QUANTIFICATIONOF DAMAGESINPERSONAL INJURYCLAIMSTHEBASICS
AlexandraDarcey
Derwent&TamarChambers
April2023
WHATAREDAMAGES?
Thereisadifferencebetweendamage(harm)anddamages Inanyclaimforpersonalinjury,itisnecessarytoestablishthefactualandthe counterfactualscenarios.
lifeisthedamageorharmthattheyhavesufferedandwillreflectthedifference betweenwhathashappenedandwhatwouldhavehappenediftheaccidenthad neveroccurred.
Damagesareasumofmoneyintendedtoplacetheinjuredpersoninthesame positiontheywouldhavebeeninhadtheynotbeeninjured.Damagesare supposedtocompensatetheinjuredpersonforthedamagethattheyhave suffered.
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CATEGORIESOFDAMAGES
Traditionallytherearethreetypesofloss:
Nonpecuniarylossdamagescanberecoveredinrelationtotheselossesevenif noactualfinanciallossiscaused.
-GeneralDamages
Lossofearningcapacitytotheextentthatthelosshasbeenormaybeproductive offinancialloss;
-Pastandfutureeconomicloss
Actualfinanciallosscostsincurredortobeincurred.
-Pastandfutureexpensesmedicalexpenses,travel,housemodifications,care requirements,domesticassistance
DOESTHECIVILLIABILITYACT2002APPLY?
INTENTIONALACTSANDSMOKING
Section3B(1)and(1A)makesitclearthattheCLAwillnotapplyto
1)claimsarisingfromanintentionalact:
a)thatisdonewithintenttocauseinjuryordeath;
b)orthatissexualassaultorothersexualmisconduct,unlessitconstitutes childabuse,beingthesexualorphysicalabuseofachild,inwhichcase Part10CLiabilityofOrganisationswillapply.
2)claimsarisingfromsmokingortheuseofothertobaccoproducts.
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DOESTHECIVILLIABILITYACT2002APPLY?MOTOR VEHICLEACCIDENTS
Section3B(2)providesthat,withrespecttoclaimstowhichPartIIIoftheMotor Accidents(LiabilityandCompensation)Act1973applies(circumstancesinwhich commonlawclaimscanbemadeandwheretheMAIBwillindemnifythenegligent driver)onlysomepartsoftheCLAwillapply,namely:
Parts2intoxicationandpresumptionofcontributorynegligencewhereapersonis intoxicated;
Part3recoverybycriminalscriminalsnottobeawardeddamages;
Part5and5A-structuredsettlementsandprovisionaldamages;
Divisions1,2,3,4and7ofPart6BreachofDuty,StandardofCare,Causation,Obvious risksandstandardofcontributorynegligence;and
Parts7AssessmentofDamagesforPersonalInjuryorDeath;and
Part8MentalHarm.
DOESTHECIVILLIABILITYACT2002APPLY? WORKERSCOMPENSATIONANDOTHERACTS
Section3B(3)providesthattheActdoesnotapplytoclaimsrelatingtoaninjuryto whichDivision2ofPartXoftheWorkersRehabilitationandCompensationAct1988 applies.Thatdivisiondealswithrestrictionsonawardsofdamagesincertain situations.
Section3B(4)providesthattheCLAdoesnotapplytoliabilityforcompensation undertheWorkersRehabilitationandCompensationAct1988(seediscussionin RapervBowden[2016]TASSC35perEstcourtJat[18]to[28]theCLAdoesnot applytoWorkersCompclaimsatall),theAsbestos-RelatedDiseases(Occupational Exposure)CompensationAct2011,theCriminalInjuriesCompensationAct1976or theAnti-DiscriminationAct1998orascheduledbenefitundertheMotorAccidents (LiabilitiesandCompensation)Act1973
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ANTECEDENTS
Antecedentsarethebasicpropositionsthatyouareassumingorassertingwhich underpinyourcalculationsonquantum.
Dependingontheexactnatureoftheclaim,youwillgenerallyneedtoidentifythe followingantecedentsbeforeyoucanundertakeyourcalculations:
DateofBirth
CurrentAge
LifeExpectancy(numberofyearsuntildeath)
RetirementAge
Numberofyearsuntilretirement
Discountrateapplicabletocalculationsforfuturepecuniarylosses
Discountfactorfornumberofyearsuntildeath:
Discountfactorfornumberofyearsuntilretirement.
