3.1 A plaintiff injured in New South Wales can pursue different avenues in a claim for damages, depending on the nature of the accident that caused the injury. Plaintiffs who are injured as a result of a motor vehicle accident can only claim damages pursuant to the Motor Accidents Act 1988 (NSW). Although the non-economic loss component of an award is always given in the form of a lump sum, the Act allows for structured settlements with respect to economic loss,1 and interim payments by insurers with respect to hospital, medical and rehabilitation expenses.2 Plaintiffs who are injured in circumstances where the Workers Compensation Act 1987 applies and who can bring a common law claim, may obtain a structured settlement in respect of future economic loss.3 The Supreme Court Act allows the award of interim damages to plaintiffs seeking damages in any type of action, excluding motor vehicle accidents.4 Finally, proceedings for damages in relation to persons suffering from a “dust-related” condition may be brought before the Dust Diseases Tribunal which has the same power to make decisions as the Supreme Court, except that the Tribunal may also make an award of provisional damages.5
3.2 Alternatives to lump sum awards were proposed by this Commission as far back as 1969.6 That paper proposed a scheme which contemplated postponement of an award of damages where there was a chance of improvement or deterioration in a plaintiff’s condition. The postponement could be for a period of up to seven years, with provision for interim payments. These proposals were never implemented.
MOTOR ACCIDENTS ACT 1988
3.3 The Motor Accidents Act 1988 was heralded as a “modified common law scheme” for compensating motor accident victims which would “provide a truly fair and equitable means of compensation to motor accident victims at a cost the community can afford”.7 In particular, Part 6 of the Act was seen as “the first step towards a general revision of the law of damages for personal injuries”.8 Significant amendments were made to the Act in 1995 to limit further the availability of damages to a person injured as a result of a motor accident.9 The changes were introduced on the basis that they were consistent with the primary aims of the motor accidents scheme as originally intended. These were stated to have been:
- to address the needs of the severely injured as a priority;
- to maintain premiums which are affordable for all vehicle owners; and
- to achieve this by limiting damages for non-economic loss in cases of minor injuries.10
The Act provides for structured settlements and interim payments.
Structured settlements
3.4 Section 81(2) of the Motor Accidents Act allows the court to approve a structured settlement with respect to future economic loss and impairment of earning capacity. There is no provision for an alternative to a lump sum to be awarded for non-economic loss. Section 81 has not been used since it came into force. The most likely reason is that s 81(1) requires the agreement of both parties before the section can take effect.11
Interim payments
3.5 Once liability has been admitted or determined, s 45 of the Motor Accidents Act imposes the duty on an insurer to make interim payments for such hospital, medical, pharmaceutical, and certain rehabilitation and respite care expenses as may be incurred by the plaintiff. Subsection (2A) provides that the payments must be “reasonable and necessary”, properly verified and relate to the injury caused. The payments can only be made once liability has been determined, and the insurer’s duty to pay arises from the provisions of the Act, with no specific order required from the court.
WORKERS COMPENSATION ACT 1987
Structured settlements
3.6 The Workers Compensation Act 1987 provides a comprehensive statutory scheme of compensation, while retaining rights at common law in certain circumstances. Where common law damages are claimable, a structured settlement is available under s 151Q.12 This section provides that damages for future economic loss can, in some cases, be awarded in the form of a structured settlement and mirrors the provisions of s 81 of the Motor Accidents Act 1988. The current s 151Q, which like s 81 of the Motor Accidents Act 1988 requires the consent of the parties to operate, was introduced by the Workers Compensation Legislation Amendment Act 1995. The previous s 151Q, introduced by the Workers Compensation (Benefits) Amendment Act 1989, differed significantly from the current provision in that the operation of the section did not require agreement between the parties but could be enlivened at the request of either of the parties or if the Court considered that it should apply. The recent amendment was introduced for the stated purpose of bringing “the provision into line with the corresponding provisions of the Motor Accidents Act”.13
3.7 Although there is some evidence of the use of s 151Q before the 1995 amendments14 it is likely that it will not be used frequently in future for the same reasons discussed above in relation to the Motor Accidents Act.15
INTERIM DAMAGES UNDER THE SUPREME COURT ACT 1970
3.8 Since 1991 Part 5 Division 2 of the Supreme Court Act 1970 has permitted the court to make interim payments in any proceedings for damages.16 The idea came from the English rules of court17 and was introduced in New South Wales to ameliorate the distress suffered by plaintiffs, particularly those who might be financially disadvantaged.18 Although there is little case law explaining the provision, the fact that payment can only be made on the application of the plaintiff suggests that it is a needs-based provision aimed at, for example, catering for immediate medical needs.
