FATAL ACCIDENT CLAIMS and INSURANCE LAW
Brent L. Handel, Q.C.
Barrister & Solicitor
After a tragic motor vehicle accident in which a loved one is lost many survivors are unable to cope with the thought of pursing legal rights. However, the surviving spouse on behalf of the children should contact legal counsel to at least discuss the options available when death is the result of a negligent act. By contacting a lawyer the survivor will at least then be in a position of making an informed decision about whether or not to pursue a fatal accident claim.
In a motor vehicle accident the deceased’s family has two policies of insurance to access to assist with expenses. One policy is from the motor vehicle in which the deceased was in and another policy of insurance is from the motor vehicle of the person who may be at fault for the accident.
The policy of insurance from the motor vehicle that the deceased was in has what are called Section B Benefits or ‘No-fault Benefits” which include $5,000.00 for funeral service expenses, plus $400.00 for grief counselling per family, plus a lump sum “Death Benefit” amount that varies based upon the age and status in the household of the deceased at the date of the accident (for a surviving spouse with two children it would be $37,000.00 payable almost immediately). These amount are payable to surviving family members from a fatal motor vehicle accident regardless of fault. Legal counsel is not normally required to access these benefits.
Third Party Liability Benefits
In addition to no-fault benefits, if someone other than the deceased was at fault for the accident, the deceased’s family may bring a claim against the auto insurance company for the party at fault. This claim, for which legal counsel is recommended, may include the following benefits to the surviving family.
1. Funeral, burial or cremation expenses and monuments
In the claim against the party at fault, the expenses for the funeral service, burial or cremation and a headstone or monument are based on the actual cost the family incurred. So long as the costs are reasonable the insurance company for the party at fault must pay for all of these costs. This is helpful to the deceased’s family since the $5,000.00 paid under the Section B portion of the policy is normally insufficient to cover all of the funeral expenses.
Under Section 8 of the Fatal Accidents Act of Alberta (FAA) there is a claim for the grief, and loss of care, guidance and companionship of the deceased which may be claimed by a parent, child, spouse or adult interdependent partner. The amount awarded is as of May 1, 2013 is $82,000.00 for a parent who loses a child, $82,000.00 for a spouse or interdependent partner who loses a spouse or partner and $49,000.00 for a child who loses a parent. Note: under Section 8(3) of the FAA a spouse or interdependent partner cannot recover for this if they were living separate and apart at the time of death.
An April, 2010 amendment to the FAA now allows $82,000.00 bereavement to the parents to be divided equally between the parents, regardless of the age of the deceased at the time of death. Prior to this amendment parents would only receive a bereavement amount if the deceased was a minor at the time of death.
3. Loss of Dependency
Additional amounts that can be claimed against the insurance company for the party at fault for a wrongful death is a function of who is left behind. For example, a sole income-earner in a family with young children and a young spouse dependant on the deceased’s income will result in a significant claim. On the other hand, the tragic loss of a child, unfortunately in the eyes of the law, does not result in significant compensation to the survivors on the basis that the survivors were not dependant on the child’s income. However, in some cases parents have successfully brought a claim for loss of dependency in old age on the child’s future income.
The calculation, for example, for a deceased family income-earner would be as follows. Calculate the expected gross income of the deceased had he/she lived over the balance of the deceased’s working life utilizing the deceased’s historical earning rate updated for inflation, which may also be increased for work productivity/promotion.
Subtract the income taxes that the deceased would have paid to arrive at a net income. Add the annual cash value of the fringe benefits the deceased had at work for such benefits as a pension plan, health benefits, dental benefits and disability benefits all of which can be calculated to result in a cash equivalent to be added to the net income.
Then a deduction must be made for the deceased’s personal expenditures that he or she would have made had he or she survived. This amount can vary depending on the number of people in the family with 20% as a benchmark - the amount of personal expenditures decreasing as the number of children increase.
Then apply a divorce contingency deduction on the basis that many marriages end in divorce. Finally, depending upon the age of the deceased, a re-marriage contingency would also be applied.
The amount now arrived at is the potential settlement amount for the loss of dependency head of damages only. As this is paid immediately and in full on settlement or Judgment, a present value calculation must be made to reflect the fact that the recipient can invest the lump sum and earn additional income which would result in over compensation if a deduction for present value was not made.
4. Loss of Housekeeping Capacity and Child Care
Another head of damages is a loss of housekeeping services and child-care claim. This claim is particularly important and can be quite significant for the survivors when the deceased was primarily responsible for taking care of the household and child-rearing.
This calculation is made based upon the hours per week the deceased worked in the household for such items as:
repairs indoor and outdoor;
any other household chores the deceased performed.
The hourly rate used for the calculation is based on the market conditions of what it will likely cost for the survivor to hire someone to now do the household chores the deceased performed.
If the deceased was a full-time homemaker with several children this claim can be large as the claim is based on the services the deceased would have provided into the future for many years. A home economist and labour economist are hired to assist with this calculation.
5. Out-of-Pocket Expenses
Other claims which may be made against the party at fault include the following:
a) Expenses incurred for the care and well being of the deceased between time of injury and death may be claimed by a spouse, adult interdependent partner, parent, child, brother or sister under Section 7(a) of the FAA.
b) Travel and accommodation expenses incurred in visiting the deceased between the time of the injury and death. This may be claimed by the spouse, adult, interdependent partner, parent, child, brother or sister under Section 7(b) of the FAA.
c) Fees paid for grief counselling that was provided for the benefit of the spouse, adult interdependent partner, parent, child, brother or sister of the deceased, which is claimed under Section 7(d) of the FAA. Proof of actual expenses needed.
Which driver is a fault?
In the difficult circumstances surrounding the death of a loved one it is common that fault or liability for the motor vehicle accident is not discussed immediately. However, if there is any question about who may be at fault for a fatal motor vehicle accident it is important that family members contact legal counsel as soon as possible so that evidence of the accident scene itself may be preserved and witness statements taken for potential use later in any civil proceedings.
Also note that liability is not an all or nothing proposition. Fault can be shared between two drivers depending on the circumstances of the accident.
Failure to wear a seat belt may result in a reduction of the claim for the survivors on the basis that the deceased contributed to the resulting death by failure to wear a seat belt. Expert evidence from a bio-mechanical engineer is crucial at an early basis to examine the seat belts and the vehicle itself for evidence of use. Failure to wear a seat belt may
result in a reduction of the survivors’ claims by 10% to 30% depending on the facts of the case.
Other Fatal Accidents
Under Alberta’s Traffic Safety Act, “off-highway vehicle” means any motorized mode of transportation built for cross-country travel on land, water, snow, ice or marsh or swamp land or on other natural terrain. The Traffic Safety Act requires these “vehicles” to be insured unless operating on one’s own land (e.g. a farmer), but then the land or homeowner’s policy will likely pay any claim for negligence
Boats are required to be insured under federal law.
In any of these situations there is likely a third party liability insurance policy in place which will respond to defend the negligent party and pay compensation to the victim’s family.
Fatal accident claims are a complex area of law. Very different claim amounts are arrived at depending on which family member was the victim of a fatal motor vehicle accident, who the survivors are, who was at fault, and whether seat belts were worn.
The deceased’s family should contact a lawyer experienced in fatal accident claims so that the surviving family members may make an informed decision about whether to hire a lawyer and proceed with a claim, and if proceeding with a claim act quickly to preserve necessary evidence.