What compensation can I seek after a motor vehicle accident?

A person who sustains injuries in a motor-vehicle accident (“a Claimant”) that was substantially caused by the negligence of another driver may be entitled to seek compensation for the impact the accident has had on various aspects of their life, known as “heads of damage”.

The Civil Liability Act (1936) governs claims for damage (financial and personal losses) arising from injuries caused by negligence in motor vehicle accidents. In 2013, changes to that legislation introduced an Injury Scale of 0-100 which applies to all physical and mental injuries sustained in motor vehicles.

A Claimant’s entitlement to damages will be reduced by the percentage of their own contributory negligence (such as driving with the prescribed concentration of alcohol, without a seatbelt, at excessive speed or without due attention).

1. Damages for Non-Economic loss

A Claimant’s injury or combination of injuries must reach an Injury Scale value (“ISV”) of 11 or more before a Claimant will be entitled to an award of damages.  An ISV of 11 would give rise to a base entitlement of only $3,000*.

(* depending on the year of the accident as the amount increases by small percent each year).

This threshold does not apply, however, if:-

1. the consequences of the personal injury with respect to non-economic loss are exceptional when judged by comparison with other cases involving the same injury; and
2. the application of the threshold in the circumstances of the particular case would be harsh and unjust.

An ISV cannot be assessed until the injury has reached medical stability (maximum medical improvement). In our experience most medical practitioners will not make such an assessment until 12 to 18 months after the date of the injury.

It will only be possible to provide Claimants with accurate advice as to their eligibility for damages for non-economic loss once their treating GP or specialist advises them that their injury is medically stable and an accredited medical practitioner has provided a reliable ISV opinion.

2. Damages for Past Economic Loss

There is no threshold for compensation for a Claimant’s Past Economic Loss.

Past Economic Loss is the financial loss Claimants sustain from the 7 days after the date of the accident until the date of settlement of their claim with the CTP insurer (or the date a Court awards damages following a trial).

Under the new legislation Claimants are entitled to recover 80% of their demonstrable losses to the date of settlement of their claim (after any reduction for contributory negligence).

3. Damages for Future Economic Loss

Claimants must attain an ISV of 8 points or more in order to be eligible for compensation for their Future Economic Losses. The same exception applies when it can be shown that the consequences of the loss or impairment of future earning capacity are exceptional and the application of the threshold would be harsh and unjust.

These losses are assessed on the basis of the likely impact injuries will have on a Claimaint’s financial situation beyond the date of the settlement or judgment of their claim. Such an assessment involves the comparison of what Claimants would have been likely to earn but for the accident and what they are likely to earn with their injuries taken into account. It is essentially an exercise in “crystal ball gazing”.

A necessitated change in career prospects or a diminished place in the employment market are all factors that are weighed into the assessment.

Provided Claimaints reach the threshold ISV of 8 points, they will be entitled to claim 80% of their demonstrable Future Economic Losses (less any reduction for contributory negligence (meaning the Claimant’s own negligence that may have contributed to the collision).

It will only be possible to advise Claimants with any certainty on this head of damage once their injuries have stabilised and their ISV has been assessed by a medical specialist.

4. Damages for Gratuitous Services

These damages relate to the assistance provided by a spouse, parent or child for domestic tasks that Claimants would have ordinarily performed but for their injuries.

To be eligible for these damages a Claimant’s ISV must be 11 points or more. In other words, the same threshold as applies for Non-Economic Loss.

Further, damages in respect of gratuitous services are not to be awarded unless the services are provided for at least 6 hours per week and for a period of at least 6 consecutive months. The prescribed rate of compensation for such Gratuitous Services is set by regulation and will usually increase each year.

Claimaints should keep a diary in which to record the date and nature of assistance provided by their spouse or family members and the amount of time each day such assistance is provided.

If a Claimant does not have a parent, child or spouse to provide domestic assistance then they may need to consider hiring professional assistance with such tasks. Legal advice should be sought or at least the approval of the CTP Insurer’s Claims Consultant before contracting such assistance as the new legislation is silent on whether a threshold test applies.

5. Damages for Medical Expenses (Past and Future)

Once the CTP Insurer has received the Notice of Injury Claim Form and conducted its initial enquiries the insurer is likely to pay the Claimants’ reasonable medical and allied health expenses as recommended by their treating practitioners. This can extend to the recommended purchases of physical aides.

The insurer may, down the track, require Claimants to be assessed by a specialist or specialists of their choice (known as an Independent Medical Examination or “IME”) and the decision to fund ongoing treatment will be guided by that opinion.

6. Damages for Travel Expenses

Claimants can be entitled to compensation for travel and accommodation costs incurred in relation to seeking recommended treatment, particularly if they are country residents needing treatment in the city.

It is recommended that a Claimant keep written records of all travel to and from medical and other injury-related appointments and the milage involved.