Wrongs Amendment Bill update
Insurance Law & Litigation update - 17 September 2015
The Wrongs Amendment Bill 2015 was introduced in Parliament on 15 September 2015. Among the key provisions are:
- a raised general damages cap of $577,050 (which represents an increase of approximately $60,000 on the current indexed amount);
- an amendment to the cap on economic loss. This is intended to remedy the "inconsistencies" exposed in the Court of Appeal's decision in Tuohey v Freemasons Hospital  VSCA 80, where high earning plaintiffs can be shut out of claiming economic loss if their gross post-injury earnings remain in excess of three times the Victorian average. The new Bill provides for a straightforward cap of three times average weekly earnings, with no requirement to disregard any amount the plaintiff might still be earning. In dependency claims, the deceased's personal expenses are also intended to be deducted prior to applying the cap;
- the introduction of an express statutory entitlement to damages for loss of capacity to provide gratuitous care to dependants of between six and 40 hours per week. This is effectively in line with the existing provisions of sections 28ID and 28IE, which are expressed as limitations on such recovery; and
- more generous general damages thresholds in respect of psychiatric and spinal injuries. Plaintiffs with a 10% psychiatric impairment, or a 5% physical impairment arising from a spinal injury will now satisfy the threshold, whereas they previously had to exceed these percentages. In practice, given the operation of the Guidelines for the Evaluation of Psychiatric Impairment for Clinicians (where the impairment classes used for assessment overlap the current threshold) this is likely to make decisions on Medical Panel referrals in cases of psychiatric injury more clear cut.
The Bill also contains some transitional provisions, which provide that the new caps on economic and non-economic loss will apply retrospectively (to claims issued but not resolved prior to commencement of the new Act).
The new general damages thresholds are also intended to apply retrospectively which may have the potential to delay claims in circumstances where a plaintiff is considered to be on the borderline of satisfying the threshold.
Rebecca Baohm | Lawyer
+61 3 9269 9456
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