In September 2014, Peter Doulis, a Victorian teacher driven to the brink by unruly students including one who made a flamethrower in class has been awarded around $1.3 million in compensation by the Supreme Court, by means of suing the state government for damages under the negligence/common law. Many ‘stress’ victims were gobsmacked at the size of the amount in compensation awarded. Let’s have a look at what the $1.3 million compensation awarded really means for Mr Doulis (and anyone else in a similar situation.)
What it means to be awarded $1.3 million compensation for a stress claim
When Victorian schoolteacher Peter Doulis was awarded nearly $1.3m in damages in September 2014, the story attracted heaps of media publicity, and many people, incl. injured workers suffering from ‘stress’, were stunned at the amount of compensation awarded.
While the awarded compensation to Mr Doulis figure appears extremely high (and almost unheard of), it may help to understand how it [the compensation] was actually calculated, and what it actually really means.
In Victoria, an injured worker has the right to sue at common law, when s/he suffers from a ‘serious injury’ (30% or more WPI or via the qualitative test) and where the injured worker can prove negligence on the part of the employer. At common law a seriously injured worker can be awarded compensation for ‘pain and suffering’ and – provided they meet the 40% income reduction threshold – awarded ‘economic loss’, which is the ‘largest sum of money’. It is worth noting that both compensation for pain and suffering and economic loss are capped.
Undoubtedly the psychologically injured teacher’s largest part of his damages award was for his loss of income. He was fairly young (38) at the time he was forced to stop work in 2004 due to his psych injury; and, like most people, he would have wanted to teach until age 67. So, basically his teaching career (and remunerative work capacity) was cut short by 28 years because of the injury he suffered.
Mr. Doulis had to teach a rather high number of very unruly students, and when he complained to the school authorities that he couldn’t continue teaching in this manner, he complaint(s) were simply ignored. The Court found that the school ought to have known that he was at a foreseaable risk of suffering a psychological injury.
Let’s have a good look at how the Supreme Court calculated the awarded damages for Mr Doulis
Awarded compensation for “Pain and suffering”
In Victoria “pain and suffering” is capped to around half a million dollars, for the most severe cases.(See: Key Workers’ Compensation Information 2013 – includes an overview of all states – SafeWork)
Mr Doulis was awarded $300,000 for his pain and suffering (and loss of life enjoyment). This is a fairly high award, and can be attributed to the severity of the teacher’s psych injury, which includes a severe psychological trauma and major depression with suicidal thoughts. It is worth noting that before his injury, this teacher had been an active, bubbly person who liked the outdoors, a far cry from his current shadow of his former self indeed.
One must remember that (any) lumpsum awarded for an injured worker’s permanent impairment is deducted from this awarded compensation. So let’s say you were assessed with a 26% WPI and received K50 as a lumpsum, this K50 will be deducted from any pain and suffering compensation awarded to you in a Court.
Awarded compensation for “economic loss”
In Victoria “economic loss – past and future” is capped to a little over one million dollar (See: Key Workers’ Compensation Information 2013 – includes an overview of all states – SafeWork)
Past loss of income awarded
Because of the severity of his psych injury, the Victorian teacher has not been able to return to work since 2004, even though he had tried in 2005 and 2006. As such, the teacher was awarded just over K400 ( $429,751) for his past loss of income. This amount also includes super, interest and tax adjustments.
(Note: showing that you have really tried to return to work when suffering from a workcover injury always works in your favour when the matter is heard in Court).
Future loss of income awarded
The medical evidence was such that the Supreme Court found it very unlikely that Mr Doulis would be able to return to any form of work.
In effect from the date of the teacher’s court hearing (Sept 2014) until his predicted retirement age, the teacher would – theoretically- have earned about $850,000. However, as is practice when awarding compensation, deductions are made for what is called vicissitudes or the “risks and uncertainties of life”. This means that compensation gets taken off as, basically, an injured worker could well get run over by a bus (!). In Doulis’ case the Supreme Court reduced his future loss compensation by a whopping 35%, so in effect he was awarded just $550,000 for his future economic loss.
When one is awarded compensation by Court, the injured worker has to pay back all weekly payments received to date from workcover (!). Often this is a substantial amount of money if the injured worker has been recieving weekly payments for a number of years. Say you received $30,000 per year in weekly payments for 5 years, this equals $150,000 of money you have to pay back to workcover. Any money you may have received from Centrelink also needs to be paid back. In addition, the injured worker’s initial lumpsum is also deducted from the ‘pain and suffering’ award. Currently a 30% WPI psych injury gives a lumpsum of around K75.
If that is not enough adjustments are made for tax purposes and the famous vicissitudes (risks and uncertainties of life), the latter attracted a 35% reduction in Doulis’ case.
And then, the largest cost is usually the legal fees involved for the injured worker. If a case drags on and has a long(ish) hearing, involving lawyers, barristers, expert witnesses, QC etc, the legal costs can rapidly grow to hundred thousands of dollars (i.e. K200).
For example a serious legal workcover case that would fetch, let’s say, over $800,000 in a Court, would mean a net amount (for the injured worker /in his/her pocket) around $400 to 500.000, taking off all the above ‘hidden costs’. Refer to how common law damages are calculated.
$500,000 is NOT a lot of money for a seriously injured worker who can never work again. Weekly payments stop as soon as the case is settled and $500,000 equals $50,000 per year for 10 years or $25,000 per year for 20 years. So forget the “myths’ about those ignorant people who think that because you have been seriously injured at work (and are entitled to a common law claim) you “will be set up for life” or “it will be like winning the lottery”. Wrong!
Also note that the average compensation payout to Victorian injured workers is still ONLY $80,000!
[Post dictated by WCV and manually transcribed by WCV3]