Knauer v Ministry of Justice

Mrs Knauer had been exposed to asbestos when working as an administrator at a prison. As a result she developed mesothelioma and died at the age of 46. She had three sons aged 22, 20 and 16. The action was brought by her widower. She had what was described as an “old fashioned” relationship with her husband, in that she did most of the housework and shopping whilst he did household repairs. The couple ran a pub together.

At the time of her death Mrs Knauer had worked for many years and in the High Court, Bean J found that she would have continued to do so. Mr Knauer therefore claimed both for an income dependency and for loss of her domestic services.

There was an issue of principle as to the multiplier to be used to calculate the value of this dependency claim. It has long been the case that the multiplier in a fatal accident claim is assessed at the date of death rather than at the date of trial: Cookson v Knowles [1979] AC 556.  The multiplier is reached by taking a starting point of the number of years to the predicted date of death of the claimant or retirement or death of the deceased (as the case may be), which is then discounted both for the uncertainties of life and for accelerated receipt. The conventional method of calculation is to fix one overall multiplier, then to classify the period to trial as special damages and the remainder as future loss. This is unlike the position in personal injury claims with living claimants where the multiplier is assessed at the date of trial.

Bean J commented that this method of calculation is illogical, because the discount for accelerated receipt should not apply in respect of the period from the death to the trial.

The Claimant submitted that the time had come to depart from the conventional method. Instead, it was argued that the period from death to trial should be treated as special damages (with a small discount for the uncertainties of life but none for accelerated receipt) and then the multiplier for future loss should be calculated starting at the date of trial or judgment. That is essentially what the Law Commission recommended in its 1999 report Claims for Wrongful Death.

Bean J said that he would have followed that course if it were open to him to do so. However, he was bound by the decisions of the House of Lords in Cookson v Knowles [1979] AC 556 and Graham v Dodds [1983] 1 WLR 808, in which the conventional approach was set out and adopted. He therefore approached the claims for past and future income dependency, and past and future services dependency, on that basis.

The Claimant appealed the decision of Bean J to the Supreme Court by way of a ‘leapfrog’ appeal, pursuant to Section 12 of the Administration of Justice Act 1969.

Frank Burton QC appeared on behalf of the Claimant before seven Justices of the Supreme Court, arguing that it was necessary to depart from the long standing authority of Cookson v Knowles and Graham v Dodds. He submitted that the approach to calculating multipliers in dependency claims ought to be the same in fatal and non-fatal accidents.

Gerard McDermott QC appeared for the Defendant. Mr McDermott recognised the actuarial flaw that arises from calculating dependency multipliers in the current way, but submitted that the overall system of damages in fatal accident claims results in fair compensation for dependants.

Today, the Supreme Court unanimously allowed Mr Knauer’s appeal, overturning Cookson v Knowles and Graham v Dodds. The Supreme Court held that, in the current legal climate, the application of the reasoning in the two House of Lords decisions is illogical and its application also results in unfair outcomes. The most important reason for coming to that view is that there has been a material change in the relevant legal landscape [23], namely the use of the Ogden tables and their endorsement by the House of Lords in Wells v Wells [1999] 1 AC 354. Additionally, the Supreme Court thought that it should depart from Cookson and Dodds because of the unfair effect of the rule as set out in those cases, leading courts to distinguish them on inadequate grounds, which means that certainty and consistency are undermined [8-9, 23].

This ruling will be a welcome decision to claimant lawyers who have long argued that the previous system resulted in under-compensation for clients.

References in square brackets are to paragraphs in the judgement.