The Law Handbook 2024

928 Section 10: Accidents, insurance and compensation of their very nature incapable of precisemathematical calculation. The court looks at these individual aspects of general damages and assesses the suitable amount of money that is fair and reasonable to both parties to compensate the plaintiff. Damages for the injured person’s dependants Where the injured person has died as a result of the negligence of a defendant, the person’s dependants have their own claim for damages. It is important to note that the dependants are not entitled to any damages for mere grief as a result of the death, but only for damages for the monetary loss that they have suffered, together with any loss of services, such as cooking and cleaning, that the injured person may have provided before. In calculating monetary loss, courts must take into account the financial benefit the dependants would have received from the deceased person had they lived, less certain benefits that they have received arising on the death. However, there may be a claim for damages for nervous shock caused as a result of the injury to, or death of, another person (see the next section, below). Claims for nervous shock If a person (the claimant) suffers serious mental harm, consisting of a recognised psychiatric illness, as a result of an injury to or death of another person (the victim), then there may be a claim for damages for that mental harm. However, the claimant must have witnessed the victim being killed, injured or put into danger at the scene. Alternatively, the claimant must be in a close relationship with the victim; for example, a parent, spouse, partner or child of the victim. Principles of duty of care and foreseeability, as set out at the start of this chapter, are also relevant. Also, there may be other entitlement requirements pursuant to such legislation as the Transport Accident Act 1986 (Vic) (see Chapter 10.2: Transport accident injuries) or the Wrongs Act (see the next section in this chapter). When the injured person has no dependants If the injured person has no dependants, the deceased’s estate can commence or continue an action for negligence. Damages are generally limited to such matters as loss of earning capacity before the death and medical, hospital and other expenses incurred before the death. Assessment of lost earning capacity To assess loss of earning capacity in the future, the court must consider to what extent the plaintiff’s ability to earn income will be affected in the future and for how long this restriction will continue. The extent to which a plaintiff’s earning capacity has been affected depends on the individual facts of each case. The judge or jury must calculate a present value of this future monetary loss (comprising loss of earning capacity and future medical expenses). In most actions for damages for personal injuries, the present value of such future loss is assessed by adopting a discount rate of five per cent (s 28I Wrongs Act 1958 (Vic)). However, the Transport Accident Act 1986 (Vic) and the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) specify six per cent. This rate is intended to make the appropriate allowance for inflation, for future changes in rates of wages and prices and for taxation upon income from investment of the sum awarded. The High Court has directed that no allowance should be made for those matters. This has now made it easier to assess the present value of future economic loss. By giving the plaintiff damages assessed at the five per cent or six per cent rate, the plaintiff may be able to invest at a higher rate and thus hopefully limit the effects of inflation and taxation on the award of damages. Key legislation: WrongsAct The Wrongs Act 1958 (Vic) (‘ Wrongs Act ’) is the main legislation governing claims for damages for personal injury (or resulting death) in Victoria, particularly in cases that do not involve transport accidents or work injuries. Major amendments to the Wrongs Act There have been four major amendments to the Wrongs Act: 1 the Wrongs and Other Acts (Public Liability Insurance Reform) Act 2002 (Vic);