All states and territories except the Australian Capital Territory, have legislation that may affect a plaintiff’s final award of compensation.
The following simply notes a number of areas in which legislative provisions may affect an award:
Legislation now bars recovery of compensation for non-economic loss (for example, pain and suffering) unless the plaintiff meets some kind of threshold in regard to the severity of loss (NSW); the type of injury i.e. being ‘significant’ (Vic); the time in which their ability to lead a ‘normal life’ has been affected (SA); the amount of the award (being above a prescribed minimum) (WA & Tas); the percentage of impairment of the whole person (NT); or the level of injury as compared to a scale (Qld).
There are also caps (limits) on the amount that may be awarded for non-economic loss in some jurisdictions.
Future Earning Capacity
Caps upon the award for loss of earning capacity also exist. A number of states/territories specify in legislation a maximum amount payable, based on “average weekly earnings” (for example, three times average weekly earnings, although the specific formula for calculating this award varies between jurisdictions).
‘Discount rate’ (reduction of award when paid in lump sum)
The award for future economic loss is reduced because the money is being paid in a lump sum, rather than over a lifetime. As the money may be invested and accrue interest, the reduction was applied to ensure a plaintiff was not over-compensated. The High Court of Australia determined that a reasonable discount rate would be around 3% (Todorovic v Waller), however most jurisdictions apply a reduction rate of 5% or higher. This makes a significant difference to the award.
A Plaintiff may claim for their need for services (for example home nursing), even if those services are provided gratuitously (that is, they are provided for free, for example, by a parent or spouse). All states and territories, except the ACT, have imposed requirements regarding the number of hours and time that such services are provided, and how the sum is calculated.