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Insurance and Risk Alert: Court awards injured worker $500,000 for future economic loss despite his higher post accident income - 7 February 2014

Future economic loss is frequently the most significant and controversial of the heads of damages in personal injuries claims.

In this Alert, partner Robert Tidbury and senior associate Anna Hendry outline the factors that may be considered by a Court in awarding a global sum for future economic loss in such circumstances where the plaintiff’s post-injury income exceeds his or her pre-injury income, with reference to the recent Haylett v Hail Creek Coal Pty Ltd decision.

Key take away points

  • Where the plaintiff has returned to work in a higher paid role but risks periods of unemployment, the Court may take into account the higher pay rate in considering the appropriate future economic loss award.
  • Where there is evidence a plaintiff is at risk of periods of unemployment, the Court may take into account the disadvantage to the plaintiff in being required to disclose his or her injury history to prospective employers.
  • Even if the plaintiff has retrained into a new role, he or she may be compensated for the loss of opportunity to work in his or her pre-injury role.

Background

In this quantum-only matter, a 42 year old plaintiff is alleged to have suffered referred pain in his right elbow over a period of time from January 2010 in the course of his employment as a bulldozer driver. Radiological investigations carried out in April 2010 revealed a C6-7 disc protrusion. On 9 August 2010, the plaintiff underwent a C6-7 discectomy and fusion to his neck.

He returned to work with his employer on 20 October 2010 on light duties. He was then retrained by that employer to work as a member of a drill crew at a mine, on a significantly higher weekly income than his pre-injury income. The Court accepted that the plaintiff was able to carry out those duties on a full time basis with some difficulty. The plaintiff remained employed in this alternative role up until the date of judgment.

Reasons

In his decision, Baulch J accepted Dr Cook’s assessment for the plaintiff of a 25 percent whole person impairment over Dr Weidmann’s evidence for the defendant. The parties were in agreement about most of the heads of damage and it was left for the court to make an award for general damages and future economic loss.

In awarding a global sum of $500,000 for future economic loss, Baulch J considered the following factors:

  • If the current trend continued at the mine where the plaintiff was employed, his already high earnings were likely to increase. Therefore, the Court concluded that were the plaintiff to suffer economic loss in the future, such loss would be incurred at a rate of not less than $1,750 net per week, the plaintiff’s higher post-injury income, during any period in which he was employed.
  • Despite acquiring a new skill as a result of retraining by his employer, the plaintiff remained unfit for return to work in his pre-injury role and his preferred role of dragline operator.
  • The plaintiff’s previous employment had always involved physically-orientated work and he must disclose his injury and claim history to any prospective employer, putting him at a very significant disadvantage when competing with able bodied applicants.

With between 23 and 25 years working life remaining, if the plaintiff continued to work for that entire period at his present rate of earnings, his future earnings would have a present value in the order of $1,300,000. When arriving at a global sum of $500,000 for future economic loss, his honour remarked that the amount was slightly less than 40 percent of the plaintiff’s notional earning capacity.

When the other heads of damage agreed by the parties were incorporated into the judgment, the total award made to the plaintiff was $637,872.54.

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