Understanding ‘damages’ in a personal injury claim

If you or somebody you know has made a claim for compensation, you may have heard the term ‘damages’ used in reference to that matter. Essentially, damages are the amounts calculated in monetary terms to compensate a person for loss suffered after pursuing a successful personal injury claim.

No two cases are alike, and there are a range of principles that must be considered when assessing the impact an injury has on a person’s life to arrive at a monetary value for the loss. Legislation also imposes thresholds and limits on certain awards of compensation which may vary according to the jurisdiction and type of claim pursued, whether that be a public liability, motor accident, or workers compensation claim.

This article sets out some of the general principles underlying an award of damages and the categories of payments that may be made to a successful claimant (the person pursuing the claim).

Basic principles for awarding damages under general law

  • The injured person should be restored as near as possible to the pre-injury position.
  • Unless exceptions apply, damages for one cause of action are recoverable only once.
  • Damages should be awarded as a lump sum, although periodic or ‘structured’ settlements may be awarded in limited cases.
  • The claimant may use the money awarded as he or she wishes.
  • The claimant must prove the injury for which damages are sought.

A lump sum award is generally final and cannot be increased should a claimant’s condition worsen in the future. Many personal injury cases may take what seems a long time to finalise – this is because a full assessment of the person’s injuries and loss (past and future) must be evaluated and the necessary evidence prepared to ensure that adequate compensation is pursued.

Different categories of damages

Special damages are those that can be accurately proven or assessed with relative certainty, such as medical costs incurred, or past earnings lost by a claimant up to a court hearing date. This information can be proven with invoices, receipts and wages records.

General damages are those that cannot be accurately shown, such as future losses, wages and future medical costs. Damages for ‘pain and suffering’ fall within general damages as the assessment will take into consideration past and future pain and suffering, neither of which can be accurately calculated.

Pecuniary losses relate to money (such as medical expenses already paid by a claimant or loss of earnings calculated between the injury date and trial date) and, if proven, form part of special damages. Future pecuniary losses (for example, loss of future earning capacity) however will usually form part of general damages.

Non-pecuniary losses are those that do not relate directly to a specified amount (for example, pain and suffering or the loss of use of a limb) and fall under general damages as they cannot be accurately calculated.

Types of damages that may be awarded

When assessing damages, a range of factors are considered working within the limits and thresholds imposed by the relevant legislation and general principles of law.

General damages

A general damages payment compensates for the impact the injuries have had on a person’s pre-injury lifestyle in terms of pain and suffering, loss of enjoyment of life or loss of amenity (continuing disability).

This category of damages is often misunderstood as injuries that are seemingly identical from person to person may result in different calculations for the ‘loss’. For example, the impact of a back injury that prevents a young sports professional from pursuing athletic endeavours compared to a similar injury suffered by a sedate retiree. Factors such as age, the permanency of the injury, likely improvement and future medical treatment must also be considered.

Loss of earnings / loss of past and future superannuation benefits

Loss of earnings includes compensation for past earnings where a person has lost wages due to the injuries sustained, as well as an assessment of his or her likely loss of future earnings.

The court will consider the likely impact the injuries will have on a claimant’s future earning capacity and whether the injury has caused a total or partial loss of earning capacity. The claimant’s potential to undertake other suitable employment, either with or without additional training, is also considered.

Damages for superannuation losses commensurate with a plaintiff’s loss of past and future earnings may also be awarded.

Gratuitous attendant care services

Gratuitous services are domestic services provided by family, friends, neighbours or paid providers. These services include nursing and personal care, assistance with daily tasks, transportation and help with cleaning, cooking and gardening. Damages may be awarded where such services are necessary and the need for them has arisen solely because of the injury. The services claimed must include tasks that were regularly performed by the injured person before the injury.

Loss of capacity to provide domestic services

Subject to limitations, damages may include compensation for the loss of capacity for an injured person to provide gratuitous domestic services to his or her dependants.

Past and future medical expenses

This includes reimbursement for past medical expenses incurred due to the injuries, such as doctor, surgical and hospital bills, rehabilitation costs, pharmaceuticals, aids and home or vehicle modifications. If medical expenses are likely to continue or arise in the future, then an assessment may be made for the reasonable costs of such expenses.

Conclusion

Compensation law is complex. If you are injured at work, in a motor vehicle accident, in a public place or through somebody’s negligence we recommend placing your matter in the hands of a trusted, experienced legal professional.

There is much at stake and the amounts claimed for your injuries should be carefully assessed and supported with the relevant evidence to ensure you are fairly compensated not only for past losses, but for the likely impact your injuries will have on your future and the financial wellbeing of your family.

This article is intended to provide general information only. You should obtain professional advice before you undertake any course of action.

Talk to a specialist

For a confidential, free case assessment, please call us on 02 6621 2481 at Lismore, Ballina on 02 6686 2522 or Byron Bay on 02 6680 8525, email [email protected] or contact us online.