Work Injury Damages

Part 1

What are ‘Damages’?

A Work Injury Damages claim must be made within 3 years from the date of accident however a Court may grant leave to proceed after 3 years if there is a satisfactory explanation for the delay.

Two limbed test for work injury damages

To claim work injury damages an injured worker must first satisfy the two limbed test for damages:

• Firstly, an injured worker must be able to prove through evidence that their employer was negligent, and that such negligence caused the worker to become injured.
• Secondly, the injured worker will need to get a whole person impairment score equal to, or greater than 15%. An assessment of whole person impairment is conducted by a Doctor who will assess the injuries based on WorkCover guidelines used for the purpose of assessing impairment.

How do I prove my Employer was negligent?

You will need to prove through evidence that the employer was negligent. That negligence must also be a direct cause of your injury. Your lawyer will assist in obtaining the necessary evidence. For example, if your employer fails to provide a safe work place and your employer knew, or ought to have known about hazards in the workplace but decided not to act it is likely that you will be able to establish that your employer was negligence.

Why do I need to have 15% whole person impairment?

The 15% whole person impairment test is in place to stop workers who have experienced minor injuries from suing their employer.

A whole person impairment score of over 15% establishes that you have, and will continue to experience serious impairment.

It is an arbitrary threshold imposed by the Workers compensation Act and many people may only receive say a 12% WPI who have a significant injury however they will be unable to pursue a claim for Work Injury Damages as the WPI is not 15% or more.

Conclusion

If you have been assessed as having a 15% WPI and can demonstrate that your employer was negligent then you are entitled to claim Work Injury Damages. Such damages are only payable in respect of loss of income and loss of superannuation for the past and into the future.

Part 2

The insurer takes over conduct of the claim and acts on behalf of your employer.

Once your Lawyer is satisfied you have obtained 15% whole person impairment (WPI) and can demonstrate negligence (the two limbed test for Work Injury Damages set out in ‘Work Injury Damages Explained Part 1’) your Lawyer will make a claim against your employer. Your Lawyer will also send a copy of this claim to the workers compensation insurer.

The workers compensation insurer is responsible for payment of any compensation (money) not the employer as the employer is covered for your claim by workers compensation.

The process of a work injury damages claim

The insurer is then required to decide if they will accept or decline your claim. The insurer will almost always deny a claim for Work Injury Damages on the basis that the employer was not negligent.

What happens if the insurer continues to dispute my claim?

If your employer declines liability your lawyer will need to prepare a statement detailing your claim, your injuries, your financial loss, and other evidence required to prove your employer was negligent. This statement will also include the amount of compensation you should receive.

This is known as a Pre-Filing Statement.

The insurer replies with a Pre-Filing Defence which sets out the insurer’s evidence and reasons why the claim has been declined.

What happens once the pre-filing documents have been supplied?

Your claim will then be referred to the Workers Compensation Commission, an independent tribunal that will arrange for Mediation of the dispute.

Mediation is an attempt to reach an agreement with the insurer and settle the claim. Usually, around 70% of Work Injury Damages matters resolve at Mediation. If you can reach an agreement the lump sum amount for damages is usually paid within 6-8 weeks.

Any ongoing Workers’ Compensation benefits such as weekly payments or medical expenses will be stopped when the Work Injury Damages payment is made. Once your claim is finalised you cannot return for any further compensation.

If no agreement is reached at Mediation your case will go to the District Court and be heard and determined by a Judge. Going to court can be risky; if you lose your claim, you may be ordered to pay the insurer’s legal costs.

You should always seek the advice of an experienced accredited specialist in personal injury law when claiming Work Injury Damages.

Part 3

There are a number of situations where there can be negligence by an employer and also negligence of a non-employer.

A claim for injury caused by a non-employers negligence is dealt with differently from a claim against an employer.

As already discussed in ‘Work Injury Damages Part 1 and Part 2’, a claim against an employer is known in NSW as a Work Injury Damages claim.

If there is a non-employer involved this is commonly described as a public liability claim.

In these circumstances both an employer and a non-employer i.e. the scaffolding company and the head builder may be liable for breach of their duty of care and be responsible for payment of compensation.

Negligence by a Non-employer

For instance, if the injured worker is a bricklayer it is likely that they will be working under the instruction or alongside a non-employers such as the head builder, scaffolding company, plumbers and the like. To varying degrees the non–employers owe a duty of care to ensure the safety of others whilst on the building site.

Most importantly, the head builder as occupier of the site owes all entrants a duty of care to ensure the premises is safe for access by trade’s people.

If a bricklayer is on site and falls through a faulty scaffold erected by a scaffolding company it is likely that the scaffolding company may have breached their duty of care and will be found negligent. The head builder may also be liable for allowing people onto the scaffold because they should have been aware it was unsafe.

Claim against an Employer

A claim against the employer is a Work Injury Damages claim pursuant to the Workers Compensation Act 1987, you must establish an entitlement to damages using the two limb test we have discussed in Part 1 and 2 of this series of articles.

