Damages - Torts Law

Class 20- Damages:

• Personal injury damages.

Compensatory damages:

• The reparation of a wrong by provision of a sum of money. Assumptions must be made about the injured person as if the tort had never occurred.

Exemplary, punitive and aggravated damages:

• Punishment and deterrence. The requirement is contumelious wrongdoing in disregard of the plaintiff’s rights. They are above what are needed to put the plaintiff into his former position.

• Questions of double jeopardy can arise. Exemplary damages cannot be awarded if they have already suffered substantial punishment in criminal law.

• Aggravated damages are considered to be compensatory. They are to compensate the plaintiff when the harm done to him was aggravated by the manner in which it was done.

• There are restrictions on them in the CLA.

Nominal and contemptuous damages:

• Small sums awarded in recognition that rights have been invaded but there was no damage. They can’t be awarded in negligence because damage is the gist of the action.

Basic principles in compensatory damages awards:

• Fault: general public sentiment that there has been wrongdoing.

• Restitution in integrum or the compensatory principle: plaintiffs are entitled to be restored to the position they would have been in before the wrongdoing.

• The once and for all rule: the cause of action arises when damages is suffered. A single lump payment is given. You can’t re-open assessment. Plaintiffs can be under compensated. There are statutory exceptions. Provisional payments are available in the Dust Diseases Tribunal. This is to stop unending litigation.

Damages awarded unconditionally:

• They can use the damages as they like.

• Atiyah says proving fault is a lottery. Stretching things will make everything worse.

Page 540

Todorvic v Waller (1981)

Facts:

• Todorvic suffered brain damage in his thirties making him unemployable.

Legal reasoning:

• Murphy J in the HC reasoned that because people who are injured are kept alive by science, damages based on restitution may be an unacceptable burden on the community. The social function of the courts has been to depress damages. This has transferred the cost of the road accidents to the injured person. Perhaps they should transfer the cost to the social welfare system or reduce the accidents.

Page 541

Lim Poh Choo v Camden (1980)

Facts:

• Choo went to hospital for a minor operation but suffered cardiac arrest because of the hospital’s negligence.

• The question was of damages.

Legal reasoning:

• Lord Scarman reasoned that there are problems with giving a lump sum in damages which is final. It will almost surely be wrong. The future will prove the award to be too high or too low.

Tort reform and the CLA:

• The CLA does not function as a code.

Assessment of damages:

• The plaintiff’s entitlement to damages arises when the cause of action is complete. It may be when the harm is sustained (negligence) or the date of trial commencement. This is fairer because there can be delays to trial.

• In Johnson v Perez a construction worker instructed solicitors to sue three separate employees for injuries. He sued them for negligently allowing the claims to fail. They assessed damages at the date of the award.

• In Thompson v Faraonio they took into account improvement or deterioration in the condition after the accident.

Recoverable heads of loss:

• They try not to double count. Physical injury can destroy physical capacity, create new needs (loss of earning capacity both before and after trial) or produce pain and suffering (non-pecuniary loss). Plaintiffs can recover these three types of loss. There is actual financial loss which is recoverable loss.

• It separates losses into special and general damages. Special is medical and associated costs of earnings. General damages are discretionary and assessment is required.

Damages for economic loss:

• Past out of pocket expenses: all recoverable and is straightforward.

• Loss of earning capacity: Income that they would have earned but now cannot.

• Damages for future economic loss depend on the extent to which a plaintiff is able to prove their capacity would have been exercised in the future and the level of income. It is the egg skull rule, taking your victim as you find them.

Page 547

Sharman v Evans (1977) – Demonstrates damage assessment.

Facts:

• Miss Evans aged 20 was injured by a motor car accident. She got brain damage and was unconscious for almost a month and is now a quadriplegic.

Proceedings:

• HC.

Legal issue:

• How can Evans be put in the same position as she would have been before the accident?

• How can double compensation be avoided?

Outcome:

• Appeal allowed. The damages will have to be reassessed. She got money for loss of expectation of life, cost or nursing and medical attention, lodging costs,

Legal reasoning:

• Gibbs and Stephen JJ reasoned that

• Both principle and authority ... establish that where, as here, there is, included in the award of damages for future nursing and medical care the plaintiff s entire cost of future board and lodging, there will be “overcompensation” if damages for loss of earning capacity are awarded in full without regard for the fact that the plaintiff is already to receive as compensation the cost of her future board and lodging, a cost which but for her injuries she would otherwise have to meet out of future earnings ... it would better accord with principle if the savings in board and lodging could be isolated from, and excluded from the damages to be awarded in respect of hospital expenses.

Ratio decidendi:

• Sharman v Evans illustrates the rule that the plaintiff is entitled to so much compensation as will replace

• them in the position that they would have been in had the wrong not happened. It shows the care with

• which the court avoids overcompensation—so that when a person loses earning capacity, they also lose

• the need to provide uniforms etc or clothes to wear at work and the sums have to be adjusted to account

• for this. This applies also to ‘lost years’—during those years the plaintiff will not need to pay for food, lodging etc and so that also needs to be taken into account.

Notes:

• Pickett v British Rail Engineering Ltd the House of Lords found that an injured plaintiff was entitled to recover damages for loss of earnings during the lost years and that those damages should be computed using the probable living expenses of the plaintiff.

• Where a plaintiff is partially incapacitated for work, issues arise as to the value of any residual capacity. If they can find new work but earn less then the damages will be deducted using the current and former income. Assessment of future economic loss takes into account promotions, overtime, sickness and child rearing.

Page 552

Graham v Baker (1961) – Loss of entitlements; entitlements like sick pay, holiday pay and pensions may be relevant in determining economic loss.

Facts:

• Baker was compulsorily retired from his job as a fire station officer because of injuries caused by Graham’s negligence. He received 178 days of sick pay before being fired.

• The trial judge calculated damages for the 178 days and so did the SC of NSW. Baker appealed to the HC.

Legal issue:

• Should the 178 days be included in the calculation of damages or are they considered part of the employment while Baker was incapacitated?

Outcome:

• Appeal allowed. Graham won. There must be a new trial on the issue of damages.

Legal reasoning:

• Dixon CJ, Kitto and Taylor JJ reasoned that it is impossible to find any loss of wages for the 178 days. The economic loss is concerned with loss of wages up to the time of trial and his future diminished earning capacity.

Ratio decidendi:

• Sick pay is considered when calculating damages for economic loss and deducted accordingly.

Notes:

• Voluntary payments by an employer that are not under the conditions of employment are not deductible from the damages.

• The CLA caps damages for past and future economic loss. No person’s loss may exceed three times the amount of average weekly earnings in the relevant jurisdiction at the date of the award (section 12)

• Section 13 requires a court to determine what the plaintiff’s most likely future circumstances would have been if the tort had not been committed, and to award damages for future economic loss based only on those circumstances.

Malec v JC Hutton Pty Ltd (1990) – Certainty and proof of loss; how can a court determine what may happen in the future if the tort had not occurred? For past loss of income the civil standard of proof applies. Where future loss of chance to earn income is used the assessment of damages can be used and there is no balance of probabilities standard required.

Facts:

• Malec was a labourer in a meatworks. He contracted brucellosis, a disease caused by animals. It can lead to degeneration of the spine and depression.

Prior proceedings:

• Malec got $19, 468 in trial. It was found that the plaintiff’s neurotic condition was caused by the brucellosis. The full court believed the spinal condition was not caused by it but increased the damages to $36,928 on the basis that the neurotic condition was caused by it. Malec appealed to the HC.

Legal issue:

• What would have Malec earned in the future if he was not tortiously injured?

Outcome:

• Appeal allowed. Malec won.

Legal reasoning:

• Brennan and Dawson JJ reasoned that when looking...