How much is your life worth in dollars and cents?

“Based on what you’ve told me, you’re probably not worth much more than your own funeral costs.

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Your dad however, his value is closer to a million dollars.”

That is what I was told last week, at the end of a two-hour conversation with a compensation lawyer, who I’d asked to put a price on my life.

It’s regularly said that various intangible elements of ordinary life are priceless – time spent with family and close friends, real romance, a clear conscience, a perfect joke. This line of thinking is mostly a lie. Nothing is priceless; my life has a monetary value that can be quantified, so does my right leg.

But how is the value of a life calculated? How is a human leg priced, and why are some worth more than others? Would my death, or the loss of one of my legs, be worth more than my father’s?

To find answers I asked Victoria Gallanders, from compensation law firm Stacks Goudkamp, and Lesley Woodmore, from insurance firm Winter Hilditch & Fotheringham.

To them, valuing humans and human body parts is not a nebulous pursuit, but a scrupulous, mathematical problem-solving exercise. Their job is to cut through the noise and work out how much worse off someone is because of something that happened to them, then give it a dollar figure. 

The hypothetical scenario I presented to Ms Gallanders was my father and I dying after being hit by a bus that ran a red light, a case where we assumed sole and undisputed liability for the accident would rest with the bus company.

The questions were generic formalities at first – how old are you? Where do you work? What are you trained in? Then they became more invasive – how long have you been with your girlfriend? Do you plan on getting married or having children? Do you spend all your salary on looking after yourself?

Ms Gallanders was trying to work out whether my girlfriend could be considered my spouse, per the Compensation to Relatives Act (1987), because without children and without a spouse my chances of being worth much at all were slim to none. Unless you can prove you have dependants, the only person that is at a loss when you die is you. And when you’re dead your body isn’t worth much.

“Unless you can prove you have dependants, the only person that is at a loss when you die is you. And when you’re dead your body isn’t worth much.”

My father, on the other hand, is able to claim on all kinds of ordinary business. But the steps to reach a valuation are complicated.

To take one example, Ms Gallanders assessed the loss of my father’s childcare work, should he die, to be worth $74,160. This calculation was based on him conducting eight hours per week of childcare – taking my younger siblings to soccer, assisting them with a paper round, helping with homework – until my youngest sibling turns 16, in 2022. Each hour was valued at a flat rate of $30.

As the payment would be a lump sum and can therefore be invested now, industry-standard actuarial charts put a 5 per cent deduction on the payout, and factor in other future economic predictions, reducing the weeks he can claim over those seven years from 364 to 309. This is how the figure was reached:

The value of my father’s childcare tasks

As my father has children and a spouse that rely on his salary, future economic loss in the case of his death was valued at $655,558.16, including superannuation. Assuming, based on his age, that he would retire in 2027, this is how economic loss from his death would be quantified:

The value of my father’s economic loss

Neither of these calculations would be factored into my claim, as I don’t have children or a spouse that relies on my salary or day-to-day assistance. 

Once all domestic services, economic loss and other out-of-pocket expenses were factored in, my father’s wrongful death claim came in at $943,338.27 tax free. I’m the son of an (almost) million dollar man!

Fairly early in our conversation I told Ms Gallanders I was only after a “simple cremation, small memorial plaque and a modest wake,” and she put my funeral costs at around $7,500.

Ultimately, this is all I was worth. In a seven-page claim assessment she sent me several days later, she wrote; “I note that you would wish for family members to be flown to Sydney for your cremation. Although we would claim this, ultimately I expect that your parents would not be able to recover this sum from the bus’ CTP insurer as it is unlikely to be found to meet the legal test of being a ‘reasonably incurred expense’.”

Brutal. I’m the $7,500 man.

It is worth noting that the way death compensation is assessed differs substantially between jurisdictions.

“The role of compensation in fatal accident claims in New South Wales is to compensate the deceased’s dependants for their loss of dependency,” Ms Gallanders said.

In NSW there is no compensatory consideration for bereavement or loss of consortium (the loss of affection, emotional care and sex, after the death of a spouse). Whereas in England and Wales, spouses are entitled to a bereavement pay out of around £13,000, and in France even brothers and sisters can claim for bereavement. Ms Gallanders said these differences “could be seen as a telling sign of how important the traditional concept of ‘family’ is in mainland Europe.”

For this question I consulted Lesley Woodmore, an insurance lawyer from Winter Hilditch & Fotheringham, who has worked for both plaintiffs and insurance companies in personal injury disputes. Lesley assessed the damages were we to have our right legs amputated above the knee after an accident similar to one Ms Gallanders assessed, where liability is undisputed.

To calculate whose limb would be priced higher, Ms Woodmore assessed how the loss of a leg would affect us under four standard ‘heads of damage’; non-economic loss (pain and suffering), out-of-pocket expenses, domestic assistance costs and economic loss. She also assumed that neither of us would use a prosthesis.

As someone that plays soccer on the weekend, regularly walks around, socialises more regularly than my father and is younger, the severity of my non-economic loss was considered to be larger than his; 70 per cent versus 60 per cent, under the terms of the Civil Liability Act. Considering actuarial forecasts, Ms Woodmore awarded me $400,500 in this category, and my father $343,000.

Put simply, my right leg is worth around 87 times more than my whole body, whereas my father’s leg is worth $350,000 less than his whole body

Injury-related out-of-pocket expenses (hospital, radiology, medication, physiotherapy, aides, etc) were similar for both of us, however as my father would require alterations to his home and as a renter I wouldn’t, his expenses came in at $47,000, and mine at $42,000.

That is not the only negative of renting. My father’s domestic assistance costs are around $27,000 more than mine, mostly because the chances of me buying a property requiring maintenance, lawn mowing, etc, are predicted to be low. Whereas my father, after losing his leg, would now need commercial assistance for those tasks, which previously he had done.

But ultimately, my leg is worth more because it’s younger. It is unclear whether losing my leg would at all affect my future career. But if it did, it would affect my career longer than my father’s. It’s egregious that this even needs to be considered – the loss of a limb shouldn’t affect anyone’s chance of finding work. But the “purpose of the damages is to put the person back in the position they would have been in but for the accident,” Ms Woodmore said, regardless of the ethics around how we calculate that. This process is based on rigor and rationalism, not idealism.

Putting a value on a leg

Put simply, my right leg is worth around 87 times more than my whole body, whereas my father’s leg is worth $350,000 less than his whole body.

Put unpleasantly, for an insurer it’s sometimes preferable if their client kills the victim rather than causes the loss of a limb when it comes to the size of a payout.

I’d also up my price range if I got married and had children. Naturally, children rely on their parents, so one’s dependency value gets a huge boost for each offspring.

“If you want to up your value get married to your girlfriend,” Ms Gallanders told me. “Have kids, earn more money and find a career path where it’s easier to identify when you will get promotions.” Gulp!

But, if you’re young with no dependents and still live at home, make sure you do chores. Domestic services can be worth a lot, so clean the bathroom, cook dinner a few nights a week, hang out the washing and drive your sister to soccer – it will pay off for your family when you’re dead.

Use your body a lot. Join a sports team, play an instrument, walk or ride your bike to work. The more you use your leg, the more it will be worth.

Importantly, spend time with your loved ones and help them out when you can. It is true that some things can be priceless, while also having a price.

@willmumford

 

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