How Much is Your Life Worth? (A Brief Analysis of Dependency Claims in Malaysia)

INTRODUCTION

How much money would your family get in the event of your death? This article aims to critically address this very question based on the legal principles governing dependency claims in Malaysia.

Initially, under common law, the death of an individual gave rise to (2) two principles, namely:

1. The death of any person is not a civil wrong. Consequently, no action can be brought in respect of the death, notwithstanding that it results in pecuniary losses to the deceased’s family; and
2. When a person dies, any cause of action vested with the deceased – either in his/her favour or against him/her – at the time of death does not survive the said death.[1]

Subsequently, the glaring lacuna in the common law which disentitled a dependent from bringing a claim for the death of an individual was cured by the inception of the Civil Law Act 1956 (“CLA”). The advent of the CLA, therefore, created a cause of action which permits the filing of a claim for the wrongful death of an individual.

THE CIVIL LAW ACT MECHANISM

The filing of a claim for the wrongful death of an individual is known as a dependency claim, being a claim by a dependent for the loss of support for the portion of the deceased’s earnings which would have been received by the dependent(s) but for the death of the decedent.

Who then, is a dependent? The CLA defines a dependent as being either the spouse, parent, child or person under disability under the care of the deceased.[2] As such, dependency claims can only be brought for the benefit of such individuals.

Accordingly, the CLA imposes a mandatory calculation method to compute the decedent’s loss of earnings. At this juncture, it is pertinent to note the following matters:

1. The CLA prescribes for an income age limit of sixty (60) years. Consequentially, any income which may have been attained by the deceased beyond the age of sixty (60) is wholly disregarded;[3] and
2. The CLA further establishes maximum years of purchase (“YOP”) – which is also known as the multiplier – of sixteen (16) years.[4] The years of purchase is the number of years which the deceased individual is presumed to earn an income recognisable in law.

In this vein, the CLA provides that the calculation of the deceased’s years of purchase is as follows:

1. In the event the decedent is aged thirty (30) and below, the deceased’s YOP fixed at sixteen (16) years;[5]
2. In the event the decedent is aged between thirty-one and fifty-nine (59), the deceased’s YOP is fifty-nine (59) minus the deceased’s age at the time of death which is then divided by two (2);[6] and
3. In the event the deceased is aged sixty (60) and above, the deceased’s YOP is zero (0) and as such no loss of earnings will be taken into consideration.[7]

Pursuant thereto, the deceased’s loss of earnings is obtained by multiplying the deceased’s annual net income with the YOP.

The dependent’s loss of support will thereupon be derived from the portion or percentage of the deceased’s loss of earning was ordinarily received by the dependent.

There are also several additional restrictions which must be taken into consideration when computing the deceased’s loss of earnings. In this regard:

1. The Court shall not take into consideration any prospective increment to the deceased’s income;[8]
2. No damages shall be awarded to a parent for being deprived of the services of a child or to a husband for having been deprived of the services or society of his wife;[9] and
3. For losses other than pecuniary losses, the CLA only permits for damages to be claimed for bereavement for the sum of RM30,000.00.[10]

THE CAP ON THE YOP

As explained above, the maximum YOP permitted by the CLA is sixteen (16) years. It is therefore noteworthy that prior to 1984, the Courts had adopted the common law method of computing the loss of support in dependency claims.

Under the common law, the courts are permitted to take into account a wide range of considerations, including the age of the deceased individual and/or the dependent which may, in turn, result in a YOP greater than sixteen (16) years. The said common law method of computation is still applied in other common law jurisdictions.

In contrast, the current statutory formula, including the cap on the YOP, was only introduced in 1984 wherein several key points were raised to support the changes to the law.

Pertinently, the amendments to the CLA were primarily directed to address the high and erratic sums awarded by the Courts as well as the concerns raised by insurance companies of their possible inability to make the relevant payments pursuant to such sums awarded.[11]

Accordingly, the current restriction placed on the YOP is an unrealistic and further unjustified means to reduce the award of damages to the dependents as it does not take into account the possibility that a deceased individual may be earning an income for a period greater than sixteen (16) years.

In addition, public policy dictates that the law should not be carved based on the interests of insurance companies to the detriment of millions of individuals.

Several changes have recently been made to mitigate the stringent approach imposed by the CLA.

For example, the CLA was recently amended to increase the income age limit from fifty-five (55) years to sixty (60) years. However, no consequential changes were made to the cap on the YOP which still stands at sixteen (16) years.

It is also applaudable that recent appellate cases[12] have moved away from the archaic common law position which imposes a mandatory one-third (1/3) deduction (or other such percentages as deemed fit by the Court) to the deceased’s YOP to account for “contingencies, other vicissitudes of life and accelerated payment”.[13]

In so deciding, the appellate court judges reasoned that such an interpretation to impose a deduction would fly in the face of the mandatory provisions of the CLA and further, that the Court is not permitted to apply the common law principle in disregard of the statute.

Although much could be said about the recent changes to the law pertaining to the applicable YOP, the fact remains that the current state of the law could be further improved to take into consideration the matters explained above.

ONLY COMPENSATORY DAMAGES PERMITTED

In a recent decision by the Malaysian apex court,[14] it was conclusively held that damages awarded pursuant to dependency claims under the CLA is only compensatory in nature.

The Federal Court had thereupon ruled out the possibility of pursuing a claim for exemplary damages (which are aimed to punish and deter) as well as damages for pain and suffering. More significantly, it was also determined that no damages can be awarded for non-pecuniary losses save for bereavement as provided for in the CLA.

It is opined that the aforesaid decision is manifestly unjust in that it disallows any claim for vindicatory damages regardless of the circumstances leading up to the death of the deceased as well as the cause for the same, however heinous or deplorable it may be.

An apt example can be found in the facts of the very case leading up to the said decision of the Federal Court. The brief facts of one of the appeals are as follows:

1. The deceased individual – together with three other individuals – were traveling when the police had stopped the said vehicle;
2. After the vehicle came to a stop, one police officer approached the car and a gunshot was heard. The police officer then screamed that an individual in the said vehicle fired the said gunshot; and
3. The police officer in charge had directed his team to open fire at the vehicle, following which all four individuals in the said vehicle were killed.

In the circumstances, the appellate court ruled that the High Court decision had failed to determine the following matters:

1. Whether the police officer had discharged the burden of proving self-defence; and
2. Whether the police officer was entitled to use excessive force to kill the deceased individual.

Despite the questionable circumstances which led to the death of the deceased individual, the Federal Court had nevertheless dismissed the Plaintiff’s claim for exemplary damages which was aimed to punish or deter such actions by the police force.

In a forceful dissenting judgment, one (1) Federal Court Judge ruled that the limitation imposed by the CLA which prohibits claims for punitive damages has no application in situations involving a contravention of a constitutional right.

The decision of the dissenting judgment is certainly commendable, as it does not shut the door to claims for punitive damages as and when the same is necessitated in the interest of justice.

Nevertheless, as it stands, until and unless this straightjacket approach by the Malaysian apex court is overruled, claims for vindicatory damages will not be possible.

CONCLUSION

In light of the foregoing, there is a need for reforms to be made to the law governing dependency claims. As opposed to a one-size-fits-all approach, judges ought to be given discretionary powers to ensure that a justice-centric approach is applied to meet the demands of dependency claims in Malaysia.