Case No: A2/2012/2259
Neutral Citation Number: [2013] EWCA Civ 972
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM the Employment Appeal Tribunal
Mr Justice Langstaff

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Wednesday 31st July 2013 
Before :

LORD JUSTICE MOORE-BICK
LORD JUSTICE PITCHFORD
and
LORD JUSTICE UNDERHILL
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Between :

	Henry Fox (father of Gary Fox deceased) 	Respondent	
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	British Airways Plc	Appellant	
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(Transcript of the Handed Down Judgment of
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Akash Nawbatt (instructed by Baker & McKenzie LLP) for the Appellant
Thomas Coghlin (instructed by Darbys ) for the Respondent
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Judgment
Lord Justice Underhill: 

INTRODUCTION
1.	Gary Fox was employed by British Airways (“BA”) for over twenty years.  Latterly he suffered from a serious back condition following an accident and had to be away from work for long periods.  In June 2010, when he had been off work for more than six months and had exhausted his sick pay entitlement, he was given notice of dismissal for medical incapacity with effect from 21 September 2010.  Five days after his employment terminated he went into hospital for a major operation.  He was expected to make a recovery in due course; but sadly he died on 16 October 2010.  He was aged only 44.  He was unmarried and childless.  He did not leave a will.  
2.	Mr Fox was entitled under his contract of employment to membership of BA’s pension scheme and had made regular contributions over the course of his employment.  Rule 21 of the scheme provides for a lump sum to be payable on the death of an “FSS Member” – that is, a member currently in employment – equal to three times his annual salary at the date of death.  I will refer to this as “death-in-service benefit”.  The benefit is not payable to his estate; rather, the Management Trustees are given a discretion to pay it to any member or members of one or more of six classes of beneficiary identified in rule 24 (a), namely: the member’s family (classes (i), (ii) and (vi)); his dependants (class (iii)); “any individual or individuals, charity, society or club” nominated by the member during his lifetime (class (iv)); and his personal representatives (class (v)).  Rule 24 (b) provides that any part of such a lump sum not paid under rule 24 (a) within two years of the member’s death shall be paid to his personal representatives.    
3.	If Mr Fox had still been in employment when he died the death-in-service benefit payable in his case would have amounted to approximately £85,000.  Who would have been the beneficiary or beneficiaries of the payment would have been a matter for the discretion of the Trustees in accordance with rule 24 as summarised above.  In the event, the Trustees were obliged only to repay his pension contributions, with interest, which totalled some £29,000.  That sum was in fact paid in equal shares to his parents and a surviving brother and sister: I dare say that those payees would have been the recipients of the death-in-service benefit had it been payable.  
4.	Mr Fox’s father (to whom I will refer as “Mr Fox senior”) has commenced proceedings in the Employment Tribunal claiming that his son’s dismissal was unfair and/or that it constituted unlawful discrimination contrary to the Disability Discrimination Act 1995.  The principal object of the proceedings is to obtain compensation for the loss of the death-in-service benefit: his case is that if Gary Fox had not been – unfairly and/or discriminatorily – dismissed when he was he would still have been in employment at the date of his death less than a month later, and the benefit would have been payable.  Strictly speaking, the claim must be for the loss of the chance of the benefit being paid; but in the particular circumstances of this case the chance is said to be tantamount to a certainty.
5.	It is common ground that Mr Fox senior has standing to bring such a claim.  Strictly speaking, the formal basis differs as between the unfair dismissal and discrimination claims.  Taking them in turn:
-	As regards unfair dismissal, section 206 (3) of the Employment Rights Act 1996 permits such a claim to be “instituted or continued” by a personal representative of the deceased employee.  Section 206 (4) provides that where there is no personal representative the claim may be instituted or continued on behalf of the estate of the deceased employee by “any appropriate person appointed by the employment tribunal”.  Mr Fox senior was granted letters of administration on 18 January 2011 only after he had first issued proceedings, and BA initially took the point that the claim was not validly instituted.  That led to duplicate proceedings being issued after the grant of letters of administration, and also to an order being made appointing him as an “appropriate person”.
-	As regards discrimination, this Court decided in Lewisham and Guys Mental Health NHS Trust v Andrews [2000] ICR 707 that a claim in the employment tribunal under the anti-discrimination statutes constituted a “cause of action” within the meaning of section 1 of the Law Reform (Miscellaneous Provisions) Act 1934 and could accordingly be pursued by a personal representative for the benefit of the employee’s estate.  
