6
Other personal injury damages issues
The terms of reference require the Commission to recommend options for the Wrongs
Act 1958 (Vic) to operate more efficiently and equitably, consistent with the objectives
of the tort law changes of the early 2000s. This chapter examines the following issues
that were raised by stakeholders concerning the operation of the personal injury
damages provisions of the Wrongs Act, namely:

differences in the treatment of remedial surgery on spinal injuries arising from
Mountain Pine Furniture Pty Ltd v Taylor (2007) 16 VR 659 (‘Mountain Pine’)

the interpretation by the courts of the threshold regarding damages for costs of
gratuitous attendant care by others

whether the Wrongs Act should provide for an entitlement to damages for loss of
capacity to care for others

a particular inconsistency arising from the interaction of the Wrongs Act and the
Transport Accident Act 1986 (Vic), whereby claims made under section 94 of the
Transport Accident Act are not subject to the limitations on personal injury and
death imposed by the Wrongs Act
The Commission has focused on assessing options for reform in these areas against the
principles of equity and consistency with the underlying objectives of tort law reform.
Efficiency impacts, in terms of transaction costs or incentives to invest in safety are
assumed to be negligible and thus are not discussed in detail. For example, providing a
limited entitlement for loss of capacity to care for others is assumed unlikely to increase
the number of claims — that is, increase transaction costs — or change incentives to
invest in safety.
Stakeholders also raised issues about the efficiency of the Medical Panels process.
These are discussed in section 6.5.
6.1
Differences in the treatment of remedial surgery
on spinal injuries
The Wrongs, Accident Compensation and Transport Accident Acts take account of the
effects of remedial surgery on spinal injuries differently. In 2007, amendments were
made to the Accident Compensation and Transport Accident Acts in response to the
Victorian Court of Appeal’s decision in Mountain Pine. The court reversed the Victorian
WorkCover Authority’s (VWA) approach to the assessment of spinal injuries, ‘holding
that workers should have their spinal injuries assessed prior to having surgery rather than
after surgery’ (Victorian Parliamentary Debates, Legislative Assembly 2007, 3125).
The 2007 amendments omitted the following paragraph on the assessment of spinal
impairments from the American Medical Association Guides to the Evaluation of
Permanent Impairment (Fourth Edition) (AMA-4 Guides):
With the Injury Model, surgery to treat an impairment does not modify the
original impairment estimate, which remains the same in spite of any
changes in signs or symptoms that may follow the surgery and irrespective
of whether the patient has a favourable or unfavourable response to
treatment. (AMA 1993, 3/100)
OTHER PERSONAL INJURY DAMAGES ISSUES
79
In introducing these amendments the then Minister for Finance, WorkCover and
Transport Accident Commission noted that the:
… [Mountain Pine] decision threatens to create significant inequities among
those Victorians supported by the [Transport Accident Commission] TAC
and VWA schemes. It is not fair that a person whose spinal injury improves as
a result of surgery be entitled to the same compensation as a person whose
injury worsens as a result of the same treatment. (Victorian Parliamentary
Debates, Legislative Assembly 2007, 3125)
No such amendments have been made to the Wrongs Act. That is, there is no
requirement in the Wrongs Act that assessment of impairment of spinal injuries take into
account the effect of any remedial surgery.
6.1.1
Participant views
In supporting amendments to the Wrongs Act to make it consistent with the other
personal injury Acts, the Australian Medical Association (Victoria) Ltd noted that:
This situation has led to difficulties for Medical Panels when assessing spinal
injuries as … Medical Panels must imagine the patient’s condition prior to
treatment in order to determine the level of impairment. (sub. 17, 2)
The Insurance Council of Australia also supported restoring the pre-Mountain Pine
position, noting that making an assessment based on the likely level of impairment after
treatment:
… would also help remove the perverse incentive of not undertaking such
treatment to maximise benefits. (sub. 14, 6)
On the other hand, the Common Law Bar Association (CLBA) submitted that given
claimants are unable to access a narrative test under the Wrongs Act (chapter 3), it
would be unfair to amend the Wrongs Act in line with the Accident Compensation and
