Keoghs Insight

Author

Natalie Dawes

Rix v Paramount Shopfitting Company Ltd (2020)

Blogs15/09/2020

Scenario:

In this case, a dependency claim was based on the lost income from a self-employed deceased where the business was inherited by the dependent widow on death. The business thrived, continuing to provide a source of income to her.

The issue:

Where was the loss of dependency if the asset that supported the deceased and widow continued despite the death of the owner?

The decision:

The success or otherwise of the business after death was irrelevant to the analysis of dependency.

The Court of Appeal decision in Welsh Ambulance Services NHS Trust and another v Jennifer Mary Williams [2008] EWCA Civ 81 was applied in Rix in favour of the dependent so that the events in the business after death were irrelevant. The loss of dependency was a factual issue assessed based on the situation at the time of death. The widow had a financial dependency on the income generated by the deceased’s work in the business and the fruit of those labours was lost through his untimely death.

This situation was contrasted with the income generating investments passing to the dependent and continuing to generate the same income. No loss was sustained in respect of these assets.  

Income which was derived from capital is not part of the financial dependency, because it will be unaffected by the deceased’s death, whereas income which was derived from labour is part of the dependency.”

The role of the deceased in generating the income on which the widow had a dependency was critical.

Assessing the value of the financial dependency could be based on the cost of replacing the time previously applied by the deceased in the business. The court rejected the replacement cost approach in this case favouring the simpler analysis based on the evidence of the actual income brought into the household by the deceased.

The cost of employment could have played a part had the loss been founded on both loss of income from capital and labour; in this case the loss was from the deceased’s labour alone and could be assessed on his actual income before death.

Why is this case important?

It neatly crystallises all the competing issues in what can be, at first blush, tricky cases where it might be argued at one level that there was no loss judged by events after the death. By winding the clock back to the date of death and ignoring events thereafter the analysis focuses on the deceased’s lost contribution.