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Understanding the value of a common law claim

In a common law claim, if the person who lodged the claim (the "claimant") is successful, they will receive an amount of money referred to as an "award of damages". The award takes into account both past and future impacts of their injury.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.

What does an award of damages cover?

The award of damages will take into account:  the nature of the injury and the extent of any resulting permanent impairment  the cost to the claimant of initial and ongoing treatment  the effect of the injury upon past earnings and future earning capacity in some cases, the need for future care with tasks the claimant can no longer perform.  The claimant will receive an amount for pain and suffering. This is determined by the type of injury and the allocation of an injury scale value.

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.

Last updated
15 February 2016

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