Transport Accident Acts to overturn the Mountain Pine decision (sub 11, 8). The CLBA
also noted that:
… the Wrongs Act already requires that the injury suffered be stabilised.
Provision is also made if 6 months pass since the first assessment, and the
clinician is satisfied the threshold will be met once the injury has stabilised:
s 28LNA. It is submitted that this is sufficient to ensure injuries are properly
assessed, without limiting the ability of an assessor to use the [Diagnosis
Related Estimates] DRE Model without having regard to surgery used to
treat impairment: section 3.3(d) of the AMA Guides (sub. 11, 8).
6.1.2
Options
The sole option for reform in this area is whether to amend the Wrongs Act to be
consistent with the changes to the assessment of spinal injuries made to the Accident
Compensation and the Transport Accident Acts in 2007 (see above).
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6.1.3
Assessment
Equity
Amending the Wrongs Act to restore the pre-Mountain Pine position would improve
horizontal equity by treating persons with similar spinal injuries in the same way under
the three personal injury Acts.
The current situation gives rise to potential inequities, whereby a person whose spinal
injury improves as a result of surgery is currently entitled to the same compensation as a
person whose similar spinal injury does not improve or worsens as a result of the same
treatment. This amendment would address this vertical inequity.
Consistency with the underlying objectives of tort law reform
The AMA-4 Guides were first applied to the impairment assessment process under the
Wrongs Act as part of tort law changes of the 2000s. Prior to this, the Guides were (and
are still) used in the assessment of impairment for the purposes of the Accident
Compensation and the Transport Accident Acts.
The explanatory memorandum and the second reading speech for the Transport
Accident and Accident Compensation Acts Amendment Bill indicate that it was
long-standing convention under both the Accident Compensation Act and the Wrongs
Act to assess impairment on the basis of the post-surgery condition. For example, the
explanatory memorandum stated that the Bill was intended to:
… codify the long standing practice in relation to the assessment of
permanent impairment, including spinal impairment, prior to the decision of
the Court of Appeal in Mountain Pine Furniture Pty Ltd v Taylor. (Victorian
Parliamentary Debates, Legislative Assembly 2007, 6)
The Commission understands the intention in introducing the impairment assessment
process into the Wrongs Act was to make the process similar to that applied under the
Accident Compensation Act and Transport Accident Acts. For example, the second
reading speech1 noted that:
Honourable members will be familiar with the use of the AMA Guides, the
psychiatric impairment guidelines and the hearing loss assessment
procedures from their use since around 1990 in the WorkCover and TAC
statutory compensation schemes. (Victorian Parliamentary Debates,
Legislative Assembly 2003a, 2078)
In regard to impacts on the price and/or availability of public liability and professional
indemnity insurance, the Law Institute of Victoria submitted that:
… the likely impact of such an amendment would be to result in lower
impairment assessments, since it is common that after a claimant has
surgery to rectify or treat an injury, the impairment is lower. (sub. 13, 18)
1
Wrongs and Limitation of Actions Acts (Insurance Reform) Bill 2003
OTHER PERSONAL INJURY DAMAGES ISSUES
81
6.1.4
The Commission’s view
The Commission’s understanding is that Parliament intended impairment assessment to
be undertaken on the basis of a claimant’s post-surgery condition. The decision in
Mountain Pine created a vertical inequity. Applying the amendments made to the
other Victorian personal injury Acts in 2007 to the Wrongs Act would remove the
inequity and restore the Parliament’s intention. The Commission returns in chapter 8 to
the treatment of remedial surgery on spinal injuries in its consideration of a package of
possible adjustments to the Wrongs Act.
6.2
Damages for costs of gratuitous attendant care
by others
Under common law, damages may be awarded as compensation for the need for an
injured person to be cared for by friends and relatives without payment (Negligence
Review Panel 2002, 199–200). These damages are known as damages for gratuitous
attendant care or ‘Griffiths v Kerkemeyer’ damages.2 They ‘compensate the injured
claimant for the claimant’s need for gratuitous services to be provided to the claimant
because the claimant can no longer provide those services to him or herself’
(NSW Government 2006, 2).
There is limited publicly available data on:

the number of awards for gratuitous attendant care

the average size of damages awarded for gratuitous attendant care.
Wrongs Act provisions
The tort law changes introduced in Victoria in the early 2000s imposed limits on
damages for gratuitous attendant care. In 2003, the second reading speech 3 noted
that:
The purpose of limiting the power of the court to award damages [for
gratuitous attendant care] is to limit excessive awards in these cases,
particularly having regard to the fact that the plaintiff suffers no actual
financial loss as the services are provided gratuitously. (Victorian
Parliamentary Debates, Legislative Assembly 2003a, 2082)
Section 28IA(1) of the Act provides that damages are only available where:

there is a ‘reasonable need’ for the care services

the need has arisen solely because of the claimed injury and the services would not
be provided to the claimant but for the injury
The Wrongs Act also limits damages for gratuitous attendant care by precluding them if
a certain threshold of care is not met. However, section 28IA(2) sets out this condition in
different terms than those described by the then Premier (box 6.1), whereby no
damages may be awarded if the services are provided, or are to be provided:
2
After Griffiths v Kerkemeyer (1977) 139 CLR 161.
3
Wrongs and Limitation of Actions Acts (Insurance Reform) Bill 2003.
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(a) for less than six hours per week; and
(b) for less than six months.
Section 28IB also places a cap on damages that can be awarded for gratuitous
attendant care, based on Victorian average weekly earnings (AWE) (or a pro-rata
amount where services are provided for less than 40 hours per week).
Court decisions
In Alcoa Portland Aluminium Pty Ltd v Victorian WorkCover Authority (2007) 18 VR 146
(‘Alcoa v VWA’), the Court of Appeal held that s 28IA only precluded damages for
gratuitous attendant care that was required for less than six hours per week and for less
than six months (box 6.1)
The effect of Alcoa v VWA is that the thresholds for eligibility operate alternatively rather
than cumulatively, in which case a plaintiff would only be eligible where the two
conditions are applied concurrently, that is, the care is required for six hours or more per
week and for a period of six months or more.
Similar judgments have been made in New South Wales (NSW) in the case of Harrison v
Melhem (2008) 72 NSWLR 380 (‘Harrison v Melhem’), and in Queensland in the case of
Grice v State of Queensland (2006) 1 Qd R 222. In 2008, in response to the decision in
Harrison v Melhem, the NSW Parliament amended personal injury legislation to clarify:
… that damages are to be awarded for gratuitous attendant care services
only if the services are provided (or to be provided) for at least 6 hours per
week and for at least 6 consecutive months. The amendment overcomes
the effect of the Court of Appeal decision in Harrison v Melhem. (NSW
Parliament 2008)
Box 6.1
The implications of Alcoa v VWA
In Alcoa v VWA, Alcoa argued that it was not necessary for both conditions of
s 28IA(2) to be satisfied to preclude a claim. That is, Alcoa affirmed that the
conditions should be read as alternatives, so that if either paragraph (a) or (b) were
satisfied the claim would be precluded. Conversely, the Victorian WorkCover
Authority argued that the conditions should be read cumulatively, given that the
‘ordinary and natural meaning’ of s 28IA(2) did not allow for an alternative reading
of ‘and’ as ‘or’ (Alcoa’s position). Rather ‘and’ should be taken, consistent with its
ordinary meaning, to require the sub-section to be read cumulatively.
Alcoa argued in response that the true meaning of s 28IA was not its literal meaning
but was to be found in the extrinsic materials, namely the Ipp report and the Second
Reading Speech.
The Victorian Supreme Court of Appeal found that the plain and literal meaning of
‘and’ prevails against any indication or expression of a contrary intention of extrinsic
materials. The Court also did not accept that the words of a Minister could
determine the meaning of a statute. Chernov JA said that the fact that the Premier
‘mis-described the operation of the provision and erroneously assumed that it was
reflecting the … recommendation of the Ipp report is not to the point. Rather ‘what
matters in the end is the language of Parliament’.
The implications of the decision were that if a plaintiff requires care for at least six
hours per week or for at least six months, his or her claim will not be precluded.
Source: Commission analysis based on ‘Alcoa v VWA’.
OTHER PERSONAL INJURY DAMAGES ISSUES
83
Relevant provisions in other Victorian personal injury Acts
Both the Accident Compensation and Transport Accident Acts exclude common law
damages for gratuitous attendant care. However, these Acts also provide for a no-fault
system of ‘medical and like benefits’, which includes provision for costs of care by
others. The Commission understands these statutory benefits are generally accessed by
eligible plaintiffs prior to seeking common law damages. The limitations on these
benefits are also substantially different from the limitations on gratuitous attendant care
under the Wrongs Act. For example, under s 60 of the Transport Accident Act, rather
than being provided for gratuitous services, benefits are only provided where a cost has
been incurred for a home service; and, unlike the Wrongs Act, services must be
performed by an ‘authorised person’.
6.2.1
Key issues
Participants raised several issues concerning the limitations on gratuitous attendant
care, including:

the need for additional restrictions due to a perceived increase in speculative
claims for gratuitous attendant care

the need for the existing threshold and caps to restrict small claims for care services