3.9 The legislation applies to any proceedings for damages commenced in the Supreme Court, except where Part 6 of the Motor Accidents Act 1988 applies,19 and gives the court a wide statutory discretion to award interim payments. The court may make an order for an interim payment or payments at any stage of the proceedings. According to s 76E(3), an order may be made if:
(a) the defendant has admitted liability; or
(b) the plaintiff has obtained judgment against the defendant for damages to be assessed; or
(c) the Court is satisfied that, if the action proceeds to trial, the plaintiff would obtain judgment for substantial damages against the defendant.
3.10 The Court, in making an order, may not order the payment of an amount which exceeds “a reasonable proportion of the damages which in the opinion of the Court are likely to be recovered by the plaintiff”,20 while also taking into account any relevant contributory negligence or cross claims.21 Section 76E(4) lists three criteria which may prevent the making of an order:
(4) The Court may not make such an order if the defendant satisfies the Court that:
(a) the defendant is not insured in respect of the risk giving rise to the plaintiff’s claim for the recovery of damages; and
(b) the defendant is not a public authority; and
(c) the defendant would, having regard to the defendant’s means and resources, suffer undue hardship if such a payment were to be made.
3.11 The making of any interim payments by a defendant does not amount to an admission of liability.22 The Court is given power to make orders with respect to interim payments “as may be just” including to vary or to order the repayment of any interim award at either final judgment, discontinuance or withdrawal of the claim, or at any other stage of the proceedings on the application of any of the parties.23 Where there is more than one defendant, the order for interim payment cannot be made generally against any defendant who may happen to have the most resources, but only against those defendants against whom the interim order has been sought and made.24
3.12 A claim for interim damages arising in respect of the death or injury of a person caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle is specifically excluded from s 76E. Such a claim must be bought under Part 6 of the Motor Accidents Act.25 This position is similar to the English legislation where the court has no jurisdiction to order the Motor Insurers’ Bureau to make interim payments. The Bureau does, however, make voluntary interim payments based on its own guidelines.26
3.13 While the court may order interim payments at any time before the assessment of damages, it is not clear how long a court can postpone final assessment. In Pettersen v Bacha27 the court commented that it has the power to delay final assessment for a number of years. In the case of a child, it was suggested this may be until the child turns eighteen, or perhaps even longer. Part 31 rule 2 of the Supreme Court Rules which deals with the separate decision of any question, whether of fact or law, permits questions of liability and damages to be tried separately. The provision is traditionally used where there is a clear division between issues of liability and damages or where there is a degree of complexity in the issue of damages, for example, where there is some doubt about the plaintiff’s prognosis and it would be appropriate to wait until his or her condition is settled.28 The postponement could be effected by the court’s power to adjourn trials.29
Judicial interpretation of s 76E
3.14 There have been few decided cases explaining s 76E of the Supreme Court Act. Frellsen v Crosswood Pty Ltd30 considered some of the issues when a plaintiff applies for an order for interim damages, the court relying on English decisions interpreting the equivalent English legislation.31 Justice Sully examined three particular questions raised by the English legislation, which he considered were equally applicable to the New South Wales legislation:
- what is meant by the requirement that the court must be satisfied that “the plaintiff would obtain judgment for substantial damages against the defendant”;32
- to what extent must a claimant for an interim payment demonstrate actual need as a pre-condition of the exercise in his or her favour of the court’s discretionary power; and
- what is the consequence, so far as concerns the satisfaction of the Court, of the claimant/plaintiff having brought the principal action against more than one defendant?