6.	It is the position of BA that even if Mr Fox senior were to succeed in establishing liability for either unfair dismissal or disability discrimination he would not as a matter of law be entitled to recover compensation for the lost death-in-service benefit.  That question was directed to be determined at a preliminary hearing (together with certain other issues with which we are not concerned).  It was heard by Employment Judge Hyams in the Watford Employment Tribunal on 2 September 2011.  He reserved his decision and promulgated a judgment with written reasons on 12 October 2011.  He decided that any award in respect of the loss of the death-in-service benefit should not reflect the loss to the potential beneficiaries but only “the loss [to Mr Fox] of the comfort of knowing that his relatives would receive a lump sum insurance benefit on his death”.  He thought that it would be appropriate to award a sum comparable to the conventional sums awarded for loss of statutory rights in unfair dismissal claims, which is nowadays typically £350.  
7.	Mr Fox senior appealed against that decision.  The President of the Employment Appeal Tribunal, Langstaff J, in a judgment handed down on 30 July 2012 ([[2012] UKEAT 0033 12 3007; [2013] ICR 51), allowed the appeal and made a declaration to the effect that if liability were established Mr Fox’s estate would be entitled to compensation in a sum equivalent to the full amount of the benefit that would have been payable under the Scheme if Mr Fox had remained in employment at the date of his death.  
8.	BA has appealed against that decision.  The matter has been well argued before us by Mr Akash Nawbatt for BA and by Mr Tom Coghlin for Mr Fox senior.
TWO PRELIMINARY POINTS
9.	I start by recording two matters which were common ground both before us and before the Employment Appeal Tribunal.
10.	First, in assessing the compensation that would be awarded if the claim were to succeed the Tribunal was obliged to apply the principles applicable to the award of damages in claims of tort.  Section 17A (3) of the Disability Discrimination Act 1995 so provides.  Section 123 of the Employment Rights Act 1996, which governs the assessment of compensation for unfair dismissal, is differently worded, but it is accepted for present purposes that the underlying principles are the same.  One consequence of this is that the issue of principle which we have to decide is one which would arise equally in relation to common law claims in tort where the chance of equivalent types of benefit being paid is said to have been lost or diminished in value; and in fact, as will appear, most of the authorities to which we were referred concern damages for personal injury.  
11.	Secondly, the estate stands in the shoes of Gary Fox.  That is of course in the nature of a claim under the 1934 Act, as was confirmed by the House of Lords in Rose v Ford [1937] AC 826 (see, e.g., per Lord Russell at p. 838 and Lord Wright at p. 843): see also White v London Transport Executive [1982] QB 489, per Webster J at p. 494H.  It must likewise be the case under section 206 of the 1996 Act.  The viability of the claim for loss of the chance of death-in-service benefit being paid is accordingly to be approached as if it formed part of a claim brought by Mr Fox himself and he had remained alive at the time of the Tribunal’s decision.  (The loss would in those circumstances have been only contingent, and the chance that but for the dismissal it would have become payable might, depending on the particular evidence, have been quite small; but the issues of principle would be the same.)
THE ISSUES
12.	BA’s essential submission was that the claim in relation to the death-in-service benefit was bad in law because Mr Fox personally could never have enjoyed that benefit.  As developed below, that argument was based both on the fact that the benefit was payable to third parties and on the fact that it would only have been paid after his death.  As regards the latter point Mr Coghlin relied in the Employment Appeal Tribunal on the “lost years” cases of Pickett v British Rail Engineering Ltd [1980] AC 136 and Gammell v Wilson [1982] AC 27, as demonstrating that an employee can in principle recover for the loss of benefits that would only have accrued after his death; and those cases feature substantially in the judgment of Langstaff J and in the skeleton arguments before us.  But it became clear in the course of the oral argument that it was the former point that was fundamental, and I will take it first. 
13.	Mr Nawbatt’s core submission was based on the straightforward principle that the victim of a tort cannot recover damages for a loss caused by the tort but which he himself has not suffered.  He submitted that Gary Fox could not at the date of his death have maintained any claim for the loss of the death-in-service benefit because it was payable to third parties.  Even if the potential recipients of the payment might be said in some sense to have suffered a loss by reason of the benefit having ceased to be payable (though that is not straightforward, because who would receive what depended on the decision of the Trustees), the fact remained that any such loss was suffered by them and not by Mr Fox.
14.	Mr Coghlin did not challenge the proposition that A cannot in principle recover for a loss suffered by B.  But his case was that the entitlement to have a payment made by the Trustees to persons in the specified classes was part of the consideration for Mr Fox’s employment, and that if it was lost as a result of a wrongful act that was properly to be regarded as a loss suffered by him and not by the beneficiaries; and further, that that loss was pecuniary in character – that is to say, that it was not just a loss of the “comfort” of knowing that his family or dependants would receive a benefit.  
