Case Law Update - Elderly Client Adviser

Feature

posted 1 Nov 1999 in Volume 5 Issue 1

Case Law Update

Cox-v-Hockenhull [1999] 3 AER 577
This case concerned the calculation of damages under the Fatal Accidents Act in a situation where the plaintiff was financially dependent on state benefits paid in respect of his late wife's disabilities. She was killed in a road traffic accident, which was entirely the fault of the defendant. The benefits in question were:

Disability living allowance (care component)

Disability living allowance (mobility component)

Severe disablement allowance

Invalid care allowance - paid to the plaintiff, who became his wife's full time carer before the accident

Income support

Housing benefit

Council tax benefit

After Mrs Cox's death, DLA, SDA and ICA ceased to be payable. Mr Cox became entitled to Incapacity Benefit in respect of his own injuries suffered in the accident, and he continued to claim IS, HB and CTB.

The dependency award made by the judge at the first instance was challenged on the basis that Mr Cox was not dependent upon his wife, and had suffered no financial loss. His dependency was entirely upon the State, both before and after her death.

The Court of Appeal held that there can be a financial loss even where the State is the sole source of income. The determining factor is the nature of the benefits claimed. In this case the loss of DLA and SDA could be taken into account in the plaintiff s dependency claim, but the loss of ICA was not compensatable, and since IS, HB and CTB remained in payment, albeit at the lower level appropriate to a single claimant, there was no loss in this respect either.

Comment

The principle articulated in this case was not previously clear-cut. Its indications may well extend beyond the scope of a FAA claim to, for example, a dependency claim made under the Inheritance (Provision for Family and Dependents) Act 1975.

Like many court decisions which purport to address welfare benefits issues, this one contains errors and inconsistencies. The Court of Appeal's conclusions as regard the various benefits that were being paid at the date of Mrs Cox's death were as follows:

i) where income-related or means-tested benefits (IS, HB and CTB) continue in payment there is 'no loss', even though the amount of benefit may be adjusted downwards to reflect the needs of a single claimant.

ii) The DLA (care component and mobility component) is a non-contributory benefit, and is not taken into account in the means test for income support.

Consequently, Mr and Mrs Cox's joint income support while Mrs Cox was alive, and the loss of this income was legitimately part of the plaintiff's dependency claim.

iii)The same applies to the SDA, although this is taken into account in the income support means test, and consequently does not make a claimant better off.

iv) As regards the ICA the State had, in effect, employed the plaintiff to look after a disabled person. If that person had been other than Mrs Cox there would have been no compensatable loss on her death. In this case the relationship of marriage was 'incidental', and the loss of ICA should not therefore be included in the dependency claim.

It is difficult to understand why, given the Court's broad conclusion that the plaintiff must have suffered loss, it then ruled that SDA was compensatable, even though payment simply reduces income support. If there was no loss 'in relation to IS, HB and CTB', why is SDA different? The Court did not mention the fact that, had the plaintiff carried on receiving SDA after his wife's death, along with his own incapacity benefit, the two benefits combined would have put him above the income support threshold, nor did it mention that SDA raises the income support threshold (see below).

As regards the ICA, the Court drew an analogy with a case where two spouses were dancing partners in a business relationship, and it was held that no benefit arose from the partnership that could properly be attributed to the relationship of husband and wife. (Burgess v Florence Nightingale Hospital (1995)).

However, entitlement to ICA is unusual in that it is a `piggy-back benefit, and can only be claimed where the person cared for is in receipt of DLA care component (or attendance allowance). Consequently the plaintiff lost entitlement because DLA ceased to be payable on his wife's death. Given that there was dependency as regards the DLA, why not as regards the ICA?

Another relevant point here is that entitlement to ICA raises the applicable amount for means-tested benefits, by creating entitlement to the carer's premium. Again, therefore, there is loss consequent upon the loss of the DLA.