Assessment of damages for personal injuries

- Non-ecoomic losso LoAo P+So LoEoL

S16 of CLA

- Economic o Hosptal careo Gratuitous services

S15 o LoEC

S12 (2)

Damage - element of cause of action in tort. Damages - remedy you receive.

• The primary purpose of an award of damages is compensation, so they are usually the exclusive head of damages awarded for claim in neg.

• Guiding principle - "restitutio in integrum" - if the plaintiff succeeds, he should be put in the position he/she was in before the was committed

Look from date of judgement into the future - constant struggle not to overcompensate the plaintiffs but don't want to under- compensate them

• ONUS ON THE PLAINTIFF - HE/SHE needs to demonstrate that head of damages is reasonably foreseeable for type of damage suffered

Plaintiff can only bring one action in respect of all the damages suffered that has been suffered up to the date of the trial and which is likely to be suffered in the future. Lump sum payment to provide recompense for past/future losses.

To what extent does the common law fault based system achieve the ends it sets out to achieve - is it the most efficient system/effective?

• Deficiencies: how to put a price on pain and suffering, seriously injured victim: how to determine what employment he or she might have undertaken or with what degree of financial reward, future loss predictions are difficult

"The fundamental rule of the common law is that in an action for damages for tort the courts awards: "that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation": Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 at 39." McHugh JA in Parramatta City Council v Lutz (1988) 12 NSWLR 293 at 335, (Cases, p 432).

"I can only hope that some day the law will provide some better way of meeting the consequences of day to day hazards than by actions of negligence and a measuring of damages by unprovable predictions, metaphysical assumptions and rationalised empiricism." Windeyer J in Skelton v Collins (1966) 115 CLR 94 at 136 (Cases, p 404)

Pecuniary damages

Loss of earning capacity• Plaintiff entitled to recover for any diminution to his or her capacity to earn, to the extent to which that

diminution is productive of financial loss• Generally computed by deducting any earnings made since the accident from those which would have been

made had the pre-accident emolument continued until the trial• Lump sum can be increased by possibility that the plaintiff might otherwise have made greater use of his or

her earning capacity by promotion or acquisition of more skills or reduced to take into account the vicissitudes of life

• Child/teenager who had not entered the workforce: compensation is still made for any loss of the future capacity to earn - assess the level of renumeration that the plaintiff might reasonably have expected

• Assessed on basis of plaintiff's life expectancy prior to injury

Cost of medical and nursing care• Entitled to recover costs of medical, hospital and nursing care rendered necessary by the injury received.

Expect to be compensated only for the level of care reasonable in the circumstances• Cost of institution cheaper than that of home: only when latter proved to be of substantial benefit to

plaintiff's wellbeing that cost thereof will be allowed as an item of the damages Plaintiff being cared for in an institution: costs on which capital is based exclude institution's charges (food

and shelter)

Non-pecuniary damages

• Provide solace to the victim for the intangible effects of the accident - pain and suffering, loss of amenity, loss of expectation of life

Pain and suffering• Relief for the physical hurt that has been occasioned by accident and its aftermath - judges are entitled to be

aware of prevailing levels of awards in roughly comparable cases to determine a range in which award lies• Awarded on a subjective basis to provide solace for the physical hurt by the defendant - so no award can be

made for a victim who is rendered permanently unconscious by the accident (Skeleton)

Loss of amenity• Provision of money to recompense for "the deprivation of the ability to participate in normal activities and

thus to enjoy life to the full" Recreational pastimes and sport, deprivation of sexual pleasure• Recompense for the mental suffering and feelings of frustration• HC: primary purpose of compensation under this head is the plaintiff's realization that the accident has

deprived him/her of the opportunity to enjoy life as fully as was the case prior to the injury So if plaintiff rendered permanently unconscious by accident: modest and conventional sum ($15000)

awarded, and if hardly aware of plight: damages correspondingly reduced

Loss of expectation of life• Purpose is to provide the victim with compensation (solace) for the fact of the deprivation of a part of his or

her life• Hard to put a money value on such an item as the extraordinary difficulty in seeking to put money value on

such item as balance of joy, sorrow - courts should award modest and conventional sum Skeleton v Collins: amount that awarded should not vary depending on the age of the victim or the years by

which life has been shorted. Only basis on variation: should take account in the fall of value of money Around $10000-$15000, and since only a conventional award: available even if plaintiff has been rendered

permanently unconscious by the accident

Economic prior to trial = special damages, after date of judgement = general

Non-economic = general prior and post date of judgement

Parramatta City Council v Lutz (1988) – BURNING COTTAGE

Principle of law: As between the plaintiff and the defendant, considerations of reasonableness may require the defendant to pay compensatory damages amounting to the reasonable cost of reinstatement (rather than replacement) of a dwelling house destroyed as a result of the defendant's negligence.