15.	Langstaff J accepted that argument.  He said, at paras. 10-11 of his judgment (p. 57 E-F):
“10  	... Whilst employed, the claimant’s son had the entitlement to a benefit. When he was dismissed, he lost that contractual right, since he was no longer in service. There was thus a loss, which was his loss, of the entitlement to have a sum paid to others on his death. There can be no doubt that that is a real benefit: he contracted for it as such.  Tudor Evans J saw it that way in Auty, in the last two sentences of the passage quoted with approval by Purchas LJ in the Court of Appeal: damages should be recoverable for, ‘after all, the rights under the scheme attached to the member’.
11.	In employment, benefits beyond the payment of salary are frequently highly valued, and the subject of negotiation. If having death in service benefit is prized, as it is, its loss is one of substance and not merely of emotional significance.”
16.	The reference in para. 10 of Langstaff J’s judgment is to the decisions of Tudor Evans J at first instance and of this Court in Auty v National Coal Board [1985] 1 WLR 784.  Although Auty is concerned with the assessment of damages in a personal injury claim Mr Coghlin submitted before us, as he did in the Employment Appeal Tribunal, that it addresses essentially the very issue which we have to decide.   Since it was at the forefront of the argument before us it makes sense to take it first.  I start by identifying the issue in Auty and what it decided.  I will then consider whether the ratio of the decision is applicable to the present case; and if so whether it was correctly decided. 

WHAT WAS DECIDED IN AUTY
17.	Auty was in the nature of a test case intended to resolve a number of issues about the quantification of damages for mineworkers who had been killed or injured at work.  The claims (as regards quantum) of four different plaintiffs, raising different (though overlapping) points, were heard together, and the issues were fully argued by leading counsel on both sides.  Tudor Evans J, who had unrivalled experience in personal injury actions, gave a very lengthy and thorough reserved judgment.
18.	The plaintiffs in Auty were contractually entitled to membership of the Mineworkers Pension Scheme (“the MPS”) and made contributions out of their earnings in the usual way.  It was essentially a traditional scheme under which pensions were calculated by reference to employees’ earnings, rather than directly to contributions; but it was more sophisticated than a basic “final salary” scheme in as much as the earnings on which the calculation was based were an average of those from the three best consecutive years in the last thirteen.  Widows’ pensions were payable if a mineworker predeceased his wife either after his retirement or while still in service.  Three of the plaintiffs – Messrs Auty, Mills and Rogers – had been obliged as a result of their injuries to give up work underground and to move to less remunerative work on the surface.  One of the consequences of that was that the earnings on which their entitlements would be calculated were lower than they would otherwise have been, and one of the issues was how damages for the resulting diminution in their eventual pensions should be assessed.  
19.	Although a number of points about the assessment process were in issue, the important point for present purposes is that the Board argued that damages should only be awarded in respect of the diminution in the value of the pensions payable to the plaintiffs themselves; any reduction in the value of their widows’ pensions should be ignored because, as counsel submitted 
“… the plaintiffs themselves have not suffered any loss and they will suffer no loss.  The loss, if any, can arise only after death and the loss then belongs to the widows.” 
	That is, of course, essentially the argument advanced by BA in the present case.
20.	Tudor Evans J rejected that argument.  He said: 
“The first question I have to decide is whether the plaintiffs Auty, Mills and Rogers are able in law to recover damages for the loss of the value of the widow’s pension on death in retirement and on death in service. …  
With respect to the claims for the loss of widows’ pensions by the first three plaintiffs Mr Morison [counsel for the Board] submits that the plaintiffs themselves have suffered no loss: the loss can only be that of the potential widows and it would arise on the death of the plaintiffs.  It is said that there is no loss in being at this time. …
Mr Mortimer [counsel for the plaintiffs] submits that the damage suffered belongs to the plaintiffs.  As a member of the Scheme the member makes provision out of his earnings for his wife in the event of his death.  It is argued that if, as a result of a tort, the member is unable to provide the benefit for his wife as a result of a reduction in earning capacity, he has suffered a loss recoverable in damages … .
… In one sense the loss can only arise on death, but the plaintiffs, as a consequence of the tort, have lost the right to contribute to the same extent from their wages in order to confer a benefit in the event of their pre-deceasing their wives.  Is that loss recoverable by the plaintiffs and, if so, how is it to be valued?  I think that the plaintiffs are able to recover damages for this consequence of the tort.  After all, the rights under the Scheme attach to the member.”
