The plaintiff who brings an action must show that the defendant was liable for an actual injury, had a duty of care and was negligent. Courts consider what a reasonable person would do, and other circumstances such as consent and contributory negligence. The amount of damages depends on the seriousness of the injury. Expenses can also be recovered.
Negligence and damages claims
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 An introduction to the 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 be the actual person injured, or 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”).
To establish liability at common law, a plaintiff must first establish that a defendant owed a duty of care (a responsibility) towards the plaintiff or the deceased person. Over a period of years the law has established a requirement that people (including companies and governments) should conduct their affairs to a standard to allow for the protection of others against unreasonable risks. The standard required is that of the reasonable person. What a reasonable person would have done in the circumstances is a matter for the courts to decide, after considering all the facts surrounding the incident or incidents that caused injury to the plaintiff or the deceased person. This involves asking questions like:
• Was the harm foreseeable?
• What is the usual practice in the circumstances?
• How likely was it that harm would result from the defendant’s conduct?
The courts have considered these problems in some detail over the years. The principles applied in specific areas are discussed in the following chapters.
If the defendant fails to do something that a reasonable person would do, or alternatively does something that a reasonable person would not do, the law states that there has been negligence. This does not necessarily mean that the plaintiff is entitled to damages. The plaintiff must show that there has been an actual injury. For example, a plaintiff who has been exposed to dangerous chemicals as a result of the negligence of another must show an actual injury, not just the mere possibility of injury.
The plaintiff must also show that there is a reasonably close connection between the defendant’s conduct and the injuries suffered by the plaintiff or the deceased person. Either the damage must not be too remote from the wrong conduct, or the wrong conduct must be an effective cause of the injuries. However, the wrong conduct need not be the only cause of injury.
The courts must consider whether the plaintiff or the deceased person engaged in conduct that will either defeat the action for damages completely or reduce the amount of damages recovered.
The defence of volenti non fit injuria (consent to the injury) is applicable if the defendant can prove that the plaintiff or the deceased person had full knowledge of the risk of injury to themselves, and had voluntarily assumed or undertaken the liability resulting from that risk. For example, a plaintiff may have been injured in a collision while travelling in a car with a driver known to be drunk. If this defence succeeds, it completely defeats the plaintiff’s claim for damages, even if the defendant was negligent as well.
If the defendant can show that the negligence of the plaintiff or the deceased person also contributed to the damage sustained, this will only reduce the plaintiff’s claim for damages by the percentage contribution found by a judge or jury. For example, if the court finds that the plaintiff or the deceased person was 10 per cent to blame for their own injuries because of not wearing a seat belt at the time of the collision, the amount of damages payable to the plaintiff will be reduced by 10 per cent.
In deciding whether a defendant has been negligent, a judge or a jury may have to consider whether there has been a breach of a statutory duty. For example, a person may have been injured in a collision where the defendant had failed to give way to the right in accordance with the Road Safety (Drivers) Regulations 2009 (Vic). Such a breach is at least evidence of negligence, as there has been a breach of the common law duty to take care. Courts have also used a breach of a statutory duty as being negligence in itself, particularly where the statute does not provide criminal penalties for the breach of that statute. Note that these principles have now been significantly altered by legislation, and in particular by the Wrongs and Other Acts (Law of Negligence) Act 2003 (Vic) (see “Key legislation: Wrongs Act”).
Once the court is satisfied that the defendant has been negligent, it then must proceed to assess damages.
Damages are generally assessed as a lump sum on a “once and for all” basis. Such an assessment finalises the injured party’s rights and there is no right to come back to the court to have damages further assessed at a later stage. However, the Wrongs Act 1958 (Vic) allows a court to make an order for a “structured settlement” by way of periodic payments funded by an annuity or other means (pt VC).
The lump sum is assessed by adding together various amounts assessed under individual heads of damages. The courts make a distinction between special damages and general damages.
Special damages: This generally refers to out-of-pocket expenses. These may include medical and like expenses such as ambulance fees, loss of earnings to the date of trial, and other incidental expenses such as home help. Because of their very nature, special damages are generally easily quantifiable.
General damages: This covers such matters as loss of earning capacity in the future, pain and suffering, loss of enjoyment of life and disfigurement. They are of their very nature incapable of precise mathematical calculation. The court looks at these individual aspects of general damages and assesses the suitable amount of money that is fair and reasonable to both parties to compensate the plaintiff.
Where the injured person has died as a result of the negligence of the defendant, the dependants have their own claim for damages. It is important to note that the dependants are not entitled to any damages for grief or suffering as a result of the death, but only to damages for the monetary loss that they have suffered. In calculating this loss, courts must take into account the financial benefit the dependants would have received from the deceased had the deceased lived, less certain benefits that they have received arising on the death.
If there are no dependants, the deceased’s estate can commence or continue an action for negligence, but damages are generally limited to such matters as loss of earning capacity before the death and medical, hospital and other expenses incurred before the death.
To assess loss of earning capacity in the future, the court must consider to what extent the plaintiff’s ability to earn income will be affected in the future and for how long this restriction will continue. The extent to which a plaintiff’s earning capacity has been affected will depend on the individual facts of each case. The judge or jury then must calculate a present value of this future monetary loss (comprising loss of earning capacity and future medical expenses).
In most actions for damages for personal injuries the present value of such future loss is assessed by adopting a discount rate of 5 per cent (s 28I Wrongs Act 1958 (Vic)). However, the Transport Accident Act 1986 (Vic) and the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) specify 6 per cent. This rate is intended to make the appropriate allowance for inflation, for future changes in rates of wages and prices and for taxation upon income from investment of the sum awarded. The High Court has directed that no allowance should be made for those matters.
This has now made it easier to assess the present value of future economic loss. By giving the plaintiff damages assessed at the 5 per cent or 6 per cent rate, the plaintiff may be able to invest at a higher rate and thus hopefully limit the effects of inflation and taxation on the award of damages.