KIRBY P: ".it is important to remember the principle which applies to the award of damages in tort, namely the principle of restituto in integrum.

a) "Once and for all. lump sum awards; special and general damages; collateral benefits

• Recipient of lump sum is an adult of sound mind that will act prudent in their interest• There is no restriction on the way which the plaintiff uses the money Say they have a health problem - they put a strain on public services. Not equitable o Courts take into account the vicissitudes of life (eg. sickness, accident, unemployment and industrial

disputes) and there is usually a discount rate for this (between 15-25% of lump sum)• Courts do not award period payments at common law

b) Gratuitous services: CLA PART 2 DIVISION 2 S15

• Plaintiff is not entitled to recover in respect of services which consist of no more than would ordinarily be provided by members of a family nor in respect of those services which exceed the bounds of that which a defendant ought properly to be responsible (therapeutic services provided free of charge by a charitable organization)

• If damages are to include a component relating to gratuitous nursing and other services, they are generally to be valued by reference to the standard or market cost of the services that have been and will be rendered: any income forgone by family member/friend in providing that care is irrelevant

But cost is no more than guide to appropriate measure of damages• When a homemaker no longer able to provide household services - and undertaken gratuitously by other

members of family - courts, from analogy of Griffiths: injury to one member of house requires someone else to perform the domestic person injured had previously undertaken. The fact that duties carried out gratuitously by other members of family not taken into account in relief of the tortfeasor - NON-PECUNIARY

Griffiths v Kerkemeyer (1977) - NURSING

P entitled to damages reflected by value of gratuitous services despite not using commercial service.

Held: whether or not later events means services are provided gratuitously does not change nature of loss.

Facts

• Car accident, P (quadriplegic) injured by negligence of driver and as a result required nursing care to be provided at home. P was fortunate to have family provide nursing care gratuitously (instead commercial services)

Held• P claims entitled to damages which reflected value of gratuitous services provided here even though didn't

use commercial services or didn't go into a facility commercially operated: the services provided had a value capable of assessment which was recoverable by the defendant

D could be compelled to pay gratuitous services and P could recover this from the defendant• P had to establish it was reasonable to recover this head of damages (to have nursing assistance, reasonably

to have those damages and those services provided for free by their family)

Kars v Kars (1996) – HUSBAND AND WIFE

Principle of Law: Under the Griffiths v Kerkemeyer principle, a plaintiff who has suffered personal injury caused by the defendant’s negligence may recover damages representing the value of necessary services, past and future, provided gratuitously to the plaintiff by a relative or friend. This principle applies where the services are provided to the plaintiff by the defendant tortfeasor.

Facts:• The plaintiff, Rebecca Kars was seriously injured in a motor accident caused by the negligence of her husband

Mark Kars, the defendant. The plaintiff's injuries left her with a permanent disability and a need for continuing care. Much of that care was provided by family members, with more than half of that care provided by the defendant.

• In the plaintiff's action against the defendant for damages, the trial judge rejected the claim for damages for the value of gratuitous services which were likely to be provided to the plaintiff by the defendant in the future

• QLD CA reversed the decision of the trial judge. The defendant appealed to the HC, which unanimously affirmed the decision of the QLD CA allowing the claim. The court also held that a plaintiff does not hold damages in respect of future care on trust for the person who may provide the services.

Held:• The argument is that, having provided the services, the defendant cannot be required to pay, in addition,

the cost of providing them• Damages are recoverable to compensate the plaintiff for the loss which is evidenced by the need for services

and it is a matter for the plaintiff whether they are used to recompense the person providing the services• The damages which a plaintiff receives for the need for services is compensation for the loss or incapacity

giving rise to the needo Held: “the fact that a D fulfils the function of providing services does not, as such, decrease

in the slightest the P’s need”.• Appeal dismissed

Civil Liability Act (2002) NSW - PART 2 DIVISION 2 s15 pg 59

(2) No damages may be awarded to a claimant for gratuitous attendant care services unless the court is satisfied that:

(a) there is (or was) a reasonable need for the services to be provided, and (b) the need has arisen (or arose) solely because of the injury to which the damages relate, and (c) the services would not be (or would not have been) provided to the claimant but for the injury.

