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Project overview: research snapshot

Understanding the Common Law experience

For workers and employers

This summary discusses research from Australia and overseas about compensation and personal injury schemes and litigation. It is not an exhaustive discussion of research in this area but is provided to help further understand some of the issues that have emerged during our interviews and workshops with workers, employers and stakeholders.

Why do workers see a lawyer or pursue damages?

Interviews and workshops with our customers and stakeholders reveal that workers are motivated to pursue a common law claim for a variety of reasons including seeking justice, concern for their future, compensation, anger about being injured or about something that has occurred since then and achieving security for their family’s future. They often see a lawyer to solve a problem that isn’t necessarily about suing their employer.

This is consistent with research in other personal injuries schemes. Research suggests that personal injury problems are often linked to other legal and non-legal problems. Work-related personal injuries problems can have considerable adverse consequences for injured workers including financial strain (30.9%), stress-related illness (22.3%), relationship breakdown (7.8%) and having to move from their home (4.3%) (Coumarelos et al 2017).

Workers consult a range of advisors to help them with their work-related personal injuries problems including lawyers, dispute/complaint handling organisations or processes, government agencies, trade or professional associations, health or welfare practitioners and financial advisors (Coumarelos et al 2017).

We have engaged a research team from Monash University to undertake a literature review to help us understand why people see a lawyer or sue their employer. We will share their findings when they are available.

What is the experience for workers and employers during common law and litigation processes?

Research has found a strong association between poor claimant health and involvement in compensation and legal processes. More than 100 studies have found that people who claim compensation have worse outcomes than those who do not claim compensation (Grant et al 2014). Claimants in a recent study in Victoria, NSW and South Australia reporting finding the following aspects of the claim process were most stressful:

  • Understanding what they needed to do (33.9%)
  • Amount of time the insurer took to deal with the claim (30.4%)
  • Number of medical assessments (26.9%)
  • Amount of compensation received (26.1%)
  • How fair was the insurer (24.8%)
  • Getting the insurer to listen to what you had to say (22.1%)

Researchers also found that the claimants with the most stressful experience had relatively poor long-term recoveries (Grant et al 2014).

While this research related primarily to statutory claims processes, many of these elements occur during the common law experience and our interviews and workshops have confirmed that these are also concerns for some of our workers.

Research suggests that a range of systemic factors might contribute including the adversarial nature of the process, the involvement of lawyers, reliance on subjective symptoms for diagnoses, the need for repeated medical examinations (retelling their story and being questioned about it) and bureaucratic complexity (Grant and Studdert 2009, Lewis 2017). The focus on building a fault case and re-telling it for many years could intensify their suffering and impede their recovery (Pryor 2006) contributing to feelings of isolation, marginalization, disempowerment, insecurity, depression and anxiety (Lewis 2017).

Pending litigation has been found to be a factor that hinders the rehabilitation and return to work process and contributes to mental health issues (Lippel 2007). Studies have considered a range of factors that might contribute to this including:

  • Stigma – people felt disbelieved and guilty
  • An imbalance of power between the parties
  • Access to social support – a positive relationship with a well-informed person they trust (Lippel 2007).

The claimant’s relationship with their lawyer is clearly important however, understanding the psychological impacts and needs of the claimant may be beyond the competence of a lawyer (Pryor 2006).

More positive feelings were associated with an opportunity to have their say and be listened to and believed (Lippel 2007). Some researchers, applying procedural justice theory, suggest that litigation may actually be beneficial as it may give the claimant some validation. Settlements rather than trials (or the opportunity to present their case before an independent decision maker) may not achieve these therapeutic benefits (Shuman 2000). In our scheme less than 1% of all common law claims proceed to trial.

In some cases, workers and employers reported to us concerns about the negotiation and conference/mediation process, feeling they were disempowered and uninvolved in what is one of the most important decisions they might make. While lawyers reported to us that collegiate relationships helped them have open and conciliatory communication, some workers and employers felt distrustful when they observed this. This has also been observed by mediators: “what do you think an injured plaintiff and their family feel, when they arrive at the mediation premises and see the collegiate atmosphere as the lawyers on both sides chat with the mediator and help themselves to coffee before the formalities commence” (Stott 2017 page 19).

Delay and uncertainty about what was happening and how long it would take has also emerged in our interviews and workshops as an issue for both workers and employers. Research suggests that delay may exacerbate harm to both claimants and defendants although “the issue is not so much speed as it is the avoidance of unnecessary delay” (Shuman 2000 page 895). In the case of claims that are resolved in our scheme during the pre-proceedings process, on average they are lodged more than 2 years after the injury and then resolve within 2.5 years of the injury. Claims that are litigated take more than 4 years on average from the injury to resolve.

