What it means to be awarded $1.3 million compensation for a stress claim

teacher-awared-million-dollar

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.

Negligence

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.

Now, we’re unsure about exactly how much of this awarded 1.3 million was netted by Mr Doulis (in his pocket).

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!

 

It is well worth noting that the average amount of damages (compensation) awarded is typically nowhere near as large as in Doulis’ case, which is an extreme case.

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]



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4 Responses to “What it means to be awarded $1.3 million compensation for a stress claim”

  1. So true an article again, I’m unable to ever return to work, due to work injury, I will be cut off workcover in 2 years. Thanks thanks Mr Wetheral and Co. Labor Government for the worker what a crock. If you just cracked down on all the dole bludgers in S.A. alone you would pay for the new Hospital and probably run it for a year. But people who do not wish to work have rights to choose not to work ???????

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  2. I was surprised you mentioned paying back Workcover for any weekly benefits received, is this only Victoria?
    I agree people tend to see the large amount & yet not forgetting his psychological impairment, the impact on his relationships, friends, family & no longer having the use of the qualifications & career he worked hard for.
    Psychological injury impairs cognitive function, for some driving is difficult, you stop socialising & withdraw. Whilst money may improve the financial strain, you might not have anyone around to share it with & money can’t buy back your sanity & purpose in life.
    These awards are high when your salary at time of injury is high & where you studied & worked hard to achieve that remuneration & it’s gone, there must be something to appropriately compensate people for the working years they’ve lost as a result & a capacity to provide for their family.
    Work injuries doesn’t just impact on the worker, it affects everyone who is dependent on your income.
    The money can’t buy back your sense of self, your goals & dreams, it can’t buy your trust & the values impacted by this horrible system.
    Some things in life, what matters most is priceless & for those who have taken their lives on Workcover as a result of psychological injury, Mr Doulis represents what they deserved.
    Instead of focusing on Mr Doulis compensation amount maybe the media should focus on preventing psychological injury in the workplace.

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    • @Maggie, Not only do you have to repay Workcover but also any income protection, and centrelink benefits, IF you are awarded loss of income…

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  3. Werribee Secondary College pays out six-figure sum to second teacher over workplace mistreatment

    Date February 4, 2015 m

    A Melbourne school that was ordered to pay a severely depressed teacher more than $1 million has been forced into a second major settlement over claims of similar workplace mistreatment.

    The new payout comes amid a spate of staff complaints to emerge against Werribee Secondary College, which has faced at least five WorkCover stress claims and three lawsuits from teachers alleging bullying and “burnout” after being given too many classes of badly behaved students.

    The claims were the basis of a landmark lawsuit launched by former teacher Peter Doulis, who won $1.3 million last September after suffering a nervous breakdown and developing depression while teaching from 1998-2004.

    The Victorian Supreme Court ruled that the school – which splits its best and worst-performing students into streams – breached its duty of care because it did not reduce the number of difficult classes Mr Doulis had to teach or support him.

    Fairfax Media has now confirmed a former teacher at the school was recently awarded a six-figure damages payout for psychological injuries.

    Her lawsuit was based on similar claims that the school’s management intentionally gave her an unduly heavy load of the worst-behaved classes because she had raised workplace complaints and they “wanted me out”.

    Revelation of the latest payment follows the awarding of an Australia Day honour to Werribee Secondary principal Steve Butyn for “outstanding public service to education”.

    Mr Doulis said the decision to award a medal to Mr Butyn – who was implicated in both former teachers’ allegations – was “not the sort of message our society should be sending”.

    “There was a culture at the school that has left a lot of teachers damaged,” Mr Doulis said.

    “He [Mr Butyn] was in charge and the buck stopped with him. Giving him this honour is rewarding a negative.”

    Mr Doulis said the workplace problems faced by his former colleague, who won the latest compensation from the Education Department, were almost identical to his own.

    “We were asking for help … we weren’t coping and we got nothing,” he said.

    The legal proceedings have raised questions about the merits of the “streaming” system adopted by the western suburbs school in 2000, which divides students into select entry, high achievers, medium achievers, low achievers and foundation levels.

    Werribee Secondary is the only Victorian school to divide students into streams for all subjects based on their academic performance.

    The model has driven up the school’s overall academic performance and ATAR scores, but sparked concern among teaching staff that separating the “best of the best” also concentrated the “worst of the worst” into very challenging classes.

    Mr Butyn declined to comment, but the Education Department said the latest legal claim to be settled related to past practices now phased out and “does not relate to current practices at the school”.

    “Teachers are given classes across levels and are not disproportionately allocated to any one level,” a spokesman said.

    “Teachers can no longer request to teach only one level.”

    The spokesman said the streaming model had helped Werribee Secondary establish itself as a “high-achieving school” and praised Mr Butyn for his work as principal.

    “Principal Steve Butyn’s determination to provide a unique and quality program in the school has resulted in outstanding opportunities for student development in Werribee and has greatly influenced educational thought within the City of Wyndham and beyond,” the spokesman said.

    “Under Steve’s leadership, Werribee Secondary College has achieved an International Schools Accreditation and become the first government school in Victoria to offer the International Baccalaureate at Diploma Level.”

    http://www.smh.com.au/victoria/werribee-secondary-college-pays-out-sixfigure-sum-to-second-teacher-over-workplace-mistreatment-20150204-135k14.html

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