a friend or relative, but on the basis of the estimated cost of employing labour to replace the lost service, was one open to him to make. Further, having so found, there is no identified requirement to make a 25% or other deduction.

1. 1. Finally, was it appropriate for the judge to adopt the commercial rate? In Housecroft v Burnett [1986] 1 All ER 332, a claim for personal injury arising from a road traffic accident, O’Connor LJ stated at p.343:

“… in cases where the relative has given up gainful employment to look after the plaintiff, I would regard it as natural that the plaintiff would not wish the relative to be the loser and the court would award sufficient to enable the plaintiff to achieve that result. The ceiling would be the commercial rate.”

1. 1. This was not an FAA claim, but I regard it as authority for the proposition that where earnings have been lost, the commercial rate of care may be appropriate. Whether it is appropriate is a fact-specific assessment for the court. The approach of the judge was reasonable, it reflected the evidence given by the claimant’s expert, there are no grounds upon which this court could interfere with the assessment.

1. Accordingly, and subject to the views of their Lordships, ground of appeal 5 is allowed. The revaluation of the claimant’s dependency is remitted to the trial judge. Grounds 1 to 3 of this appeal are dismissed.