Damages (Outline)

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This article provides an extremely short outline of how damages in negligence are assessed. Due to the complexity of this area of the law, it is highly recommended that one reads the detailed explanation.

Loss is categorised under different heads. These include

  1. Economic loss (special damages). This includes:
    • Past expenses (medical treatment and loss of ability to work etc incurred before the time of the trial).
    • New economic needs (future medical treatment after the time of the trial).
      • Only reasonable medical needs are recoverable. Reasonableness is determined using a 'cost < benefit' analysis.[1]
    • Loss of earning capacity (inability to earn money in the future).
      • Calculated according to the ability of the plaintiff to make money, not present day wages.[2]
      • Net income, deducted by 'outgoing' expenses (expenses incurred in order to maintain one's job - clothing, transport etc).[3]
      • Maximum estimated earning capacity is 3 times the average wage.[4]
      • Later adjusted to account for vicissitudes (see below).
    • Gratuitous care services (compensation for friends or family who are likely to become carers for the plaintiff without seeking payment).[5]
    • Inability to provide gratuitous care services (compensation for the plaintiff's inability to care for those who previously depended on his gratuitous care).[6]
    • Note: economic losses undergo discounts or adjustments:
      1. Present value discount (this accounts for interest. 5% negative compound interest on all economic damages).[7]
      2. Vicissitudes discount/adjustment (this accounts for ups and downs of life (this applies only to future earning capacity).[8] A 15% reduction is set by default to account for sickness, unemployment etc, but can be adjusted by the court.[9]
  2. Non-economic loss (general damages). This includes:
    • (a) pain and suffering,
    • (b) loss of amenities of life,
    • (c) loss of expectation of life,
    • (d) disfigurement.
    • Note: damages under these heads will be lower for plaintiff's who are unconscious of their condition (comas, brain damage etc).[10]
    • Non economic damages are subject to limitations:
      • Maximum amount is $350,000 (subject to inflation).[11]
      • Losses considered as below 15% in proportion to a very extreme case cannot be recovered.[12]
      • Losses are adjusted according to their proportion to a very extreme case according to the sliding table in s 16(3).
    • Note: A plaintiff is not required to show extreme loss under all four heads of non-economic loss in order to qualify as a 'most extreme cast'.[13]


Other rules regarding the assessment of damages include:

  • Interest - interest is not awarded for:[14]
    • (a) Non-economic loss.
    • (b) Gratuitous care services.
    • (c) Loss of capacity to provide gratuitous care services.
  • Mitigation - the plaintiff must take reasonable steps to mitigate or minimise his harm. To demonstrate that the plaintiff failed to mitigate, the defendant must show that:[15]
    1. The proposed steps could have actually have mitigated the harm (in this case, the defendant successfully showed how the surgery probably would have mitigated the harm).
    2. The proposed steps were reasonable, or that the refusal to take them is unreasonable.
      • When examining whether a refusal to mitigate was unreasonable (or, whether the step to mitigate was reasonable), a court considers what a reasonable person in all the circumstances of the plaintiff would have done.

References

  1. Sharman v Evans (1977) 138 CLR 563
  2. Cullen v Trappel (1980) 146 CLR 1, 7-8 (Barwick CJ); Atlas Tiles Ltd v Briers (1978) 144 CLR 202, 210 (Barwick CJ).
  3. Sharman v Evans (1977) 138 CLR 563
  4. CLA, http://www.austlii.edu.au/au/legis/nsw/consol_act/cla2002161/s12.html
  5. CLA, s 15
  6. CLA, s 15B
  7. CLA, s 14
  8. CLA, s 13
  9. Wynn v NSW Insurance Ministerial Corp (1995) 184 CLR 485
  10. Skelton v Collins (1966) 115 CLR 94
  11. CLA, s 16(2). Rules regarding inflation are specified in s 17.
  12. CLA, s 16(1)
  13. Dell v Dalton (1991) 23 NSWLR 528, 531
  14. CLA, s 18 (1)
  15. Glavonjic v Foster [1979] VR 536
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