15 May 2018The first question most people ask regarding compensation is how much money they can expect to receive. There are a number of factors at play in determining the total sum of a claim and, for this reason, there is no clear-cut answer.
The factors to consider include:
- the circumstances of the accident;
- the nature and extent of the injuries sustained;
- the nature and extent of any pre-existing injuries;
- the age and life expectancy of the person;
- whether the injuries have impacted on the person’s ability to earn an income in the past;
- whether the injuries are likely to impact on the person’s ability to earn an income in the future;
- past and future care required, both paid and gratuitous;*
- medical or other expenses incurred; and
- likely future expenses.
*(Note: In Queensland, there is no entitlement to claim for past and future gratuitous care in respect of common law work injury claims. In accordance with section 59 of the Civil Liability Act 2003 (“CLA”), a threshold of six hours of care per week for a minimum continuous period of six months following an injury must be met before a claim for gratuitous care can be pursued. An exception to this is where the CLA is disengaged by reason of a common law claim being made against both an employer and host employer, in which case the threshold is removed in regards to the claim against the host employer.)
Large payouts can lead to unrealistic expectations
People will often read in the paper or hear about a significant award of compensation and compare their own circumstances with those of the publicised case, incorrectly assuming that their claim will be worth a similar amount.
Adding to the complexity of estimating the total of a potential claim is that different provisions apply depending on the circumstances of the accident, which affects the amount of damages claimable.
Pain and suffering alone may not lead to high compensation payout
Pain and suffering compensation, also referred to as general damages or non-economic loss, can be awarded as damages for the detrimental effect an injury has had on a person and their life.
It is a particularly important part of a compensation claim for people such as retirees and the unemployed, who may not be able to claim wage losses. For individuals in this situation, general damages often represent the largest part of their compensation claim.
However, general damages alone do not usually result in a high award of compensation. More often than not, there also needs to be a claim for future economic loss, future care and assistance, or both.
The way in which an injury has impacted on a person’s ability to work, the level of their pre-injury earnings, their employment history and their employment plans for the future – but for the accident – are all relevant considerations when assessing an entitlement for future economic loss.
The nature and level of care and assistance that will be required in the future must also be considered.
In assessing a claim, lawyers will look to previous decisions to provide some guidance as to how similar cases have been decided.
Components to be considered when calculating the total of a claim
Calculating the total (or ‘quantum’) of a claim involves assessing the evidence for each of the claimable components (or ‘heads of damage’) which are as follows:
- General damages (pain and suffering) – this considers the nature and extent of the injury, taking into account any pre-existing injuries or conditions. In assessing an entitlement to this component, a court is required to assess an ‘injury scale value’ (“ISV”) by reference to the applicable legislation, being either the Civil Liability Regulation 2014 (“CLR”) or, in the case of a common law work injury damages claim, the Workers Compensation and Rehabilitation Regulation 2014. The ISV range will vary, depending on the body part that has been injured (in the case of a physical injury), the nature of the injury and whether multiple injuries have been sustained. The court may have regard to other matters to the extent they are relevant in a particular case, such as the injured person’s age, degree of hindsight, life expectancy, pain, suffering and loss of amenities of life; the effects of a pre-existing condition of the injured person and the difficulties in life likely to have emerged for the injured person whether or not the injury happened. In assessing an ISV for multiple injuries, the court may have regard to the range for, and other provisions of schedule 4 of the CLR in relation to an injury other than the dominant injury of the multiple injuries. (See Schedule 3, Part 1, section 9 of the Civil Liability Regulation 2014.) Pain and suffering includes not only physical injuries, but also psychiatric injuries such as adjustment disorders, post-traumatic stress disorders (PTSD), anxiety and depression.
- Past economic loss – this is a mathematical calculation of a person’s past loss of earnings based on their pre-injury income, taking into account any anticipated change in earnings, such as a promotion or increase in hours.
- Future economic loss – this is usually the component which attracts the highest amount of compensation and is consequently the component that is the most contentious. In assessing an entitlement to future economic loss, the court considers a range of factors noted above.
- Past and future loss of superannuation entitlements – this is presently 9.5% of the amount awarded for past loss of earnings and 11.3% of the amount awarded for future loss of earnings.
- Past and future care and assistance – this is a component which can also attract a significant level of compensation, depending on the person’s age and ongoing needs for the future.
- Past and future treatment – this is a mathematical calculation of the expenses incurred in the past as a result of the accident and the anticipated future expenses, such as for surgery and post-operative rehabilitation.
Seeking the assistance of a lawyer
Unfortunately, the mere fact that a person has experienced pain and suffering as a result of an accident does not necessarily mean they will be entitled to compensation, as it depends very much on the circumstances surrounding the accident in which the injury was sustained.
For this reason, it is highly advisable for potential claimants to seek legal assistance early. A compensation lawyer will help to determine the likely prospects of succeeding in a compensation claim for injuries sustained, and what a person can expect to receive by way of compensation.