21.	Having decided that the diminution in the value of the widows’ pensions was in principle recoverable, it remained for Tudor Evans J to value the loss.  He proceeded separately as regards the two distinct circumstances in which a widow’s pension might become payable – that is, after the death of the plaintiff in retirement and on his death in service.  As regards the former, he was in any event calculating a figure for the diminution in the value of the pension payable to the plaintiff, using life tables to arrive at a lump sum capitalising the annual loss; and he reflected the diminution in the widow’s pension by using tables which took into account the joint life expectancies of both husband and wife.  The lump sum produced by that exercise (after allowing for accelerated receipt and contingencies) was £800 in the case of Mr Auty, £3,046 in the case of Mr Mills and £1,848 in the case of Mr Rogers.  But that did not cover the diminution in the value of the widow’s pension if the plaintiff died in service.  Tudor Evans J did not feel able to calculate the contingencies involved in that scenario and simply awarded an additional lump sum which, as he put it, gave his “impression of this risk”.  The risk varied as between the plaintiffs, having regard to their and their wives’ ages, but he came up with figures of £200, £150 and £150 respectively.  Although those figures were avowedly not arrived at by a process of calculation, they – and of course the uplift achieved by using joint lives in calculating the diminution in the value of the retirement pension – were nevertheless intended to compensate the plaintiff for a pecuniary loss.  Tudor Evans J was plainly not awarding a sum intended merely to offer the plaintiffs comfort for the fact that their widows would be less generously provided for, as proposed by the Employment Judge in the present case.  
22.	The plaintiffs appealed against, inter alia, Tudor Evans J’s quantification of the loss consisting of the reduction in value of the widows’ pensions.  The Board did not cross-appeal against his finding that the loss was recoverable in principle, and accordingly that issue was not directly addressed.  However, Purchas LJ, in dealing with the quantum issue, said, at p. 812 A-F:
“Mr. Mortimer suggested that claims for reduction in the value of the widow's pension arising on death either in service or in retirement were not susceptible to computation by the conventional method and that, therefore, resort must be had to actuarial computations. Mr. Mortimer complained that the judge had ‘plucked a figure out of the air’, and that he was wrong in so doing. Mr. Mortimer submits that the proper measure of damage would be the cost of obtaining insurance cover to meet the shortfall in prospect of the pensions available to the widows. With respect to Mr. Mortimer, this submission has a clear fallacy in it, namely, that it is buying the damage suffered in fact by the widow, whereas the injury in respect of which damages can be awarded is that suffered by the plaintiff. In effect the only loss recoverable is the loss of opportunity to continue to provide a higher widow's pension in either event.
He then quoted the final paragraph from the passage from the judgment of Tudor Evans J which I have set out at para. 20 above and continued:  
“With respect, I agree entirely with the judge's approach to this problem. The value of the right to contribute to an enhanced widow's pension is not susceptible to any mathematical computation and must be one of impression. In my judgment the judge approached this head of damage in a perfectly proper manner. I can see no ground at all for interfering with his assessments in any of the three cases.”
Waller and Oliver LJJ also held that the appeal on this point should be dismissed, but their judgments on the point (at pp. 798 G-H and 803G) are very short and contain no relevant analysis.
23.	It seems that it has been accepted practice in personal injury claims since Auty to allow a claimant who has suffered a loss of earnings or of earning capacity to recover damages for the consequent diminution in the value of pension or equivalent benefits earned by him but payable to his widow.  We were shown passages to this effect in Butterworths Personal Injury Litigation Service (para. 1373); in Kemp & Kemp (para. 11-053); and in Personal Injury Schedules, ed. Latimer-Sayer, at para. H207.  Likewise the Guidelines entitled Compensation for Loss of Pension Rights, which have for many years been used by employment tribunals to calculate compensation in cases where an employee’s pension rights have been diminished as a result of unfair or discriminatory dismissal, take it for granted that compensation should in principle cover any diminution in the value of a widow’s pension: see paras. 5.4 and 5.17 (2) in the main report (3rd ed., see pp. 18 and 21) and the assumptions explained in Appendix 2 (see p. 41).  
24.	It seems that it is also accepted practice, in both personal injury and employment cases, to award compensation to claimants for any loss of life insurance cover, whether enjoyed under the terms of a pension scheme (which I suspect is the most usual case) or under some other term of the contract.  Such awards are referred to in Kemp & Kemp, at para. 11-053.  They are also referred to in the Employment Tribunal Guidelines referred to above, at para. 3.13, which reads:
“Life Assurance Cover.  Many pension schemes provide, or have separate schemes associated with them to provide, life assurance benefits for their members. In appropriate cases it may be just and equitable or otherwise appropriate to compensate former employees for the loss of the benefit of belonging to such schemes by awarding as compensation the average market rate for providing equivalent cover.”
Such cover is of course substantially equivalent to the death-in-service benefit with which we are concerned in this case.  The practice is not apparently directly based on any authority, but it may well have been assumed to follow from the decision in Auty.  An award of this kind was made in Knapton v ECC Card Clothing Ltd [2006] ICR 1084.  The employment tribunal in that case included in the award of compensation for the dismissed employees the cost, at market rates, of acquiring cover to replace a life insurance benefit payable under the employer’s pension scheme.  However, there was no issue as to whether such an award should have been made: the question considered by the Employment Appeal Tribunal was only whether it should have covered the pre-hearing period, in circumstances where the claimant had not in fact yet purchased any cover and had survived to the date of the hearing.
