Torts B Extended Personal Injury Compensation (Damages) Notes

Personal Injury Compensation

Damages

General Information

Damage: loss harm or injury – central to claims made under tort of negligence

Damages: a sum of money or compensation awarded by judge or as part of settlement to a successful P in claim in negligence

Aggravated Damages

• Given by way of compensation for injury for injury to the P which may be intangible resulting from the circumstances and manner of wrongdoing by D

• ‘Aggravated damages in contrast to exemplary damages are compensatory in nature, being awarded for injury to the P’s feelings caused by insult, humiliation and the like’ (see Lamb v Cotogno, (1987) 164 CLR 1 at 8).

Exemplary damages (punitive)

• Where D’s conduct so outrageous that court regards award of compensatory damages (even including aggravated damages) as inadequate to punish and deter D or to deter others

• Rooks v Barnard UK case doubted where exemplary damages were appropriate so the approach is quite limited in the UK

• In Australia, need to show conduct of D was ‘high-handed insolent, vindictive or …. in some other way exhibited a contumelious disregard of the P’s rights’ (see Uren v John Fairfax & Sons Ltd (1966) 117 CLR 118 at 128 per Taylor J)

  • There must be evidence of some positive misconduct to justify a verdict of exemplary damages. Eg. evidence of a conscious wrongdoing in contumelious disregards of another’s rights

• Right to claim exemplary damages abolished in several state/territorial jurisdictions in wake of Ipp reforms - though note exceptions remain

• Right to claim exemplary damages excluded in Victoria: see for example -

  • Survival of actions (see later in this lecture)

  • Motor vehicle accidents (see s 93(7), Transport Accident Act 1986)

• If a P fails to prove an element of the tort, no damages will be awarded non withstanding that the conduct of the D would justify exemplary damages

Compensatory Damages

“In the first place, A P who has been injured by the negligence of the D should be awarded such a sum of money as will, as nearly as possible, put him in the same position as if he had not sustained the injuries. Secondly, damages for one cause of action must be recovered once and forever, and (in the absence of any statutory exception) must be awarded as a lump sum … Thirdly, the court has no concern with the manner in which the P uses the sum awarded to him; the P is free to what he likes with it. Fourthly, the burden lies on the P to prove the injury or loss for which he seeks damages” Todorovic v Waller (1981) 150 CLR 402 at 412.

Key Principle One: Compensatory damages are designed to restore the P to the original position they were had the tort not been committed

Key Principle Two: Once and For All Rule: Once damages are assessed, that is the end of the matter

You don’t come back and award more money for more damages. The award usually made as one lump sum

“The award is final; it is not susceptible to review as the future unfolds, substituting fact for estimate. Knowledge of the future being denied to mankind, so much of the award as is to be attributed to future loss and suffering – in many cases this is the major part of the award – will almost surely be wrong. There is really only one certainty: the future will prove the award to either too high or too low” Lim v Camden & Islington Area Health Authority [1980] AC 174 at 183.

There are often difficulties in making precise calculations as you are looking at the harm that has happened and the harm that will continue to occur in the future. Because of the difficulties, there are exception created in relation to this rule.

Reforms (these were not used often as P generally preferred a lump sum)

• Periodical payments

• Interim payments (pending a final assessment of the lump sum)

• Provisional (payments which will be re-assessed on the occurrence of an event)

• Structured settlements

Method of Assessment: Pecuniary vs Non-Pecuniary loss

• Most members of the High Court moved to a position whereby they considered that it was in the interests of parties and of appellate courts to know how the lump sum was broken down

Categories of Compensation

Pecuniary: loss of earning capacity (destruction of the capacity of a person earning over the course of their earning life, the ‘lost years’) and other calculable expenses (eg medical & like expenses)

• In some cases future earning will be based on what the P was earning at the time of the injury, however a more difficult situation arises where a P is a child or somebody who is out of work or on benefits. The emphasis in these cases is on capacity in order to compensate persons who had no earnings but had the capacity to produce earnings in the future. To calculate this various methods are employed

  • You calculate what they would have been likely to earn then make deductions for contingencies are tax

  • Calculations are made net of tax in line with a ‘recognised discount rate’

  • Contingencies of about 15% are taken into account

• The IPP committee recommended an even stricter approach and any loss of earning capacity should be capped

• Medical Expenses: expenses that have already been occurred. This may be pleaded specifically and it must be proved (with receipts). The court must decide whether future medical expenses should be paid for.

  • In Australia there is legislation which insures the Health Insurance Commission can recoup expenditure on the medical insurance costs of those making claims for personal injury under the tort of negligence where settlements or judgment have been received for relatively small amount then they will be exempt. In larger claims, P need to be advised of the need to make repayment to the HIC in the event that the claim for damages is successful. The P’s legal rep would ensure that until settlement that he has an accurate idea of what such repayment is likely to be in terms of advising the P as well as ensuring that all medical expenses are claimed and recovered.

Non-pecuniary: non-financial loss due to pain and...

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