(3) Further, no damages may be awarded to a claimant for gratuitous attendant care services if the services are provided, or are to be provided:

(a) for less than 6 hours per week, and (b) for less than 6 months. s18(1)(b) CLA: no interest on gratuitous attendant care services

c) Possibilities and contingencies: the "before and after" picture

• Head of loss (non-pecuniary): cost of administering award of damages i.e. if the plaintiff rendered incapable by the injuries of managing his/her own affairs, or intellectually impaired by reason of some pre-existing disability, it has been accepted that the award must necessary be managed with professional assistance and charges made for that service be included as part of the loss suffered

o Modifications to house: ramps/wheelchair access, pool to exercise in or accommodation for a live-in career

Wynn v NSW Insurance Ministerial Corporation (1995) - AMEX

Principle of Law: In the assessment of damages for loss of future earning capacity, the court must take into account the contingencies or "vicissitudes" of life, that is, "the various possibilities which might otherwise have affected earning capacity."

Facts:1. In 1986, the appellant sustained injury in a car accident.2. 14 years ago, she also suffered an accident but had surgery at that time and was virtually symptom-free by the time he sustained the car injury.3. Before the time she got hurt in the car accident, she had a very successful life and she was one step below vice-president.4. The accident brought about a serious aggravation of the injury she sustained in 1972.5. Consequently, she was unable to continue her previous career and at the time of trial, worked part-time for a family business.6. Trial awarded appellant 5% discount in vicissitudes of life.7. The decision of NSWCA increased the discount to 28%.8. On appeal by the appellant.

Held:

In the assessment of damages for loss of future earning capacity, the court must take into account the contingencies or"vicissitude" of life, that is, "the various possibilities which might otherwise have affected earning capacity, however, "child care"and "domestic help" should not be a consideration for the realization of earning capacity.

• In the Court of Appeal - considered that the calculation of future eco loss should be deduced by amounts to allow for super annuation contributions and the cost of child care and domestic help

o Child care only one of various costs associated with children – 2 years salary• Respondent's argument was that allowance should have been made for the possibility that the appellant's

1972 injury would have prevented her working in a high level managerial position until age 60 even if the 1986 accident had not occurred

• In the Court of Appeal - argued that no allowance should be made for the prospect of advancement and 38% fairly represents the possibility that the appellant would have taken unpaid maternity leave and further possibility that her previous neck injury would have prevented her continuous employment until age 60

• Discount for contingencies or vicissitudes is to make account of matters which might otherwise adversely affect earning capacity

Professor Luntz: death apart, "sickness, accident, unemployment and industrial disputes are the four major contingencies which expose employees to the risk of loss of income"

Contingencies are to be considered in terms of their likely impact on the earning capacity of the person who has been injured, not to the workforce generally

• Was there a chance of the appellant's pre-existing condition reducing her ability to work, and if so, what allowance should be made for that chance may conveniently be dealt with by this Court

o Spinal fusion in 1974: nevertheless, her spine was vulnerable to further injury. Evidence of treating doctor: particularly at risk in first 4-5 years but became more able to handle the situation. This did not exclude a continuing risk of injury

• Evidence also clearly established the possibility of degenerative changes i.e. symptoms could have occurred earlier than 60 - reduced earnings or early retirement. This and possibility of non-tortuous injury should have been allowed in determining appropriate discount for contingencies Statutory discount of 5%

Damages are to be founded on hypothetical evaluations. The discount to be allowed for the possibility that the appellant's previous in]ury might have resulted in her impaired earning capacity can be at best a matter of impression. Having regard to the better than average risk of result of the surgical fusion and the risk of further in]ury, the discount should not be great. In our view, the appropriate discount for maternity leave and possible effects of the condition brought by the 1972 accident, balanced against the prospect of further advancement should be 12 * per cent ..

Appeal allowed in part.

