Court of Appeal upholds principles of dependency in our mesothelioma case Steve Hill Ltd v Mrs Sarah Witham
Steven Snowden QC and John-Paul Swoboda of 12 KBW, and Dushal Mehta of Fieldfisher
Following the defendant's appeal of our successful claim on behalf of Sarah Witham at trial, the Court of Appeal today handed down a powerful and unanimous judgment in this fatal mesothelioma claim.
At stake was the width and breadth of dependency claims under the Fatal Accidents Act and the proper method of valuing claims under the Act. Nicola Davies LJ gave lead judgement and Stuart-Smith LJ and Sir Patrick Elias agreed.
If it was not enough to lose her husband, a personal tragedy for claimant Sarah Witham (the removal of two foster children from her care following trial) provided the defendant with a further argument - that the future loss of services dependency, relating to the children was no longer sustainable given their removal from the claimant’s care after trial.
You can read the facts of the case and the first instance decision here and you can read the judgment here.
What qualifies as a recoverable dependency under the FAA?
Nicola Davies LJ rejected the defendant’s arguments that the claimant’s lost opportunity to return to work following the death of her husband, Neil, who was the homemaker and responsible for primary childcare, was not recoverable under the FAA since the loss was properly characterised as the foster children’s loss and because the loss arose from a business relationship (fostering). As Bedlam LJ had stated in Wood v Bental Simplex Ltd [1992] PIQR 332 (CA) “No aspect of the law of damages has been found in practice to be more dependent upon the fact of each particular case than the assessment of loss of pecuniary benefit to dependants under the Fatal Accidents Act.” Neither Nicola Davies LJ nor any other member of the board was willing to go behind the Deputy High Court judge’s findings of fact.
The judgment does not simply refuse to interfere with factual findings made by the judge below, but clarifies the law in several ways. Firstly, just because a husband and wife (or any other dependants within the meaning of the FAA) receive money for a service (in this case fostering) that does not mean that the reason for the service is business, such that any loss arising from the death of one spouse is ‘incidental’ to the relationship of husband and wife. This is a question of fact that requires a determination of why the husband or wife provided that service. In this case Anthony Metzer QC, sitting as a Deputy High Court Judge determined that the decision to foster was “at is core” a decision to have a family and therefore not incidental to the relationship of husband and wife.
Secondly, in situations where the same loss is suffered by dependants (able to bring a dependency claim) and non-dependants (not able to bring a dependency claim) the mere fact that a non-eligible person(s) has suffered the same loss as a dependant does not prohibit recovery by the eligible dependant. As Nicola Davies LJ put it, “The fact that the children [who by reason of being foster children were not eligible to claim under the FAA] also benefitted from the deceased’s care does not detract from, still less undermine, the claim of Mrs Witham.”
The final area of clarification in this appeal is that the section 3(1) gateway under the FAA is a wide gateway that cannot be reduced to a simple formulation. The foundation of any claim under s3(1) is a dependant’s loss of expectation of future pecuniary benefit from the deceased and “there is no prescriptive method by which such damage is to be identified” (as Nicola Davies LJ emphasised at para 43 of her judgment). There is no rule that where the loss arises because the dependant has lost earnings it is not recoverable; in Witham the Claimant/dependant’s claim arose from her lost career (the pecuniary loss giving rise to the s3(1) claim being the loss of earnings) which the court found to be a recoverable dependency. The question of how a court should value such a loss is separate and considered immediately below.
How should a recoverable dependency be valued?
The judge at first instance valued the claimant’s dependency on the deceased in providing childcare to the children by costing the care given to them by the deceased on a commercial basis and without making a 25 per cent deduction (as happens in PI cases where gratuitous care is provided to an injured claimant to reflect that no tax or NICs will be paid by the care-giver). The defendant claimed that since it was Sarah who was now providing the care to the children, the valuation should not have been at commercial rates and there should have been a 25 per cent deduction, as would happen in PI cases.
The defendant’s arguments were dismissed on the basis that a judge under the FAA had a discretion to find the measure of loss most appropriate to the facts of the case. Further, and importantly, the claimant’s argument that the valuation is of the deceased’s services, rather than the replacement services was also accepted.
As Nicola Davies LJ put it at para 52 of her judgment “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 Court of Appeal confirmed there is no principle that means commercial care cannot be used to value the service provided by the deceased and there is no requirement for a 25 per cent discount where care is subsequently provided on a gratuitous basis. A trial has a discretion as to the measure of loss and there is “no prescriptive method by which such damage is to be … calculated”.
Can loss of earnings, in principle, be used as the measure of loss? This is an issue that has often been taken by defendants following Rupasinghe v West Hertfordshire Hospitals NHS Trust [2017] P.I.Q.R Q1. While the Court of Appeal did not deal squarely with this issue the fact that Nicola Davies at para 51 indicated that the judge did not choose loss of earnings as the measure of loss which would have given rise to the highest level of damages, presupposes that loss of earnings would have been open to the judge at first instance as a measure of loss. Further, the Court of Appeal’s restatement in Witham that there is “no prescriptive method by which such damage is to be identified or calculated” (this in fact being a quote from Cape Distribution v O’Loughlin [2001] EWCA Civ 178 [11]) means any alleged principle that loss or earnings cannot be used as the measure of loss cannot be right as such a principle would amount to a prescriptive method by which damage is, or is not, to be calculated.
Remission to the High Court
An extraordinary turn of events happened to Sarah following conclusion of the original trial, but before the decision on whether to grant the defendant permission in appeal. The removal of the children from her care so she no longer acted as their foster carer was unexpected and unforeseen. It would be wrong to go into detail on this issue here, since a) the Court of Appeal has remitted the matter to High Court to determine how the change of circumstances should affect the claimant’s dependency on the deceased, in so far as it related to the children, and b) the Claimant hopes to have the children returned to her care.
However, this extraordinary turn of events meant that the Court of Appeal considered two principles of general importance: in what circumstances should fresh evidence be permitted after a trial but before an appeal; how far can post death events be taken into account in valuing a dependency under FAA.
While accepting the general principle that there must be an end to litigation save in very exceptional circumstances (which augurs strongly against the admission of new evidence), the Court of Appeal restated their broad discretion to admit new evidence. As the first instance judge had found that the foster care arrangement would continue until 2029, Nicola Davies LJ stated “to refuse to admit the evidence would affront common sense [and] a sense of justice.”
Further, while the Court of Appeal reiterated that dependency is valued at the date of death it also acknowledged that “post death events which are relevant are those which affect the continuance of the dependency…” (cf. Welsh Ambulance Services NHS Trust and anoth v Jennifer Mary Williams [2008] EWCA Civ 81). On the facts of this case, the Court of Appeal found that the new evidence was directly relevant to the continuance of the dependency and that it was a post death event that was relevant.
Upon these findings, the Court of Appeal remitted the matter to the High Court to determine the valuation of the Respondent’s services dependency upon the deceased, in respect of his childcare for the children after 19th May 2021 (the date the children were removed from Sarah's care) only.