Research from other schemes and insights from our interviews and workshops point to opportunities to reduce the stressfulness of the common law experience and the impact on the parties’ health (especially workers’ health) through:

  • Reducing the sense of it being adversarial
  • Improving communication and information so that the process is more transparent and all parties feel more supported, involved, informed and empowered
  • Greater opportunity for workers and employers to feel they have been heard and listened to
  • Reviewing the process to eliminate unnecessary delays and steps that might adversely impact the parties’ health including considering the role of medical examinations
  • Considering how we manage claims for psychiatric conditions

What do workers want to achieve from common law?

Interviews and workshops with workers, employers and stakeholders consistently reported that workers were seeking more from common law than payment of damages. They reported that workers were often seeking justice either for being injured or events that occurred after that, help with return to work and recovery and/or securing their financial future. In many cases, workers reported that these needs or expectations weren’t ultimately met.

In our scheme, the parties are focused on agreeing on a damages settlement. More than 99% of all cases are ultimately resolved with the terms only including a damages payment. Many workers reported that the damages settlement did not meet their expectations.

Researchers suggest that there may be other outcomes that could better meet the needs of claimants. They “may benefit greatly from an opportunity to tell their story of loss, to receive an explanation or apology, and to learn about changes that have been made to avoid harm to other in the future” (Rundle 2017).

In relation to apologies, researchers suggest they can help people feel greater respect and dignity, dissipate anger and address feelings of power imbalances (Vines 2015). They can also change claimants’ perceptions and reactions to harm-causing incidents and settlements (Robbennolt 2013), making them more amenable to settlement (Robbennolt 2006). They need to be “real apologies” and have more impact if they are made by the defendant rather than their lawyer (Vines 2013 and Robennolt 2013).

Section 72A of the Civil Liability Act 2003 does not protect apologies in workers’ compensation matters. There is no similar provision in the Workers’ Compensation and Rehabilitation Act 2003.

Workers also told us they wanted more help with return to work and recovery. 57% of workers are unemployed when they lodge their common law claim. However, only 46% of unemployed common law claimants agree to participate in WorkCover’s return to work program. Agreement to participate is negotiated with the plaintiff lawyer and this participation rate is highly variable across Plaintiff law firms. Only 41% of workers who ultimately complete the program actually return to work before their claim is finalised.

These results point to a significant need to improve both participation rates and the outcomes achieved.

References

C Coumarelos, G Grant and Z Wei, ‘Personal injury problems: new insights from the Legal Australia-Wide Survey’, (2017) 22 Justice Issues (Law and Justice Foundation of NSW).

G Grant, M O’Donnell, M Spittal, M Creamer and D Studdert, ‘Relationship between stressfulness of claiming for injury compensation and long-term recovery: a prospective cohort study’, (2014) 71(4) JAMA Psychiatry 446.

G Grant and D Studdert, ‘Poisoned Chalice? A critical analysis of the evidence linking personal injury compensation processes with adverse health outcomes’, (2009) 33(3) Melbourne University Law Review865.

J Lewis, ‘Challenges of managing the injured worker in a compensation scheme: a psychiatric perspective’, (2017) 138 Precedent 14.

K Lippel, ‘Workers describe the effect of the workers’ compensation process on their health: A Quebec study’, (2007) 30 International Journal of Law and Psychiatry 427.

E Pryor, ‘Noneconomic damages, suffering and the role of the plaintiff’s lawyer’, (2006) 55 DePaul Law Review 563.

D Shuman, ‘When time does not heal:understanding the importance of avoiding unnecessary delay in the resolution of tort cases’, (2000) 6(4) Psychology, Public Policy and Law 880.

K Stott, Mediation: understanding what motivates a plaintiff and how to negotiate the best result for your client, 2017.

O Rundle, ‘Are we here to resolve our problem or just to reach a financial settlement?’, (2017) 141 Precedent 12.

P Vines, ‘Apologising for personal injury in law: failing to take account of lessons from psychology in blameworthiness and propensity to sue’, (2015) 22(4) Psychology and Law 624.

J Robbennolt, ‘The effects of negotiated and delegated apologies in settlement negotiation’, (2013) 37(2)Law and Human Behaviour 128.

J Robbennolt, ‘Apologies and settlement levers’, (2006) 3 Journal of Empirical Legal Studies 333.

P Vines, ‘The apology in civil liability: underused and undervalued?’, (2013) 115 Precedent 28.

Civil Liability Act 2003.

Workers’ Compensation and Rehabilitation Act 2003.

Last updated
25 October 2018

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