23/02/2024

Common Law Damages Claims for Motor Vehicle Accidents

Common Law Damages Claim in the New South Wales CTP Scheme

No one wishes to be involved in a car accident. While you might have to live with serious injuries after an accident, receiving compensation can reduce your medical care expenses and help you slowly get your life back on track.

If you’ve been involved in a motor vehicle accident in NSW, sustained severe injuries, and you’re not at fault for the accident, you might be eligible for lump sum compensation under common law damages.

This article will guide you in understanding what common law damages claims are for motor vehicle accidents, whether you’re eligible for one, and the process of filing a claim.

What are Common Law Damages for Motor Vehicle Accidents?

A common law damages claim refers to taking legal action against a negligent driver for causing a motor vehicle accident. If the other party was at fault for the accident that resulted in serious injuries, you may be entitled to claim lump sum compensation through common law damages.

Common law damages is a provision under the Motor Accident Injuries Act 2017 (NSW).

There are some elements of negligence you have to prove when arguing a common law damages claim. They are:

  • Duty of care: This means that the defendant owed you a duty of reasonable care to avoid causing injuries. The law requires every driver to follow traffic regulations, avoid motor accidents, and keep other road users safe. For example, if a driver fails to stop at a red light, they’ve breached their duty of care.
  • Damages: It’s not sufficient that the at-fault driver failed to adhere to their duty of care. The breach of duty of care has to lead to damages in the form of physical injuries or property damages. 
  • Causation: you need to establish that the at-fault driver’s actions were the cause of your injuries. This is also referred to as “but-for” causation, in that but for the negligent driver’s actions, your injuries wouldn’t have occurred.
  • Breach of duty: If you can prove that the negligent driver owed you the duty of care, you should also prove that they breached that duty. A breach of duty of care is when a negligent driver fails to act with the degree of care that a responsible driver should.

Who is eligible to make a claim?

You can make a common law damages claim if:

  • You have more than minor injuries
  • You were not wholly at fault for causing the accident
  • The accident was caused by the owner or driver at fault for the accident

Your injuries were determined to be above threshold

You’re only eligible for common law damages compensation if your injuries are determined to be above threshold. Above-threshold injuries are more serious injuries that may demand intense treatment and take longer to heal. They mainly involve fractures and internal injuries.

Examples of above-threshold injuries include broken limbs, nerve injuries, tendon ruptures, head or brain injuries, spinal injuries, and injuries that require surgery.

You were not wholly at fault for the accident

If you were at fault for the accident, you’re not eligible for claiming lump sum compensation under common law damages. However, there are some special cases where you may be eligible if you were partially at fault. 

For example, if you were in an accident involving multiple vehicles and it’s determined that all drivers involved were partially at fault, you may still be eligible for lump sum compensation. However, the compensation in such a case would be lower due to “contributory negligence”

You have a WPI of > 10% (when claiming for non-economic loss)

You need to have a Whole Person Impairment (WPI)  of at least 10% if you’re claiming for non-economic loss. If your assessment shows your WPI is less than 10%, then the only way to claim for common law damages is through economic loss. 

It’s important to note that you will require an Impairment assessment to support your claim. This involves scheduling an assessment with a SIRA approved medical specialist to assess your level of impairment in accordance of Motor Accident Permanent Impairment Guidelines. 

What compensation is available under Common Law Damages?

There are two different types of common law damages claims that you can make. They are:

  • Economic loss
  • Non-economic loss

1. Your economic loss – future potential earnings

This is compensation for past and future loss of earnings or the reduced ability to earn and superannuation due to the injuries from the accident. 

The damages awarded for economic loss include:

  • Damages due to loss of earnings due to weakened earning capacity
  • Damages for travel or accommodation costs (not the cost of treatment or care)
  • Damages for financial management costs of the awarded damages
  • Damages for reimbursement of income tax paid or payable on statutory benefits or common law damages 

Damages for economic loss may be calculated based on your age until retirement. For example, if you have an accident at 45 and your retirement age is 67 years, you may receive compensation for the potential income lost for the 12 years.

2. Non-economic loss – pain and suffering

Non-economic loss compensates you for pain and suffering, emotional distress, and the reduced quality of life after the accident. You’re eligible for both non-economic loss and income loss compensation only if you sustained a whole-person impairment (WPI) of more than 10%.

Non-economic losses are more subjective than economic losses and they relate to types of harm or effects that don’t come with receipts or objective documentation. 

Non-economic loss compensation is calculated based on a fixed whole person impairment table that’s usually indexed every year. As such, it’s important to have a medical practitioner assess your WPI correctly and account for all your injuries.

How Much is a NSW Common Law Damages Payout?

The amount of lump sum compensation you receive for motor vehicle accident injuries depends on the extent of your loss and the impact of the injuries on your life. In short, every case is unique. There’s no set amount on the minimum or maximum lump sum payout you can expect.