inequities for family members who care for catastrophically injured persons

whether the time thresholds should operate alternatively or cumulatively (box 6.2).
There is limited publicly available information on which to assess these issues. The
Commission was, for example, unable to identify data on the number or size of awards
for gratuitous attendant care under the Wrongs Act. It is likely, however, that such
damages represent a significant component of damages for those claimants with
severe injuries. The Victorian Managed Insurance Authority (VMIA) noted that damages
for future care costs — which include both attendant and nursing care — comprise a
large component of medical indemnity claims costs for catastrophic injury claims. For
example, typically in catastrophic medical indemnity claims, the claim made for future
care costs can be equivalent to a third of the total damages claimed (VMIA 2013). The
Ipp report cited evidence that damages for gratuitous attendant care components
represent ‘about 25 per cent of the total award in claims for more than $500 000’
(Negligence Review Panel 2002, 200).
The Commission notes that the National Disability Insurance Scheme (NDIS) and the
National Injury Insurance Scheme may impact on the award of damages for gratuitous
attendant care for some persons (chapter 2). Given that the NDIS is currently not due
for full rollout in Victoria until July 2019, and the lack of certainty about how both of
these schemes will operate, the Commission has not taken into account the potential
impacts of these schemes in its analysis.
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Box 6.2
Participant views on gratuitous attendant care
The Municipal Association of Victoria (MAV) submitted that in its experience, ‘claims
for these damages are becoming more and more speculative and sizable’
(sub. 12, 15). The MAV argued that damages for gratuitous attendant care should
be excluded under the Wrongs Act, or alternatively, access to such damages
should be restricted to ‘the most severe cases of catastrophic injuries such as
asbestos claims, quadriplegia, paraplegia and severe brain damage’ (sub. 12, 17).
The Australian Lawyers Alliance (ALA) submitted that the cap on damages for
gratuitous attendant care by others ‘unfairly disadvantages the families of
catastrophically injured claimants, many of whom require 24 hour care, 7 days per
week’ (sub. 9, 13-14). The ALA thus argued that the ‘cap on recovery for gratuitous
care should be removed for claimants who require care for not less than 40 hours
per week’, and that such an amendment would ‘only affect a small class of the
most severely injured claimants: those most in need of care and support’
(sub. 9, 14).
The Law Institute of Victoria submitted that the inquiry should clarify that the time
thresholds are alternative not cumulative, in order to provide equitable outcomes
for persons injured for less than six months but requiring extensive periods of care or
periods of long term but low care needs (sub. 13, 9). In contrast, Avant Mutual
Group Limited supported cumulative thresholds to restrict small claims for care
services — such that services be required for six hours per week and for not less than
six months — to restrict small claims for care services. Avant argued that ‘in many
cases the costs of investigating the care claim is likely to outweigh the value of the
potential damages.’ (sub. 16, 4).
Source: Submissions to the inquiry.
6.2.2
Options
To deal with the issues raised by participants, the Commission examined three options:
(1) Restricting access to damages for gratuitous attendant care to the most severe
cases of catastrophic injuries.
(2) Removing the cap on gratuitous attendant care for catastrophically injured
claimants.
(3) Adopting the NSW approach, such that damages for gratuitous attendant care will
be allowed if the care has been provided, or is likely to be provided, for at least
six hours per week and for at least six consecutive months. That is, cumulative rather
than alternative operation of the thresholds.
6.2.3
Assessment of options
Consistency with the underlying objectives of tort law reform
The available evidence suggests that the original intention of limitations on gratuitous
attendant care was to:

minimise transaction costs associated with smaller claims

permit access to damages for gratuitous attendant care for injured persons who
can demonstrate need arising from their injuries
OTHER PERSONAL INJURY DAMAGES ISSUES
85

place a cap on the amount of gratuitous attendant care that can be awarded
based on AWE, to facilitate access to affordable public liability and professional
indemnity insurance (Negligence Review Panel 2002; Victorian Parliament 2003a).
The Ipp report proposed that the thresholds for gratuitous attendant care operate
cumulatively, so that eligibility depends on care being ‘provided for more than six hours
per week and for more than six consecutive months’ (Negligence Review Panel 2002,
205). NSW, Queensland, Northern Territory and Tasmania have also adopted the Ipp
report’s cumulative approach.
Based on these considerations, option 3 (introducing a cumulative rather than
alternative operation of the thresholds) would appear to be consistent with both the
original intent of tort law changes, and the approach adopted in other jurisdictions.
Equity
All of the options for addressing concerns about the limitations on gratuitous attendant
care would affect equity in one way or another.
Horizontal equity requires similar levels of compensation for injuries of similar severity or
care needs (chapter 1). The existing thresholds mean that persons with similar (but not
identical) care needs, are treated differently. For example, one person with broken
wrists may require care for five months and for five hours, whereas another person with
a similar injury requires care for five months and six hours. Under the current test, the
former would not be eligible for damages, while the latter would be.
This inequity would be reinforced by moving to option 1 or option 3, as even more
plaintiffs would be ineligible.

Under option 1, a plaintiff can meet both tests and still be ineligible for
compensation because their injury is not severe.