IS THE RATIO OF AUTY APPLICABLE TO THE PRESENT CASE ?

25.	The essence of Tudor Evans J’s reasoning in Auty was that the contingent diminution in the value of the widows’ pensions should be treated as a loss suffered by the plaintiffs, notwithstanding that the sums in question would never have been payable to them, because it constituted a diminution in the value of benefits which the Board had agreed to procure as part of the terms of their employment.  That reasoning would appear to apply squarely to the present case.  It is not suggested that it makes any difference in principle that in Auty the value of the benefit was only diminished rather than, as here, wholly extinguished.  Nor can it make any difference in principle that the only potential beneficiaries in Auty were the plaintiffs’ widows, as opposed to the wider classes provided for under the BA scheme.  
26.	Mr Nawbatt, however, sought to distinguish Auty on the basis that the benefit with which it was concerned took the form of widow’s pension and not, as here, death-in-service benefit.  Pension payments are correlated to an employee’s years of service and thus, albeit indirectly, to his contributions to the pension scheme, whereas the amount of death-in-service benefit in the present case is a fixed sum unrelated to length of service or therefore to the value of contributions paid.  I accept that that is a distinction between the cases but I do not see why it gives rise to a difference in principle.  In both cases, notwithstanding the different method of calculation, the lost/diminished benefit is part of the package of benefits under the pension scheme to which the employee is accorded access as part of his terms of employment and which is in part funded by his contributions. 
WAS AUTY CORRECTLY DECIDED  ?
27.	The foregoing is concerned with identifying the ratio of Auty as decided by Tudor Evans J at first instance.   Since, as I have said, the Board did not appeal against his decision that the plaintiffs were entitled to recover in respect of the diminution in the value of the widows’ pensions, nothing that was said in this Court on the issue of the quantum of such a claim can be treated as binding on the issue of whether damages under that head were recoverable at all.  It is thus open to us to depart from Tudor Evans J’s reasoning.  The question is whether we should do so.
28.	I agree with both Tudor Evans J and Langstaff J that the starting-point in considering the recoverability of compensation for losses of the kind suffered both in Auty and in the present case is that the benefits in question form part of the employee’s remuneration.  I believe that the law would be seriously defective if an employee were unable to claim compensation where such rights were adversely affected as a result of a wrong merely because the subject-matter of the right was a payment to be made to a third party; and all the more so since the potential beneficiaries of such a payment would themselves have no claim.  I see no reason why that should be the case.  In my view it reflects reality to treat the loss, or the diminution in the value, of the benefits in question as a pecuniary loss suffered by the claimants themselves.  As Tudor Evans J emphasised in Auty, “the rights under the Scheme attach to the member”.   In that case the rule that A cannot recover for a loss suffered by B is not engaged.  
29.	Mr Coghlin sought to reinforce his submissions on this aspect by referring to Lowe v Guise [2002] QB 1369, in which the claimant’s loss of the ability to contribute to his family’s welfare by looking after his disabled brother was treated as a loss by him of “something of real value to himself” for which he was entitled to claim in damages: see per Rix LJ at para. 38 (p. 1385).  He also referred to Offer-Hoar v Larkstore Ltd [2006] 1 WLR 2926, in which Rix LJ referred to the law’s unwillingness to countenance the existence of “black holes” through which wrongdoers can “escape from their liabilities by reference to the general principle that a person can only recover for his own loss” – see paras. 67 and 84 (pp. 2941 and 2945).  Lowe v Guise was concerned with a different situation, and I would be cautious about treating it as directly analogous (and still more so as regards Rix LJ’s dicta in Offer-Hoar).  Nevertheless I think Mr Coghlin is entitled to rely on it at least as illustrating that the law does not take the absolute position that the only pecuniary loss for which a claimant may recover is the loss of a payment that would have been made to him personally.  
30.	I am also, I think, entitled to attach some weight to the fact that, while in Auty Purchas LJ was indeed concerned only with the issue of quantification, his reasons for accepting Tudor Evans J’s approach to that issue, as set out at para. 21 above, do seem to involve a positive acknowledgment of the underlying basis of the award: I do not believe that he would have expressed himself as he did if he had considered that the award was unprincipled or otherwise anomalous.

CONCLUSION ON THE QUESTION OF PRINCIPLE
31.	For the reasons given above I consider that the loss of the chance of death-in-service benefit being paid under rule 24 of the Scheme is to be regarded as a pecuniary loss suffered by Mr Fox for which he could have claimed in proceedings brought prior to his death.
