Common law payments
Common law payments or damages are a monetary payment made to compensate for the losses sustained as a consequence of a work-related injury.
WorkCover Queensland is required to make these payments if an injured worker can prove their employer has breached their duty of care to them to provide a safe, documented and supervised system of work. This is often referred to as negligence and/or a breach of an implied term in any contract of employment to provide a safe system of work.
The Workers' Compensation and Rehabilitation Act 2003 sets out eligibility requirements and time frames for the common law claim process. WorkCover aims to achieve settlements or key milestones within the nominated time frames.
WorkCover is committed to managing common law claims in accordance with model litigant principles. Our philosophy of making our best offer early helps us achieve better outcomes for all of our customers.
Components that make up a damages payment
Damages are calculated by considering where an injured worker has suffered loss as a result of the injury. These include:
- pain and suffering
- past wages or economic loss including interest and loss of superannuation contributions
- future wages or economic loss including future loss of superannuation contributions
- past and future medical, hospital, pharmaceutical, rehabilitation, domestic assistance and care expenses.
Permanent impairment and future economic loss
If a claimant proves they have suffered a permanent impairment from a workplace injury, damages will generally be given to compensate for any potential future loss of earnings as a result of the injury. This is referred to as an award for future economic loss. This is usually the largest component of any damages assessment and some damages for economic loss can be very large as they are calculated from date of accident up to retirement.
On the other hand, if the claimant has been able to resume their pre-injury role, with no ongoing loss of income at the time the claim is finalised, the damages for future economic loss may simply be a 'global amount'. The global amount is awarded to compensate for general disadvantage on the open labour market should the claimant be required to seek alternative employment.
Where the claimant is suffering an ongoing reduction of income, from either having to work in a role with a lower salary or due to an inability to perform full hours or overtime, damages may be awarded for future economic loss. This compensates them for the ongoing loss and includes a global amount for general disadvantage on the open labour market.
In some cases the medical experts may consider that, while a claimant can currently perform a pre-injury role, due to their injury this will not be possible through to normal retirement age. In this scenario, damages may be awarded for a complete loss of earning capacity for a number of years prior to retirement.
The claimant is also entitled to be compensated for the anticipated loss of employer funded superannuation contributions associated with the future economic loss.
Ongoing medical treatment
If the medical evidence indicates the claimant will require ongoing medical treatment, future surgery, therapies, pharmaceutical items (such as pain medication) and associated travelling expenses, damages will be awarded to cover these ongoing expenses.
There are some limited circumstances in which a claimant can be compensated for future care. Any such entitlement will be considered on an individual case basis. The claimant will be required to refund any Centrelink benefits, Medicare subsidies and payments already made by WorkCover for medical treatment or lost wages from the damages they receive.
How damages benefits are calculated
When calculating the amount that a damages claim is worth the following evidence will be considered:
- worker's age
- where the worker lives and works
- retirement age
- past and current work history
- medical records
- independent medical examinations and reports obtained by WorkCover and worker's solicitor during the statutory and common law claims
- Medicare and Pharmaceutical Benefits Scheme (PBS) records
- tax and financial documents including copies of PAYG Summaries, previous tax returns and Australian Tax Office Notice of Assessments
- Centrelink records
- employer records including payroll and personnel file information
- tax invoices and receipts for expenses incurred as a consequence of the work related injury.
WorkCover will also take into consideration previous damages amounts paid on common law cases that are similar in nature to the current common law claim, for example age, work type, location, type and extent of injury etc.
WorkCover will attempt to resolve the claim with the injured worker and their solicitor as part of the pre-court process which is set out in the legislation. WorkCover will aim to do this informally as this process is more cost-effective for the parties. If this cannot be achieved, a more formal process called a ‘settlement conference’ will need to be undertaken.
If a resolution of the claim cannot be achieved at any of the above stages, then the matter will proceed to litigation and potentially to court.
How are common law damages benefits paid?
Your solicitor will inform you:
- when the claim has settled and the amount of the settlement
- the legal fees and claim expenses incurred in managing the claim
- whether we will be paying any costs in addition to the settlement amount.
Before we can pay the settlement to your solicitors' trust account (held on your behalf), we need to:
- obtain a signed discharge from you, and
- work out the exact amount of the settlement payment.
You'll need to sign a discharge document to confirm the settlement. By signing the discharge, you acknowledge you have no further entitlement to any monies from WorkCover or the employer for the work-related injuries. Your solicitor will explain the details of the discharge to you before they sign it.
We are required by law to deduct any amounts (also known as refunds) that are owed to the following organisations:
- Health Insurance Commission (HIC) or Medicare
- Commonwealth Rehabilitation Service (CRS)
- Child Support Agency (CSA)
WorkCover must obtain these notices confirming the amounts owing—even if we are sure there'll be no refund owing. Your solicitor may also obtain these notices.
We also deduct any outstanding monies owed to WorkCover due to overpayments made during any previous statutory claims, such as overpayment of wages or reimbursement of medical expenses.
Once we receive the notices, we deduct any amounts from the settlement total and forward refund monies direct to the relevant organisations.
We then forward the balance as a settlement payment to the solicitors' trust account.
A claimant can only receive one award for each accident or event which caused the injury. If they spend the money, they can't then claim again for that injury.
The entitlement to claim back additional costs depends on the degree of permanent impairment (DPI) as assessed by WorkCover. The amount that can be claimed is determined by legislation. Anything above the specified amount will need to be paid by the worker to their solicitor. This amount will be included in the settlement payment to the worker's solicitors.
The worker's solicitors will then deduct their fees and costs, before paying the remainder of the settlement payment to the worker.
- Last updated
- 14 June 2019