Under option 3, for example, a plaintiff requiring care for six hours a week for seven
months would remain eligible. However, a plaintiff requiring care for seven hours a
week for five months, or five hours a week for seven months would no longer be
eligible.
Another horizontal equity consideration is consistency with the provisions of the other
Victorian personal injury Acts. Given the other Acts provide for statutory benefits for care
— and exclude access to common law damages — comparison across the Acts are of
limited value.
Vertical equity requires that persons with more severe injuries should receive higher
levels of compensation than less severe ones (chapter 1). Option 2 would improve
vertical equity by providing additional benefits to catastrophically injured persons, if the
cap was undercompensating for their needs for gratuitous care. The other options
would not impact vertical equity, given that those with more severe injuries would
continue to receive higher levels of compensation.
Due to the lack of available information on damages for gratuitous attendant care the
Commission has been unable to assess the magnitude of the equity effects of the
options.
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Impact on price and availability of public liability and professional
indemnity insurance
As noted, damages awarded for gratuitous attendant care potentially comprise a
significant proportion of claims costs and thus changes in the limitations have the
potential to impact on the affordability and availability of public liability and
professional indemnity insurance.
Option 1 (restricting access to severe injuries) would see access to damages restricted
to a small group of plaintiffs. In the first instance, this would reduce transaction costs
and place downward pressure on insurance premiums. However, those persons denied
access to damages for gratuitous attendant care may have a strong incentive to
retain professional carers rather than family members to provide the services, perhaps
leading to an increase in total damages awarded, and thus insurance premiums
(Negligence Review Panel 2002, 201).
Option 2 (removing the cap for catastrophic injuries) would result in additional benefits
to a small group of plaintiffs. The Productivity Commission has reported that around
1000 people are catastrophically injured across Australia each year, with 11 per cent
arising from medical incidents and 32 per cent from general injuries (PC 2011, 793).
Assuming uniform distribution of injuries across Australia, this suggests around 250 people
are catastrophically injured in Victoria, with about 40 per cent (or around 100) people
suffering medical and general injuries — which would be likely to be covered by the
Wrongs Act. If each of those people is assumed to have been injured as a result of the
negligence of another and received additional (uncapped) damages for gratuitous
attendant care of say $100 000, then there would be a $10 million impact on payouts.
Thus, there is the potential for this option to have a significant impact on the price
and/or availability of public liability and professional indemnity insurance.
Option 3 (requiring thresholds to be cumulative) would be likely to result in fewer claims,
as some claimants would be excluded by the cumulative threshold. This would place
some downward pressure on insurance premiums, reduce transaction costs and bring
Victoria into line with most other jurisdictions.
6.2.4
The Commission’s view
The Commission’s preferred option is option 3 (requiring thresholds to be cumulative), as
this option best reflects the original intention of the Ipp report recommendations. The
Commission has not found data on how many people would be affected by this
change, but would expect there would be some downward pressure on insurance
claims and thus premiums.
Of the other options considered:

option 2 presents a risk of an unduly adverse impact on insurance premiums, given
the potential for unlimited damages for gratuitous attendant care for some people

option 1 may provide people denied access to damages for gratuitous attendant
care with a strong incentive to retain professional carers, rather than family
members to provide the services, potentially increasing damages awards. In turn,
this could have a significant impact on insurance premiums.
OTHER PERSONAL INJURY DAMAGES ISSUES
87
6.3
Damages for loss of the capacity to care for
others
Prior to a 2005 High Court of Australia decision (see below), a separate head of
damages for loss of capacity to care for others (family members or dependants) was
available at common law. These damages were paid as compensation for the ‘loss of
capacity, rather than financial loss as such’ (Negligence Review Panel 2002, 205).
Under s 28ID(a) of the Wrongs Act, no damages may be awarded to a claimant for any
loss of the claimant's capacity to provide gratuitous care for others unless the court is
satisfied that the care:

was provided to the claimant's dependants

was being provided for at least six hours per week and for at least six consecutive
months before the injury to which the damages relate.
Alternatively, s 28ID(b) provides that no damages may be awarded unless there is a
reasonable expectation that, but for the injury to which the damages relate, the
gratuitous care would have been provided to the claimant’s dependants:

for at least six hours per week and

for a period of at least six consecutive months.
Section 28IE places a cap on the amount of damages that can be awarded for loss of
capacity to provide gratuitous care. The cap is based on Victorian AWE.4
In the case of CSR Ltd v Eddy (2005) 226 CLR 1 (‘CSR Ltd v Eddy’), the High Court held
that damages for the loss of capacity to care for others (also known as Sullivan v Gordon
damages)5 should not be recoverable as a specific head of damages. The court also
held that this type of damages should be part of an award for non-economic loss,
reflecting the loss of amenity and enjoyment of life the plaintiff had derived from
providing assistance (Hunt 2010, 3). To be eligible for damages for non-economic loss, a
claimant under the Wrongs Act needs to meet the ‘significant injury’ threshold, and any
damages are subject to a cap of around $500 000 (chapters 3 and 4).
6.3.1
Key issues
A number of jurisdictions — NSW, Queensland, South Australia and the Australian
Capital Territory — have enacted statutory provisions to partially restore the common
law right to damages for loss of capacity to care for others (NSW Government 2006, 3).
This reflects the view expressed by the High Court in CSR Ltd v Eddy that the legislature,
rather than the courts, should determine whether and in what circumstances these
damages should be awarded (Queensland Parliamentary Debates 2009, 2607).
4
Section 28IF also provides an exception from s 28ID and s 28IE for injuries resulting from dust related
conditions or from smoking, use of tobacco products or exposure to tobacco smoke.
5
After Sullivan v Gordon (1999) 47 NSWLR 319.
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Participant views
Limited comment was received from participants on the issue of damages for loss of
capacity to care for others.
The Law Institute of Victoria submitted that the Wrongs Act ‘should be amended to
clarify that the intention [of s 28ID] is to partially reinstate ‘Sullivan v Gordon damages’
in cases where the lack of such a head of damage would result in serious inequity to
people injured or killed by negligent acts’ (sub 13, 9). The LIV also reported that its
members encountered this issue only in rare cases (sub. 13, 18).
Similarly, the ALA noted that:
Section 28ID currently assumes the existence of this head of damages …
The legislature sought to confirm the existence of this head of damages, as
it would be unjust for recovery to be forbidden in appropriate cases.
However, a balance was struck by creating a threshold requirement for
recovery. (sub. 9, 14)
Avant Mutual Group Limited supported the removal of s 28ID, noting that:
Section 28ID purports to limit damages that are not available to the plaintiff
at common law. The provision does not create a legal basis for damages
for the loss of capacity to care for others. (sub. 16, 4)
6.3.2
Option
The NSW reforms provide an example of how a limited entitlement to damages for loss
of capacity to care for others could be implemented in the Wrongs Act. These reforms
were designed to ensure that damages are payable in the cases of greatest need,
such as in cases where the claimant was providing significant care — for at least
six hours per week and for six consecutive months — for dependants with a physical or
mental incapacity (NSW Government 2006).
To achieve these objectives, s 15 of the Civil Liability Act 2002 (NSW) imposes limitations
such that:

