Topic 4- Common law damages under Victorian workers’ compensation legislation PDF

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Topic 4: Common Law damages under Victorian workers’ compensation legislation 1

Introduction 1. This topic examines the requirements that a worker must satisfy in order to bring an action for common law damages under the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) and the Accident Compensation Act 1985 (Vic) (the ‘AC Act’). 2. Under these provisions a claimant must first establish that: 2.1. S/he has suffered a compensable injury within the meaning of the legislation and 2.2. Prove that this injury is a ‘serious injury’ within the meaning of the provisions. 3. The effect of a grant of leave is that the plaintiff is entitled to sue for common law damages in respect of their injury in a damages trial.

1.1

Serious Injury: Actions for common law damages under Victorian workers’ compensation legislation

1. If the injury was caused by another person’s negligence or breach of contract (s 318), a plaintiff may sue at common law for: 1.1. Economic (loss of income and medical expenses) and 1.2. Non-economic loss (pain and suffering) 2. However, the Acts only allow a worker to sue if they have sustained a ‘serious injury’ 3. A worker will have a ‘serious injury’ if: 3.1. She is assessed as having a whole-person impairment of 30% or more, 3.2. If the VWA determines that the injury is a serious injury, or 3.3. If a Court grants leave on the basis that the injury is a serious injury. 4. The WIRC Act provides a ‘code’ for bringing common law proceedings in respect of workplace injuries and is expressed in the negative to prohibit any such action that is not in accordance with its provisions: s 326 WIRC Act (s 134AB(1) AC Act).

1.2

Limited Common Law Rights

An application can only get common law compensation if the following requirements are met 1.1.1

Gateway

1. Worker must not recover damages ‘except as permitted by and in accordance with’  Pt 7, Div 2 (Actions for damages)—ss 324-356; or  Pt 7, Div 3 (actions by terminally ill workers etc); or  s 366 (Pt III Wrongs Act 1958): s 326(c) 2. Pt 7, Div 2  ‘Subject to this Division, a worker may recover damages in respect of an injury arising out of, or in the course of, or due to the nature of, employment if the injury is a serious injury.’ s 327 3. What is ‘serious injury’? Set out in Pt 7, Div 2 and case law  30% or greater impairment; or  satisfy the ‘narrative test’ o refers to a spoken test/ narrative story and has subjective elements to be met

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1.1.2

Damages Trial

Caps on damages: s 340 1. Pecuniary loss  Minimum: $56,650 (indexed)  Maximum: $1,275,570 (indexed) 2. Pain and suffering  Minimum: $54,730 (indexed)  Maximum: $555,350 (indexed) 3. Deductions: ss 342 and 343  Cannot double dip with no-fault entitlements  NB: we do not deal with damages trials in this unit

1.3

Which Act Applies? 1. Starting point is WIRC Act  All claims for compensation lodged after 1 July 2014 will be governed by the lodgement provisions of the WIRC Act (Part 2, Divisions 1 and 2, ss 15-36).  Once a claim us made in accordance with these lodgement provisions, a determination will be made as to whether the worker’s rights and entitlements are governed by the AC Act or the WIRC Act according to the date of injury. 2. The WIRC Act provisions apply to:  all claims lodged for injuries sustained on or after 1 July 2014: s 5(1) WIRC Act; and  all gradual process claims where the gradual process period commenced before and continues after 1 July 2014: s 5(1) WIRC Act. 3. The AC Act provisions continue to apply to:  all claims lodged for injuries sustained solely before 1 July 2014: s 5(1) WIRC Act; and 4. For all claims, whether the injury date is pre- or post- 1 July 2014, the WIRC Act provisions apply to:  claim application procedures and rules: s 6(1) WIRC Act;  return to work rules and obligations: s 639 WIRC Act (which repeals Part VIIIB of the AC Act);  dispute resolution: s 627 WIRC Act (which repeals Part III of the AC Act).

2 2.1

Procedure for Bringing Actions for Common Law Damages The Limitations 1. There is a limitation on proceedings for damages in respect of an injury arising out of, in the course of, or due to the nature of employment: s 326 2. The plaintiff may recover damages if the injury is a ‘serious injury’: s 327 3. A “serious injury” is either– a. Degree of impairment must have been determined s 328(1)(a), or b. 18 months must have passed since the date of injury s 328(1)(b) and s 328(2)(b) 4. The plaintiff must make an application for serious injury: s 328(1)(a)

2.2

Procedure for Seeking Serious Injury Certificate (topic 10 re claims and procedures) Page 2 of 32

1. A determination of the worker’s degree of impairment has been made under Div 4 of Part 5 or s 104B of the AC Act, s 328(1)(a). a. Or, at least 18 months has passed since the event or circumstance giving rise to the injury, ss 328(1) (b) and (2)(b) 2. The worker must make an application under s 328 a. in a form approved by the VWA: s 328(4)(a); b. accompanied by a signed medical authority authorising the release of medical information to the VWA: s 328(4)(b); c. accompanied by a copy of all medical reports: s 328(4)(c)(i); d. accompanied by an affidavit in support of the application: s 328(4)(c)(ii). 3. The worker must serve the claim on ‘each person against whom’ the worker ‘claims to have a cause of action’: s 328(6).

