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Injury compensation for Medical Negligence, Public Liability and Other Claims

By Nicholas O’Bryan

In my experience members of the community not familiar with the Law, quite reasonably assume that the Law provides a right to sue and recover damages for injury caused by another’s negligence. Unfortunately, it is not so straight forward.

Different laws for different situations

In Victoria entitlements to compensation and the recovery of damages for personal injury are in part regulated by different legislative schemes. For transport accident injuries (TAC claims) the Transport Accident Act (Vic) 1986 will likely apply.

For injuries arising in the course of employment (WorkCover claims / Worker’s Compensation claims) either the Accident Compensation Act (Vic) 1985 or the Workplace Injury Rehabilitation and Compensation Act (Vic) 2013 will likely apply.

For injuries caused by medical negligence or for public liability claims and some other injury claims the Wrongs Act (Vic) 1958 with its many amendments likely applies. It is this last piece of legislation on which I intend to focus but firstly a brief history.

Changes to the Law

In the late 1990’s and early 2000’s there was much discussion about the increase in cost and availability of public liability and professional indemnity insurance. It was argued by the insurance industry and others that in order to contain costs, law reform was required to restrict rights to common law compensation for injury caused by the negligence of others and to this end following a review of the law each State enacted its own legislation designed to restrict to varying degrees access to compensation.

In Victoria, this resulted in amendments to the Wrongs Act in 2002 and 2003 which, amongst other things, introduced an injury threshold test designed to restrict a person’s access to pain and suffering compensation. The changes mean that aside from some limited exceptions, an injured person cannot be compensated for pain and suffering unless the injury caused by another’s negligence, results in a permanent physical impairment of greater than 5% of the whole person or a primary psychiatric impairment of greater than 10% of the whole person. If this threshold test is satisfied, a person is deemed to have sustained a ‘significant injury’.

How is impairment measured?

The Wrongs Act (‘the Act’) provides that impairment is to be measured using the American Medical Association Guides to the Evaluation of Permanent Impairment (Fourth Edition) (“the Guides”) and in accordance with the Act and regulations made thereunder. In assessing impairment, the Guides require an evaluation as to the permanency of the injury and consideration of defined medical criteria. The effect of the injury on the individual’s lifestyle and in terms of causing pain and suffering is not necessarily relevant in terms of measuring impairment under the Guides.

What does the threshold test mean?

In simple terms if the alleged negligence has not caused a permanent impairment at the required level (aside from limited exceptions) then compensation is not recoverable for pain and suffering against the entity which caused the injury. At times this produces inequities and inconsistencies with respect to entitlements for personal injury claims regulated by the Wrongs Act (typically medical negligence and public liability claims) in comparison to TAC claims or Workcover claims. For example because of the way the Guides measure impairment, many serious spinal injuries result in an impairment rating of 5% and as such miss out on pain and suffering compensation if the injury was caused by medical negligence or in a public liability situation and the Act applies. By contrast a person with the same injury may be entitled to pain and suffering compensation if injured in a car accident or a work accident irrespective of impairment by virtue of a ‘serious injury’ test which takes into account the impact of the injury on a person’s lifestyle.

There will also be cases regulated by the Wrongs Act where the injured person endures considerable and lengthy suffering but ultimately is left with either no or minimal permanent injury. It might be for example that a patient requires treatment and/or surgical procedures which would not have been needed but for the medical negligence of a doctor or hospital. Ultimately, however if the patient was to make a good recovery then there will be no entitlement to common law damages for pain and suffering to compensate for the medical error. The same might apply to a victim of food poisoning arising from eating a meal at a restaurant, or injury caused by dog bite or by defective product or a slip and trip injury caused by another’s negligence. In all of these instances, the right to recover pain and suffering compensation will likely depend on the permanency and severity of the injury.

Compensation for lost income and other expenses

Regardless of the level of impairment, compensation for claims regulated by the Act can still be awarded for loss of earnings, past or future medical expense and certain other types of expense if the loss or expense has been caused or incurred due to the negligent act of another. There are however limits, restrictions and thresholds on the amounts of compensation that can be recovered for these items and in some cases it might not be economical to pursue a claim for a modest sum.

A personal injury lawyer can help

In conclusion, it is important that a personal injury lawyer be fully conversant with the Wrongs Act and its application to various claims including medical negligence, public liability and occupiers liability claims. The lawyer needs to have regard to a client’s particular circumstances and injury. This will ensure realistic advice is given about prospects of successfully recovering compensation without putting the client at risk of incurring unnecessary legal costs.

For further information contact Nicholas O’Bryan on 9200 2533 or by email at nobryan@galballyobryan.com.au.

This information is of a general nature only and will not reflect any changes to the law if made after the date of this article. It should not be relied upon as a substitute for discussing your situation with a qualified legal practitioner.