LAWS1113 Lecture 13

Negligence: Damages

Types of Damages

Exemplary Damages: Awarded when the court wishes to punish the tortfeasor for outrageous behaviour. Also known as punitive damages
Compensatory Damages: General damages awarded to compensate the defendant and restore them to their pre-wronged state
Aggravated Damages: Additional compensation awarded when a tort is committed in a particularly humiliating or insulting manner – compensation for the distress caused by this.

Statutory Modification

CLA s 52 – exemplary, punitive, and aggravated damages only apply for intentional physical injury or sexual assault.

Problems with Compensation

  • Amenity Losses
    • Difficult to allocate an exact dollar amount to the inability to enjoy life to the degree you used to (although the CLA does it)
  • Lump Sum System
    • All damages generally awarded at once
    • Tries to estimate future losses, with a risk of:
      • Overcompensation; or
        • If they’re too severe, the plaintiff recovers, etc.
      • Undercompensation.
        • Underestimation of damage or the plaintiff simply blows the lump sum after receiving it …

Alternative Compensation

  • Court Ordered Periodic Payments (instead of a lump sum)
    • Primarily only used for long term/lifelong injuries, due to the additional administrative costs.
  • Compensation Systems
    • eg. Workers Compensation and Rehabilitation Act 2003 (Qld)
      • Includes periodic wage payments, although only for a limited time period.

Pecuniary Loss

1. Loss of Earning Capacity

  • Special (past) damages + General (future) damages
  • Estimated Earnings multiplied by expected years they would have worked for
  • CLA limits maximum of 3 times the average Australian weekly wage (imposes a cap on the top 1.4% of the population – everyone else earns less than 3 times the average)
  • CLA s55 – People with irregular incomes can only be awarded damages if the loss can be established beyond doubt, and the just must state/demonstrate the assumptions and methodology for determining amounts (eg. Professional surfer)
  • Acceleration of Death – reduced estimated life span (compensation for the ‘lost years’)
  • Loss of marriage prospects if injury contributed to relationship breakdown – not so relevant in this day and age
  • Adjust for future degeneration or improvement (HCA – Malec)
  • Discount for contingencies (eg. Smoker or Alcoholic – shorter lifespan) and capitalisation (5% as per CLA s57)
  • Deduct any relevant collateral benefits (state clawback of pensions – for private insurance, they would have already taken over the case and be receiving the benefits instead)
  • Plaintiffs obligation to mitigate future loss (still expected to work if able, etc.)
  • Generally the younger the child, the smaller the award – impossible to calculate future earnings for a 2 year old

2. Medical and Nursing Costs

  • Only entitled to claim home care costs if it can be demonstrated that there is a substantial benefit to home care – otherwise damages only cover cheaper institutionalised care
  • If home care is qualified for, costs for care from family or friends (as well as paid carers) can be recovered at the market rate for paid care
  • Pre-requisites for claiming home care (CLA s59) – must be necessary, soley arise due to the injury claimed for, and be required for at least 6 hours a week and at least 6 months
  • Does not include costs to replace any gratuitous services that the plaintiff had been providing prior to their injury

Non-Pecuniary Loss

  1. Loss of Amenity as per CLA s62
  2. Pain and Suffering (physical pain)
  3. Loss of Expectation of Life (nominal payment for a reduced lifespan)

Limitations of Actions

  • Reasons: To protect defendants from open-ended liability and due to the difficulty of finding witnesses/evidence from decades back
  • Limitation Periods as per Limitations Act 1974 (Qld) – 3 years for personal injury, 6 years otherwise
  • When time starts to run – “date on which cause of action arises”
  • So only starts to run when ALL requirements have been met (if damage is required, only when damage crystallises – if not, during the act itself)
  • Irrelevant if plaintiff is actually AWARE the damage has occurred

Time Extensions

  • Disability (time starts at cessation of disability – eg. Children can sue until they turn 21)
  • Latent Injuries – Limitation of Actions Act 1974 s31, s33 can add an extension under certain circumstances
  • If you did not know and had no means of knowledge of relevant decisive material facts during the 3rd year, and then get them later, the court can extend the time period (Queensland v Stephenson)

Relevant Cases

Reardon-Smith v Allianz Australia Insurance: Plaintiff must substantiate any claims for economic loss from irregular income. Semi-professional surfer only entitled to income he could demonstrate he would have made on the balance of probabilities.

Griffiths v Kerkemeier: Plaintiffs can claim for home care provided whether or not they pay for it. Quadriplegic claimed for care provided by fiancé and family.

Kriz v King: Once the 6 hour for 6 months threshold has been reached, any additional services required, even if they drop below 6 hours, are still covered. CLA s59 interpretation.

CSR v Eddy: A person who has suffered personal injury cannot recover damages for loss of capacity to care for another family member. Loss of capacity to care for disabled wife not recoverable.

Skelton v Collins: The payment for loss of expectation of life or permanent unconsciousness is comparatively modest.

Queensland v Stephenson: If you did not know and had no means of knowledge of relevant decisive material facts during the 3rd year, and then get them later, the court can extend the time period under the Limitations of Actions Act 1974

Relevant Statutes

CLA s 52: Exemplary, punitive, and aggrevated damages can no longer be awarded for personal injury claims except for intentional injury or a sexual assault.

CLA s 53: Defendant may give plaintiff written notice suggesting ways they can mitigate the damage suffered and damages payable, and the court must take this into account.

CLA s 54: Damages for loss of earnings capped at 3 times the average wage – top wage earners will not recover full wage.

CLA s 55: People with irregular incomes can only be awarded damages if the loss can be established beyond doubt, and the just must state/demonstrate the assumptions and methodology for determining amounts (eg. Professional surfer)

CLA s 57: 5% discount rate applied to all damages for future losses

CLA s 59: Pre-requisites for claiming home care – must be necessary, soley arise due to the injury claimed for, and be required for at least 6 hours a week and at least 6 months

CLA ss 61 & 62: Injury scale is used to identify maximum/minimum damages for general damages.

Limitation of Actions Act: 3 years for personal injury, 6 years for other torts, can add extension under certain circumstances.