Many people believe, wrongly, that most claims seeking compensation for personal injuries are claims for damages. However, very few claims for personal injury are actually entitled to damages. Generally, for an injured person to be entitled to damages, they must first establish that there has been negligence on the part of another person. Such a case may occur in an industrial accident or motor vehicle accident. Other cases may occur as a result of a slip or fall in a public place, or as a result of medical treatment.

Claims for damages arising out of negligence usually proceed in the County Court or the Supreme Court, but occasionally they are issued in the Magistrates' Court. The seriousness of the injury, and thus the amount of damages sought, will determine the court in which proceedings are issued (see: Chapter 1*2 Courts, for monetary limits). In the County Court and the Supreme Court, claims for damages arising out of negligence can be heard before a Judge sitting alone or a Judge sitting with a jury. Claims in the Magistrates' Court are heard by a Magistrate without a jury. Generally, claims are commenced by the issue of a writ (Supreme or County Court) or a complaint (Magistrates' Court).

The plaintiff is the person claiming damages. The plaintiff may have been the actual person injured, or may be a dependant claiming damages arising out of the wrongful death of an injured person. The defendant is the person or body alleged to have been negligent or to have been responsible for such negligence.

There are two aspects to every claim for damages arising out of negligence. First, a plaintiff must establish liability (or fault) on the part of the defendant by proving negligence. Second, once liability has been established the court must then assess the amount of appropriate damages.

Damages are assessed under a number of individual heads (see: "Assessing damages", below).