What is a personal injury claim?

Transcription

1 FA5 Damages and economic loss in personal injury claims a practical guide Dimitra Dubrow Principal Medical Negligence Department Maurice Blackburn David Heath Director Cumpston Sarjeant Pty Limited What is a personal injury claim? A common law claim for compensation for injury, loss and damage flowing from injury to the person as a result of negligence and/or breach of contract and/or breach of statutory duty The negligence, breach of contract or statutory duty may be an act or an omission Most personal injury claims are based on negligence To establish negligence, need to prove: o That there was a duty to take reasonable care; o The duty of care was breached; and o The breach of the duty has caused or materially contributed to an injury All rights reserved. 1

2 Compensatory Principle Fundamental principle p applied by the Courts in awarding damages for personal injury is the compensatory principle Damages should be awarded to restore the Plaintiff to the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation Livingstone v Raywards Coal Company y( (1880) 5 App Cas 25( (HL) The cases refer to this being done so far as money can do so with the focus on fair but not perfect compensation. 3 Limitations on compensatory principle The common law clearly cannot restore the Plaintiff to the same position had negligence not occurred: o no amount of money can put injured person back to where they would have been had it not been for the negligence and injury. o difficult exercise of hypothesising as to what would have happened had the person not been injured involving assessing possibilities and probabilities. o statutory incursion in the form of thresholds and caps in all Australian States limiting the recovery of damages All rights reserved. 2

3 Once and for all rule Once lump sum damages received, cannot come back and re-litigate the matter. Can result in great unfairness, for example, where the plaintiff s condition worsens considerably after compensation received. Balanced by need for certainty and finality in damages claims. It is therefore vital for a plaintiff lawyer to: o ensure that a claim is properly and comprehensively prepared; and o all possible heads of damage have been considered and evidence obtained in relation to them. 5 Once and for all rule There are exceptions to the once and for all rule, for example, where legislation allows for annuities to be paid or where there are benefits under a statutory scheme. For example, a plaintiff might require further back surgery as a result of a work injury. Even if they have been compensated for their injury, a statutory authority, such as the Victorian Workcover Authority, will fund the further surgery related to work injury All rights reserved. 3

4 Damages Damages are awarded for: o non-economic loss (general damages); and o economic loss (special damages). Non-economic loss damages are to compensate the plaintiff for: o Pain and suffering; o Loss of amenities of life; o Loss of enjoyment of life; o Loss of expectation of life; o Disfigurement. 7 Work-related injuries statutory schemes and common law A person s entitlement to compensation will depend on how they came to be injured Every Australian state has a no-fault workers compensation scheme, i.e. injured workers able to access benefits without having to resort to negligence claim Common law rights for work place injuries vary amongst the states ACT and Tasmania retain unfettered common law rights Common law rights but only where: Victoria a worker establishes that they have a serious injury narrative test or 30% whole person impairment (Accident Compensation Act 1986 Commonwealth employee - where have a whole person impairment of more than 10% (Safety Rehabilitation and Compensation Act 1988 (Cth) NSW - elect between compensation for permanent loss on Table of Disabilities and common law damages for which 15% threshold of most extreme case applies (Workers Compensation Act 1987) Queensland For injuries pre- 15 Oct 2014 no restrictions on common law but for injuries post 15 Oct 2014, must have an impairment of 6% or more to pursue a common law claim (Workers Compensation and Rehabilitation Act 2003) Western Australia - more than 25% whole person impaired or limited common law where more than 15% whole person impaired (Workers Compensation and Injury Management Act 1981) South Australia - no common law rights (Workers Rehabilitation and Compensation Act 1986) Northern Territory - no common law rights (Work Health Act 1986) All rights reserved. 4

5 Transport Accidents statutory schemes and common law Statutory no-fault compensation schemes in Victoria, Tasmania, Northern Territory and limited scheme entitlements for seriously injured drivers at fault in Queensland. Common law rights retained in ACT, Queensland and Tasmania Statutory restriction on recovery of common law damages: Victoria need to establish serious injury narrative test or 30% whole person impairment (Transport Accident Act 1986) South Australia - needs to have been a significant impairment of normal life for at least 7 days or medical expenses of the prescribed minimum. Then general damages are assessed according to a scale from 0 to 60 (Civil Liability Act 1936) NSW non-economic loss limited to cases of more than 10 per cent whole person impairment i (Motor Accidents Compensation Act (1999) Western Australia - deductible threshold of $19,500 which gradually decreases. All damages assessed as a percentage of a hypothetical most extreme case which is allocated a maximum - the max is indexed annually and is currently $390, (Motor Vehicle (Third Party Insurance ) Act) Northern Territory no common law rights (Motor Accidents (Compensation) Act 1979) 9 Non-economic loss/general damages Award of non-economic loss damages cannot be calculated with any type of specificity. It has been said that they are of their very nature, incapable of mathematical calculation Paff v Speed (1961) 105 CLR 549 at Pain and suffering damages are based on the subjective feelings and insight of the plaintiff. Therefore plaintiff who has been catastrophically injured and rendered unconscious likely to be awarded modest compensation for pain and suffering All rights reserved. 5

6 Statutory limitations on noneconomic loss damages Victoria i - damages for non-economic loss are only recoverable if the injury is assessed as a significant injury. Defined as: o o o o a whole person impairment under the American Medical Association Guides 4 th Edition of more than 5% for a physical and more than 10% for a psychiatric injury; Loss of a breast; Loss of a foetus: Psychological or psychiatric injury arising from the loss of a child due to injury to the mother or foetus or child before, during or immediately after the birth. Sections 28LE and 28LF, Wrongs Act 1958 Cap for general damages now around $497, Sections 28G and 28H, Wrongs Act Statutory limitations on noneconomic loss damages New South Wales - person needs to be 15% of the most extreme case and then sliding scale. Section 16, Civil Liability Act 2002 Western Australia - threshold amount needs to be reached which is then deducted from the award of damages. Amounts are assessed from a scale as the amount increases. Sections 9-10, Civil Liability Act 2002 South Australia - needs to have been a significant impairment of normal life for at least 7 days or medical expenses of the prescribed minimum. Then general damages are assessed according to a scale from 0 to 60. Section 52, Civil Liability Act All rights reserved. 6

7 Economic loss claims Economic loss claims include the following heads of damage:- o Loss of earning capacity including earnings, superannuation, bonuses and other benefits and allowances; o Cost of needs created by the injury including: Costs of medical and hospital treatment and pharmaceutical expenses Costs of allied health therapy and equipment (for example, speech pathology) Past gratuitous care (Griffiths v Kerkemeyer damages) Attendant care Domestic assistance and community access Accommodation Transport (for example, vehicle modification) Statutory compensation schemes also provide some benefits for loss of earnings and costs created by injury. 13 Cost of needs created by injury To calculate the future costs arising from the injury, it is necessary to have evidence in the form of reports from appropriate experts in relation to: the plaintiff s current and future therapy and equipment needs the medical treatment and/or surgery likely to be required and when the current cost of the medical treatment/surgery, therapy and equipment; and the time period for which h the therapy and equipment is required together with replacement periods All rights reserved. 7

8 Cost of needs created by injury In calculating future losses, it is necessary to apply a multiplier dictated by the discount rate as prescribed in the various State legislation. This has brought about the development of life tables which incorporate deferred multipliers and fixed term multipliers. Lawyers will make reference to available tables and online calculators or seek specific multipliers from actuaries. 15 Cost of needs created by injury Necessary for briefing solicitor to advise the actuary of the following relevant information: The discount rate applicable; The date of birth of the Plaintiff; The date the loss is to be calculated from; The date the loss will end i.e. death or retirement or another date; Whether it is for a fixed period; Whether it is a loss which will occur at some point in the future and the date of the loss; The payment frequency for example weekly, fortnightly, monthly, one yearly, two yearly, five yearly All rights reserved. 8

9 Loss of earning capacity principles It is for the plaintiff to prove loss of earning capacity and the extent to which that loss produces, or might produce, financial loss Todorovic v Waller (1981) CLR 402, 412 An injured person s economic loss is to be assessed by reference to the actual loss of wages which h occurs up to the time of trial and which h can be more or less precisely ascertained and then, having regard to the plaintiff s proved condition at the time of trial, to attempt some assessment of his future loss. Graham v Baker (1961) 106 CLR 340 at [346] to [347] 17 Loss of earning capacity principles Generally assessed as the difference between the plaintiff s pre-injury and post-injury earning capacity If there has been a loss of earning capacity, then, taking into account the facts of the past and the probabilities of the future, it is necessary to determine the damage that will flow from the loss of that capacity The court is to look at whether the plaintiff has capacity for work beyond their pre-injury employment Medlin v The State Government Insurance Commission (1995) 182 CLR 1 at [6], [17] and [19] All rights reserved. 9

10 Loss of earning capacity principles When the law takes into account future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The court takes account of the degree of probability that an event would have occurred or might occur and adjusts the award of damages to reflect the degree of probability. Malec v JC Hutton Pty Ltd (1990) 169 CLR Loss of earning capacity principles No denial of damages or award of only nominal damages because plaintiff failed to call evidence about likely future earnings if there is a clear loss of earning capacity However, where evidence should have been available and plaintiff does not call this evidence, they cannot complain about a low award State of New South Wales v Moss (2000) 54 NSWLR 536, 552 and 554 Plaintiff has the onus to prove economic loss and the information concerning economic loss and documents relevant to it are within ihi the knowledge and possession of the Plaintiff, so the lack of clarity on these matters is primarily the responsibility of the Plaintiff. AMP General Insurance Limited v Kull [2005] NSW CA All rights reserved. 10

11 Legislative caps on economic loss Legislative caps on amount to be awarded for economic loss: Disregard amount by which pre-injury earnings exceed three times gross average weekly earnings Section 28F Wrongs Act 1958 (Vic) Section 12 Civil Liability Act 2002 (NSW) Civil Liability Act 2002 (WA) Personal Injuries Proceedings Act 2002 (Qld) Disregard net weekly earnings exceeding $2,500 (indexed amount now about $4,300) Section 125 Motor Accidents Compensation Act (NSW) 21 Is it all about the tax returns? In preparing p a claim, it is necessary to establish what the pre-injury earning capacity of the plaintiff was. Usually rely on the plaintiff s previous earnings as set out in tax documentation, group certificates or payslips to calculate the net earnings lost. Dangerous predicament for a plaintiff where tax returns do not reflect the true earning position. It would be inadvisable to go beyond the tax returns given the negative view taken to undeclared income and exposure to tax evasion prosecution. Court will scrutinise the evidence with special care and non-compliance will reflect on plaintiff s credit and may lead to evidence being rejected Giorginis v Kasterati (1998) 49 SASR All rights reserved. 11

12 Is it all about the tax returns? Morvatjou v Moradkhani [2013] NSWCA 157 Plaintiff injured while working as a painter for the defendant Claimed damages for his economic loss on the basis of earnings of $600 net per week, based on the relevant industry award Tax returns identified that plaintiff had earned $149 net per week in the year immediately prior to his injury Awarded past economic loss damages based on $ Awarded d for future economic loss based on the amount of $480 net per week Plaintiff appealed 23 Is it all about the tax returns? Appeal court found: o Should not rely solely on the plaintiff s income tax returns to quantify past loss of earning capacity o plaintiff does not have to admit to tax evasion before a court can quantify the plaintiff s lost earning capacity o tax treatment of a plaintiff s income is not conclusive o court must determine what the plaintiff could have done in the work force and what sum of money the plaintiff would have had at his or her disposal. Was it relevant that it was the defendant employer who paid plaintiff cash in hand? All rights reserved. 12

13 Earnings of a partnership Claim generally made on the basis of the plaintiff s personal income loss. But need to look beyond this where plaintiff was in a partnership, company or trust. Husher v Husher (1999) 197 CLR 138 at [20] Plaintiff was a self-employed block layer working in a partnership with his wife Plaintiff performed the labour, wife took messages and did the bookkeeping Injured in car accident while wife driving High Court said plaintiff was entitled to recover the total profits of the partnership in respect of loss of earning capacity as: the whole of the income of the partnership came from the efforts of [the plaintiff] and the exploitation of his earning capacity, and that what [the plaintiff] would have had under his 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 that he has lost. 25 Business income post injury Fkiaris v Fkiaris (2010) NSWCA 116 Plaintiff suffered severe brain damage in motor vehicle accident in 2004 Plaintiff was a successful businessman who together with his wife ran businesses including a fast food outlet and owned property including a shopping arcade Plaintiff did the thinking and was responsible for the business operations Following injury, plaintiff unable to work and make business decisions However, apart from year after injury, plaintiff s income exceeded the cap of $3,584 provided for at s 125 of the Motor Accidents Compensation Act Post injury income derived d from distributions ib i from the entities i which h formed part of the business operations and the accumulation of capital from plaintiff s work and business acumen over many years Issue was whether the cap resulted in the plaintiff being unable to recover damages for economic loss except for that one year post injury when his income was below cap? All rights reserved. 13

14 Business income post injury Court found that earnings for purpose p of the section means earnings from personal exertion or the exercise of the injured person s earning capacity. Section is concerned with awarding past and future economic loss due to deprivation of personal earning capacity from injury. In this case, the plaintiff s earning capacity after injury was nil. Court rejected insurer s argument that post injury earnings resulted from preinjury earning capacity of the plaintiff and so there was a causal link between that capacity and the post-injury earnings. Court allowed trial judge s calculation of loss based on cost of engaging another person to do the work the plaintiff would have done had he not been injured. Cap fixed by section 125 therefore irrelevant 27 Future economic loss For future economic loss claim, need evidence to establish the probable and likely future earnings path the Plaintiff would have enjoyed but for the injury. This evidence will need to come from: The Plaintiff s employer and co-workers about their performance at work and their likely progress and career path; The earnings of a comparable worker; Where the Plaintiff asserts that they would have followed a certain career with advancements and promotions, evidence of the likelihood of this occurring based on their performance to date and corroborating evidence from other sources All rights reserved. 14

15 Loss of dependency claim Where negligence g has resulted in death, a claim can be brought by the dependants of the deceased for: o Loss of past and future financial loss and support; and o Loss of past and future services. There is one lump sum representing the loss of all dependants and is to be apportioned among them. Loss of financial i support is based on: The earnings of the deceased and the likely future earnings; Deduction of amounts that would have been spent on the deceased; The period of dependency i.e. children up to 18 or 21 years of age? 29 Expert Evidence The role of expert witnesses, including accountants, is to provide expert opinion based on specialised knowledge and the assumptions of fact put forward by the briefing solicitor. It is for the parties and their legal team to obtain the evidence to support the assumptions asserted in the claim. An expert is someone with specialised knowledge based on their training, study or experience. Order 44 Supreme Court General Civil Procedure Rules 2005 (Vic) Section 79 Evidence Act 2008 (Vic) and Evidence Act 1995 (Cth) The Rules of Court in most Australian jurisdictions provide for Expert Witness Codes of Conduct. Schedule 7, Uniform Civil Procedure Rules 2005 (NSW) Uniform Civil Procedure Rules (QLD) In Victorian rules, the Code provides that an expert is to set out: Their qualifications to prepare the report; The facts, matters and assumptions on which each opinion is expressed; and Reasons for and any literature or materials utilised in support of their opinion All rights reserved. 15

16 Expert Evidence The expert is to declare that they have made all enquiries that they believe are desirable and appropriate and that there are no matters of significance which the Expert regards as relevant that are being withheld from the Court. The Code also provides that an expert witness is to confer with any other expert witness and provide the Court with a joint report if directed by the Court to do so. Order 44 Supreme Court General Civil Procedure Rules 2005 (Vic) 31 Calculation of economic loss Actuarial perspective Acting as expert witness Meeting definition of expert via training, education, qualifications, experience Take obligations very seriously Paramount duty to the Court, not acting as advocate Obligation to narrow the issues in dispute (s.23, Civil Procedure Act) Obligation to ensure costs are reasonable and proportionate (s.24) Acting under instructions Bit players in the process? Sophisticated calculators (how much opinion evidence?) All rights reserved. 16

17 Calculation of economic loss Actuarial perspective Tax Net Loss Tax Net 'But for' injury Difference in net earnings Past vs. Future Earnings and superannuation 'Despite' injury 33 Calculation of earnings loss Past losses usually from date of accident to date of calculation (say date of trial, mediation). There are exceptions e.g. Victorian transport accidents loss commences 18 months post accident Future losses typically from date of calculation to date of retirement (55, 60, 65, 67, 70?) Future losses require a discount rate Discount rate is meant to take the following into account Future inflation (wage inflation) Future investment returns ( conservative investments?) Taxation on investment returns So multipliers reflecting discount rates should (in theory) lead to a lump sum for the plaintiff that if invested should provide regular drawdowns equivalent to the after-tax earnings until retirement age All rights reserved. 17

18 Discount rates In Todorovic v Waller, the High Court established a 3% real discount rate Replication of Todorovic v Waller reasoning Long term government bond rate 13.0% 4.0% plus bond premium 3.0% 2.0% Long term "market" bond rate 16.0% 6.0% less allowance for taxation 23% 21% After tax investment rate 12.32% 4.74% less long term inflation rate 10% 3% Net of inflation, after tax investment rate 2.32% 1.74% Following (my understanding of) the reasoning of this landmark case would indicate an appropriate real (after inflation) discount rate should be in the order of 1.5% - 2.5% per annum Statutory discount rates often 5%, 6%. For comparison, weekly multiplier for 25 years at 6% p.a. is Same multiplier at 3% p.a. is A tension arises. The requirement to use a statutory discount rate appears to be incompatible with attempts to indemnify a plaintiff for loss of earnings as a result of injury 35 Calculation of earnings loss - Superannuation Subject of my presentation to this conference in Melbourne in 2012 No strict method accepted in any jurisdiction. Some legislated, other methods accepted. Must be aware of the jurisdiction in which the case shall proceed, and the relevant legislation If in doubt, seek instructions For Defined Contribution funds (consistent with Superannuation Guarantee), some jurisdictions adopt a percentage method. Others allow methodology which considers tax on contributions, ti fund expenses and investment t returns. Allowing for Defined Benefit schemes more complicated What if an employee has been salary sacrificing? Assumed continuation? All rights reserved. 18

19 Calculation of earnings loss - Other issues Consistent with statutory discount rates, prohibition against allowance of future wage increases. However, while allowance for general wage inflation prohibited, we are often instructed to assume a promotional path. Often in cases where plaintiff is a police officer, military officer, teacher, nurse or other occupation where promotions clearly defined. For example, police constable injured. Letter of instruction may assume would have attained Senior Constable in 2016, Sergeant in 2021, Senior Sergeant in 2028 etc. Typically beyond my expertise to know career path. What if no earnings history? For example an injured child. May receive instructions to assume Average Weekly Earnings. Alternatively, have received instructions such as: Both parents have postgraduate degrees and high earning professionals, older sibling had excellent school results and now enrolled at university, so higher income expected. Comparable employees sometimes used 37 Calculation of earnings loss - Other issues Courts typically apply deductions for vicissitudes, often in the order of 15% My understanding being that Court is recognising and allowing for the possibility that even if not injured the plaintiff would have been subject to uncertainties such as possible death, disablement, no earnings due to industrial disputes, illness, economic downturn etc. Unless requested, we do not typically include any deduction for vicissitudes We understand Courts should assess the circumstances of each individual case to arrive at an appropriate deduction Difficult to justify a 15% deduction, on average, in comparison to statistics for death, disablement, industrial dispute etc. Previously, we adopted multipliers that included allowance for average mortality. Unless requested, we do not allow for mortality in multipliers to retirement age: 1. Could lead to double counting if deduction for vicissitudes 2. Population mortality rates relatively low until mid-60s or later All rights reserved. 19

20 Calculation of Dependency loss The earnings of the deceased were (and would have continued to be) spent partly on themselves, and partly contributed to the household (spouse and dependent children) Loss of earnings of deceased is a loss to the household Ideally would base loss estimate of actual past expenditure, however appropriate data difficult to access (this may change?) Using ABS Household expenditure survey, can look at average expenditure pattern. Data presented in income quintiles. Resulting dependency percentages take into account income/earnings of each parent (one or two incomes), number of dependent children Publications by Cumpston Sarjeant (my firm) and Vincents (Lee & Bossert) both have shortcomings. My colleagues are in the process of revising our dependency calculations. 39 Other actuarial involvement Costs of care for jurisdictions where medical, treatment, long term care are awarded as lump sum, may be requested to calculate such a lump sum Typically rely on other experts e.g. doctors, occupational therapists, architects Application of multipliers reflecting statutory discount rate, but can get complicated e.g. wheelchair to be replaced every seven years, but serviced every two years in-between. So servicing costs at year 2, 4, 6, 9, 11, 13, 16, 18, 20, 23, 25,. Taxation calculations on past loss (so called Fox v Wood benefit for Victorian workers compensation plaintiff has received statutory income benefits net of taxation, but upon receipt of any lump sum must repay gross of taxation) Comparison of statutory benefits vs Common Law benefits e.g. Is the plaintiff better off pursuing Common Law economic loss, or alternatively remaining on statutory income replacement benefits? May need to consider interaction of social security benefits, particularly disability pension All rights reserved. 20

21 Main messages Always remember your role as an expert Be sure not to act outside your area of expertise Be sure not to act as an advocate for either party (inherent tension as unless single expert, typically being commissioned by either the plaintiff s or defendant s solicitors) If in doubt, disclose what you have assumed or the methodology you ve adopted If you ve relied on other experts, disclose it Know the relevant legislation/jurisdiction in which you are operating Act on instructions, but don t blindly accept them 41 Joint reports and concurrent evidence In Victoria, Courts now have greater discretionary power under the Civil Procedure Act 2010, in relation to expert evidence in civil litigation. The Court may: direct expert witnesses to hold a conference and prepare a joint expert s report (expert conclave), at Section 65I. direct that evidence be given concurrently, including that witnesses be permitted to ask questions of any other expert witness giving evidence concurrently (concurrent evidence) at Section 65 K. at any time order that an expert be engaged jointly by the parties (single joint expert) at Section 65L. appoint an expert to assist the Court and enquire in to as well as report on any issue in the proceedings (Court appointed experts) at Section 65M All rights reserved. 21

22 43 Joint reports and concurrent evidence No question that joint reports, experts conclaves and concurrent evidence feature prominently and are now an established part of Australian litigation landscape Gives rise to the need for court direction and oversight In Victorian Bushfires class action, a number of rulings were made in relation to expert conclaves. Matthews v SPI Electricity Pty Ltd (Ruling 10) [2012] VSC 379 Court decided composition of conclaves should be by reference to specific issues rather than broad topics. Approach would: result in more conclaves 14 in total Less likelihood expertise of expert challenged Avoid imbalance of numbers of experts more likely to assist court to refine issues and identify issues in dispute if joint report on specific issues Joint report based on specific issues model would not determine the composition of the concurrent evidence at trial All rights reserved. 22

23 Example heads of damage Mules v Ferguson and Anor [2014] QSC 51 Plaintiff unsuccessful in Queensland Supreme Court in claim against her GP for allegedly failing to refer her to a specialist for further investigations after she presented with a sore neck, headache and dizziness. The plaintiff was ultimately diagnosed with cryptococcal meningitis, however by the time that the diagnosis was made the plaintiff had already been rendered both deaf and blind. Plaintiff failed to establish negligence management by GP. Plaintiff has appealed decision. Judge made findings in relation to quantum. 45 Mules v Ferguson and Anor [2014] QSC 51 General Damages statutory maximum $250, Past economic loss plaintiff had been employed as an operations manager in a full time capacity at a hotel in Cairns, where she earned $65,000 per annum, inclusive of superannuation (or $ per week after super, taxes and medicare levy). plaintiff awarded 278 weeks of lost income at $ per week, plus lost super. $263, Future economic loss plaintiff s wage would have remained at $ per week for next 18 years until retirement at 67 years of age Using the 5% discount rate (multiplier li 625), total of $526,387.50, with a 12% discount for the vicissitudes i i of life, giving total of $463,221. Future superannuation calculated at 11%, $50, $514, All rights reserved. 23

24 Mules v Ferguson and Anor [2014] QSC 51 Past Gratuitous Care and Services - allowed 200 weeks of 12 hours per week of care and services provided by plaintiff s mother $639, Future care - 12 hours of active care and 8 hours of inactive or sleep-over care allowed until death based on plaintiff s life expectancy of 39 years and applying multiplier 910 and discounting 12% for contingencies $4,333, Case management $55, Future domestic and home maintenance needs $58, Future aids and equipment $52, Case management $55, Future domestic and home maintenance needs $58, Future aids and equipment $52, Future medical expenses $9, Future paramedical expenses $65, Future pharmaceutical expenses $3, Future accommodation costs $85, Mules v Ferguson and Anor [2014] QSC 51 Additional vehicle costs only additional insurance allowed $ Future technology needs $6 $165, Holiday/leisure costs including additional carer s costs $116, Special damages and out of pocket expenses $7, for pharmaceutical expenses; $33, for travel; $3, for medical expenses; $3, for paramedical expenses; $38, for therapeutic aids, and $4,620 for expenses. $90, Interest on special damages and out of pocket expenses $8, Total claim for damages: $6,727, All rights reserved. 24

25 The Past Dictates the Future Aircraft Technicians of Australia Pty Ltd v Archie Stephen St Clair; St Clair v Timtalla Pty Ltd [2011] QCA 188 Plaintiff was injured on 21 June 1994 while mustering cattle by helicopter in the Northern Territory. Plaintiff performed contract mustering work through a company commenced a year earlier. Hired three Robinson R22 helicopters to do the work, leasing them on an hourly rate. Plaintiff and his wife suffered injury when the engine failed, causing it to crash. Plaintiff suffered significant physical injuries, including spinal fractures, lower limb paralysis causing difficulty walking and requiring a knee brace and bladder and renal problems. 49 Aircraft Technicians of Australia Pty Ltd v Archie Stephen St Clair [2011] QCA 188 Helicopter lost power because of failure of upper actuator bearing. Part was replaced with a non-manufacturer approved bearing. Plaintiff sued Timtalla, the owner of the helicopter, and Aircraft Technicians of Australia, the company engaged to undertake maintenance of the helicopter. Awarded $150, for pain and suffering. Awarded additional sum for hospital and other medical expenses. Past work history was closely scrutinised in assessing the past and future economic loss. Plaintiff left school at age 14 and working in a number of different jobs, including as a butcher, stockman, oil rig worker and then commercial helicopter pilot All rights reserved. 25

