DAMAGES FOR LOSS OF FATAL ACCIDENT ACT DAMAGES WHEN LIFE EXPECTANCY IS REDUCED: HAXTON –v- PHILLIPS CONSIDERED

 HAXTON V PHILIPS ELECTRONICS UK LIMITED [2014] EWCA Civ 4

What can a claimant do if your claim under the Fatal Accidents Act is reduced because, as a result of the defendant’s negligence, their own life expectancy is lowered and the claim under the Fatal Accidents Act is therefore reduced?  The answer lies in Haxton –v- Philps Electronics [2014] EWCA Civ 4 bring an action for personal injury to make up the difference

THE FACTS

Both Mr and Mrs Haxton developed mesothelioma after been exposed to asbestos. Mr Haxton was exposed through his employment with the Defendant; his wife was exposed whilst washing his work clothes.

THE CLAIM BROUGHT BY MRS HAXTON

Mr Haxton died in 2009 after developing mesothelioma symptoms in 2008. Mrs Haxton’s first claim was brought a fatal accident claim under the Law Reform (Miscellaneous provisions) Act 1934 and under the Fatal Accidents Act 1976. The second claim was a claim for negligence in relation to the injuries and reduced life expectancy she now suffered.

THE ISSUE FOR THE COURT       

Mrs Haxton’s case was that but for the defendant’s negligence, her life would not have been cut short and the assessment of her dependency claim in the first action would have been significantly greater. The Defendant should therefore compensate her for that loss. The issue for the court was whether this was in law, a recoverable head of damage.

THE DEPENDENCY CLAIM HAD BEEN REDUCED BECAUSE OF THE CLAIMANT’S REDUCED LIFE EXPECTANCY

The court began by considering whether the first dependency claim had been calculated correctly. Lord Justice Elias commented that

“5. The underlying principle in assessing the value of a dependency claim is laid down by Section 3 (1) of the 1976 Act which provides that the courts must award “such damages…as are proportioned to the injury resulting from the death to the dependants respectively.” In order to be proportioned they must relate to the actual loss suffered although statute has modified that principle in certain ways…

 6. The significance of Mrs Haxton’s own death is that dependency would in any event have ended at that point even had her husband still been alive, and the widow suffers no loss after that date. The agreed damages in the first action were calculated in accordance with that principle and Mr Weir QC accepts that this was the proper basis of assessment. Mrs Haxton was necessarily limited to damages calculated by reference to her own life expectancy. However had she not herself contacted mesothelioma as a result of Philip’s negligence, she would have recovered more in her dependency claim because her life expectancy would have been greater.”

THE DECISION: THE CLAIMANT WAS ENTITLED TO DAMAGES FOR THE REDUCTION OF HER FATAL ACCIDENT ACT CLAIM

The Court of Appeal upheld Mrs Haxton’s appeal and concluded that she was entitled to damages in the second action for the reduction of her dependency claim in the first action.

NO PUBLIC POLICY REASONS TO PREVENT THE CLAIMANT RECOVERING DAMAGES

They found that there was no reason of principle or public policy which meant Mrs Haxton should be prevented from recovering damages

 “13.The critical question in this case is whether there is any reason of principle or policy which should deprive the appellant from recovering damages which represent the loss she has in fact suffered as a result of the curtailment of her life by the admittedly negligent action of the defendant

14. I am not persuaded that there is. The Fatal Accidents Act confers a statutory right to recover for the loss of dependency and in her claim under that Act she cannot recover more than her actual loss.  But I see no reason why the diminution in the value of that right resulting from the negligence of the respondent cannot be recovered as a head of loss in the claimant’s personal action. This does not, in my view, involve any interference with the principles governing the payment of compensation under the legislation. They are left wholly unaffected. 

15. In my view, there is nothing in the legislation which justifies the inference that Parliament must have intended that the claimant should be denied the right to recover the reduction in the value of this claim, notwithstanding that it is wholly attributable to the negligence of the respondent.  It is a common law claim for damages for loss of dependency; it is a claim for diminution in the value of a valuable chose in action, a statutory right. There is nothing in the language of the Fatal Accidents Act or the authorities on that Act which suggests that there is any special attribute distinguishing this particular chose in action from any other.  It follows that Ms Foster’s related submission, that this is not a head of loss which ought to be recoverable in law, fails also.”