3.15 As to the question of what “satisfied” means for the purposes of s 76E(3)(c), the court applied English authorities directly on point,33 and concluded that something more than a prima facie case needs to be established by the plaintiff. A plaintiff was not, however, required to prove beyond reasonable doubt that substantial damages would be recovered.
3.16 The English authorities34 are not so conclusive as to the degree of need which must be demonstrated by a claimant for an interim payment. The New South Wales legislation does not include any positive requirement that a plaintiff demonstrate need, hardship or any other prejudice. In Frellsen Justice Sully indicated that the absence of any such need or hardship would no doubt be a factor to be taken into account in the exercise of the court’s discretion to award an interim payment award, but that it was not a precondition.35
3.17 In respect of the final matter considered by the court, it is important to note there is a difference in wording between the New South Wales and English legislation, in that s 76E does not address the situation “where there are two or more defendants”. Despite this, Justice Sully did not see how s 76E(3)(c) could refer to anything other than the particular defendant against whom the interim payment order has been sought.
DUST DISEASES TRIBUNAL ACT 1989
Provisional damages
3.18 The Dust Diseases Tribunal Act 1989 (NSW) establishes the Dust Diseases Tribunal which has jurisdiction with respect to proceedings for damages in relation to persons who are suffering or have suffered from “dust-related” conditions.36 The Tribunal has the same power to make decisions as the Supreme Court would in relation to similar proceedings,37 but in addition the Tribunal may make an award of provisional damages under s 11A.38
3.19 Section 11A essentially follows the scheme laid down by s 32A of the Supreme Court Act 1981 (Eng)39 except that it applies to causes of action in relation to a person suffering from a “dust-related” condition. It must be proved or admitted that there is a chance that, at some definite or indefinite time, the person will, as a result of the relevant breach of duty, develop another dust-related condition. For example, a person suffering from asbestosis may develop mesothelioma.40 The court may then, under s 11A(2):
(a) award damages assessed on the assumption that the injured person will not develop another dust-related condition; and
(b) award further damages at a future date if the injured person does develop another dust-related condition.
3.20 Rules have been passed pursuant to s 11A41 and these essentially follow the provisions of the English Rules of the Supreme Court.42 One particular aspect to note is that the Rules allow the Tribunal to make an award of provisional damages only if the plaintiff “has pleaded a claim for provisional damages in the proceedings”.43 The Tribunal has advised the Commission that, to date, there has not been any use of provisional damages awards.
FOOTNOTES
1. Motor Accidents Act 1988 (NSW) s 81.
2. Motor Accidents Act 1988 (NSW) s 45.
3. Workers Compensation Act 1987 (NSW) s 151Q. Provision is made for interim payments in certain specified circumstances under the compensation scheme: s 112.
4. Section 76E.
5. Dust Diseases Tribunal Act 1989 (NSW) s 11A.
6. New South Wales Law Reform Commission, The Deferred Assessment of Damages for Personal Injuries and Interim Payments During the Period of Postponement of Assessment and on the Relevance of Remarriage or Prospects of Remarriage in an Action under Lord Campbell’s Act (Working Paper 2, 1969).
7. New South Wales, Parliamentary Debates (Hansard) Legislative Assembly, 29 November 1988 at 3832.
8. New South Wales, Parliamentary Debates (Hansard) Legislative Assembly, 29 November 1988 at 3832.
9. Motor Accidents Amendment Act 1995 (NSW).
10. New South Wales, Parliamentary Debates (Hansard) