Assessment of damages for personal injuries

Non-ecoomic loss
o LoA
o P+S
o LoEoL
S16 of CLA

Economic
o Hosptal care
o Gratuitous services
S15
o LoEC
S12 (2)
Damage - element of cause of action in tort. Damages - remedy you receive.

The primary purpose of an award of damages is compensation, so they are usually the
exclusive head of damages awarded for claim in neg.
Guiding principle - "restitutio in integrum" - if the plaintiff succeeds, he should be put
in the position he/she was in before the was committed
Look from date of judgement into the future - constant struggle not to
overcompensate the plaintiffs but don't want to under- compensate them
ONUS ON THE PLAINTIFF - HE/SHE needs to demonstrate that head of damages is
reasonably foreseeable for type of damage suffered

Plaintiff can only bring one action in respect of all the damages suffered that has been
suffered up to the date of the trial and which is likely to be suffered in the
future. Lump sum payment to provide recompense for past/future losses.
To what extent does the common law fault based system achieve the ends it sets
out to achieve - is it the most efficient system/effective?

Deficiencies: how to put a price on pain and suffering, seriously injured victim: how
to determine what employment he or she might have undertaken or with what degree
of financial reward, future loss predictions are difficult
"The fundamental rule of the common law is that in an action for damages for tort
the courts awards: "that sum of money which will put the party who has been
injured, or who has suffered, in the same position as he would have been in if he had
not sustained the wrong for which he is now getting his compensation or reparation":
Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 at 39." McHugh JA in Parramatta
City Council v Lutz (1988) 12 NSWLR 293 at 335, (Cases, p 432).
"I can only hope that some day the law will provide some better way of meeting the
consequences of day to day hazards than by actions of negligence and a
measuring of damages by unprovable predictions, metaphysical assumptions and
rationalised empiricism." Windeyer J in Skelton v Collins (1966) 115 CLR 94 at 136
(Cases, p 404)
Pecuniary damages

Loss of earning capacity

Plaintiff entitled to recover for any diminution to his or her capacity to earn, to the
extent to which that diminution is productive of financial loss

Generally computed by deducting any earnings made since the accident from those
which would have been made had the pre-accident emolument continued until the trial

Lump sum can be increased by possibility that the plaintiff might otherwise have made
greater use of his or her earning capacity by promotion or acquisition of more skills or
reduced to take into account the vicissitudes of life

Child/teenager who had not entered the workforce: compensation is still made for any
loss of the future capacity to earn - assess the level of renumeration that the plaintiff
might reasonably have expected

Assessed on basis of plaintiff's life expectancy prior to injury

Cost of medical and nursing care

Entitled to recover costs of medical, hospital and nursing care rendered necessary by
the injury received. Expect to be compensated only for the level of care reasonable in
the circumstances

Cost of institution cheaper than that of home: only when latter proved to be of
substantial benefit to plaintiff's wellbeing that cost thereof will be allowed as an item of
the damages

Plaintiff being cared for in an institution: costs on which capital is based exclude
institution's charges (food and shelter)
Non-pecuniary damages

Provide solace to the victim for the intangible effects of the accident - pain and
suffering, loss of amenity, loss of expectation of life

Pain and suffering

Relief for the physical hurt that has been occasioned by accident and its aftermath judges are entitled to be aware of prevailing levels of awards in roughly comparable
cases to determine a range in which award lies

Awarded on a subjective basis to provide solace for the physical hurt by the defendant so no award can be made for a victim who is rendered permanently unconscious by the
accident (Skeleton)
Loss of amenity

Provision of money to recompense for "the deprivation of the ability to participate in

normal activities and thus to enjoy life to the full"
Recreational pastimes and sport, deprivation of sexual pleasure

Recompense for the mental suffering and feelings of frustration

HC: primary purpose of compensation under this head is the plaintiff's realization that
the accident has deprived him/her of the opportunity to enjoy life as fully as was the
case prior to the injury

So if plaintiff rendered permanently unconscious by accident: modest and conventional

sum ($15000) awarded, and if hardly aware of plight: damages correspondingly reduced
Loss of expectation of life

Purpose is to provide the victim with compensation (solace) for the fact of the
deprivation of a part of his or her life

Hard to put a money value on such an item as the extraordinary difficulty in seeking to
put money value on such item as balance of joy, sorrow - courts should award modest
and conventional sum

Skeleton v Collins: amount that awarded should not vary depending on the age of the

victim or the years by which life has been shorted. Only basis on variation: should take
account in the fall of value of money
Around $10000-$15000, and since only a conventional award: available even if plaintiff
has been rendered permanently unconscious by the accident

Economic prior to trial = special damages, after date of judgement = general

Non-economic = general prior and post date of judgement

Parramatta City Council v Lutz (1988) BURNING COTTAGE

Principle of law: As between the plaintiff and the defendant, considerations of
reasonableness may require the defendant to pay compensatory damages
amounting to the reasonable cost of reinstatement (rather than replacement) of a
dwelling house destroyed as a result of the defendant's negligence.
KIRBY P: ".it is important to remember the principle which applies to the award of damages
in tort, namely the principle of restituto in integrum.

a)

b)

"Once and for all. lump sum awards; special and

general damages; collateral benefits
Recipient of lump sum is an adult of sound mind that will act prudent in their interest
There is no restriction on the way which the plaintiff uses the money
Say they have a health problem - they put a strain on public services. Not
equitable
Courts take into account the vicissitudes of life (eg. sickness, accident,
unemployment and industrial disputes) and there is usually a discount rate for
this (between 15-25% of lump sum)
Courts do not award period payments at common law

Gratuitous services: CLA PART 2 DIVISION 2 S15

Plaintiff is not entitled to recover in respect of services which consist of no more than
would ordinarily be provided by members of a family nor in respect of those services
which exceed the bounds of that which a defendant ought properly to be responsible
(therapeutic services provided free of charge by a charitable organization)
If damages are to include a component relating to gratuitous nursing and other
services, they are generally to be valued by reference to the standard or market cost of
the services that have been and will be rendered: any income forgone by family
member/friend in providing that care is irrelevant
But cost is no more than guide to appropriate measure of damages
When a homemaker no longer able to provide household services - and undertaken
gratuitously by other members of family - courts, from analogy of Griffiths: injury to one
member of house requires someone else to perform the domestic person injured had
previously undertaken. The fact that duties carried out gratuitously by other members
of family not taken into account in relief of the tortfeasor - NON-PECUNIARY

Griffiths v Kerkemeyer (1977) - NURSING

P entitled to damages reflected by value of gratuitous services despite not using commercial
service.

Held: whether or not later events means services are provided gratuitously does not
change nature of loss.
Facts

Car accident, P (quadriplegic) injured by negligence of driver and as a result required

nursing care to be provided at home. P was fortunate to have family provide nursing
care gratuitously (instead commercial services)
Held

P claims entitled to damages which reflected value of gratuitous services provided here
even though didn't use commercial services or didn't go into a facility commercially
operated: the services provided had a value capable of assessment which was
recoverable by the defendant

D could be compelled to pay gratuitous services and P could recover this from the
defendant

P had to establish it was reasonable to recover this head of damages (to have nursing
assistance, reasonably to have those damages and those services provided for free by
their family)

Kars v Kars (1996) HUSBAND AND WIFE

Principle of Law: Under the Griffiths v Kerkemeyer principle, a plaintiff who has suffered
personal injury caused by the defendants negligence may recover damages
representing the value of necessary services, past and future, provided gratuitously to
the plaintiff by a relative or friend. This principle applies where the services are provided
to the plaintiff by the defendant tortfeasor.
Facts:

The plaintiff, Rebecca Kars was seriously injured in a motor accident caused by the
negligence of her husband Mark Kars, the defendant. The plaintiff's injuries left her with
a permanent disability and a need for continuing care. Much of that care was provided
by family members, with more than half of that care provided by the defendant.

In the plaintiff's action against the defendant for damages, the trial judge rejected the
claim for damages for the value of gratuitous services which were likely to be provided
to the plaintiff by the defendant in the future

QLD CA reversed the decision of the trial judge. The defendant appealed to the HC,
which unanimously affirmed the decision of the QLD CA allowing the claim. The court
also held that a plaintiff does not hold damages in respect of future care on trust for the
person who may provide the services.
Held:

The argument is that, having provided the services, the defendant cannot be
required to pay, in addition, the cost of providing them

Damages are recoverable to compensate the plaintiff for the loss which is evidenced by
the need for services and it is a matter for the plaintiff whether they are used to
recompense the person providing the services

The damages which a plaintiff receives for the need for services is compensation for the
loss or incapacity giving rise to the need

Held: the fact that a D fulfils the function of providing services does not,
as such, decrease in the slightest the Ps need.

Appeal dismissed

Civil Liability Act (2002) NSW - PART 2 DIVISION 2 s15 pg 59

(2) No damages may be awarded to a claimant for gratuitous attendant care
services unless the court is satisfied that:
(a) there is (or was) a reasonable need for the services to be provided, and
(b) the need has arisen (or arose) solely because of the injury to which the
damages relate, and
(c) the services would not be (or would not have been) provided to the claimant
but for the injury.
(3) Further, no damages may be awarded to a claimant for gratuitous attendant
care services if the services are provided, or are to be provided:
(a) for less than 6 hours per week, and
(b) for less than 6 months.
s18(1)(b) CLA: no interest on gratuitous attendant care services

c)

Possibilities and contingencies: the "before and after"

picture

Head of loss (non-pecuniary): cost of administering award of damages i.e. if the plaintiff
rendered incapable by the injuries of managing his/her own affairs, or intellectually
impaired by reason of some pre-existing disability, it has been accepted that the award
must necessary be managed with professional assistance and charges made for that
service be included as part of the loss suffered
Modifications to house: ramps/wheelchair access, pool to exercise in or
accommodation for a live-in career

Wynn v NSW Insurance Ministerial Corporation (1995) AMEX

Principle of Law: In the assessment of damages for loss of future earning capacity,
the court must take into account the contingencies or "vicissitudes" of life, that is,
"the various possibilities which might otherwise have affected earning
capacity."
Facts:
1. In 1986, the appellant sustained injury in a car accident.
2. 14 years ago, she also suffered an accident but had surgery at that time and was virtually symptom-free by the time he sustained
the car injury.
3. Before the time she got hurt in the car accident, she had a very successful life and she was one step below vice-president.
4. The accident brought about a serious aggravation of the injury she sustained in 1972.
5. Consequently, she was unable to continue her previous career and at the time of trial, worked part-time for a family business.
6. Trial awarded appellant 5% discount in vicissitudes of life.
7. The decision of NSWCA increased the discount to 28%.
8. On appeal by the appellant.

Held:

In the assessment of damages for loss of future earning capacity, the court must take into account the contingencies or
"vicissitude" of life, that is, "the various possibilities which might otherwise have affected earning capacity, however, "child
care"
and "domestic help" should not be a consideration for the realization of earning capacity.

In the Court of Appeal - considered that the calculation of future eco loss should be
deduced by amounts to allow for super annuation contributions and the cost of child
care and domestic help
Child care only one of various costs associated with children 2 years salary
Respondent's argument was that allowance should have been made for the possibility
that the appellant's 1972 injury would have prevented her working in a high level
managerial position until age 60 even if the 1986 accident had not occurred
In the Court of Appeal - argued that no allowance should be made for the prospect of
advancement and 38% fairly represents the possibility that the appellant would have
taken unpaid maternity leave and further possibility that her previous neck injury would
have prevented her continuous employment until age 60
Discount for contingencies or vicissitudes is to make account of matters which might
otherwise adversely affect earning capacity
Professor Luntz: death apart, "sickness, accident, unemployment and industrial disputes
are the four major contingencies which expose employees to the risk of loss of income"
Contingencies are to be considered in terms of their likely impact on the earning
capacity of the person who has been injured, not to the workforce generally
Was there a chance of the appellant's pre-existing condition reducing her ability to work,
and if so, what allowance should be made for that chance may conveniently be dealt
with by this Court
Spinal fusion in 1974: nevertheless, her spine was vulnerable to further injury. Evidence
of treating doctor: particularly at risk in first 4-5 years but became more able to handle
the situation. This did not exclude a continuing risk of injury
Evidence also clearly established the possibility of degenerative changes i.e. symptoms
could have occurred earlier than 60 - reduced earnings or early retirement. This and
possibility of non-tortuous injury should have been allowed in determining appropriate
discount for contingencies Statutory discount of 5%

Damages are to be founded on hypothetical evaluations. The discount to be allowed

for the possibility that the appellant's previous in]ury might have resulted in her
impaired earning capacity can be at best a matter of impression. Having regard to the
better than average risk of result of the surgical fusion and the risk of further in]ury, the
discount should not be great. In our view, the appropriate discount for maternity leave
and possible effects of the condition brought by the 1972 accident, balanced against
the prospect of further advancement should be 12 * per cent ..
Appeal allowed in part.
Lump sum representing past damage and damage liable to suffer in future the
court cannot know for certain if situation can improve or deteriorates. If
improves may be undercompensated, if deteriorates may be
undercompensated (because of vicissitudes in life)

McCracken v Melbourne Storm (2007) MELBOURNE

STORM
Facts

Rugby league injury P plays for West Tigers

P gets dangerously tackled
Ds considered negligent they admitted guilt
McCrackens income had increased after the accident where he engaged in
property development
Became very profitable
Therefore, he did not have future economic loss

Trial judge no loss of earnings he would have earnt 700k minus 10% for
contingencies. He was awarded 90k
Held
Dismiss cross appeal from Storm players
Onus is on plaintiff to show what he is not capable of earning no evidence
When you are doing damages assessment look at pre and post salary learning
capacity sometimes increases.
P bares onus of proof to show loss of future earning capacity.

d)

General damages: three case studies

Skelton v Collins (1966) VEGETABLE

Principle of Law: In the case of a young person rendered unconscious in an
accident and with very short post-trial expectation of life during which
consciousness would not be regained, damages for loss of future earning
capacity should be assessed by reference to the plaintiff's pre-accident
expectation of life but subject to deduction of the plaintiff's living costs during
the years in which he or she will be dead. In a case such as the present, damages for
loss of amenities of life and loss of expectation of life should be limited to a modest
amount.
Facts

Appeal from judgement of the Supreme Court of WA in which damages were awarded in
respect of personal injuries sustained by the plaintiff (appellant) as a result of the
defendant's (respondent's) negligence

Complaint was that the amount awarded was manifestly inadequate

Plaintiff, who was 17 years of age at the time when injuries were sustained, suffered
severe brain damage which rendered him unconscious. He had remained unconscious
since the accident and, at the date of the trial, was expected to die within 6 months.
- Needed to consider these when determining future earning capacity
Held
Loss of amenity: compensate P for continuing disability
- Small amount for loss of amenity as P had no subjective feelings of being
quadriplegic unconscious.
Pain and suffering: mental and physical pain and suffering

Pain and suffering must be experienced by P. Thus if P in vegetative state no

damages (Skelton v Collins).
Loss of expectation of life: loss of a measure of prospective happiness.
- Amount is small and similar across factual situations judges do not like to value
human life.
- Does not include mental distress due to realization of loss: Skelton v Collins.
-

Appeal allowed.

Plaintiffs damages may be reduced if they cannot demonstrate that they experienced
a loss, Skelton v Collins (1966)
Awarding damages CLA (s 16) requires:
-

most extreme case to be identified

plaintiffs injury compared and found as percentage of the most extreme case;
and apportion the plaintiffs damages accordingly, Southgate v Waterford (1990)

maximum for non-economic loss is $450,000, for a most extreme case, s 16(2)

For injuries 0-14% of most extreme case, no damages awarded; 15-33% tables
are used to determine the percentage of a most extreme case to be awarded;
and from 34% onward a linear relationship between the percentage of a most
extreme injury and the plaintiffs injury exists.

Other cases may be used to support the claim for a particular award, s 17A(1).

Include amount plaintiff has already paid in expenses related to accident

Sharman v Evans (1977)
Plaintiffs expected loss of earnings, CLA s 13, Sharman v Evans (1977)
a) s 13(1): determine the most likely future earnings (objective - find the mean)
b) s 13(2): adjust for circumstances of the individual, by the percentage
probability of them earning the mean without the injury (subjective find the
variation)
c) CLA s 13(3): Justify assumptions, Malec v JC Hutton Pty Ltd (1990)
Limitations:
o amount awarded for gross weekly earnings limited to three times average
weekly total earnings, CLA s 12(2), figure set by the Australian Statistician,
CLA s 12(3).

base discount rate is prescribed by regulation, s 14(a), if not, 5% should be

applied, s 14(b), Wynn v NSW Insurance Ministerial Corporation (1995)

Anything that mitigates plaintiffs loss because of the injury reduces

damages, Graham v Baker (1961) (e.g. lawyer doesnt have to buy suits
now)

Sharman v Evans (1977) QUADRAPLEGIC

Reasonable cost of expenses recoverable (incl vehicle, home modifications).
Test - Sharman v Evans: the touchstone of reasonablenessiscost matched
against health benefits.
o if cost if very great and benefits to health slight or speculativeclearly be
unreasonable

Difficult to allocate monetary amounts for loss of what is essentially human condition.
Thus: courts provide reasonable compensation (will be reduced as damages
under other heads) for P rather than perfect compensation (Sharman v
Evans).

Principle of Law: Where, as a result of his or her injuries, the plaintiff will spend
substantially the rest of his or her life in hospital (and be entitled to damages for future
hospital expenses), a deduction should be made from damages for loss of future earning
capacity to take account of saved outside expenses such as board and lodging and
work-related outgoings. At the same time, it should be acknowledged
that there are inherent difficulties in assessing damages for the loss of
amenities of life, "perfect" compensation being impossible.
Considered issues of damage
Facts:

Defendant appeals against dismissal by SW CA. Evans, aged 20, was injured in motor
car accident in Dec 1971. She suffered serious injuries including brain stem damage;
she was unconscious for almost a month and is now a quadriplegic. This condition, is in
her case aggravated by trauma-caused epilepsy, by unusually severe impairment to
her respiratory function as a consequence of the brain injury and almost total loss of
the ability to speak because of injury to larynx.

Before accident prospects bright: she was trained for and experienced in secretarial
work. She was going to marry a young man. After accident engagement announced
and but for her ultimate decision she could not permit him to take as his wife a
quadriplegic.

She would have been married to him at the time of the trial.

General damages $275,000, special damages of $25,500. 3 consequences of her

injuries account in large measure for the size of award of general damages: her need
for intensive nursing and medical attention in the future, total loss of earning capacity
and the gross impairment of the future enjoyment and amenities of her life. Also pain
and suffering
D argued that 300,000 was excessive as it was the highest award for personal injury case in
Australia.
Insurance agency argued that she would be spending some of her time outside permanent
care and on that basis it should be reduced.
Gibbs J and Stevens J
It is appropriate to examine the various heads of damage that presented themselves for
assessment so as to appreciate and deal with the various critismsc raised by the appellant.
It was necessary important to discuss whether care could be for in hospital or at more
expensive amount for her to be cared for at home.

Whether or not compensation should be paid for the higher costs of compensation at home.
They stated that
the touchstone of reasonableness in the case of providing nursing and medical
care for the P in the future is the cost matched against health benefits to the P.
They were embarking on a cost v benefit analysis
They concluded that the appropriate criterion must be that such expenses as the
P may reasonably incur should be recoverable from the D.
It was reasonable for the woman to spend the rest of her life in hospital and more
expensive alternative of staying at home would be unreasonable and would not
provide any more amenity.

Held:

Where the plaintiff is to be cared for in the future will not only directly affect the extent
of nursing and medical expenses which are to be compensated for, it will also bear
upon the extent of her loss of the amenities and enjoyment of life, a lifetime
substantially spent in hospital will greatly aggravate that loss

The future cost of reasonable nursing and medical attention must be assessed on
the basis of a lifetime based substantially in hospital
It follows that the plaintiff's loss of enjoyment and amenities of life will be the
greater. She must be regarded as wholly deprived of the everyday pleasures of living in
the environment of her own home. The effect of the situation of the permanent
hospitalization can clearly be somewhat mitigated if she is able to vary the monotony of
the hospital ward by occasional day visits to her home and other outings
Both in 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 but for her
injuries she would otherwise have to meet out of future earnings
It would be 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
What is to be avoided is double compensation - it is a matter of already having
compensated for future board and lodging as a component of hospital expenses, so that
to disregard this and award the full sum for lost earning capacity, part of which would
be used to provide the very item of board and lodging already compensated for, would
be to award compensation twice over
Where as the plaintiff suffers a total loss of earning capacity he will not normally
continue to incur all of the outgoings necessary for the realization of that capacity which
would have been incurred had his capacity been unaffected; items such as the cost of
clothing
It has now been established that no reduction is to be made, when awarding
damages for loss of earning capacity, for the cost of maintaining oneself and one's
dependants unless an element of double compensation would intrude
Plaintiff still possesses powers of enjoyment through use of her senses .. she can
experience pleasure and ward of melancholia by distractions
As to "lost years" the plaintiff is to be compensated in respect of loss of earning
capacity during those years by which her life expectancy as been shortened, least to
the extent that they are years when she would otherwise have been earning income

Because in the ordinary case a plaintiff must maintain himself in the future out of his
damages, the cost of doing so is not to go in reduction of an award for lost earning
capacity during his remaining years of life . in the special case of lost earning capacity
in "lost years" that because those years can involve him in no cost of maintenance the
cost thus avoided must go to reduction in damages as the court does not concern itself
with how the plaintiff expends his income or damages
Loss must depend upon the likelihood that there would have been a future exercise
of earning capacity: the only relatively certain factor will be pre-injury possession of
earning capacity and this in itself may be sufficient reason, for the adoption of the
expedient course of simply disregarding the prospect of marriage as a relevant factor in
the assessment of such a plaintiff's future eco loss
Damages for pain, suffering and loss of the enjoyment and amenities of life and
damages for shortening of life expectancy - the amount to be awarded may properly
take into account a fall in the value of money but it is to be no more than quite
conventional sum
The warning against attempting perfectly to compensate means, in the case of
pecuniary loss, no more than the need to make allowance for contingencies, for the
vicissitudes of life, compensating for probable rather than for merely speculative
detriments
Non-pecuniary detriment in question: question cannot refer to the exclusion of all
question of punishment of the wrongdoer, the word "compensation" standing on own
sufficient to do this, rather designed to remind that maiming of plaintiff and its
consequences cannot wholly be made good by an award of damages and no amount is
too large to atone for p's suffering (unfair to D)
Damages awarded under other heads produce freedom from eco uncertainty and
availability of funds for pleasurable activities

Husher v Husher (1999) 197 CLR 138 - High Court of

Australia
Principle of Law: In the assessment of damages for loss of future earning capacity,
the basic task is to identify "what earning capacity has been impaired or lost and what
financial loss is occasioned by that impairment or loss." Thus, where the plaintiff
was in a profit-sharing partnership for income tax purposes with his or her spouse
before suffering the relevant injury, this fact should not obscure the true extent of the
plaintiff's loss of future earning capacity.
Facts:

The appellant (plaintiff) was injured in a motor accident caused by the negligent driving
of his wife, the respondent (defendant), before the accident, he had carried on a
business as a block layer in a partnership with his wife. His skill and physical labour
generated the entire income and his wife did the bookkeeping and similar tasks.

Profits divided equally for tax purposes.

After the accident he was unable to continue with his work and his partnership ceased
operation. In his action against his wife in negligence, he claimed damages for the loss
of earning capacity. The trial judge assessed damages on the basis that the partnership
would have continued and the plaintiff would have received half the profits for the rest
of his working life
o CA of the Supreme Court of QLD upheld this decision. The plaintiff appealed to the High
Court.
Held:

If the victim's pursuit of gainful employment is interrupted or affected because of

e)

the negligent infliction of physical injury, the victim is to be compensated by an amount

that reflects the financial consequences that follow from the impairment
It is necessary to identify both what capacity has been lost and what economic
consequences will probably flow from that loss. Only then will it be possible to assess
what sum will put the plaintiff in the same position as he or she would have been if
injury had not been sustained.
What a worker earned in the past may provide very useful guidance about what would
have been earned if that worker had not been injured. But the inquiry is an inquiry
about the likely course of future events and evidence of past events does not always
provide certain guidance about the future.
Need to identify what earning capacity has been impaired or lost and what
financial loss is occasioned by that impairment or loss. In the present case there is no
dout that the capacity that the appellant lost was a capacity to earn whatever he could
have earned working as a block layer. But the inquiry does not stop at what the
appellant could have earned. It is necessary to ask what loss the appellant suffered
because of the diminution of that capacity and that invites attention to what would have
happened but for the negligent infliction of injury
The financial loss occasioned by impairment of earning capacity is the loss of what
the injured plaintiff would have expected to have under his or her control and at his or
her disposal by exercising that capacity
The income of the partnership came from the efforts of the appellant and the
exploitation of his earning capacity, and the partnership was a partnership at will. The
appellant would very probably have chosen to maintain those arrangements but that
was his choice . if he chose to make some other arrangement concerning the fruits of
his labour, effect would be given to that choice, whatever view his wife held
What A would have had under control and at his disposal but for the accident was
therefore, the whole of the fruits of his skill and labour. And it is then, the whole of those
fruits he has lost
Deciding what value is to be ascribed to the loss of future earning capacity of an
injured plaintiff requires close attention to the facts of each case. The inquiry is about
what could the plaintiff have done in the workforce but for the accident and what sum of
money would the plaintiff have had at his or her disposal. in looking at the sum of
money regard must be had to all those contingencies of life that might reasonably be
expected to affect the course of events in the future
The assessment of damages for loss of future eco capacity involves questions of
judgement and estimation. Being an attempt to predict what would have happened, the
process can never be exact
Even so, the assessment of lost earning capacity requires some care in identifying what
net income the plaintiff would have had at his or her disposal. That may require some
consideration of the taxation consequences of different arrangements
Appeal allowed

Effect of inflation and the "discount rate"

Todorovic v Waller (1981) 150 CLR 402

Discount rate for future economic loss:
o Inflation is not a direct factor taken into account (OBrien v McKean; Todorovic
v Waller).
o Takes into account investing and interest discount so P does not profit

Common law: Todorovic v Waller: discount rate of 3%, unless altered by

legislation.
o Eg. Motor Accidents Act 1988 and Workers Compensation Act 1987 (NSW)
5% discount
o CLA s14 5% discount.
Taxation factored in by courts determining Ps NET income after taxation
(Cullen v Trappell).
o

Principle of Law: In the assessment of damages for future economic loss, "evidence
as to the likely course of inflation, or of possible future changes in rates of
wages or of prices is inadmissible." However, a discount rate of 3 per cent, to
be used in all cases in calculating the present value of a future loss, is intended
to make appropriate allowance for these matters.

Gibbs CJ and Wilson J

Two principal elements: the loss or diminution of earning capacity in so far as it is likely
to cause financial loss in the future, and the need, caused by the injuries, for services
(such as medical treatment) or goods (such as appliances) in the future
If the award is not discounted, the plaintiff will necessarily be over- compensated. The
process of discounting can only be dispended with if some other consideration
completely offsets the advantage that a plaintiff gains by receiving at the date of
judgement a sum that if he had not been injured would have been paid to him at some
point in the future, or a sum he would be required to expend at some time in future
Court to reject evidence of inflation because such evidence would be purely
speculative, it would tend to prolong trials and would introduce an additional element
of uncertainty into awards

Basic principles which underpin common law's award of compensatory damages for
personal injury (GIBBS CJ)
1. Principle of "restitutio in integrum"
2. The "once and for all" rule: when a court assesses damages it so for a once and for
all basis for the judgement Looking at the past and into the future - what are the actual
harms that occurred because of the tort and what are the prospective harms likely to
occur into the future Great possibility for over or under compensation: there is no
periodic payment/monitor on how people receive or spend amounts of money, they
simply get a lump sum
3. Courts do not concern themselves with how plaintiff's spend an amount of money: if
given a lump sum of compensatory damages, you can spend that however you choose.
Liberal conception of indv
4. Burden lies upon the plaintiff to prove entitlement to each and every head of
damages. Intimate connection with causation- remoteness of damage: onus to prove
cause of entitlement for a head of damages

f)

Statutory caps on the amount of damages recoverable

and special no-fault schemes: catastrophic and
"blameless" motor accidents: public transport
accidents; workplace accidents' other negligence
claims; claims by air passengers.

Motor Accidents Compensation Act 1999 (NSW) - pgs 43-44.

S138:
S140:
S142:
S144:

Contributory negligence.
Defence of voluntary assumption of risk.
Damages for the loss of services.
Exemplary/Punitive damages.

Transport Administration Act 1988 (NSW) s 121 - pg 83.

Focus on public transport vehicles

S121(1): Relates to injury caused by/arising out of motor accident.
S121(2): What is a motor vehicle accident.
S121(2): What is a public transport accident [no air transport, no tourists, when
someone else is responsible], and when regulations include accident of a class.
S121(4): Applies to accidents after Motor Accidents Comp Act 1999

Civil Liability Act 2002 (NSW) ss 11-18 - pgs 59-64

Motor Accidents [Lifetime Care and Support) Act 2006
Ross Anderson, "Catastrophic and blameless motor accidents and no fault recovery by
children" (PRINT OUT, SUP MATERIALS).
Civil Aviation [Carriers Liability) Act 1959 (Cth)
Ross Anderson, "Liability of air carriers for death and bodily in]ury of passengers" (PRINT
OUT, SUP MATERIALS).

CIVIL LIABILITY ACT 2002 (NSW)

Economic Loss: Part 2 Division 2 pg 59.

Non-Economic Loss: Part 2 Division 3 s16 pg 64.
Pain/suffering, loss of amenity of life, loss of expectation of life, inconvenience caused
by being subjected to serious personal injury - discomfort/inconvenience suffered by P
CAP YOU CAN RECOVER