Based on SIRA data, there have been 10,210 damages claims lodged to 30 June 2023. The expected average payment for a claim for damages when the injured person has a permanent impairment of 10% or less is $150,000. This compares with $500,000 for those with a permanent impairment of greater than 10%.

That said, here’s a breakdown of some factors that typically affect your lumpsum payout amount:

  1. Your injury type and its impact on your life
  2. Your level of fault– Your lum psum payout is likely to be reduced significantly if you’re partially at fault.
  3. Your age and life expectancy– The younger you are, the more working years you have left, hence the more impact the injuries have.
  4. Past & Future Loss Income: Taking time off to seek treatment for your injuries or being unable to work at full capacity will also be considered.
  5. Medical Expenses: Past and Future Your past and future expenses spent on surgery, specialist medical care, physiotherapy, and rehab can be included in the payout.
  6. Your Pain and Suffering– Your payout may include compensation for pain and suffering, lost quality of life, and emotional loss.

What happens to my statutory benefits?

Under the common law damages, you can’t claim past and future medical costs as damages. You can only claim treatment and care expenses under a statutory benefits claim, also known as personal injury benefits.

Also, any income support benefits you receive in the form of statutory benefits will cease once the claim for damages has been finalised and you’ve received your lumpsum compensation.

Case study: $540,000 settlement for Motor Vehicle Common Law Claim

In a recent case, one of our clients was a pedestrian walking a road when a car veered off its lane and collided with our client. The client sustained multiple severe injuries, including concussion, broken teeth, facial abrasions and lacerations, strain to the neck and back, and post-traumatic stress disorder.

Our team went to work and presented the case to the insurer, highlighting the extent of the injuries and their impact on the claimant’s life. After protracted discussions and negotiations, we settled on a $540,000 compensation, which covered the client’s pain and suffering and future loss of income. 

The importance of legal representation

While you can file a common law damages claim yourself, we don’t recommend it. Remember, the insurer will also hire a team of lawyers, medico-legal specialists, and other experts to assess your claim. 

Besides, some doctors are notorious for providing a lower WPI assessment to favour the insurer. Winning such a case by yourself might be an uphill task.

The best way to increase your chances of winning your common law damages claim is by hiring expert motor vehicle accident lawyers to represent you. As seen in the above case study, having a skilled lawyer is very important when it comes to maximising your compensation.

Steps to lodging a Motor Vehicle Common Law Claim

Here’s the step-by-step process for lodging a common law damages claim:

  1. Check your eligibility– The first step should be to check whether your injuries are above threshold and if your WPI assessment is above 10%.
  2. Seek legal advice: Common law damages claims can be complex, but a specialist lawyer will help you understand what you’re entitled to and advise you on the steps to take. Your lawyer will also help you calculate the amount of money to claim in economic and non-economic losses.
  3. Fill out your application: Fill out the common law damages application form and send it to the insurer. Also, complete the personal injury benefits claim form if you haven’t already. Contact your lawyer to help you through this process. 
  4. Attach Evidence in the application: Collect your medical records, photographs, witness statements, hospital discharge summary, media reports, property damage insurance claims, CCTV, dashcam footage, certificate of fitness, & proof of earnings. 
  5. Lodge your application to the insurer: Sign a declaration and authority and submit the application to the insurer, your lawyer can help you with this.

Time limits for making a common law damages claim

To file your common law damages claim, you need to fill out an Application for Personal Injury Benefits form within three months of the accident. After that, you have three years to file a common law damages claim.

If your injuries are assessed as 10% WPI or less, a claim must be made between 20 months and three years after the accident. If your injuries are assessed as more than 10% WPI, you can make the claim any time within three years from the date of accident.

What happens once you’ve lodged your claim for damages?

The insurer will need to contact you once the claim has been lodged to acknowledge they have received the claim. Then they’ll do their own investigations and come to a decision, the decision to accept or deny liability must be made within 3 months of the lodgement of your claim. 

Once the insurer has accepted liability, then we’ll work together to negotiate a settlement amount for your lump sum compensation with the insurer. If there is a disagreement between the settlement amount then we’ll also represent you in court proceedings. 

After all this is done and we reach an agreed settlement, only then will you receive your lump sum payment. 

Speak to our expert team today | No Win no Fee

The importance of having an expert lawyer when making a common law damages claim in NSW can never be overstated. In some cases, you might have to challenge the insurer’s decision in court.

Luckily, you can rely on our experienced team of car accident lawyers to guide you through the often challenging task of compiling evidence for the claim, communicating with the insurer’s lawyers, and navigating the legal process to challenge their decision.

You can focus on treatment, recovery, and getting your life back together while we do all the heavy lifting. You don’t pay unless we win. Your compensation is our reputation. 

Give us a call today at (02) 8764 1776 and get access to accredited specialists

Get in touch to find out more HERE … or call 02 8764 1776
We can help.
No win, no fee.
We can help.
No win, no fee.

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