2.3

Strict Time Limitations

Strict time limits then apply for the assessment of the worker’s application by the VWA 1. The VWA must, within 120 days of receiving the application, advise the worker in writing whether the worker has a serious injury: s 330(1)(a). 2. If the VWA fails to advise the worker in writing within 120 days, the worker is ‘deemed’ to have a serious injury: see s 330(3)– this is 4th Gateway 3. NB: If SI granted, compulsory ‘Statutory Conference’ held to determine damages amount: s 333 Of these procedural requirements, the first is the most important. The worker may only make an application for a serious injury certificate after a medical practitioner has made a determination of her degree of impairment: Wilson v Nattrass (1995) 21 MVR 41 (SCV).

3

Requirements for Bringing Actions for Common Law Damages

3.1.

What must the worker prove in order to claim common law damages?

As the WIRC Acts specifies, the worker must satisfy the following before he or she can successfully pursue an action for common law damages under the Act: 1. That the worker has an entitlement to compensation in respect of his or her injury (see topic 2): s 326 WIRC Act (s 134AB(1) AC Act) 2. That the injury is a ‘serious injury’: s 327 WIRC Act (s 134AB(2) AC Act). What, then, is a ‘serious injury’? There are three gateways 3.2.

Three Gateways: Serious Injury

The WIRC Act sets out three ‘gateways’ by which a worker can satisfy the ‘serious injury’ 1. The degree of impairment to the worker is 30% or more: s 335(1); 2. The degree of impairment is less than 30%, but the VWA or self-insurer is satisfied that the injury constitutes a serious injury and issues the worker a certificate in writing consenting to the bringing of proceedings: s 335(2)(c); or 3. The degree of impairment is less than 30%, but a court (other than a Magistrates’ Court), on the application of the worker, grants leave to the bringing the proceedings: s 335(2)(d).

Gateway 1: Impairment of 30% or more: s335(1) Page 3 of 32

What are the requirements for impairment of 30% of more? (s335(1)) 1 Background 1. An application for serious injury under s 335 WIRC Act (s 134AB(15) AC Act) ‘quantitative’ test, deems the worker’s injury a ‘serious injury’ if the degree of impairment is 30% or more. 2. Under the test, the worker’s injury must have a Whole Person Impairment (‘WPI’) of 30% or more assessed in accordance with Part 5, Division 4 (‘Claims for compensation for non-economic loss’) WIRC Act AMA-4 in order to be deemed a serious injury

2 Must comply with Procedural Requirements An application for serious injury under this s 335 WIRC Act (s 134AB(15) AC Act) ‘quantitative’ test, requires the worker to: 1. Comply with the procedural and formal requirements set out above; and 2. Has advised the VWA or self-insurer under  section 205(3) or 206(3) of this Act or  under section 104B(6B) or (7B) of the AC Act 1985 that he or she accepts the determinations of degree of impairment, s 328(2)(a)(i); or  has received the advice of a medical panel determination of degree of impairment under section 207(3) of this Act or under section 104B(10) of the AC Act 1985, s 328(2)(a)(ii)

3 What Types of Impairment would constitute 30% or more? The deeming test requires that a worker establish one of the following to qualify as a deemed serious injury: 1. 2.  3.

a 30% physical impairment; a 30% primary psychiatric impairment; secondary psychological injury is neither assessable nor compensable s 30% combination of physical and primary psychiatric impairment.

Gateway 2: Impairment Less than 30% but VWA issues Certificate (s335(2)) 1 Requirements s335(2) 1. If– a. the assessment of the degree of impairment is less than 30% (s 335(2)(a)) or b. a determination of degree of impairment has not been made, s 335(2)(b) 2. The worker has complied with the procedural and formal requirements set out above 3. The claimant can only bring separate proceedings for the recovery of damages in respect of the injury if the VWA– a. is satisfied that the injury is a serious injury, s 335(2)(c)(i); and b. issues a certificate in writing consenting to the bringing of the proceedings (known as a ‘serious injury certificate’, s 335(2)(c)(ii)

2 In applications under this second gateway, the worker must: 1. Comply with the procedural and formal requirements set out above for seeking a serious injury certificate; and

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2. EITHER, if there has been an impairment assessment under Part 5, Division 4 (‘Claims for compensation for non-economic loss’) WIRC Act (s 104B AC Act), advised the VWA/self-insurer that she has accepted the impairment assessment: s 328(2)(a) WIRC Act (s 134AB(4)(a)(i) AC Act). 3. OR, if there has been no such impairment assessment, 18 months has elapsed and any directions under s 352 WIRC Act (s 134AF AC Act) have been complied with: s 328(2)(b) WIRC Act (s 134AB(4)(a)(i) AC Act).

3 Time Limitations 1. The VWA must, within 120 days of receiving the application, advise the worker in writing whether the VWA will issue a serious certificate: s 330(1) WIRC Act (s 134AB(7) AC Act). 2. If the VWA fails to advise the worker in writing within the 120-day period, the worker is deemed to have a serious injury: s 330(3) WIRC Act (s 134AB(9) AC Act).

Gateway 3: Impairment Less than 30% but Court Grants Leave 1 When does this apply? 1. If the assessment of the degree of impairment is less than 30% (or VWA or self-insurer advises under s330(1) that it will not issue a certificate) 2. The worker may apply to the court for ‘leave’ to bring proceedings. 3. In effect the worker seeks a determination from the court that his injury is a serious injury, and the court will issue a serious injury certificate.

2 The Procedure 1. The worker makes an application to a court, other than the Magistrates’ Court, within 30 days (or longer with the consent of the VWA, s 335(d); and 2. The worker serves a copy of the application on the Authority or self-insurer and on each person against whom the applicant claims to have a cause of action, s 335(4) 3. The court gives leave to bring proceedings, s 335(2)(d) 4. The Court must not give leave unless it is satisfied on the balance of probabilities that the injury is a serious injury, s 335(5)(a)

Outline of ‘Serious Injury’ Test 1. Relevant provisions of the WIRC Act: Part 7 (ss 318-371) 2. 3 ‘gateways’ for bringing common law claims seeking damages: ‘serious injury’ 3. Focus on 3rd gateway: leave of Court a. b. c. d. e.

How to establish ‘serious injury’ under 3rd gateway? .Identify compensable injur(y/ies) Identify impairment, disfigurement or mental or behavioural disturbance Identify consequences of the impairment, disfigurement or mental or behavioural disturbance Assess whether the consequences meet or exceed the relevant threshold

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1 Narrative Test 1.1 What is the Narrative Test? 1. 2.

3. 4. 5.

The ‘narrative test’ is the test for determining serious injury under ss 324-347 WIRC Act (s 134AB AC Act). It includes the definition of ‘serious injury’ in s 325(1) WIRC Act (s 134AB(37) AC Act), namely the four kinds of serious injury in paragraphs: a. permanent serious impairment or loss of body function b. permanent serious disfigurement c. permanent severe mental or permanent severe behavioural disturbance or disorder, or d. loss of a foetus. It also contains the further clarification of the meaning of ‘serious’ (and ‘severe’) in s 325(2)(b), (c), and (d) WIRC Act (s 134AB(38)(b), (c) and (d) AC Act), which were called ‘reference points’ by the court in Barwon Spinners. All these, constitute the so-called ‘narrative test’: Barwon Spinners v Podolak & Ors Gateways 2 and 3 made on basis of ‘narrative test’

2.1 In the determination of serious injury under this test, i is the consequences that are determinative, as the Court stated in Barwon Spinners [47] p. 644: 1. 2. 3.

A determination that an applicant has suffered a serious injury is a decision that can be reached only according to the reference points laid down by Humphries v Poljak, reference points that are now enshrined in s 134AB(38). As we have seen, in relation to (inter alia) impairment or loss of a body function, the term "serious" is to be satisfied by reference to the consequences to the worker "when judged by comparison with other cases in the range of possible impairments or losses of a body function ..." (under para (b)) and (under para (c)) only if the consequence relied upon "is, when judged by comparison with other cases in the range of possible impairments or losses of a body function ... fairly described as being more than significant or marked and as being at least very considerable.

2.2 Serious Injury: The Narrative Test 2.2.1

Section 325(1) WIRC Act

serious injury means— (a) permanent serious impairment or loss of a body function; or (b) permanent serious disfigurement; or (c) permanent severe mental or permanent severe behavioural disturbance or disorder; or (d) loss of a foetus.