26 Aircraft Technicians of Australia Pty Ltd v Archie Stephen St Clair [2011] QCA 188 Started mustering business the year before the accident. After the accident, the Plaintiff went to great efforts to obtain alternative employment. Worked as an ostrich farmer, food vendor and sculptor. Interestingly, he found success as a sculptor of public sculptures in Texas in 2002 earning more income than he earned as a helicopter pilot in Court of Appeal commented on this as little short of extraordinary. At trial, Plaintiff relied on a report from a forensic chartered accountant, Mr Calabro, claiming a past economic loss of $1,126, Report based on instructions that, had he not suffered injury, the plaintiff would have leased a second helicopter and employed another pilot by Trial judge had difficulty accepting that the plaintiff s life would have been as planned given the plaintiff s work history of changing occupations. 51 Aircraft Technicians of Australia Pty Ltd v Archie Stephen St Clair [2011] QCA 188 Judge accepted the evidence of accountant, Mr Green, engaged g by the defendant, who averaged the plaintiff s pre-injury net income for the four years before the accident to arrive at a calculation of the plaintiff s loss. Mr Calabro had relied on the earnings from the financial year before the accident. Judge did not think this provided a fair representation of the past income. Judge noted that the Plaintiff failed to keep accurate records and conducted his business quite haphazardly All rights reserved. 26

27 Aircraft Technicians of Australia Pty Ltd v Archie Stephen St Clair [2011] QCA 188 Mr Calabro and Mr Green prepared p a joint report and gave evidence concurrently. Judge asked questions individually and jointly zeroing in on the assumptions that had to be accepted before either report was followed. The Judge determined that the Plaintiff s work history after the accident would have been similar to the past; that is, changing occupations. Adopted the approach of Mr Green and awarded past loss of earnings in the sum of $130, with an additional amount for interest. 53 Aircraft Technicians of Australia Pty Ltd v Archie Stephen St Clair [2011] QCA 188 In determining future economic loss, assessed the work and earnings of the plaintiff since the accident and employability as a sculptor. Plaintiff was earning more as a sculptor than he ever had before but the uncertainty of future work and the limitations of his injury was taken into account to arrive at an annual loss of $50, The Plaintiff succeeded in his claim against Aircraft Technicians of Australia but failed against Timtalla. Total damages awarded were $1,729, All rights reserved. 27

28 Aircraft Technicians of Australia Pty Ltd v Archie Stephen St Clair [2011] QCA 188 ATA appealed, as did the plaintiff, on the basis that the damages awarded were inadequate, and also against the dismissal of the claim against Timtalla. Appeal Court found that: o o o the plaintiff had chequered past employment but was a young man at the time interested in travel and adventure. In the year before the accident, he had found an occupation he enjoyed with significantly better financial return. This suggested a reasonable likelihood that he would continue to do this work and there was evidence that the work was available. 55 Aircraft Technicians of Australia Pty Ltd v Archie Stephen St Clair [2011] QCA 188 o o The Plaintiff had persevered in his studies to be a pilot and despite his disability had attempted many ventures, culminating in his realisation of a talent for sculpture. This suggested in weighing the various contingencies about how the Plaintiff might have exploited his pre-injury capacity for remunerative employment, His Honour failed to put in the balance the positive indicators. In focusing only upon the less favourable, the Plaintiff was deprived of the more appropriate assessment of his past loss of earning capacity. Had the positive contingencies been appropriately taken into account, balanced by the past employment history, the past loss represented by $25, per annum would better represent the Plaintiff s past earning capacity. The amount awarded for past loss of earnings was increased to $400, All rights reserved. 28

