Supreme Court departs from precedent over damages calculation date in mesothelioma case

A Supreme Court ruling has found that a mesothelioma victim’s family was under-compensated by almost £53,000 because of the date from which damages were calculated.

The case, Knauer v Ministry of Justice, revolved around whether compensation for the victim, Mrs Knauer, should have been calculated from the date of death in August 2009, or from the date of trial.

In a damages hearing before Bean J in July 2014, the parties agreed the annual figure for the value of the income and services lost as a result of Mrs Knauer’s death.

The trial judge held that he was bound to follow the approach adopted by the House of Lords in the cases of Cookson v Knowles [1979] AC 556 and Graham v Dodds [1983] 1 WLR 808 and to calculate the multiplier from the date of death.

He said that he would have preferred to calculate the multiplier from the date of trial in line with the approach recommended by the Law Commission in their report Claims for Wrongful Death.

Bean J granted a certificate under section 12 of the Administration of Justice Act 1969 to enable Mr Knauer to appeal direct to the Supreme Court.

The Supreme Court unanimously allowed Mr Knauer’s appeal. Lord Neuberger and Lady Hale gave a joint judgment, in which they said that calculating damages for loss of dependency from the date of death, rather than the date of trial, means that the claimant suffers a discount for early receipt of the money when in fact that money will not be received until after trial. This, they said, results in under-compensation in most cases.

They said that the Court had no hesitation in applying the 1966 Practice Statement and departing from precedent.

“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,” read the judgment.

“The most important reason for coming to that view is that there has been a material change in the relevant legal landscape [23]. Cookson v Knowles [1979] AC 556 and Graham v Dodds [1983] 1 WLR 808 were decided in a different era, when the calculation of damages for personal injury and death was nothing like as sophisticated as it is now and the use of actuarial evidence or tables was discouraged,” it said.

Mark Dugdale