Services

HG Insurance and Risk Alert: Liability for multi-factorial psychiatric injury (Part 2) - 28 April 2014

The plaintiff’s duty to mitigate his or her loss is one founded in common law and echoed in the Workers’ Compensation and Rehabilitation Act 2003 (WCRA), but a failure to do so is rarely pursued by defendants.

In the second Alert of this two-part series, Senior Associate Anna Hendry and Solicitor Abbey Wilkinson consider the hurdles involved in successfully demonstrating a failure to mitigate, using Harris v State of Queensland to illustrate the outcome of such an argument (Part 1 can be viewed here).

Key points

  • A plaintiff has a common law duty to take all reasonable steps to mitigate the loss consequent on any negligence for which a defendant is liable, and the defendant bears the onus of proving that the plaintiff unreasonably failed to mitigate.
  • Section 267 of the WCRA provides:
    • an opportunity for the workers’ compensation insurer to offer to fund appropriate treatment and rehabilitation throughout the statutory and common law claim;
    • statutory recognition of the plaintiff’s common law duty to mitigate; and
    • an opportunity for the insurer/employer to demonstrate failure to mitigate if the plaintiff unreasonably refuses to engage in the treatment and rehabilitation offered.
  • A breach of the duty to mitigate may see damages reduced, in order to allow for the prospect that the proposed mitigating steps would have reduced the plaintiff’s loss.
  • Whether the plaintiff’s failure to undertake the proposed mitigating steps was unreasonable must be determined with reference to:
    • medical evidence regarding the plaintiff’s physical/psychiatric capacity; and
    • any other social/family circumstances peculiar to the plaintiff.
  • If it is not possible to demonstrate that the plaintiff has unreasonably failed to participate in treatment to date, it may still be possible to obtain a discount of future losses on the basis that the plaintiff ought to undergo particular treatment and that an improvement in capacity could be expected within a particular timeframe.

A Working Example: Harris v State of Queensland

The plaintiff, Rosemaree Harris, was employed at the Maryborough Correctional Centre as an administration clerk. In the course of her employment on 30 October 2009, she was accidentally struck from behind by another employee who was pushing a trolley. Ms Harris suffered an injury of ruptured ligaments in her left ankle and alleged a secondary psychiatric injury. Liability for the incident and the physical injury was admitted by the defendant.

The defendant claimed the plaintiff failed to mitigate her loss because she:

  • failed to make reasonable attempts to return to work and, in particular, failed to properly participate in a graduated return to work program arranged by the insurer and the defendant; and
  • unreasonably failed to attend a pain management program and receive appropriate psychiatric treatment which had been offered by the insurer.

Decision

District Court Judge Long SC did not accept the plaintiff’s contention that she was unable to continue in the return to work program due to memory problems, concentration and pain, because that explanation was inconsistent with her failure to raise those concerns with her supervisor at the time.

However, he found that the defendant had failed to establish that the claimant was medically capable of participating in the return to work program, considering the potential effect of her psychiatric injury, which was diagnosed some time after her withdrawal from the program.

The plaintiff’s treating specialist gave evidence that participation in a pain management program would have been beneficial to the plaintiff. Although the insurer offered the plaintiff the opportunity to engage in such a program fairly early in the claim, the Court found that the plaintiff did not reject that offer until February 2013, when she told her occupational therapist that she did not need to be involved in the program.

In considering whether the rejection of that offer was unreasonable, the Court noted the complication of the claimant’s psychiatric injury and the further recent clarification of the plaintiff’s treatment needs during the trial.

While Justice Long did not limit or discount the plaintiff’s loss and damage to date of judgment, he took into account the prospect that the plaintiff might be substantially improved within 12 to 18 months of participating in the relevant treatment, arriving at a global future economic loss assessment of $100,000.00.

For more information, please contact HopgoodGanim’s Insurance and Risk team.

Now in its 40th year and with offices in Brisbane, Perth and a presence on-the-ground in Shanghai, HopgoodGanim offers commercially focused legal advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.