Settlement considerations for claimants with a reduced life expectancy – conundrums and strategies

At Bolt Burdon Kemp, we often see tragic cases where negligence cuts a person’s life expectancy short. Without the right legal advice, those affected risk being under-compensated at a time when financial security and justice are needed most.

Our clients come to us because their condition was missed or not identified correctly, and by the time the true diagnosis was established, it is terminal (this is sadly often the case with cancer claims). Other times, a claimant has been severely injured through no fault of their own and received a terminal prognosis.

At Bolt Burdon Kemp, our complex injury team has extensive experience handling claims for bereaved families following a claimant’s death, as well as for claimants who are still living but have a limited life expectancy. In this blog, I discuss the intricacies surrounding this complex area of law, why it can be tricky to navigate and why it is important to seek legal advice.

Fatal claims

There are two main pieces of legislation which allow for claims to be made after someone has died:

The Law Reform (Miscellaneous Provisions) Act 1934 (LRMP) allows for claims to be brought on behalf of the estate of the deceased for any losses the deceased could have claimed right up until the moment of death.

The Fatal Accidents Act 1976 allows the deceased’s ‘dependants’ to claim for the losses they have suffered as a result of the deceased’s death. There are two main types of dependency claims: financial dependency (where you were financially dependent on the deceased) and services dependency (where the deceased provided ‘services’ which you were dependent on, such as childcare).

Can you bring both a living and fatal claim?

The law becomes complicated when there is a living claimant with a reduced life expectancy. An experienced solicitor will need to navigate the overlap between the living claim and potential future fatal claim.

In all circumstances, the law does its best to prevent double recovery. As such, it is well established in case law (Read v Great Eastern Railway (1868)) that where a claimant fully pursues to judgment or settlement a living claim for damages for an injury (so that the claim concludes during their lifetime) and then the claimant dies as a result of that injury, their dependants cannot then bring a fatal claim under the Fatal Accidents Act 1976 on top of the claim that was concluded during the claimant’s lifetime.

The interplay  

Generally speaking, where a claimant bringing a negligence claim has a significantly reduced life expectancy, their options are:

• To pursue and settle a claim in their lifetime so that access to all their compensation is obtained during their lifetime;
• For the claimant’s ‘dependants’ to pursue a fatal claim after the claimant’s death; or
• To pursue a middle-ground approach where some parts of the claim are litigated so the claimant can receive some compensation, but the rest of the claim is ‘stayed’ (ie. put on hold) until the claimant passes away.

What’s the difference between fatal and living claims?

In a living claim, a claimant with a reduced life expectancy can bring a claim for ‘lost years’ – covering money they would have earned in their lifetime. A deduction is made for living expenses, which usually starts at 50%.

Conversely, in a financial dependency claim under the Fatal Accidents Act, the conventional deduction is 33% of joint income where there is only a dependant spouse. Where the dependants are children and a spouse, the conventional deduction falls to 25%.

In addition, dependants can bring a services dependency claim under the Fatal Accidents Act for services the deceased provided such as caring for young children. There is no direct equivalent in a lost years claim for a ‘services’ dependency, so a claim under the Fatal Accidents Act is generally more likely to benefit dependants.

Unlike living claims, fatal claims also allow the estate of the deceased to claim funeral costs, and spouses and long-term partners can receive a ‘bereavement award’ which is currently set at a statutory figure of £15,120.

What’s best for you?

No individual’s circumstances are the same.

It is often the case that fatal claims are awarded higher compensation payments for the deceased’s dependants, and therefore the claimant might prefer for the claim to be stayed, safe in the knowledge that their loved ones will be financially more secure and supported.

However, there are instances when a ‘lost years’ claim could award a larger payment. For example, where the deceased did not provide many ‘services’ and the spouse earned a lot more than them.

Another consideration is whether or not life expectancy is uncertain. There could be a scenario where a claimant stays their claim to allow their family to bring a future fatal claim, and years later they outlive their projected life expectancy and are given a much better prognosis. The compensation award of their claim would be significantly reduced if they no longer have a terminal diagnosis. In this scenario, a higher compensation award could have been secured if they settled their entire claim promptly during their lifetime.

Individual preferences also play a part. If a claimant wants access to all their compensation as soon as possible, for example, to take their dream holiday, that is their choice and the entire claim can be settled during their lifetime.

Seeking legal advice

An experienced solicitor will appreciate the interplay between living and fatal claims which will affect claimants with a reduced life expectancy, and understand how to secure the maximum compensation for their clients in settlement negotiations.

It is crucial to seek legal advice from a solicitor experienced in dealing with reduced life expectancy claims as you may risk being undercompensated or losing the right of your dependants to bring a claim.

Bolt Burdon Kemp is highly experienced in bringing fatal claims and claims for those who have suffered a reduced life expectancy as a result of clinical negligence or personal injury. If you think this may be relevant to you or a member of your family, please request a free callback to speak to one of the members of our team.