On 12 November 2015, the Victorian Parliament passed the Wrongs Amendment Act 2015 (the Amending Act). As its name suggests, the Amending Act is designed to amend the Wrongs Act 1958 (Vic) (the Act).
Organisations regularly faced with public liability and common law negligence claims are likely to be affected by the following amendments to the Act:
Amendment to the ‘Threshold Level’ for Spinal and Psychiatric injuries
Claimants who suffer spinal injuries assessed at or equal to 5% impairment and claimants who suffer psychiatric injuries that are assessed at or equal to 10% impairment will be eligible to access damages for non-economic loss.
Amendment to increase to maximum amount of damages for non-economic loss
The maximum amount of damages that may be awarded to a claimant for non-economic loss will be increased from $497,000 to $577,000, which will align with the cap under the Accident Compensation Act 1985 (Vic).
Amendment to alter the operation of the cap on damages for loss of earnings
Previously, a high income earner could be awarded no damages for loss of earnings because his or her post-injury earnings were still in excess of three times the average weekly earnings notwithstanding he or she had suffered a loss of earnings by reason of the injury giving rise to his or her claim – see Tuohey v Freemasons Hospital  VSCA80.
The Amending Act addresses this issue by noting no amount is disregarded and clarifying the maximum amount which can be awarded is three times the average minimum weekly earnings.
As such, a high income earner who suffers a loss but still earns more than three times the average minimum weekly wage at the time of the assessment will be awarded up to three times the average minimum weekly wage in damages for loss of earnings.
The Victorian Competition and Efficiency Commission suggestedthat this should not cause an increase in premiums given only 2.5% ofVictorians earn three times the average weekly earnings.
Insertion of a right to damages for claimants who provide gratuitous care to dependants
Claimants who cared for others before the injury giving rise to the claim will now receive a limited entitlement to damages by reason of his or her loss of capacity to care for others.
A claimant will not be entitled to compensation under this head of damage unless the claimant satisfies the Court:
- The claimant provided care to his or her dependants before the liability in respect of which the claim is made arose; and
- The claimant’s dependants were not, or will not be, capable of providing the care themselves because of their age or their physical or mental incapacity; and
- 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 six hours per week and for a period of at least six consecutive months; and
- There will be a need for the care to be provided for those hours per week and those consecutive periods of time and the need is reasonable in all the circumstances.
It should be noted the Amending Act expresses the applicable threshold as being for both six hours per week and for six consecutive months, and the Explanatory Memorandum which accompanies the Amending Act suggests Parliament intends both elements of the threshold need to be satisfied for a claimant to be entitled to this head of damages.
As such, a claimant who would have provided gratuitous care for six hours per week and for six months will be entitled to damages, but a claimant who would have provided gratuitous care for more than six hours per week but for less than six months or for less than six hours per week but for more than six months will not be entitled to damages – see also Alcoa Portland vVictorian WorkCover Authority  VSCA 210.
What it means for you
The Amending Act creates some important changes and insurers and self-insurers should be aware of those changes when fixing premiums and assessing claims.
Now it is easier to satisfy the threshold which must be met to claim non-economic loss for spinal and psychological injuries and the maximum which can be awarded for non-economic loss for physical and psychological injuries has increased by $80,000.
It is also now possible for high income earners to be awarded some damages for loss of earnings.
Finally, there is now an additional head of damage for the cost or value of care a claimant provided to others before the injury the subject of his or her claim which a claimant may obtain if he or she satisfies the above four prerequisites.
Cameron Roberts | Partner | +61 3 9641 8696 | firstname.lastname@example.org
Samuel Barker | Lawyer | +61 3 9641 8969 | email@example.com