32.	Once that point is reached the objection that the payment would be made only after Mr Fox’s death becomes irrelevant.  What he is entitled to compensation for is, precisely, the fact that a benefit payable, to others, on his death has been lost.  Mr Nawbatt had before the Employment Appeal Tribunal sought to rely on the provisions of section 1 (2) (a) of the 1934 Act (as amended by the Administration of Justice Act 1982), which precludes any recovery by a deceased’s estate of “damages for loss of income in respect of any period after [his] death”.  I did not understand him to press that point before us, but in any event it plainly has no application to a case of the present kind: the provision was introduced by the 1982 Act in order to reverse the effect of the decisions in Pickett and Gammell.  Mr Nawbatt also sought to rely on a passage in the speech of Lord Wright in Rose v Ford dealing with the effect of section 1 (2) (c) of the 1934 Act, which is addressed to cases where the death of the deceased has been caused by the acts complained of and provides that damages in such a case “shall be calculated without reference to any loss or gain to his estate consequent on his death”. Lord Wright observed that this provision
“… presupposes that damages may in general be calculated where death has been caused by the wrong, but excludes from the calculation losses or gains to the estate consequent on the death. I need not examine the full scope of this proviso, which is not directly material in this appeal.  Obvious instances of what are referred to are such items as, on the one side, insurance moneys falling due on death, and, on the other, annuities ceasing on death. These are irrelevant to the question of what damages can survive, because the dead man could neither have collected such gains or experienced such losses.”
Mr Nawbatt appeared to submit that that final sentence enunciates a general principle that a claim under the 1934 Act cannot be made in respect of the loss of benefits which could never have accrued to the deceased in his lifetime.  I cannot accept that.  Lord Wright was simply explaining the effect of section 1 (2) (c), which has no application to the present case.
33.	It should be acknowledged that in one respect an award of compensation in the Employment Tribunal will not precisely restore the position that would have obtained if the death-in-service benefit had been payable under the Scheme.  In that case the identity of the beneficiaries would have been a matter for the discretion of the Trustees, whereas any award made by the Employment Tribunal would have been paid to Mr Fox, if he had still been alive, to be used as he saw fit, and it will, in the events that have happened, now be paid to his estate and distributed at the discretion of his personal representatives.  But it was, rightly, not suggested that this was a reason why an award should not be made.  If the loss is correctly characterised as Mr Fox’s loss any compensation must inevitably be payable to him, or, after his death, to his personal representatives; and he or they will then be in a position to make equivalent payments to those that would have been made under the Scheme.  I see no need for the imposition of a trust requiring distribution to beneficiaries in the classes identified in rule 24 (even if this were within the powers of the tribunal): although a trust was imposed on the claimant in Hunt v Severs [1994] AC 350 the circumstances of the present case are different.
THE QUANTIFICATION OF THE LOSS
34.	Other things being equal, where a claimant has as the result of a tort suffered the loss of a benefit in the nature of life assurance, the appropriate measure of damage would appear to be the cost of securing an equivalent benefit in the market.  In Auty Oliver LJ recorded (at p. 801 D-F) the plaintiffs’ submission that 

“[t]heoretically he ought to be compensated for [the diminution in the value of the widow’s pension on death in service] by an award of a sum which would enable him to buy, in the market, insurance cover to protect his widow against loss by providing for her, on his death in service, a sum equal to the difference between what she will actually receive in this event and what she would have received if he had continued to work normally”
– though that was not in fact possible because no such equivalent cover was available in the market; and he did not suggest that that submission was wrong as far as it went.  That that is the usual measure is taken for granted in the Guidelines referred to at para. 24 above and was also unchallenged in Knapton.  Langstaff J took the same view in the present case: see para. 29 of his judgment (p. 61 H).
35.	However in the unusual circumstances of the present case other things are not equal.  Once Mr Fox had died it was too late to seek alternative life insurance cover.  Nor, as Langstaff J notes at para. 34 of his judgment (p. 62H), was it argued that he should have mitigated his loss by seeking such cover prior to his death: that was probably in any event precluded by his impecuniosity and/or his already poor health.  
36.	In these circumstances it is necessary to go back to first principles.  Mr Fox’s estate is entitled to be put in the position that Mr Fox would have been in if he had not been dismissed (ex hypothesi unlawfully) when he was.  In that case he would virtually certainly still have been in employment at the date of his death: the possibility that his employment might have terminated (lawfully) for some other reason in the interval between 21 September and 16 October 2010 is too small to require any discount.  His beneficiaries would at that point have become entitled to the payment of £85,000.  Since that entitlement is to be regarded as a benefit to him he – or his estate – can only be put in the position that he would have been in but for his dismissal if it is put in a position to enable an equivalent payment to be made; and that can only be done by the award of compensation in the full amount.  The logic of that seems to me inexorable, and indeed in his oral submissions in reply Mr Nawbatt was constrained to accept that in truth his case was “all or nothing” – that is, either the death-in-service benefit was wholly irrecoverable or the full amount lost had to be paid in compensation.