LIFEEXPECTANCY
Inusualcases,canbeestablishedbytheuseoflifetables.
Lifetablesarepublishedtablesofdatarelatingtothemortalityofapopulation.
PublishedinAustraliabyAustralianBureauofStatistics bytheAustralianGovernmentActuaryaftereachcensus.
Publishedinaccessibleformbyvariousactuarialfirms,including:
CumpstonSarjeantConsultingActuarials;and
FurzerCrestaniForensicCharteredAccountants
Incaseswhereinjuryordiseaseislikelytohavesignificantlyimpactedonthelife expectancyofaplaintiffthenexpertmedicalevidencemayhavetobeobtainedin ordertoestablishlifeexpectancy.
SeeRapervBowden[2016]TASSC35,paragraphs109to124perEstcourtJ
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HTTPS://CUMSA R.COM.AU/WPCONTENT/UPLO ADS/MULTIPLIER S_READY_RECK ONER_2022
RETIREMENTAGE
Adeterminationwillneedtobemadeincaseswhere theplaintiffisclaimingforeconomiclossintothefuture, basedonalossofearnings.
Anappropriateassumptionaboutretirementagewill requireaconsiderationofallrelevantfacts.Itwillnot necessarilybetheageatwhichapersonisentitledto claimtheagedpension.
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DISCOUNTRATESFORFUTUREPECUNIARYLOSSES
Whereaplaintiffisseekingdamagesforfuturepecuniarylossesa discountrateisappliedtoestablishthepresentdayvalueofthe loss.
Withoutadiscountratebeingappliedanawardofdamagesfor futurepecuniarylossmayresultinawindfalltothePlaintiff becausetheywouldbeobtainingmoneynowthattheywould not,butfortheaward,havereceiveduntilsometimeinthe future.Potentiallytheycouldinvestthatmoneyandinthefuture, itwouldbecomeagreatersumthanthelossthattheyhave incurred.
DISCOUNTRATESFORFUTUREPECUNIARYLOSSESWHATRATE APPLIES?
IftheCivilLiabilityActappliesseeS28A
alumpsumforfutureloss,thepresentvalueofthatfuturelossisto bequalifiedbyadopting
(a)adiscountrateof5percent;or
CommonLawTodorovicvWaller[1981]HCA723%andsee discussioninRapervBowden[2016]TASSC35,paragraphs103to 106perEstcourtJ
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DISCOUNTRATESFINDINGTHEDISCOUNTFACTOR
Onceyouhaveestablishedyourdiscountrate(5%iftheCLAapplies)thenyouneed toapplythatratetoyourcalculation.Therateisappliedthroughtheuseof multiplicationfactors.Theseareobtainedbylookingatspeciallydesignedactuarial tablesbecausethemultiplicationfactorthatyouneedtousewillbedifferentfor differentperiodsoftime.Youcannotsimplyapplya5%discountratetothepresent dayvalueoftheclaim.
Whenyouaremakinganassessmentoffuturecoststhatwillbeincurredyoumust identify:
Isthecostaoneoffcost?
Isthecostalumpsumcostthatwillbeincurredanumberoftimesintothefuture andifso,howmanytimeswillthelumpsumcostbeincurredandatwhat intervals?
Isthecostanongoingcostandifso,whenwilltheongoingcoststartandfinish? Youwillthenknowwhichactuarialtablesyouwillneedtoconsult.
DISCOUNTRATESFINDINGTHEDISCOUNTFACTOR
Ifacostisaoneoffcostwhichistobeincurredimmediatelythennodiscountis applied.Thetotalamountoftheoneoffcostisclaimable.
Ifthecostisaoneoffcostbutitisgoingtobeincurredatregularintervalsintothe futurethenyouneedtouseafactorwhichrepresentsaDeferredMultipliertoobtain thepresentdayvalueoftheclaim.Youwillneedtoundertakeseparatecalculations foreachintervalandthenaddthesumofeachcalculationtogetyourclaim.
Ifthecostisanongoingcostwhichstartsimmediatelyandcontinuesforasettime intothefuture,thenyouneedtouseafactorwhichrepresentsaWeeklyMultiplierto obtainthepresentdayvalueoftheclaim.
