Negligence, liability and damages
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Very few claimants 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. Examples of such cases include an industrial accident, a motor vehicle accident, a slip or fall in a public place, or medical treatment gone wrong.
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 then assesses the amount of appropriate damages.
It is important to seek advice from a lawyer or a community legal centre in all cases involving a possible claim for damages for personal injury.
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Claims for personal injury 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 (for monetary limits, see Chapter 1.2: An introduction to the courts).
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).
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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.
Establishing liability
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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.
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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(s) 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 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 does something that a reasonable person would not do, the law states that there has been a breach of the duty of care.
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Establishing that there has been negligence does not necessarily mean that the plaintiff is entitled to damages. The plaintiff must show that there has been an actual injury, not just the mere possibility of injury.
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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 does not need to 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.
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The defence of volenti non fit injuria (consent to the injury) is applicable if the defendant can prove that the plaintiff had full knowledge of the risk of injury to themselves, and had voluntarily assumed or undertaken the liability resulting from that risk.
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.
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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 2019 (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 negligent 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’, below).
Assessing damages
Once the court is satisfied that the defendant has been negligent, it then must proceed to assess damages.
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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) (‘Wrongs Act)’ 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.
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Special damages 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.
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General damages 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.
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Where the injured person has died as a result of the negligence of a defendant, the person’s dependants have their own claim for damages. It is important to note that the dependants are not entitled to any damages for mere grief as a result of the death, but only for damages for the monetary loss that they have suffered, together with any loss of services, such as cooking and cleaning, that the injured person may have provided before. In calculating monetary loss, courts must take into account the financial benefit the dependants would have received from the deceased person had they lived, less certain benefits that they have received arising on the death.
However, there may be a claim for damages for nervous shock caused as a result of the injury to, or death of, another person (see the next section, below).
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If a person (the claimant) suffers serious mental harm, consisting of a recognised psychiatric illness, as a result of an injury to or death of another person (the victim), then there may be a claim for damages for that mental harm. However, the claimant must have witnessed the victim being killed, injured or put into danger at the scene. Alternatively, the claimant must be in a close relationship with the victim; for example, a parent, spouse, partner or child of the victim. Principles of duty of care and foreseeability, as set out at the start of this chapter, are also relevant. Also, there may be other entitlement requirements pursuant to such legislation as the Transport Accident Act 1986 (Vic) (see Chapter 10.2: Transport accident injuries) or the Wrongs Act (see the next section in this chapter).
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If the injured person has no dependants, the deceased’s estate can commence or continue an action for negligence. 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.
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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 depends on the individual facts of each case. The judge or jury 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 five per cent (Wrongs Act s 28I). However, the Transport Accident Act 1986 (Vic) and the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) specify six 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 five per cent or six 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.
Negligence, liability and damages
Chapter: 10.1: Negligence and injury
Contributor: Brian Wright, Reserve Magistrate, Magistrates’ Court of Victoria
Current as of: 1 September 2024
Law Handbook Page: 832
Next Section: Key legislation: Wrongs Act
