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Gail Buckley and others against (First) Alan Budzynski and (Second) UK Insurance LTD (Court of Session)
Factual and Procedural Background
On Christmas Day 2024, the Deceased, a retired airline pilot, was killed in a head-on collision with a motor car driven by the Defendant Driver, who had attempted an unsafe overtaking manoeuvre. The surviving family members brought claims against the Defendant Driver and the Defendant Insurer. Liability was accepted, and all claims other than the Plaintiff's claim for loss of financial support were resolved extra-judicially. [1]
The Deceased had invested substantial savings in a personal pension scheme. On his death, the account and investments passed to the Plaintiff outside the estate and free of inheritance tax. The Plaintiff retained the investments in a dependant's drawdown product and had not withdrawn income from them. [2]
The remaining dispute concerned whether the Plaintiff had suffered loss of support based on income that the Deceased would allegedly have drawn from the investments over approximately 20 years. The proof and submissions were completed in less than a day. [3][4]
Legal Issues Presented
- Whether the Plaintiff suffered a compensable loss of financial support when the income-producing investments previously held by the Deceased passed to her on his death. [5][6]
- Whether section 8(1)(a) of the Damages (Scotland) Act 2011 required the inherited investments or their income to be disregarded. [7][8]
- Whether section 7(2) of the 2011 Act permitted the court to depart from the 75% general rule for calculating loss of support. [9][10][11]
Arguments of the Parties
Defendant Insurer's Arguments
- The Plaintiff had suffered no claimed loss because the income-producing investments had passed to her on the Deceased's death. [5]
- Alternatively, applying the 75% general rule would produce a “manifestly and materially unfair result”, permitting a different percentage under section 7(2). [9]
- The court was invited to follow the approach adopted in England and Wales. [12]
Plaintiff's Arguments
- Section 8(1)(a) required any patrimonial gain or advantage received by succession or settlement from the Deceased to be ignored. [13][7]
- The claim should therefore be assessed by reference to the investment drawdowns that the Deceased would have continued to take during his lifetime. [7]
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Rix v Paramount Shopfitting Co Ltd [2021] 4 WLR 109 | The court must first identify the loss suffered; inherited passive income-producing assets may mean that no loss of that income has occurred. | The court adopted the distinction between income derived from capital and income derived from the deceased's labour. [14][15][16] |
| Wood v Bentall Simplex Ltd [1992] PIQR P332 | A dependant who inherits the source of income on which the dependency was based has not lost that income. | The principle supported the conclusion that the Plaintiff had inherited the investments generating the relevant income. [15] |
| Pym v Great Northern Railway Company (1863) 4 B&S 396 | The relevant loss is deprivation of a reasonable expectation of pecuniary advantage from the deceased's continued life. | The court used this formulation in identifying the nature of a loss-of-support claim. [17] |
| Cape Distribution Ltd v O'Loughlin [2001] EWCA Civ 178 | Where inherited assets had increased in value because of the deceased's skill and business acumen, the loss could consist of the cost of professional management rather than the assets themselves. | The case illustrated the distinction between passive capital income and benefits attributable to the deceased's personal qualities. [17][18] |
| Williams v Welsh Ambulance Services NHS Trust [2008] EWCA Civ 81 | A claimant cannot recover both inherited income-producing assets and damages for loss of that income, but may recover for the loss of the deceased's skills and services. | The court relied on this distinction between inherited capital and losses caused by the deceased's labour or expertise. [19] |
| Smith v Comrie's Executrix 1944 SC 499 | An earlier Scottish approach permitted inherited assets to reduce a claim based on lost earnings. | The court described this approach as subsequently criticised and contrasted it with the statutory reform. [20][21] |
| Cantwell v Criminal Injuries Compensation Board [2001] UKHL 36; 2002 SC (HL) 1 | Statutory provisions preventing deductions for collateral benefits do not create a loss that did not otherwise exist. | The court applied that reasoning to conclude that section 8 could not establish a loss of support where none had occurred. [22][23] |
| Auty v National Coal Board 1985 1 WLR 784 | The relevant statutory provision concerned collateral benefits and did not create an otherwise nonexistent loss. | The court cited the case in support of its interpretation of section 8(1)(a). [10] |
Court's Reasoning and Analysis
The court treated the claim as compensatory: the first question was whether the death caused any loss of financial support, before considering whether any benefit should be deducted. [24][6]
The court distinguished earned income, which may be lost through the death of the person's labour or skills, from unearned income generated by investments. Where the same income-producing investments pass seamlessly to the surviving spouse, the investment income is not lost. [25][6][8]
The court considered that the Scottish common law was consistent with the English authorities. The statutory protection for benefits received following death prevents certain deductions from a genuine loss; it does not create a loss where the claimant continues to have the relevant income-producing assets. [26][24][23]
Because the Plaintiff received all the same income-producing investments and the Deceased had no other source of income, she had suffered no loss of financial support. Her decision not to draw income from the account did not alter that conclusion. [27]
Section 8(1)(a) was the provision on which the Plaintiff relied, but it could not assist her because it did not create a loss that had not occurred. The court also observed that the account income did not arise from a “pension” for purposes of section 8(1)(b), although the same conclusion would follow even if that analysis were incorrect. [8][10]
The section 7(2) issue therefore did not arise. In any event, that provision was intended as a safeguard against an obvious injustice produced by applying the 75% general rule, not as a means of disregarding income that demonstrated that no loss existed. [11][28][29]
Holding and Implications
The court absolved the Defendant Insurer from the Plaintiff's claim for loss of support. The Plaintiff had suffered no compensable loss because the investments and their income-producing capacity had passed to her. [27][4]
The court continued the case for lodging a joint minute resolving the action, with a further procedural hearing to follow if that was not done within six weeks. [4]
No broader implication or new precedent is identified; the direct effect was to dispose of the remaining loss-of-support claim and facilitate settlement of the proceedings. [4]
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