Ifthecostisnotgoingtobeincurreduntilsometimeintothefuturebutonceitstarts itwillbeanongoingcost,thenyouneedtouseacombinationoffactors representingDeferredandWeeklymultipliers.
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EXAMPLE1USEOFWEEKLYMULTIPLIER
Theplaintiffisgoingtorequirepsychologicalcounselling,visitsto hisGP,painkillingmedicationanddomesticassistance.These coststotal$500perweek.ThePlaintiffwillrequiretheseservices andmedicationsforthenext20yearsofhislife.
Thelossiscalculatedasfollows:
$500x666.4(5%weeklymultiplierfor20years)=$333,200.00
HTTPS://CUMSAR.COM. AU/WPCONTENT/UPLOADS/M ULTIPLIERS_READY_REC KONER_2022
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EXAMPLE2USEOFADEFERREDMULTIPLIER
Theplaintiffwillberequiredtoundergokneereplacementsurgery.This surgerywillberequiredin10yearstimeandwillcost$25,000.00.
Thelossiscalculatedasfollows:
$25,000x0.614(5%deferredmultiplierfor10years)=$15,350.00.
Thelifespanoftheprosthetickneeis10yearssotheplaintiffwillneed anotherkneereplacementoperationin20yearstimeandthecostwillbe $25,000.00.
Thelossiscalculatedasfollows:
$25,000x0.377(5%deferredmultiplierfor20years)=$9,425.00
Iftheplaintiffwillonlyrequiretwokneereplacementsfortherestofhislife thenthetotalclaimforfuturekneereplacementsurgerywillbe$15,350.00 +$9,425.00=$24,775.00
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HTTPS://CUMSAR.C OM.AU/WPCONTENT/UPLOAD S/MULTIPLIERS_REA DY_RECKONER_20 22 17 18
EXAMPLE3COMBINEDWEEKLYANDDEFERRED
Theplaintiffisgoingtorequireincreasedassistance aroundhishomeforhandymantasksandgarden maintenanceintenyearstime,fromtheageof65.The costofthoseservicesisgoingtobe$500perweek.He willneedthoseservicesuntilheisaged85years,a periodof20years.
Thecalculationisasfollows:
$500x0.614(5%deferredmultiplierfor10years)x 666.4(5%weeklymultiplierfor20years)=$205,585
GENERALDAMAGES
Alsoknownasnon-economicloss
Includes: Painandsuffering; Lossofamenitiesandenjoymentoflife; Lossofexpectationoflife; Disfigurement.
CivilLiabilityAct2002
S3.Interpretationdefinitionofnoneconomicloss.
S27.Restrictionsondamagesfornon-economiclossslidingscale
28.Tariffsfordamagesfornon-economicloss(generaldamages)
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GENERALDAMAGESESSENTIALREFERENCES
AssessmentofDamagesforPersonalInjuryandDeathFourthEdition HaroldLuntz2002ReedInternationalBooksAustraliaLimited
DodgevSnell[2011]TASSC19,paragraphs483to497
PottsvFrost[2011]TASSC55,paragraphs325to332
HendrexvKeating[2016]TASSC20at172
RapervBowden[2016]TASSC35at125to140
PlanetFisheriesPtyLtdvLaRosa(1968)199CLR118
ECONOMICLOSSDAMAGESFORLOSSOF EARNINGCAPACITY
LossofearningcapacitycappedbyS26oftheCLA
26.Damagesforlossofearningcapacity
(1)Whereapersonisentitledtodamagesinrespectoflossof earningcapacityorwhereaclaimfordamagesismadepursuantto theFatalAccidentsAct1934,acourtmustnotawardthose damagesonthebasisthepersonwas,ormayhavebeencapable of,earningincomeatgreaterthan3timestheadultaverageweekly earningsaslastpublishedbytheAustralianBureauofStatistics beforedamagesareawarded.
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ECONOMICLOSSDAMAGESFORLOSSOF
EARNINGCAPACITY-SUPERANNUATION
S25.ClaimforfutureSupercappedatminimumemployer contribution
PartridgevHobartCityCouncil[2012]TASFC3at paragraphs245to246
PottsvFrost[2012]TASFC6atparagraphs43to46
PASTANDFUTUREMEDICALEXPENSES
Recoverabletotheextentthattheyhavebeenor willbe:
reasonablyincurred,and arecausallyrelatedtotheharmsuffered.
