An evolution in services dependency in fatal accident claims?

Steve Hill Ltd v Witham [26.08.21]

The Court of Appeal has handed down judgment in this interesting fatal accident claim which will have repercussions for Insurers and their claims portfolios, particularly those involving significant services (care) dependency claims.

The first instance decision resulted in some controversy within the market in its application of the Fatal Accidents Act 1976 (FAA) to care dependency claims.

First instance trial

Mr Hill, the deceased was the primary carer of two foster children, which allowed this wife/the claimant to work as the sole breadwinner for the family. Following his death, the claimant quit her job and took over full-time care of the foster children.

Of note is a key factual point specifically that the fostering agreement required at least one parent to be a full-time carer for the children, originally planned to be the deceased, so the death essentially compelled the claimant to choose between the children and her career.

The trial judge determined the valuation of the claimant’s dependency on the basis of the deceased staying at home to provide childcare, domestic and other service in the sum of £928,827.22 allowing for commercial care rates.

The appeal

The Court of Appeal was asked to rule on four issues, three of which we consider are of particular interest:

1. Whether the true loss of the deceased’s services was in fact to the foster children who do not fall within the category of dependants as set out in Section 1(3) FAA.

The court rejected the appeal. Rather than the foster children, who are strictly not categories of dependants under s.1(3) of the FAA, having lost the services of the deceased, it was the claimant who had lost the benefit of the service which the deceased provided in caring for the children and which had allowed her to work.

In this way, the court ruled that the claimant was able to recover the loss of the care the deceased had provided to the foster children when the usual approach may have resulted in a claim for care dependency by the children failing.

2. Whether care should have been costed at the gratuitous and not commercial rate.

Citing Housecroft v Burnett [1986], the court considered 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 trial judge was deemed reasonable and reflected the evidence given by the claimant's expert.

Of note is that a commercial rate was allowed despite no professional package being in place by the time of trial, which historically is the limited exception to the application of gratuitous rates.

3. To adduce fresh evidence and add a further ground for appeal - specifically that the two foster children no longer remain in the care of the claimant.

The court allowed new evidence showing that the foster children were no longer in the care of the claimant and that the matter be remitted to the trial judge to allow for a re-evaluation of the claimant's care dependency. The new evidence was deemed to consider an issue that wasn’t addressed at trial and questioned the fundamental basis of the dependency claim.

It is a rare example per Jones v MBNA International Bank [2000] of an exceptional circumstance allowing admission of new evidence after trial.

Implications for the market and strategies

At face value, the first instance and appeal decisions may be considered as having an inflationary effect on fatal accident claims. Articles have been published almost suggesting the decision as akin to a landmark case on the application of commercial care rates, and as a route to widening the scope of applicable dependants.

However, the market must bear in mind that the judge awarded commercial care rates and the recovery of care provided to foster children through the claimant in highly fact specific circumstances that will not be applicable in the majority of fatal accident claims i.e. the terms of the fostering agreement required at least one parent to be a full-time carer.

It can reasonably be argued that because of the highly unusual facts of this case, the majority of fatal accident cases are distinguishable.

Nevertheless, insurers and their advisers will need to be mindful of claimant firms trying to use this judgment as the basis for larger services (care) dependency claims based on commercial rates and claims masquerading as a loss suffered by a claimant from a still wider class of dependants than in s.1(3) of the FAA.

The factual basis of such claims should be carefully scrutinised and consideration given to suitable stress testing, including where appropriate expert care evidence, forensic intelligence gathering and targeted disclosure requests (including e-disclosure).

Finally, this case is a rare but useful example showing the willingness of the Court of Appeal to admit new evidence and remit to the trial judge for reconsideration where new evidence emerges which questions the fundamental basis of a claim and it relates to an issue that wasn’t considered at trial.

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