37.	Before Langstaff J Mr Coghlin had put forward a superficially different approach, asking what premium it would have been necessary for Mr Fox to pay, as at 21 September 2010, to obtain life assurance in the sum of £85,000 on the basis – which he submitted must be adopted since the court does not speculate when it knows – that he was in fact to die in 25 days’ time; to which the answer was that the premium would inevitably have been no lower than the full amount.  Langstaff J was content to accept that way of putting it – see para. 34 (p. 62 G-H); but although it produces the same result it seems to me flawed, for the reasons given by Moore-Bick LJ in his judgment.  The right approach is not to make an artificial prospective valuation of the loss as at the date of the termination of the employment but to value it in the light of the events which have actually happened.  
38.	I would emphasise, as Langstaff J did (see para. 34, at p. 62H), that this outcome depends on the particular, and very unusual, facts of the present case.  In all ordinary cases the cost of obtaining insurance which will provide equivalent benefits will be the appropriate measure; and even if for some reason that route is not available, so that the tribunal has – as Tudor Evans J did in Auty – to value the loss for itself, normally the loss will be less than a certainty and the exercise will be one of the valuation of a lost chance.  
DISPOSAL
39.	I would accordingly in substance dismiss this appeal.  I do, however, have a concern about the formulation of the declaration made by the EAT, which  was as follows:
“… the Claimant’s loss (in respect of both his claim for disability discrimination, if proved, and unfair dismissal, if established, and in that case subject to the statutory cap) is the equivalent of 3 years’ pay.”
As mentioned at para. 3 above, the Trustees have made a repayment of contributions, with interest, in the sum of £29,000.  It seems to me unlikely, though we were not shown the relevant provisions, that if Mr Fox had remained in employment at the date of his death, and a payment of death-in-service benefit had been made accordingly, his estate would have been entitled to a repayment of contributions as well.  We were not addressed about this, but I should like to leave it open to the Tribunal to consider, should the point be taken, whether any award in respect of the lost death-in-service benefit should be discounted by that amount.  That can be achieved by re-wording the declaration as follows:
“… the Claimant’s loss in relation to death-in-service benefit (in respect of both his claim for disability discrimination, if proved, and unfair dismissal, if established, and in that case subject to the statutory cap) is to be assessed as three years’ pay, subject to any proper discount in respect of other benefits received.”
Lord Justice Pitchford :
40.	I agree with both judgments.
Lord Justice Moore-Bick :
41.	For the reasons given by Underhill L.J. I respectfully agree that, if Mr. Fox can make good his claim that his son was unfairly dismissed or that his dismissal amounted to unlawful discrimination, Gary Fox had at the time of his death a right to recover from British Airways Plc (“the company”) damages in respect of the loss of the contractual benefit represented by the death-in-service benefit provided by the company’s pension scheme of which he would otherwise have remained an active member. 
42.	The death-in-service benefit, under which a lump sum becomes payable by the trustees of the scheme to various classes of persons at their discretion, is similar to term life assurance limited to the period of employment. The employee himself is not a beneficiary (although his personal representatives form one class of persons to whom the benefit may be paid). He can never therefore have a claim to it in his own right. Nonetheless, just as life assurance is considered to provide a valuable benefit to the policy holder (even if his is the life assured and neither he nor his estate is a beneficiary), so does the death-in-service benefit to the employee. It follows that in my view Gary Fox’s claim in respect of the loss of that benefit is one which can be maintained by his father as his personal representative. The difficulty is how the value of that benefit is to be measured.  
43.	The dismissal of Gary Fox meant that when he died there would be no death in service benefit available for distribution among his relatives. If he had wanted to provide for them in the event of his death, he could have obtained term life assurance for whatever period seemed appropriate, provided he could afford to do so and that the state of his health did not make that impossible. That would have mitigated the damage and the cost of such insurance for the remainder of the period for which he could reasonably have been expected to remain in the company’s employment would have provided a reasonable measure of his loss. That approach was recognised by Oliver L.J. in Auty v National Coal Board [1985] 1 WLR 784. It was also the approach adopted by the Employment Appeal Tribunal in the present case, although for reasons which I shall explain its application of the principle was, in my view, flawed.
44.	In the present case Gary Fox did not obtain life assurance to replace the death-in-service benefit, but it is not said that he was thereby in breach of his duty to mitigate. In those circumstances the loss which has to be valued is his loss of membership of the scheme up to and at the time of his death. If he had not died at a time when he would otherwise still have been in the company’s employment, the cost at the date of his dismissal of obtaining life insurance would have provided a fair basis for assessing the value of the benefit of which he had been wrongly deprived. The premiums would have reflected what it was worth to him to have the benefit in place and would reflect the risk of his dying during the period of cover, probably quite small. However, he did in fact die during that period and if it is permissible to take that into account the position looks rather different.
