In the recent case of Smith v Lancashire Teaching Hospitals NHS Trust & Ors the Court of Appeal found the bereavement damages regime in England and Wales to be incompatible with the European Convention on Human Rights (ECHR).
Overturning the High Court decision, Sir Terence Etherton (Master of the Rolls) held that Section 1A of the Fatal Accidents Act 1976 (FAA) is contrary to Article 8 (Right to respect for private and family life) and Article 14 (Prohibition of discrimination) of the ECHR, to the extent that it prevents cohabiting couples of over two years from being entitled to bereavement damages (currently £12,980).
The Court of Appeal made a declaration of incompatibility under s.4 of the Human Rights Act 1998 (HRA), as it was impossible to interpret the provision to make it compliant with the ECHR. However, the current law will remain in place until it is amended by statute and will still be applied by the courts in its current form.
Despite the need for legislative intervention, insurers may start reserving for cohabitee claims on a precautionary basis in anticipation of a change, and may even begin to factor this issue into negotiations on relevant cases. Publicity concerns in respect of certain claims, for example mesothelioma, may prompt some insurers to consider compensating claimants prior to any legislative change.
In the legacy arena, it appears the impact from a change to the law will be relatively muted. The average age of the claimant in a mesothelioma claim is 72. This average age may reduce further with improved detection rates. The vast majority of the claimants are married or widowed and very few are currently cohabitating with a partner.
It is currently common for a cohabiting couple to marry in the last few months before the claimant dies, although this trend may change. Indeed the likelihood is that cohabitating will increase generally. Statistics show that divorce is driven by those aged 45 and over, with the largest percentages divorced at ages 50 to 64 in 2014.
Government statistics show cohabitation is increasing, but it is fair to say that within the age groups for typical mesothelioma claimants on the proportion are relatively small and are likely to continue that way:
- 60- 64 years - 5.9%
- 65-69 years - 4.19%
- 70+ years- 2.2%
Taken collectively the current incidence of mesothelioma claims volume claims is around 2,600 cases per annum and so approximately 100 cases are likely to be affected.
We should also bear in mind that many of the settlements achieved for mesothelioma claims are now achieved whilst the claimant is still alive. This is due to earlier diagnosis and better medical treatment which allows for a prolonged life expectancy. A bereavement award is only payable to a partner if the claimant dies. If settlement is achieved whilst the claimant is alive then bereavement damages do not form part of the claim.
The reality here is that whilst this recent decision is very interesting and will change the landscape in terms of who can receive a bereavement damages award in future; it is unlikely to have a significant effect in terms of current reserving for mesothelioma claims.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.