there is a reasonable expectation that, if the claimant had not been injured, the
claimant would have provided the services for at least six hours per week and for at
least six consecutive months

the claimant’s dependants must not be capable of performing the services
themselves by reason of their age or physical or mental incapacity

the services are needed and that need is reasonable in all the circumstances.
6.3.3
Assessment
Equity
Providing an entitlement to damages for the loss of capacity to care for others would
address a potential inequity in that persons injured through no fault of their own would
be entitled for the loss of their ability to care for family members and others. And if the
damages were targeted to those with the greatest need, vertical equity would also be
improved. The exact impact would depend on how many persons were eligible to
access such damages.
OTHER PERSONAL INJURY DAMAGES ISSUES
89
Consistency with the underlying objectives of the tort law reform
While s 28ID of the Wrongs Act provides limitations on the amount of damages that can
be awarded for loss of capacity to care for others, it does not provide a statutory
entitlement for these damages. There is limited public information about the
Parliament’s view about entitlement to these damages. For example, the second
reading speech for the Wrongs and Other Acts (Law of Negligence) Bill stated that:
The purpose of limiting the circumstances in which an award of damages
may be made is to limit the number of claims for loss of capacity to provide
care for others. The purpose of limiting the level of damages that may be
awarded is to prevent excessive awards of damages for these types of
claims. (Victorian Parliamentary Debates, Legislative Assembly 2003b, 1428)
Furthermore, the explanatory memorandum for the Bill noted that:
Section 28ID(b) also provides that the court can award damages for loss of
capacity to provide gratuitous care for others where there is a reasonable
expectation that but for the injury, the gratuitous care would have been
provided to the claimant's dependants for at least 6 hours per week and for a
period of at least 6 consecutive months. (Victorian Parliament 2003b, 15)
Taken together, the Commission considers it reasonable to conclude that the original
intention of the reforms was to limit, but not completely deny, the availability of this type
of damages at common law.
Impacts on the price and/or availability of public liability and
professional indemnity insurance
Only limited information is available to assess likely impacts on insurance premiums. The
LIV cited anecdotal feedback from NSW practitioners (solicitors and counsel) that claims
for this head of damages were not common in the public liability and medical indemnity
areas, and that ‘a flood of claims has not been observed’ (LIV correspondence).
Modelling of the impact on public sector medical indemnity premiums of allowing
damages for the loss of capacity to care for others found that:
These damages could potentially be claimed for very significant periods, for
example lifelong care for a family member that may be disabled. What the
VMIA claims data does show is that future care costs paid to adults in claim
settlements represents approximately 8% of total medical indemnity claim
payments. On the basis of the VMIA modelling the upwards impact on
premiums of introducing a statutory entitlement to Sullivan v Gordon
damages could be in the order of magnitude of 5% to 10%. (VMIA 2013, 17)
While it is difficult to extrapolate these results to the broader public liability and medical
indemnity insurance markets, the findings suggest that allowing damages for the loss of
capacity to care for others could place significant upward pressure on insurance
premiums.
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6.3.4
The Commission’s view
The Commission considers there is a prima facie case to provide a limited entitlement to
damages for loss of capacity to care for others, given the original intention of the
reforms was to limit, but not completely deny, access to this type of damages. The NSW
approach would appear to be a reasonable means of ensuring that this type of
damages would be restricted to those most in need. However, the Commission does
not favour implementing this option at this time, given uncertainty about the likely
impacts on insurance premiums. The Commission seeks further information from
participants about the likely impact of this option.
Information
request
What are the likely impacts on the price and availability of public
liability and professional indemnity insurance of adopting the NSW
approach to provide a limited entitlement to damages for loss of