THE PREVIOUS AUTHORITIES SUPPORTED THE CLAIMANT

The Court also considered the previous authorities. Although there was no case directly on point there were authorities which lent some support to Mrs Haxton’s arguments.

  1. The recent Court of Appeal case of Fox v British Airways [2013] EWCA Civ 972; [2013] ICR 1257 provides an analogy to this case. The claimant died following surgery three weeks after he had been dismissed from his employment.  Had he not been dismissed, his dependants would have benefited from a death in service benefit of three times his salary conferred by the terms of his contract. The question before the court was whether, if he succeeded in a claim for unfair dismissal brought by his father on his behalf, he would be entitled to claim this as a head of loss. The employers argued that he should not since he personally did not suffer the loss; it could only benefit his estate after his death. The court rejected this submission. It recognised that in the usual way the relevant loss would be the cost of insurance to provide equivalent benefits, but in the unusual circumstances of this case that would not be appropriate.  The court held that the benefit ought to be treated as belonging to the son and that the dismissal removed that benefit; accordingly if he was unfairly dismissed, it should be compensated. Underhill LJ said this (para 28):

“I believe that the law would be seriously defective if an employee were unable to claim compensation where such rights were adversely affected as a result of a wrong merely because the subject-matter of the right was a payment to be made to a third party; and all the more so since the potential beneficiaries of such a payment would themselves have no claim. I see no reason why that should be the case. In my view it reflects reality to treat the loss, or the diminution in the value, of the benefits in question as a pecuniary loss suffered by the claimants themselves. As Tudor Evans J emphasised in Auty, “the rights under the Scheme attach to the member”. In that case the rule that A cannot recover for a loss suffered by B is not engaged.

 

  1. Fox shows that the loss or diminution of a contractual right may be recoverable even though it is not directly suffered by the claimant. A fortiori that should be the case where, as here, the reduction in the dependency compensation was a loss actually suffered by the claimant herself when her dependency claim under the Fatal Accidents Act was settled.  The source of this right is statutory and not contractual, as it was in Fox, but that is not in my view a material distinction”

 

THERE WERE NO ARGUMENTS RELATING TO REMOTENESS

The Court of Appeal also ruled out the argument that such a loss was too remote.

“22.     Ms Foster did not suggest that recovery should be precluded because the loss would be too remote, but as I have said in Baker v Willoughby Lord Pearce considered that it was.  The report of the case shows that counsel for the appellant (Hugh Griffiths QC, later Lord Griffiths) had argued that the loss of part of the value of a subsisting cause of action against an existing tortfeasor was too remote to constitute a proper head of damage against a subsequent tortfeasor. It was not a reasonably foreseeable consequence of the second tort. He derived that submission in particular from the observations of Lord Wright in Liesbosch Dredger v S.S. Edison (Owners) [1933] A.C. 449, 459.  Lord Pearce, without reaching a concluded view on the matter, said (p.496A):

“I doubt whether that would be an admissible head of damage. It looks too remote.”

I respectfully disagree that a loss of this kind would in principle be too remote.   Moreover, it is relevant to note that in Lagden v O’Connor [2003] UKHL 64; [2004] 1 AC 1067 the House of Lords departed from the approach adopted in the Liesbosch. Lord Hope of Craighead described the test of remoteness as it should now be applied in the following terms (para 60):

“It is not necessary for us to say that The Liesbosch was wrongly decided. But it is clear that the law has moved on, and that the correct test of remoteness today is whether the loss was reasonably foreseeable. The wrongdoer must take his victim as he finds him: talem qualem, as Lord Collins said in the Clippens Oil case [1907] AC 291, 303. This rule applies to the economic state of the victim in the same way as it applies to his physical and mental vulnerability.

23.       Applying that test, it seems to me that it is reasonably foreseeable that a curtailment of life may lead to a diminution in the value of a litigation claim and if a claimant has such a claim, the wrongdoer must take the victim as he finds him. I would be inclined to think that this would be the case even if Mrs Haxton’s tortfeasor had not been the same as her husband’s. But the remoteness argument is, in my judgment, even harder to sustain in circumstances where the same tortfeasor is responsible for injuries to both husband and wife. It must have been foreseeable to this defendant that the claimant would have dependency rights which would be diminished as a result of their negligence.

 SUMMARY

  • There is nothing to prevent a claimant who has had their dependency claim reduced because of negligence claiming that loss as a claim for personal injury.

 

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