Compensation for Loss of Dependency arising out of Fatal Accident
A fatal accident can happen anytime. Though it may appear to only involve the decease, the effects of the fatal accident may not only be felt emotionally by the next of kin but materially as well. Some of the common cases I deal with involves situations where the deceased was gainfully employed prior to the accident and had been contributing a sum of money to his next of kin prior to the accident. Quite obviously, now they are deprived of the sum of money due to the demise. I will give you some scenarios and whether they will get compensation for loss of dependency arising out of such fatal accidents.
Scenario 1 :
A successful businessman aged 58 drives to his office and is killed in a road accident. He leaves behind a housewife and 4 children. Prior to his death, he was earning approximately RM12,000.00 a month and gives his wife RM6,000.00 a month.
Scenario 2 :
A hardworking professional in his 30s and married with 2 young toddlers is killed in a road accident. He was earning RM8,000.00 a month and gives his wife RM6,000.00 a month for household expenses.
Scenario 3 :
A young graduate has just been working for 6 months when he was involved in a fatal road accident. He gives half of his RM2,500.00 salary each month to his parents. He was not married and was just 25 years of age at his demise.
In all the 3 scenarios above, the respective spouses and parents have lost their source of dependence due to the fatal accident. Assuming that the fatal accident was not attributable to any negligence on the part of the deceased, can the said spouses and parents claim the said amount of loss of dependency from the party at fault (the insurer)? Well, this is governed by the Civil Law Act 1956, in particular Section 7.
Let’s take Scenario 1. Section 7 (3) (iv) (a) stipulates that where the person deceased has attained the age of 55 years at the time of his death, the spouse, parent or child may not claim for any loss of dependency (paraphrased). In other words, if a person has already attained the age of 55 years old, his dependents may not claim for any loss of dependency even though the deceased was gainfully employed or receiving earnings by his own labour just before the fatal accident. He may have contributed hundreds or thousands of ringgit each month to his dependents but as far as the law is concerned, they will get nothing for loss of dependency. Cruel and sad, but true.
What about Scenario 2? Well, Section 7 (3) (iv) (d) provides that in case of any person of the age range extending between 31 to 54 years of age at the time of death, the calculation shall be 55 minus the age and dividing by 2. From this figure is then multiplied the amount given to the lawful dependents (only spouse, parents or children qualify) annually. Assuming he was 36 years of age and had given his spouse RM6,000.00 per month, the calculation would be (55-36) /2 = 9.5 x 12 months x RM6,000 thus giving the full figure of RM684,000.00.
Finally, let’s see the fate of the parents in Scenario 3. Here, Section 7 (3) (iv) (d) stipulates that in the case of a person who was aged 30 and below at the time of the accident, the number of years multiplier shall be 16 years. Therefore, the calculation would be 16 x 12 months x RM1,250.00 = RM240,000.00.
It would thus show that the law protects the dependents of those whose breadwinner was aged 54 and below at the time of the breadwinner’s demise. It could perhaps be argued that where a person has attained the age of 55, his children (if any) would probably have started working and supporting or helping to support the family. Nonetheless, this piece of law is not without its controversies especially as it does not take into account the increasing lifespan as well as working lifespan for people in the 21st century. Many people are at their prime earnings in their 50s or even 60s (depending on their industries) and this form of rigid law takes away the realities.
Solution? One would be to purchase insurance plans which protect the income. The other would be to petition parliament to relook into this piece of legislation. I think the former would be more realistic indeed.
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[...] Loss of Dependency Where a breadwinner succumbed to his injuries in a road accident, his dependants may make a claim against the insurer of the other vehicle in the event negligence could be established. The amount of damages payable are guided by the law and I have written extensively on this subject previously. You may read about them in my topic entitled Compensation for Loss of Dependency arising out of Fatal Road Accidents. [...]
[...] the families of those who perished in the senseless accident. I have previously written about the compensation for loss of dependency arising out of fatal accidents. You will also notice that even the compensation available for loss of dependency can be unjust to [...]