2.2.2. Differences with TA Act 1. 2. 3. 4.

‘permanent serious impairment’ s 325(1) of the WIRC Act ‘serious long term impairment’ s 93(17)(a) of the TA Act o in s 135A, the predecessor to s 134AB and s 325(1) Interpreted in the TA Act case of Humphries v Poljak, now ‘codified’ in section 325(2) of the WIRC Act. WIRC Act uses ‘permanent’ rather than ‘long term’ in TA Act

2 Satisfying the Narrative Test  

The legislation gives little guidance on how to assess whether an injury that constitutes an impairment is or is not a serious injury under the narrative test. The process of reasoning that the courts adopt in determining serious injury under the narrative test, therefore, has its foundations in two landmark cases, Humphries v Poljak [1992] and Barwon Spinners v Podolak.

4 steps in establishing serious injury for the purpose of the narrative test are: 1. 2. 3. 4.

Identify compensable injury/ injuries Identify impairment/LOBF, disfigurement or mental or behavioural disturbance Identify consequences flowing from the impairment, disfigurement or mental or behavioural disturbance Assess whether the consequences meet or satisfy the ‘serious injury’ test.

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Step 1: Identifying the Compensable Injury 1. “Injury” and “Compensable Injury” 1.1 What first should first be taken? 1. It is necessary to first understand the precisely the nature and extent of the injury itself that is the subject of the serious injury application: Barwon Spinners at [33]. 2. This involves considering two matters 1. First: what is an injury? 2. Second: whether the injury is a compensable injury in the sense that it is linked to employment and occurred at a time when the Act applies.

1.2. What is an ‘injury’? 1. An injury is a ‘some physiological change to a body part’- Barwon Spinners (at [9]), 2. Further, in Barwon Spinners at [33], the Court emphasised the importance of identifying ‘precisely the nature and extent of the injury’.

1.3. What is ‘Compensable injury’? 1. The injury that is to be considered as constituting a serious injury must be a compensable injury in the sense that it gives rise to an entitlement to compensation under the Act, 2. That is it has a nexus to the worker’s employment and occurred during the applicable period of the Act. 3. Timing of injury  AC Act gateway applied if arose out of, in the course of or due to the nature of employment on or after 20 October 1999 but before 1 July 2014: ss 134AB(1) and (2) AC Act  WIRC Act applies if arose out of, in the course of or due to the nature of employment on or after 1 July 2014: s 5 (1) WIRC Act  Or, injury by way of gradual process over a period beginning before, and continuing on or after 1 July 2014: s 5 (1)(b). Also see Grech v Orica (VSCA, 2006).

1.4. Key case Grech v Orica Australia (2006): “Compensable Injuries” and “Serious Injury” Grech v Orica Australia (2006) Facts 1. This case involved an injury that arose before the Appointed Day but its symptoms only manifested themselves after the Appointed Day. 2. The plaintiff commenced employment with the defendant. His employment ended, after more than 30 years, when he was made redundant in late May 2002. 3. The plaintiff was required to open and close valves repeatedly. The frequency of that task considerably reduced after a computerized system was introduced in 1993. 4. Even so, as the judge found, when the plaintiff worked outside the control room he still manually operated valves - at least up until late 2000, at which time he sought treatment for wrist and hand pain and other symptoms. 5. In 2000, the plaintiff began to notice intermittent numbness and pain in his hands at night. 6. Symptoms worsened. He consulted the works nurse on 8 September 2000, and was thereafter referred to the factory doctor, whom he saw in October that year. 7. He was sent to a hand therapist and given splints to wear at night. 8. He reported injury to his hands on 8 November 2000, and made a claim for compensation in respect thereof on 6 December. Issue 9. Was there a failure by applicant to satisfy trial judge that he had suffered identifiable physical or mental injury on or after 20 October 1999 10. Was this a compensable injury? 11. It was a necessary preliminary step for plaintiff to show he or she suffered a compensable injury after 20 October 1999 Trial Judge 12. The histories attributed to the plaintiff by the doctors are ... consistent with a finding that there has been a gradual onset of the bilateral carpal tunnel condition referable to employment before and after 20 October 1999.

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13. The Court is again left without identification of compensable injury that is referable to employment after 20 October 1999 Court of Appeal, Ashley JA (Buchanan and Chernov JJA agreeing) 14. ‘It is for a plaintiff to establish that he or she suffered compensable injury on or after 20 October 1999, and to sufficiently establish what that injury was. 15. Only then will it be possible for a plaintiff to establish that such injury was, in its consequences, serious injury as defined. 16. It is not enough that the plaintiff establish that he or she developed, on or after 20 October 1999, serious injury consequences of compensable injury sustained before that date.’ [45], p. 614 17. ie, compensable...