Lump sum representing past damage and damage liable to suffer in future the court cannot know for certain if situation can improve or deteriorates. If improves may be undercompensated, if deteriorates may be undercompensated (because of vicissitudes in life)

McCracken v Melbourne Storm (2007) – MELBOURNE STORM

Facts Rugby league injury – P plays for West Tigers P gets dangerously tackled D’s considered negligent – they admitted guilt McCracken’s income had increased after the accident where he engaged in property

development Became very profitable Therefore, he did not have future economic loss

Trial judge – no loss of earnings – he would have earnt 700k minus 10% for contingencies. He was awarded 90k

Held

Dismiss cross appeal from Storm playersOnus is on plaintiff to show what he is not capable of earning – no evidence

When you are doing damages assessment – look at pre and post salary – learning capacity sometimes increases.

P bares onus of proof to show loss of future earning capacity.

d) General damages: three case studies

Skelton v Collins (1966) – VEGETABLE

Principle of Law: In the case of a young person rendered unconscious in an accident and with very short post-trial expectation of life during which consciousness would not be regained, damages for loss of future earning capacity should be assessed by reference to the plaintiff's pre-accident expectation of life but subject to deduction of the plaintiff's living costs during the years in which he or she will be dead. In a case such as the present, damages for loss of amenities of life and loss of expectation of life should be limited to a modest amount.

Facts• Appeal from judgement of the Supreme Court of WA in which damages were awarded in respect of personal

injuries sustained by the plaintiff (appellant) as a result of the defendant's (respondent's) negligence• Complaint was that the amount awarded was manifestly inadequate• Plaintiff, who was 17 years of age at the time when injuries were sustained, suffered severe brain damage

which rendered him unconscious. He had remained unconscious since the accident and, at the date of the trial, was expected to die within 6 months.

- Needed to consider these when determining future earning capacity

Held

Loss of amenity: compensate P for continuing disability- Small amount for loss of amenity as P had no subjective feelings of being quadriplegic unconscious.

Pain and suffering: mental and physical pain and suffering- Pain and suffering must be experienced by P. Thus if P in vegetative state no damages (Skelton v

Collins).Loss of expectation of life: loss of a measure of prospective happiness.

- Amount is small and similar across factual situations – judges do not like to value human life.- Does not include “mental distress due to realization of loss”: Skelton v Collins.

Appeal allowed.

Plaintiff’s damages may be reduced if they cannot demonstrate that they experienced a loss, Skelton v Collins (1966)

Awarding damages CLA (s 16) requires:

- most extreme case to be identified- plaintiff’s injury compared and found as ‘percentage’ of the most extreme case; and apportion the

plaintiff’s damages accordingly, Southgate v Waterford (1990)- maximum for non-economic loss is $450,000, for a most extreme case, s 16(2)- For injuries 0-14% of most extreme case, no damages awarded; 15-33% tables are used to

determine the percentage of a most extreme case to be awarded; and from 34% onward a linear relationship between the percentage of a most extreme injury and the plaintiff’s injury exists.

- Other cases may be used to support the claim for a particular award, s 17A(1).

- Include amount plaintiff has already paid in expenses related to accident Sharman v Evans (1977)

- Plaintiff’s ‘expected’ loss of earnings, CLA s 13, Sharman v Evans (1977)a) s 13(1): determine the most likely future earnings (objective - find the mean)b) s 13(2): adjust for circumstances of the individual, by the percentage probability of them earning

the mean without the injury (subjective – find the variation)c) CLA s 13(3): Justify assumptions, Malec v JC Hutton Pty Ltd (1990)

- Limitations:o amount awarded for gross weekly earnings limited to three times ‘average’ weekly total

earnings, CLA s 12(2), figure set by the Australian Statistician, CLA s 12(3). o base discount rate is prescribed by regulation, s 14(a), if not, 5% should be applied, s 14(b),

Wynn v NSW Insurance Ministerial Corporation (1995)o Anything that mitigates plaintiff’s loss because of the injury reduces damages, Graham v Baker

(1961) (e.g. lawyer doesn’t have to buy suits now)

Sharman v Evans (1977) – QUADRAPLEGIC

Reasonable cost of expenses recoverable (incl vehicle, home modifications). Test - Sharman v Evans: “the touchstone of reasonableness…is…cost matched against health benefits”.

o “if cost if very great and benefits to health slight or speculative…clearly be unreasonable”

Difficult to allocate monetary amounts for loss of what is essentially – human condition. Thus: courts provide reasonable compensation (will be reduced as damages under other heads) for P rather

than “perfect” compensation (Sharman v Evans).