Damages are payable for loss of income and loss of superannuation only.

Claim against a Non-employer

A claim for damages against a non-employer is pursuant to the Civil Liability Act 2002.

The type of compensation payable under the Civil Liability Act is different to a Work Injury Damages claim.

In addition to the loss of income and loss of superannuation you can also claim lump sum compensation for pain and suffering, future medical treatment and care and assistance. The amount payable in this type of claim is usually 30% to 50% greater than the amount received in a Work Injury Damages claim.

It is important to always consider if such a claim exists as you will receive a lot more compensation if you make a successful claim against a non-employer.

Apportionment of damages

If both an employer and a non-employer are liable to pay compensation to an injured worker the amount payable is apportioned between each based on the application of S.151Z of the Workers Compensation Act. This is a complex section and has been the subject of many decisions of the NSW Court of Appeal.

A Court is required to assess damages payable under a Work Injury Damages claim (say $350,000) and then assess damages payable under the Civil Liability Act (say $650,000).

The Court apportions responsibility between the employer and non-employer based on each party’s responsibility for the injury.

For example if the Court finds each is 50% liable then the Court would award 50% of the amount assessed under Work Injury Damages and 50% of the amount awarded under the Civil Lability Act.

So using the figures above the injured worker would receive $175,000 + $325,000 = $500,000.00.

This is somewhat unfair as the worker receives less money simply because the employer was also negligent. Why shouldn’t an injured worker receive the entire $650,000.00 payable as a result of the non-employers negligence?

These are complex legal issues that should only be dealt with by an accredited specialist in personal injury law.

Part 4

For Work Injury Damages claims against an employer, employees are entitled to claim a lump sum amount for loss of income only.

An injured worker is not entitled to any compensation for pain and suffering, medical expenses, loss of enjoyment of life, or care and assistance.

A Schedule of Damages is used by Lawyers to show how much compensation you are entitled to receive for loss of income by looking at your financial loss from the date of the injury until your statutory retirement age, now age 67.

The insurer is also required to pay an amount for legal costs determined by a scale in the Workers Compensation Regulations.

Loss of income

The amount of financial loss is divided into;

1. Past loss of income – from the date of injury to the date of the settlement conference or Award.
2. Future loss of income – from today into the future until your statutory retirement age.
3. Loss of superannuation – you are also entitled to loss of superannuation based on the gross loss of both past and future loss of income awarded.

Schedule of damages

Name: John Citizen
DOB: 28/02/1970 – Current age 46
Years until retirement (age 67): 21 years

5% multiplier 685.6
(Note a multiplier of 5% is always used when finding the present value of any future loss)

Past Wage Loss
29 September 2002 to 5 November 2005 (162 weeks @ $600 net per week) $97,200.00

Future Wage Loss
$600 net loss p/w x 685.6 less 15% $349,656.00
Note: 15% is usually deducted for the vicissitudes of life

Past loss of Superannuation
11% of past net loss $10,692.00

Future loss of Superannuation
13.5% of net future loss $52,448.00

Final Total: $509,996.00

From any Work Injury Damages claim agreed or resolved as above, any past workers compensation payments received for wages paid must be deducted from the total.

For example Mr Citizen in this example received $400.00 per week in weekly benefits for the past period claimed of 162 weeks so 162 x $400 = $64,800.00 must be deducted and refunded to the Workers Compensation insurer as a claimant cannot receive the same compensation twice.

Damages are only payable against an employer for loss of income including loss of superannuation. Unfortunately no compensation is payable for pain and suffering, future medical treatment or care and assistance.

You can receive these types of compensation if your claim is against a non-employer. Claims against an employer are as a result worth a lot less than claims against non-employers so it is always important to obtain proper legal advice as to your rights.

Part 5

Superannuation

The current rate of compulsory superannuation is 9% on gross loss or 11% on net loss.

In any claim for Work Injury Damages you can include in the calculation of damages your loss of compulsory superannuation payments due to your inability to work.

You must be able to establish that but for the injury you would have been paid compulsory superannuation benefits by your employer. This is due to increase in the future in accordance with Federal Government legislation.

Your lawyer should make sure the proper amount of superannuation is claimed in any Work Injury Damages claim.

The approach to payment of superannuation in Work Injury Damages claims was looked at in the case of Najdovski v Crnojlovic 2008 where it was found that superannuation is payable on the gross loss of income not net loss. The Court adopted an approach of using 11% of the net loss of superannuation to take into account that super is paid on gross loss and also different taxation treatment of such income.

As a result of the increase in superannuation over the coming years the 11% figure applies to super payable at 9%. When assessing future loss of superannuation we need to “gross up” the future loss which means the percentage used depends on the years to retirement and can be between 11.61% and 14.16%.

For example; 5 years to retirement is 11.61%, 10 years is 12.44%, 20 years is 13.44% and 30 years is 13.85% and so on up to 14.16%.