Even when you have been awarded a serious injury certificate in Victoria (or elsewhere) for both pain and suffering and economic (pecuniary/future earnings) loss for a common law claim, your lawyer may advise you to drop the economic loss part of your claim and to only pursue the pain and suffering claim. This brief article explores the potential reasoning for not pursuing the economic loss part and to stay on workcover (weekly payments) instead.
To drop or not to drop the economic loss part of a common law claim
Common law damages claims in Victoria – summary
In Victoria your rights as an injured worker to sue at common law are restricted by the Victorian workcover legislation.
You may have an entitlement to sue at common law if you can show that someone else was at fault in causing your injury (or illness). In other words you have to prove negligence on the part of your employer. However you first need to show (and prove) that you suffer from a “serious injury“, which can be tricky (and that you have suffered ‘loss’ and ‘damage’).
Common law claims (aka damages claims) are available if the injured worker is able to go through one of two sets of “criteria” (aka “gateways”) under the Serious Injury Test as set out by the Victorian workcover legislation.
The first “gateway”, also known as the quantitative or deeming test, requires that the injured worker is assessed under the AMA Guides to the evaluation of permanent impairment (4th Edition) has having a whopping (and very rare) 30% whole person impairment (WPI). This assessment is undertaken by a medical assessor (i.e. IME), accredited in undertaking impairment assessments, and must take place no earlier than 12 months after the date of your injury (or until your injury has stabilised). If you are not happy with an Assessor/IMEs level of permanent impairment assessment, you can refer the matter to a Medical Panel.
If an injured worker does not meet the quantitative or deeming test (= does not obtain 30% WPI), then a ‘serious’ injured worker can (try) to obtain a serious injury certificate under the second ‘gateway’, which is also known as the narrative’ or ‘qualitative’ test, which requires that the injured worker has:
- a permanent serious impairment or loss of body function, or
- a permanent and serious disfigurement, or
- a permanent severe long term mental disorder or permanent severe long term behavioural disturbance or disorder, or
- the loss of a fetus
This narrative test will be determined by lawyers for the workcover insurance (or a Court/Judge) and will take into account the consequences of the injury for the injured worker in terms of pain, suffering and economic loss. To pass this test, the consequences of the injury must result in ‘considerable’ pain and suffering, and/or serious financial loss. You are basically compared to other injured workers, because this test is designed to assess the individual impact of an injury and its consequences. In particular, the test focuses on the effects of an injury on a person’s quality of life or inability to earn income.
If serious financial loss can not be demonstrated, the injured worker will only be able to clam common law damages for pain and suffering .
In order to claim common law damages for economic/financial loss, the injured worker must be able to demonstrate that the injury or injuries have resulted in a 40% (or greater) permanent loss in gross income and 40% (or greater) permanent loss of income earning capacity.
In assessing such a claim, a court (or workcover defense lawyers) will review the injured worker’s earnings in the 3 years leading up to the injury, and will also consider the opportunity the injured worker has for rehab, retraining and suitable alternative employment. The injured worker must basically prove that such opportunities do not (realistically) exist or are not suitable. This can be very difficult to prove, particularly because the Defense will ultimately come up with (outrageous) jobs you could perform (i.e call centre work, school traffic lollipop, licking envelopes etc.)
A frequently asked question by seriously injured worker(s)
I have recently been awarded a serious injury certificate in Victoria for both pain and suffering and economic future earnings. I have been on workcover receiving weekly payments for nearly 5 years for a [x] injury sustained from working as a [x].
I have received an email from my lawyer followed by a phone call where they are advising me to drop the economic loss and pursue pain and suffering only and also advising me to put a statutory offer in at $x.
I have informed my lawyer that I do not agree with this as I believe I have a very solid case and want to pursue it further.
My lawyer has told me that I will be better off staying on workcover payments as it will be more beneficial for me.
I completely disagree as I do not wish to be dealing with workcover indefinitely as I want to move forward with my life and attempt to recover from this whole situation, something that I feel I won’t be able to do if forced to deal with workcover forever.
I have now received a letter from my lawyer stating that if I do not follow their advice then I will no longer be able to pursue the claim through the “no win no fee”, which was the original agreement as I am not following “reasonable advice” (even though I feel their advice is far from reasonable).
I don’t know what to do and would like some advice on what is the best course of action to take from here…
To drop or not to drop the economic loss part of the common law claim
Deciding whether or not to drop your economic loss claim can be very difficult and catchy, both for you and your acting lawyer.
In some cases it is possible for the injured lawyer to make a very good assessment of the chances of success in court. In other cases it is extremely difficult as it may simply turn on which evidence the Court (Judge or Jury) is likely to accept. This is especially difficult to foresee or predict where a jury is involved. It is therefore common for these risks to be taken into account when working out the ‘commercial value’ of a common law case.
Whilst most such cases are resolved without going to court, through mediation and negotiation, in private negotiations one extremely important factor is also taken into account, namely the question of whether the injured worker will win or lose the court case. Obviously if an injured worker loses their case no damages are payable. If negligence is found damages (compensation) will be paid to the injured worker. But what’s of extreme importance to know is that, at least in VIC, if the court (Judge/Jury) awards you less than the statutory offer (made in the mediation/negotiation by the Defense) then the injured worker becomes liable for the cost of the legal proceedings for the other party as well! (*) Which may leave you in debt! So there is only a measly 10% margin, not much room for speculation indeed!
- if the judgment or order is for not less than 90% of the worker’s counter statutory offer but greater than the agent’s (or employer’s) statutory offer, the agent (or employer) must pay all costs
- if the judgment or order is equal to or less than the agent’s (or employer’s) statutory offer the worker must pay all costs
- if the judgment or order is less than 90% of the worker’s counter statutory offer but greater than the agent’s (or employer’s) statutory offer each party must pay their own costs
That is why it is so important to carefully listen to your lawyer when it comes to settling and making the counter offer.
But by dropping your common law economic loss claim, you will also keep your workcover weekly payments. If you win a the economic claim, your weekly payments stop (and you have to pay back workcover for all your past weekly payments as well!)
Compensation are generally unfair. The average compensation payout in Victoria is $80,000 (eighty thousand dollars). It has therefore been suggested that it may be more beneficial to stay on the trickle of weekly payments (i.e. $30,000 per year for 10 years = $300,000; $30,000 per year for 20 years = $600,000).
In other words, because of the way that a court (Judge) would finalise your entitlement in the form of a lump sum payment (your compensation) you are often a lot better off staying on a periodic workcover payments than seeking a lump sum compensation.
This is particularly the case if the injured worker’s ongoing medical and like treatment costs/needs are uncertain. Courts will generally heavily discount any monetary compensation which cannot be clearly demonstrated as needed, conversely workcover will simply have to pay whatever emerges.
Referring back to the question we received (above), an injured worker in this situation may well receive a great deal more from workcover in the form of weekly payments than they will by way of an economic loss damages award, and such injured workers will continue to have the peace of mind that they will be entitled to further medical and like treatment paid by workcover, if required. Conversely if such injured workers obtain a compensation award, the cost of any further medical and like treatment, even if not foreseen, may (in some jurisdictions) be the injured worker’s problem. (Note in VIC you continue to be entitled to medical treatment after a settlement).
What should you do if you don’t agree with your lawyer’s recommendation?
Please ask your lawyer to provide proper explanation and justification for his/her advice (assuming s/he has not already done so) and if you still prefer to obtain the lump sum (compensation payout) then that is your choice.
However, please bear in mind that if your lawyer can provide a sensible, justifiable explanation for his/her advice to drop the economic loss part of the common law claim, then it is highly likely that a court will consider it reasonable. Furthermore, you will have no reason for complaint if you do not take your lawyer’s advice and as such also allow your lawyer(s) to avoid any ‘no win no fee’ term in your cost agreement!
Unfortunately this is the reality of many injured workers’ legal situation.
Better off workcover?
We, personally, strongly believe that in order to truly recover, heal and ‘move on’ with our injury/illness/disability, we are better off getting off the workcover system all-together and as fast as possible as to preserve our sanity or what is left of it. Staying on workcover ‘for life’ on a trickle or ‘drip-feed’ will only continue the ‘endless cycle of despair’, as we can be sure that the insurer will ‘regularly’ continue to send you for IME reviews and assessments, review your medical and like services, and simply continue their ‘business as usual’ (delay, deny, defend); impeding our maximal ‘recovery’.
Given a choice, we believe most injured workers are prepared to ‘settle’ their cases for (much) less, simply to find the much needed ‘closure’.
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