Principle of Law: Where, as a result of his or her injuries, the plaintiff will spend substantially the rest of his or her life in hospital (and be entitled to damages for future hospital expenses), a deduction should be made from damages for loss of future earning capacity to take account of saved outside expenses such as board and lodging and work-related outgoings. At the same time, it should be acknowledged that there are inherent difficulties in assessing damages for the loss of amenities of life, "perfect" compensation being impossible.

Considered issues of damage

Facts:• Defendant appeals against dismissal by SW CA. Evans, aged 20, was injured in motor car accident in Dec

1971. She suffered serious injuries including brain stem damage; she was unconscious for almost a month and is now a quadriplegic. This condition, is in her case aggravated by trauma-caused epilepsy, by unusually severe impairment to her respiratory function as a consequence of the brain injury and almost total loss of the ability to speak because of injury to larynx.

• Before accident prospects bright: she was trained for and experienced in secretarial work. She was going to marry a young man. After accident engagement announced and but for her ultimate decision she could not permit him to take as his wife a quadriplegic.

• She would have been married to him at the time of the trial.• General damages $275,000, special damages of $25,500. 3 consequences of her injuries account in large

measure for the size of award of general damages: her need for intensive nursing and medical attention in the future, total loss of earning capacity and the gross impairment of the future enjoyment and amenities of her life. Also pain and suffering

D argued that 300,000 was excessive as it was the highest award for personal injury case in Australia.

Insurance agency argued that she would be spending some of her time outside permanent care and on that basis – it should be reduced.

Gibbs J and Stevens JIt is appropriate to examine the various heads of damage that presented themselves for assessment so as to appreciate and deal with the various critismsc raised by the appellant.

It was necessary important to discuss whether care could be for in hospital or at more expensive amount for her to be cared for at home.

Whether or not compensation should be paid for the higher costs of compensation at home. They stated that “the touchstone of reasonableness in the case of providing nursing and medical care for the P in the future is the cost matched against health benefits to the P”.

They were embarking on a cost v benefit analysis

They concluded that the appropriate criterion must be that such expenses as the P may reasonably incur should be recoverable from the D.

It was reasonable for the woman to spend the rest of her life in hospital and more expensive alternative of staying at home would be unreasonable and would not provide any more amenity.

Held:• Where the plaintiff is to be cared for in the future will not only directly affect the extent of nursing and

medical expenses which are to be compensated for, it will also bear upon the extent of her loss of the amenities and enjoyment of life, a lifetime substantially spent in hospital will greatly aggravate that loss

• The future cost of reasonable nursing and medical attention must be assessed on the basis of a lifetime based substantially in hospital

• It follows that the plaintiff's loss of enjoyment and amenities of life will be the greater. She must be regarded as wholly deprived of the everyday pleasures of living in the environment of her own home. The effect of the situation of the permanent hospitalization can clearly be somewhat mitigated if she is able to vary the monotony of the hospital ward by occasional day visits to her home and other outings

• Both in principle and authority establish that where as here there is included in the award of damages for future nursing and medical care the plaintiff's entire cost of future board and lodging, there will be overcompensation if damages for loss of earning capacity are awarded in full without regard for the fact that the plaintiff is already to receive as compensation the cost of her future board and lodging, a cost but for her injuries she would otherwise have to meet out of future earnings

o It would be better accord with principle if the savings in board and lodging could be isolated from and excluded from the damages to be awarded in respect of hospital expenses

• What is to be avoided is double compensation - it is a matter of already having compensated for future board and lodging as a component of hospital expenses, so that to disregard this and award the full sum for lost earning capacity, part of which would be used to provide the very item of board and lodging already compensated for, would be to award compensation twice over

• Where as the plaintiff suffers a total loss of earning capacity he will not normally continue to incur all of the outgoings necessary for the realization of that capacity which would have been incurred had his capacity been unaffected; items such as the cost of clothing

• It has now been established that no reduction is to be made, when awarding damages for loss of earning capacity, for the cost of maintaining oneself and one's dependants unless an element of double

compensation would intrude• Plaintiff still possesses powers of enjoyment through use of her senses .. she can experience pleasure

and ward of melancholia by distractions• As to "lost years" the plaintiff is to be compensated in respect of loss of earning capacity during those

years by which her life expectancy as been shortened, least to the extent that they are years when she would otherwise have been earning income

o Because in the ordinary case a plaintiff must maintain himself in the future out of his damages, the cost of doing so is not to go in reduction of an award for lost earning capacity during his remaining years of life . in the special case of lost earning capacity in "lost years" that because those years can involve him in no cost of maintenance the cost thus avoided must go to reduction in damages as the court does not concern itself with how the plaintiff expends his income or damages