capacity to care for others?
6.4
Inconsistency arising from the interaction of
personal injury Acts
6.4.1
Context
The Commission was advised of a particular inconsistency arising from the interaction of
the Wrongs Act and the Transport Accident Act. This arose from the case of Hynes v
Hynes (2007) 15 VR 475 (‘Hynes v Hynes’). In this case, the plaintiff brought a common
law claim against the defendant for negligently removing the cap from the overheated
radiator of his car, allowing boiling water to suddenly erupt and injure the plaintiff.
Part VB of the Wrongs Act provides that some awards of personal injury damages are
not subject to caps and discounts, including an award to which Part 3, 6 or 10 of the
Transport Accident Act applies (s 28C(2)(b)). In addition, Part VBA provides that the
Wrongs Act thresholds for recovery of damages for non-economic loss do not apply to
certain claims, and these also include claims to which Part 3, 6 or 10 of the Transport
Accident Act applies (s 28LC(2)(b)).
6.4.2
Key issues
In Hynes v Hynes, the Court of Appeal held that the defendant was negligent and that
the plaintiff’s claim for damages was not restricted by the thresholds, caps and discounts
in the Wrongs Act by virtue of the exceptions in ss 28C and s 28LC. The defendant was
indemnified by the TAC under Part 6 of the Transport Accident Act, which indemnifies
owners and drivers of Victorian registered vehicles in respect of liability arising from use of
the indemnified vehicle (s 94).
This decision means that in situations where a person is injured through the negligent use
of a motor vehicle the TAC is potentially liable to indemnify claimants for: small claims
given that there is no threshold; and uncapped claims, however large. In addition,
awards are not discounted as they are in other cases brought under the Wrongs Act
(chapter 5).
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91
6.4.3
Option
The option for reform would be to amend the Wrongs Act to ensure that claims made
under s 94 of the Transport Accident Act are subject to the limitations of the Act.
6.4.4
The Commission’s view
The decision in Hynes v Hynes appears to be inconsistent with the underlying intention
of tort law changes to restrict access to common law rights for injured persons for
personal injury incidents covered by the Wrongs Act. The Commission has also not
found any policy reasons (for example, within Victorian Parliamentary debates or the
Ipp report) to support an exclusion for these types of TAC claims for people who suffer
personal injuries or death as a result of another person’s negligent use of a motor
vehicle. The Commission is also not aware of any comparable liability in other Australian
jurisdictions.
In addition, from an equity perspective, the option for reform would improve horizontal
equity, as it would mean that a person injured in incidents arising out of the use of a
motor vehicle would no longer have access to uncapped damages. Rather, they
would have the same rights as other Wrongs Act claimants.
6.5
Medical Panels processes
Medical Panels are constituted pursuant to the Accident Compensation Act and the
Wrongs Act. Medical Panels are a key part of Wrongs Act pre-litigation procedures that
enable claimants and respondents to determine whether the significant injury threshold
is met (chapter 3). Wrongs Act referrals to Medical Panels are made by respondents
after being served with a Certificate of Assessment by a claimant (or a claimant’s
representative).
Figure 6.1 shows a stylised representation of the Medical Panels process.
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ADJUSTING THE BALANCE: INQUIRY INTO ASPECTS OF THE WRONGS ACT 1958
Stylised representation of the Medical Panels
process
Claimant serves statement of
claim on respondent.
To support claim for non-economic loss,
claimant provides prescribed
information and Certificate of
Assessment.
Respondent takes decision to
either:
(a) Accept Certificate of
Assessment or
(b) Refer ‘medical question’ to
Medical Panel.
Respondent has 60 days in which to
respond to claimant. Respondent can
request more information from
claimant within the 60 days.
Where (b) occurs, respondent
provides prescribed information,
copy of Certificate of Assessment
and medical question to the
Medical Panels.
Medical Panels require the medical
question to be defined as ‘does the
degree of impairment resulting from the
injury to the claimant alleged in the
claim satisfy the threshold level?’
(s 28LB).
Convenor of Medical Panels
decides whether to convene a
Panel based on information
provided in referral, including the
medical question.
Convenor may request:

respondent to amend medical
question to comply with s 28LB

further documentation from the
respondent (for example, medical
records).
If Medical Panel is convened, the
Panel considers relevant medical
information, including claimant’s
medical history, to determine the
incremental impairment. Medical
Panel must disregard unrelated
injuries or causes.
Medical Panel may ask claimant to
supply all documents in their possession
that relate to the medical question;
meet and answer questions; and
submit to a medical examination.
Medical Panel makes
determination on whether the
injury meets the ‘significant injury’
test.
Source: Commission analysis.
OTHER PERSONAL INJURY DAMAGES ISSUES
93
6.5.1
Number of Wrongs Act referrals
From 2010–11 to 2012–13, the Medical Panels received 1377 Wrongs Act referrals. Of
these referrals, 731 or around 55 per cent were categorised as ‘slips/trips and fall’, while
315 or around 25 per cent were medical-related claims for ‘failed or injurious treatment
by practitioner or consultant’ (table 6.1).
Wrongs Act referrals by type of event: 2010-11 to
2012-13
Type of event
Number
Percentage of all
events (%)
Slip/trip and fall
731
56
Failed or injurious treatment by practitioner
or consultant
315
24
Impact by object
56
4
Care/custody/control
55
4
Traumatic event, witness or exposed to
39
3
Physical assault
27
2
Sport/recreation
19
1
Faulty product
15
1
Fire
14
1
Fall from height
11
1
Collapse of building/structure
10
1
Discrimination/harassment
10
1
Notes:
A number of other categories had less than 10 referrals: abuse/molestation; accidental breakage;
animal bite/attack; dog bite/attack; electric shock; environmental contamination or pollution;
equipment breakdown; explosion and/or vibration; exposure to or contact with substance; faulty
workmanship; impact by animal; impact or damage by vehicle; lifting; carrying or putting down
objects; long term exposure to sound or noise; machinery use; negligent advice; other causes; other
contamination; repetitive/overuse injury; subsidence/landslide; water. The following categories had
zero referrals: asbestos; defamation/slander; excavation/drilling damage; exposure to sudden sound
or noise; lease liabilities; mould; other financial loss; rusting/oxidation/discolouring; spray drift; trapped
by machinery or equipment; weakening and/or removal of supports; welding; worker to worker injury.
Source: Medical Panels correspondence.
6.5.2
Key issues
Participants raised a number of issues with the Medical Panels process. For example, the
MAV invited the Commission to consider whether the Medical Panels process ‘allows for
the best decision to be made … [as] the current process does not ensure that the
Medical Panel has all the relevant material before it to assist in its decision-making’
(sub. 12, 14).
Norton Rose Fulbright and Wotton Kearney identified problems in relation to:

the requirement for a claimant to provide prescribed information to a respondent

the timing of Certificates of Assessment issued by claimants to respondents

whether a Certificate of Assessment can bind multiple respondents (sub. 8; sub. 18).
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ADJUSTING THE BALANCE: INQUIRY INTO ASPECTS OF THE WRONGS ACT 1958
Avant Mutual Group Limited also advocated that the Certificate of Assessment should:
… be served before or at the time of serving the statement of claim, so as
to give certainty to the defendants as to what head of damage the plaintiff
will pursue. (sub. 15, 3)
The LIV raised the issue of whether Medical Panels should be required to provide
reasons for its decisions, consistent with the provisions of the Accident Compensation
Act (sub. 13, 19).
6.5.3
The Commission’s view
The terms of reference require that in making recommendations relating to personal
injury damages, the Commission is to have regard to the possible impacts on Medical
Panels and the courts. These impacts are relevant for provisions governing access to
damages for non-economic loss. The Commission notes that in the absence of any
changes to these provisions, the workload of Medical Panels is on an upward trend,
and that additional claims could exacerbate this trend (chapter 3).
Based on the processes outlined above, the Commission understands that in order to
make an informed decision about whether a significant injury exists, the Medical Panels
process relies upon:

An initial assessment of the injury by an approved medical practitioner of whether
the injury meets the threshold test. This is provided in the form of the Certificate of
Assessment.

The prescribed information provided by the claimant and the respondent related
to the injury, including the description of the incident and details of the injury the
claimant alleges to have suffered as a result of the incident.

Complete and accurate medical information relevant to the claim, especially
regarding unrelated or pre-existing injuries, including medical records, clinical and
medical
reports,
reports
of
relevant
tests
and
imaging,
court
documents/Statements of Claim and submissions.

A medical question defined in a manner that allows the Panel to assess the
incremental impairment from the injury, that is, to disregard unrelated (pre-existing)
injuries or causes.
The Commission identified a number of possible actions that could improve the
operation of the Medical Panels process by reducing disputes about the referral and
the problems of missing and incomplete information in referrals:
(1) Placing the requirement on the claimant to identify all claimed injuries.
(2) Requiring the respondent — when making a referral of the medical question — to
base its referral on the information provided by the claimant regarding the nature
of the claim and injury. The respondent would still be able to make a submission to
the Panel about the claim.
(3) Codifying the decision in Mitchell v Malios [2013] VSC 480, such that the Medical
Panels would only be required to make a determination about the injuries assessed
in the Certificate of Assessment.
These proposed actions may be a relatively low cost means of improving the efficiency
and equity of the Panels process. Wider policy and legal questions, such as the
interaction of the Panels process with court proceedings, including the timing of the
OTHER PERSONAL INJURY DAMAGES ISSUES
95
serving of Certificates of Assessments, and whether the Panels should provide reasons
for their decisions, are outside the scope of the terms of reference.
Information
request
96
What if any, further actions need to be considered to assist the
Medical Panels to make timely and accurate decisions? What
would be the costs and benefits of these actions?
ADJUSTING THE BALANCE: INQUIRY INTO ASPECTS OF THE WRONGS ACT 1958