There are three main heads of damage in a compensation to relatives claim, these being:
- Loss of financial support;
- Loss of care; and
- Other expenses – medical and funeral.
There are no damages for non-pecuniary loss; however, separate actions may be taken for nervous shock where applicable.
Loss of Financial Support
The principle behind the loss of financial support is that the claimants would have derived some financial benefit from the deceased had the deceased lived. The first step is calculating the probable earnings of the deceased. This is calculated in a similar way to any personal injury matter of economic loss.
The second step is establishing the dependency of the claimants on the deceased’s income. The most common and accepted view is that set out in Luntz, Assessment of Damages in Personal Inury & Death, 4th Edition, in which the range of dependency is between 31.2% and 82.8% depending upon the number of dependents and the income ratios of the husband and wife.
Where children are currently of school age, it is necessary to apply the percentage of dependency up until the age of at least 18 years. However, argument could be made, depending on the circumstances, that dependency may continue for a number of years later, say up to the age of 22-23, depending up university attendance or family history.
However, it should be noted that the table above is extracted from average expenditure of all groups of the Australian Bureau of Statitics, Household Expenditure Survey 1999. Where the income of the deceased is likely to exceed or be lower than the average, consideration should be given to an alternative method where it is likely the the table of dependencies does not reflect the plaintiff’s actual circumstances.
Alternative Methods of Establishing Loss of Dependency
Where someone has an established history of expenditure, an alternative approach based on information supplied by the claimant as to the family’s expenditure may be used. This would need to be supported by the claimant’s statement and other records, such as bank statements, loan applications, etc.
Household Expenditure Survey
The Household Expenditure Survey can sometimes be used to extract the relevant information, especially where the deceased’s income is significantly out of the range over the average earnings. Care should, however, be taken in this approach because district courts may be unwilling to accept variances on the established precedences.
In all instances of using an alternative, you need to ensure that it is a realistic claim and judge the claimant’s statement with an independent eye.
Many of the benefits derived from the deceased’s earnings would have been shared by the family as a whole. Those payments for housing (whether in the form of a mortgage, rent or interest foregone), electricity, gas, etc, accrue for the benefit of all. The value of the shared benefits should therefore be divided among all those who are claimants, without taking account of the fact that the deceased, and others who are not claimants, might also have benefited from the expenditure.
The claimants are also entitled to receive compensation in accordance with the principles set down in Griffiths & Kirkemeyer for services provided by the deceased. This may include baby sitting, lawn mowing, work around the house, help with homework. It may also include, where a trade or similar qualification applies, that the commercial value of those services (whether a builder, car mechanic, etc) be claimed on the basis that the deceased would have, if not for the accident, carried out those activities himself at no cost. The labour portion only should be claimed, but consideration should also be given for the discount available for trade prices.
For past care, the average weekly earnings rates should probably be applied. For future care, commercial rates should be used.
Medical and Funeral Exenses
The claimants are entitled to claim for medical and funeral expenses incurred as a result of the accident. Medical expenses are generally something covered by the solicitor and not necessarily something that we need to concern ourselves with. Funeral expenses, where given, should be included in our report, the main consideration being that the funeral expenses are reasonable. This includes the reasonable cost of a headstone or tombstone. Other costs, such as transporting bodies, have been allowed, depending on the circumstances.
It has been long established that the possibility of the surviving spouse remarrying has relevance to the assessment of damages for the loss of reasonable expectation of support. There appears to be some relucantance to apply a discount for remarriage recently. There are figures available on the remarriage rate of widows but the application of those rates is uncertain. Consideration should be given where the deceased was a very high income earner, that the spouse may remarry someone on a lesser income.
Insurance policies, whether they be in the form of a life insurance policy, income protection, life assurance or payment from superannuation fund, are not to be deducted.