• Loss must depend upon the likelihood that there would have been a future exercise of earning capacity: the only relatively certain factor will be pre-injury possession of earning capacity and this in itself may be sufficient reason, for the adoption of the expedient course of simply disregarding the prospect of marriage as a relevant factor in the assessment of such a plaintiff's future eco loss

• Damages for pain, suffering and loss of the enjoyment and amenities of life and damages for shortening of life expectancy - the amount to be awarded may properly take into account a fall in the value of money but it is to be no more than quite conventional sum

• The warning against attempting perfectly to compensate means, in the case of pecuniary loss, no more than the need to make allowance for contingencies, for the vicissitudes of life, compensating for probable rather than for merely speculative detriments

o Non-pecuniary detriment in question: question cannot refer to the exclusion of all question of punishment of the wrongdoer, the word "compensation" standing on own sufficient to do this, rather designed to remind that maiming of plaintiff and its consequences cannot wholly be made good by an award of damages and no amount is too large to atone for p's suffering (unfair to D)

• Damages awarded under other heads produce freedom from eco uncertainty and availability of funds for pleasurable activities

Husher v Husher (1999) 197 CLR 138 - High Court of Australia

Principle of Law: In the assessment of damages for loss of future earning capacity, the basic task is to identify "what earning capacity has been impaired or lost and what financial loss is occasioned by that impairment or loss." Thus, where the plaintiff was in a profit-sharing partnership for income tax purposes with his or her spouse before suffering the relevant injury, this fact should not obscure the true extent of the plaintiff's loss of future earning capacity.

Facts:• The appellant (plaintiff) was injured in a motor accident caused by the negligent driving of his wife, the

respondent (defendant), before the accident, he had carried on a business as a block layer in a partnership with his wife. His skill and physical labour generated the entire income and his wife did the bookkeeping and similar tasks.

Profits divided equally for tax purposes.• After the accident he was unable to continue with his work and his partnership ceased operation. In his action

against his wife in negligence, he claimed damages for the loss of earning capacity. The trial judge assessed damages on the basis that the partnership would have continued and the plaintiff would have received half the profits for the rest of his working life

o CA of the Supreme Court of QLD upheld this decision. The plaintiff appealed to the High Court.

Held:• If the victim's pursuit of gainful employment is interrupted or affected because of the negligent

infliction of physical injury, the victim is to be compensated by an amount that reflects the financial

consequences that follow from the impairment• It is necessary to identify both what capacity has been lost and what economic consequences will

probably flow from that loss. Only then will it be possible to assess what sum will put the plaintiff in the same position as he or she would have been if injury had not been sustained.

o What a worker earned in the past may provide very useful guidance about what would have been earned if that worker had not been injured. But the inquiry is an inquiry about the likely course of future events and evidence of past events does not always provide certain guidance about the future.

• Need to identify what earning capacity has been impaired or lost and what financial loss is occasioned by that impairment or loss. In the present case there is no dout that the capacity that the appellant lost was a capacity to earn whatever he could have earned working as a block layer. But the inquiry does not stop at what the appellant could have earned. It is necessary to ask what loss the appellant suffered because of the diminution of that capacity and that invites attention to what would have happened but for the negligent infliction of injury

• The financial loss occasioned by impairment of earning capacity is the loss of what the injured plaintiff would have expected to have under his or her control and at his or her disposal by exercising that capacity

• The income of the partnership came from the efforts of the appellant and the exploitation of his earning capacity, and the partnership was a partnership at will. The appellant would very probably have chosen to maintain those arrangements but that was his choice . if he chose to make some other arrangement concerning the fruits of his labour, effect would be given to that choice, whatever view his wife held

o What A would have had under 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 he has lost

• Deciding what value is to be ascribed to the loss of future earning capacity of an injured plaintiff requires close attention to the facts of each case. The inquiry is about what could the plaintiff have done in the workforce but for the accident and what sum of money would the plaintiff have had at his or her disposal. in looking at the sum of money regard must be had to all those contingencies of life that might reasonably be expected to affect the course of events in the future

