Family Compensation (Death) Claims
The law in British Columbia provides limited compensation arising out of the death of a family member. The right to claim for the loss of a family member is a statutory right coming from the Family Compensation Act. Otherwise, in common law, there are no rights to claim due to the loss of a loved one.
The compensation is essentially limited to:
- Damages for loss of love, guidance and affection (generally for infant children of the deceased only);
- Damages for the loss of services that would otherwise have been rendered by the deceased to the remaining family members;
- Damages for the loss of financial support to the remaining family members as a result of the death. The deceased’s take home income is reduced by the portion of that income that would have been used to cover the deceased’s own personal expenses with the balance left being for the support of the remaining family members;
- Limited out-of-pocket expenses incurred as a direct result of a death (funeral and related expenses);
- Damages for loss of inheritance; and
- Tax gross-up and management fees on the future loss award.
Additionally, court order interest is payable on loss of love guidance and affection, on past services, on past financial support and on out-ofpocket expenses. Our law does not allow any recovery for the grief and sorrow caused by the death of a family member.
Note that at the time of writing this article, amendments to the Family Compensation Act are being considered by the legislature to expand the potential losses.
a. Class of Claimants
The family members that are entitled to compensation are limited under the Family Compensation Act to the following:
- Children of a deceased;
- Parents of the deceased; and
- Grandparents of the deceased who have taken over the role of the parent.
b. Loss of Love, Guidance and Affection
The Courts of British Columbia have held that children are entitled to an award under this head of damage but unfortunately, a spouse is not. In some instances a parent may receive compensation but the compensation is usually under $5,000 and only awarded in rare situations.
The accepted range of damages is usually between $15,000.00 and $35,000.00 for children, depending on their age and attachment with the deceased. When a child gets past the age of majority, limited compensation is allowed ($0- $5,000.00) but only in unusual situations.
c. Loss of Services
This head of damage provides compensation for the loss of services, past and future, provided by the deceased to the family unit. Usually, an economist calculates the loss based on the average of the hours worked per week helping out in the family unit and then figuring out the loss over the lifetime of the deceased had he/she not died in the accident. This is a very complicated calculation.
d. Loss of Financial Support
This head of damage provides compensation for the loss of financial support, past and future, provided by the deceased to the family unit. Generally speaking, an economist is needed to calculate this figure. The economist figures out the income of the deceased and figures out how much personal consumption of that income went only to the deceased’s own needs. The remainder of the income is considered in the calculation of loss of financial support, in the past and into the future.
e. Out of Pocket Expenses
The law has evolved such that the out-of-pocket expenses that can be recovered generally only relate to funeral and expenses surrounding the funeral.
f. Loss of Inheritance
The loss of inheritance a family member has suffered is the amount the family member will not receive as an inheritance in the future when the deceased normally would have died. Again, this is a very complicated calculation and considers such things as the amount of the inheritance at the time of the accident, the rate of savings of the deceased over time had the accident not occurred and negative/positive contingencies.
g. Contingencies / Reduction in Claim
In a death claim, the courts will consider negative and positive contingencies. Negative contingencies include the chances of remarriage, the chances of divorce, the chances of early death, etc. Positive contingencies include the chance that the deceased would have received a promotion at work, would increase services throughout his/ her life to family members, etc.
h. Tax Gross Up
This claim is based on the fact that if a family member gets an award now for a future loss, the family member will have to pay taxes on the investment income over time. The amount of the tax gross-up award is basically compensation for having to pay taxes on the investment income.
i. Management Fees
The Courts may award money to a family member in order for that person to hire an investment manager to manage the award, especially if the family member has little or no investment experience. The reason for this award is that a family member receiving a large future award needs to invest it to ensure it lasts a lifetime.
In summary, there are only a limited number of family members that can receive compensation for the loss of a loved. To determine the loss suffered by the claiming family member, a complicated set of calculations needs to be done which invariably means that a lawyer and economist have to be involved in the claim. It’s important that the lawyer actually has extensive experience in death claims because this is a specialized area of ICBC law.