Failedorineffectivetreatmentdoesnotpreclude recoveryforpastexpenses.
Butcostofexperimentaltreatmentthatoffersno curewillnotberecoverable
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GRATUITOUSSERVICESGRIFFTHSV KERKEMEYER
28B.Damagesforgratuitousservices
(1)Damagesforgratuitousservicesmaybeawardedinrespectof gratuitousservicesrequiredbythepersonasaresultofinjuriestothat personcausedbythenegligenceofanotherperson.
(2)Apersonmaynotrecoverdamagesforgratuitousservicesunlessthe serviceshavebeenprovided,orarelikelytobeprovided,tothatperson formorethan6hoursperweekandformorethan6consecutivemonths.
(3)Incalculatingdamagesforgratuitousservices
(a)thehourlyrateisnottoexceedone-fortiethofadultaverageweekly earnings;and
(b)theweeklyrateisnottoexceedadultaverageweeklyearnings.
GRATUITOUSSERVICESSULLIVAN&GORDON
28BA.Damagesforlossofcapacitytoprovidegratuitousservicestoanother
(1)Apersonmayrecover,inrelationtoapersonalinjury,damagesforthelossofcapacitytoprovidegratuitousservicestoanother person.
(2)Aperson(theclaimant)mayrecoverundersubsection(1),inrelationtoapersonalinjury,damagesforthelossofcapacityto providegratuitousservicestoanotherpersononlyif
(a)either
(i)theclaimantwas,beforethelossofcapacityoccurred,providingtheservicestotheotherpersonformorethan6hoursperweek andmorethan6consecutivemonthsanditwasnecessaryfortheservicestobeprovidedtotheotherperson;or
(ii)theotherpersonwas,beforetheinjuryoccurred,anunbornchildoftheperson;and
(b)theotherperson
(i)isapersonwhowouldhavebeenentitledtorecoverforlossoftheclaimant'sservicesiftheclaimanthadbeenkilledratherthan injured;or
(ii)wouldhavebeen,ifheorshehadbeenbornbeforetheinjuryoccurred,entitledtorecoverforlossoftheclaimant'sservicesifthe claimanthadbeenkilledratherthaninjured;and
(c)thereisareasonableexpectationthat,butforthelossofcapacity,theclaimantwouldhaveprovidedthoseservicestotheother person,aftertheinjury,formorethan6hoursperweekandmorethan6consecutivemonths;and
(d)theotherpersonwillneedtheservicesformorethan6hoursperweekandmorethan6consecutivemonthsandtheneedis reasonableinallthecircumstances.
(3)Incalculatingdamagesforthelossofcapacitytoprovidegratuitousservices
(a)thehourlyrateisnottoexceedone-fortiethofadultaverageweeklyearnings;and
(b)theweeklyrateisnottoexceedadultaverageweeklyearnings.
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FUNDMANAGEMENT
Plaintiffmayrecoverthereasonablecostofmanagingthefundawarded wrong.
Itisclearfromtheevidenceastotheimpairmentoftheplaintiff'scognitive PerBlowCJat[167]inHendrexvKeating[2016]TASSC2016
Attherequestoftheparties,BlowCJadded17%ofthebalancejudgmentsum asrepresentingtheawardforfundmanagement
CONTINGENCIES
Whatpositiveandnegativecontingenciesmaycometobearontheplaintiff?
Whatisthelikelihoodofimprovementordeteriorationoftheircondition?Howwillthis affectgeneraldamages?
Whatisthelikelytrajectoryoftheirfinancialcircumstances?
Howshouldthesecontingenciesbemanagedintermsofafurtherdiscountfor vicissitudesoflife?
Pre-existinghealthailmentsaretakenintoaccountinanassessmentofdamages. Theonusisonthedefendanttoestablishtheneedforadiscountforvicissitudes(Watts vRake(1960)108CLR158).
Themerefactthatdamagesaredifficulttoassessbecauseofuncertaintydoesnot relievethecourtofitsresponsibilitytoattempttoassessthosedamages,takinginto accountcontingencies.Allowancesmustbemadeproportionatetothechanceof thelossoccurring(thedegreeofprobability).(MalecvHuttonvJCHuttonPtyLtd (1990)169CLR638
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