• The assessment of damages for loss of future eco capacity involves questions of judgement and estimation. Being an attempt to predict what would have happened, the process can never be exact

o Even so, the assessment of lost earning capacity requires some care in identifying what net income the plaintiff would have had at his or her disposal. That may require some consideration of the taxation consequences of different arrangements

• Appeal allowed

e) Effect of inflation and the "discount rate"

Todorovic v Waller (1981) 150 CLR 402

Discount rate for future economic loss:o Inflation – is not a direct factor taken into account (O’Brien v McKean; Todorovic v Waller).o Takes into account investing and interest discount so P does not profit

o Common law: Todorovic v Waller: discount rate of 3%, unless altered by legislation.o Eg. Motor Accidents Act 1988 and Workers Compensation Act 1987 (NSW) 5% discounto CLA s14 5% discount.

o Taxation – factored in by courts determining P’s NET income after taxation (Cullen v Trappell).

Principle of Law: In the assessment of damages for future economic loss, "evidence as to the likely course

of inflation, or of possible future changes in rates of wages or of prices is inadmissible." However, a discount rate of 3 per cent, to be used in all cases in calculating the present value of a future loss, is intended to make appropriate allowance for these matters.

• Gibbs CJ and Wilson J• Two principal elements: the loss or diminution of earning capacity in so far as it is likely to cause financial

loss in the future, and the need, caused by the injuries, for services (such as medical treatment) or goods (such as appliances) in the future

• If the award is not discounted, the plaintiff will necessarily be over- compensated. The process of discounting can only be dispended with if some other consideration completely offsets the advantage that a plaintiff gains by receiving at the date of judgement a sum that if he had not been injured would have been paid to him at some point in the future, or a sum he would be required to expend at some time in future

• Court to reject evidence of inflation because such evidence would be purely speculative, it would tend to prolong trials and would introduce an additional element of uncertainty into awards

• Basic principles which underpin common law's award of compensatory damages for personal injury (GIBBS CJ)1. Principle of "restitutio in integrum"2. The "once and for all" rule: when a court assesses damages it so for a once and for all basis for the judgement Looking at the past and into the future - what are the actual harms that occurred because of the tort and what are the prospective harms likely to occur into the future Great possibility for over or under compensation: there is no periodic payment/monitor on how people receive or spend amounts of money, they simply get a lump sum3. Courts do not concern themselves with how plaintiff's spend an amount of money: if given a lump sum of compensatory damages, you can spend that however you choose. Liberal conception of indv4. Burden lies upon the plaintiff to prove entitlement to each and every head of damages. Intimate connection with causation- remoteness of damage: onus to prove cause of entitlement for a head of damages

f) Statutory caps on the amount of damages recoverable and special no-fault schemes: catastrophic and "blameless" motor accidents: public transport accidents; workplace accidents' other negligence claims; claims by air passengers.

Motor Accidents Compensation Act 1999 (NSW) - pgs 43-44.

• S138: Contributory negligence.• S140: Defence of voluntary assumption of risk.• S142: Damages for the loss of services.• S144: Exemplary/Punitive damages.

Transport Administration Act 1988 (NSW) s 121 - pg 83.

• Focus on public transport vehicles

• S121(1): Relates to injury caused by/arising out of motor accident.• S121(2): What is a motor vehicle accident.• S121(2): What is a public transport accident [no air transport, no tourists, when someone else is responsible],

and when regulations include accident of a class.• S121(4): Applies to accidents after Motor Accidents Comp Act 1999

Civil Liability Act 2002 (NSW) ss 11-18 - pgs 59-64

Motor Accidents [Lifetime Care and Support) Act 2006Ross Anderson, "Catastrophic and blameless motor accidents and no fault recovery by children" (PRINT OUT, SUP

MATERIALS).Civil Aviation [Carriers Liability) Act 1959 (Cth)Ross Anderson, "Liability of air carriers for death and bodily in]ury of passengers" (PRINT OUT, SUP MATERIALS).

CIVIL LIABILITY ACT 2002 (NSW)

• Economic Loss: Part 2 Division 2 pg 59.• Non-Economic Loss: Part 2 Division 3 s16 pg 64.• Pain/suffering, loss of amenity of life, loss of expectation of life, inconvenience caused by being subjected to

serious personal injury - discomfort/inconvenience suffered by P CAP YOU CAN RECOVER