29 Company losses - actio per quod claim Chaina v Presbyterian Church Property Trust (No 25) [2014] NSWSC 518 Old doctrine of action per quod servitium amisit was relied upon by companies run by the two injured plaintiffs. Case involved tragic death of a 15 year old pupil of Scot s College NSW while on a school hiking trip in the Moreton National Park in The deceased, Nathan, was trying to get across a log crossing but was swept away by a wave of flood water. The school admitted breach of duty of care 57 Chaina v Presbyterian Church Property Trust (No 25) [2014] NSWSC 518 Claims for psychiatric py injury were pursued by the parents of Nathan and his two brothers. Brothers claims were resolved. Trial dealt with claims brought by Nathan s parents and the two companies of which Nathan s parents were sole directors for loss of profits because of injuries to two directors. Judgment was handed down in May 2014, 15 years after Nathan died. Litigation had a remarkably long and tortured history All rights reserved. 29

30 Chaina v Presbyterian Church Property Trust (No 25) [2014] NSWSC 518 The first company, Proton was a supplier of chemicals to the industrial laundry, food processing, food service, healthcare, hospitality and general industry sectors. The second company, Deluxe, developed property and provided finance to Proton and other companies owned by the parents. Claim was that as a result of their injuries, the parents, were unable to relaunch products and launch new products to the market as planned in 1999 and that as a result, the companies lost profits. The losses were calculated by chartered accountants. Work experience, titles and qualifications Mr Chaina asserted to hold, came out in evidence as being untrue damaging Mr Chaina s credit. 59 Chaina v Presbyterian Church Property Trust (No 25) [2014] NSWSC 518 Damages for psychiatric injury limited to a period of two years following the death. Each plaintiff iff assessed as suffering injury assessed as 28% of the most extreme case and that entitled to each of them to $77, Also awarded compensation for economic loss. Accountant calculated past and future economic loss on the basis of salaries small business proprietors such as Mr Chaina and an office manager such as Mrs Chaina would be likely to earn based on salary survey information published by AIM, rather than actual earnings. Assumption that a small business proprietor would expect to earn a premium over and above the average earnings to compensate them for their dual roles of owner and manager, the risks of being self employed and for the long hours worked. On this basis, Mr Chaina s earning capacity was put at $180, gross and Mrs Chaina s at $100, gross All rights reserved. 30

31 Chaina v Presbyterian Church Property Trust (No 25) [2014] NSWSC 518 Judge rejected approach finding that income as declared in the tax returns should form the basis of the calculations. past loss of wages for two years after the death of Nathan were awarded based on the figures declared in Mr and Mrs Chaina s tax returns being: o $104, and lost superannuation entitlements of $7, for Mr Chaina. o $48, and superannuation entitlement losses of $3, for Mrs Chaina. 61 Chaina v Presbyterian Church Property Trust (No 25) [2014] NSWSC 518 Court scrutinised accounts of the companies and found that the material was not consistent with a business that came to a grinding halt because the two moving figures, Mr and Mrs Chaina, were not able to work.. Figures showed that the business never had sales exceeding $1.75 million and never made a net profit of more than $375, and in the immediate period after Nathan s death, sales increased. claim for loss of commercial opportunity was rejected on basis that evidence did not support that the companies had a formula to manufacture products at the time, the finance to undertake the exercise and the capability to manufacture the product All rights reserved. 31

32 Chaina v Presbyterian Church Property Trust (No 25) [2014] NSWSC 518 Judgement addressed measure of damages in a per quod claim discussed in High Court decision i of Barclay v Penberthy [2012] 246 CLR 258. If employer employs numerous staff to take up the duties of the injured employee, then measure of the employer s loss may be in extra payments by way of overtime to secure the performance of these additional duties. Like any plaintiff, the employer would have to try to mitigate their loss as a result of the injured employee. Exception to this would be where the company was a one man company controlled by the injured party. Even in such a case, the measure of damages would not include loss of profits unless the loss was attributable to the loss of services and no other likely cause had been identified. One man company exception did not apply in this case as it could not be said that Mr Chaina was the key scientific and entrepreneurial mind behind the corporate plaintiff. 63 Chaina v Presbyterian Church Property Trust (No 25) [2014] NSWSC 518 One of the Plaintiffs' expert witnesses gave evidence about the likely sales revenue of the Proton company, the market share represented by the sales estimates and the likely loss sales revenue. Judge found this expert to be an advocate for the Plaintiffs and that.despite his adoption of the Expert Witness Code, he did not in fact see that his paramount duty was to the Court.. Determined that in this case it would not be appropriate to request a joint report because the plaintiffs did not have legal representation. Plaintiff s expert not happy with this approach which became evident throughout the examination. Judge determined that the witness was attempting to hijack the process. At one point, expert asked if he could cross examine another witness in the conclave on behalf of the plaintiffs! All rights reserved. 32

33 2014. All rights reserved. 33