45.	The employment judge came to the conclusion that, since the only benefit Gary Fox himself could derive from membership of the scheme was the comfort of knowing that his relatives might benefit from it after his death, a lump sum of a kind that is typically awarded as compensation for the loss of statutory rights as a result of unfair dismissal (about £350) adequately reflected the loss. However, since he had not heard argument on the amount of the payment, he confined himself to holding that Mr. Fox could not recover damages in an amount equal to the death-in-service benefit.
46.	In the Employment Appeal Tribunal the President (Langstaff J.) held at paragraph [29] that:
“Proper compensation in any case where there has been a loss of death in service benefit will be that sum which, when paid, will secure payment on death in the sum which it was agreed should be payable in the event of death.  Usually, this will be the cost to the claimant of the insurance premium for a policy which will as nearly as possible provide the payment to which the wrong done to him has denied entitlement.”
Accordingly, he held in paragraph [30] that:
“ . . . the sum which should have been payable to the estate of Gary Fox was the equivalent to that which in the circumstances would have been paid to secure that a death in benefit payment of some £85,000 was payable upon his death within the three weeks following his dismissal.”
47.	If Gary Fox had obtained life assurance immediately after he was dismissed, the premiums would have reflected many factors, including his age, his general health and any other matters considered relevant by the underwriters (smoking, drinking etc.). They might have been higher for him than for some others, but they would probably have been modest by comparison with the amount of the benefit. The Employment Appeal Tribunal, however, proceeded on the basis that among the factors to be taken into account would have been the knowledge that he would die within three weeks. The President said in paragraph [33]:
“[The underwriter] would be dealing with the cost of providing for a benefit which, as the court now knows, would have to be paid within the next 25 days.  It is inconceivable that the cost of providing for payment of a lump sum known to be due within a period as short as that would have been any less than the sum itself.”  (Emphasis added.)
48.	In my view the tribunal went wrong at this point. If one assumes for these purposes that Gary Fox had applied for life assurance on 22nd September 2010 (as the President assumed) the underwriter could not have known that he was to die in 25 days time. He would have made an assessment of the risks in the normal way and would have set the premium accordingly, but it would not have been at a level which equated to the payment of 100% of the sum assured within three weeks. If the underwriter had had the ability to see into the future and had foreseen Gary Fox’s death, he would not have accepted the risk at all – indeed in those circumstances there would not have been a risk capable of being insured.  
49.	The tribunal appears to have gone wrong because it misunderstood the remark of Lord Bingham in Golden Strait Corporation v Nippon Yusen Kubishika Kaisha (The ‘Golden Victory’) [2007] UKHL 12, [2007] 2 A.C. 353 at page 371G when he described the Bwllfa principle (Bwllfa and Merthyr Dare Steam Collieries (1891) Ltd v Pontypridd Waterworks Co [1903] A,C, 426) as being that “you need not gaze into the crystal ball when you can read the book”. If the court is asked to decide for the purpose of assessing damages what would have happened in a certain eventuality, it can no doubt in an appropriate case apply the benefit of hindsight, but that is not the exercise which the EAT had in mind. The question the President asked himself was what premium would a reasonable underwriter have charged on 22nd September 2010 to insure Gary Fox’s life for £85,000 over a 20 year term (i.e. the rest of his working life). The underwriter would have had no book to consult.
50.	All this assumes that the loss falls to be assessed at the date of the wrongful act (in this case the date of dismissal) and that damages are to be assessed prospectively, but the court has the power to in appropriate cases to take account of what it knows actually happened: see the ‘Golden Victory’.  Gary Fox did not have a wife and children. Had he done so, the issues raised by this appeal would have been thrown into sharper relief. The company would then have been forced to argue that it should him pay no (or very little) compensation for depriving him at the time of his death of the satisfaction of knowing that his wife and children could reasonably hope to receive all or part of the benefits payable under the scheme. Under those circumstances it is appropriate in my view to consult the book rather than the crystal ball. That would involve taking account of the known fact of Gary Fox’s death and of the fact that what was once no more than a risk  has turned into a reality. At that point the value to the employee of his right to remain a member of the scheme can properly be measured by the value of the fund that would have become available for distribution to his family. He can be placed a position to obtain that benefit for them only by an award of damages in an equivalent amount. 
51.	As Underhill L.J. has emphasised, this appeal turns on very unusual facts which are unlikely to recur frequently, if at all. For the reasons I have given I agree with him that, if Mr. Fox can establish that his son was unfairly or discriminatorily dismissed, he will be entitled to recover by way of damages on behalf of his son’s estate a sum equal to the value of the death in service benefit. Since I am also of the view that it may be necessary to take into account the repayment of contributions and interest, I agree that the form of declaration should be varied to enable the employment tribunal to consider the matter.