The assessment of damages in personal injury claims for civil liability
In NSW, claims for damages involving harm caused by negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise are governed by the Civil Liability Act 2002 (NSW) (“Act”).
However, there are some claims that are excluded from this regime namely:
- Claims arising from motor vehicle accidents.
- Work injury damages claims against an employer.
- Claims arising from injuries caused by an intentional act done with intent to cause
harm. - Sexual abuse claims against perpetrators of the abuse and those vicariously liable for
a perpetrator’s acts. - Dust disease claims.
The Act limits the types (heads) of damages and losses that can be claimed and imposes caps, threshold requirements and assessment criteria for the various heads of damages.
The legal costs that can be recovered for claims worth less than $100,000 are also capped.
The Act provides that a court cannot award exemplary or punitive damages or damages in the nature of aggravated damages for claims assessed under the Act.
Aggravated damages are for injured feelings or distress caused. Exemplary damages are awarded where there was a total disregard for unjustified conduct and punitive damages are awarded to punish a wrongdoer. Exemplary damages are awarded as a form of punishment, to deter repetition of reprehensible conduct by the defendant or by others, or to act as a mark of the Court’s disapproval of that conduct.
The types of damages and loss that can be claimed under the Act fall into two categories, non-economic loss and pecuniary loss. There are various categories of pecuniary loss which are compensable.
Non-economic loss covers the elements of pain, suffering, disability and loss of amenity of life, in the past and in the future. This head of damages can be referred to as general damages or non-pecuniary loss. A lump sum is awarded as compensation.
Damages for non-economic loss can only be awarded if the severity of the non-economic loss is at least 15% of a most extreme case; and where the non-economic loss is equal to or greater than 15% of a most extreme case, damages are to be awarded in accordance with a table to a maximum award of $705,000. The court will make a percentage assessment of the injuries and disabilities compared to a most extreme case and once that is assessment is made, the amount of damages for non-economic loss is determined from the table.
Pecuniary losses include income loss, superannuation losses and out-of-pocket expenses such as voluntary and commercially provided care expenses. The components which will be subject to a damages award under the Act include:
- Lost income:
- Past economic loss is awarded for impairment to income and earning capacity when the impairment is productive of income loss.Damages for past and future loss of income are allowed because diminution of earning capacity is or may be productive of financial loss.
- A Court must disregard the amount (if any) by which a claimant’s gross weekly earnings would, but for the injury have exceeded an amount that is three times the amount of average weekly total earning of all employees in NSW ($1,378.60) at the date of the award.
- Past and future loss of superannuation will also be awarded, although it is important to note that compulsory superannuation contributions was only introduced in Australia from 1 July 1992.
- Out-of-pocket expenses:
- Expenses incurred are recoverable to the extent that they are reasonably incurred and expended in the treatment of injuries caused.
- Damages for the cost of future treatment are allowed.
- In general, claims for out-of-pocket expenses are based on needs for treatment, past and future rehabilitation, and aids to assist a person overcoming disability arising from injury including home modifications and disability aids.
- Gratuitous Care:
- Care provided by friends or family on a gratuitous basis are allowed.
- As with all heads of damages, a victim may recover compensation for the loss of capacity for self and domestic care only if the need for the care arises out of injuries suffered.
- There is a threshold on the recovery of damages that requires that not less than six hours per week be provided for a period of at least six consecutive months.
- The maximum amount recoverable is set, where services are provided for more than 40 hours per week at the weekly sum that is the Australian Statistician’s estimate of the average weekly total earnings of all employees in NSW, and where the weekly requirement is less than 40 hours, at the hourly rate that is one-fortieth of this figure.
- Commercial Care:
- Where care is not provided on a gratuitous basis, the reasonable cost of reasonably required commercially provided services is recoverable for services provided in the past and for services that are required in the future.
- Inability to care for others:
- Where a person provided care to dependants and can no longer do so because of their injury, compensation will be awarded for the cost required for others to provide the services where there was a reasonable expectation that, but for the injury to which the damages relate, the person would have provided the services to their dependants.
Preparing evidence to prove a claim is not without challenges.
Our Law Society Accredited Specialists in Personal Injury Law are experts in civil liability claims. They have run claims for and against Councils, shopping centre owners, construction companies, cleaning companies and act for insurers as well as plaintiffs claiming damages for injuries sustained.
Our team is in a unique position, having expertise on both sides of the fence.
You can reach out to us if you need advice, want to know more about the assessment of damages or would like us to take a look at see whether you are entitled to bring a claim.
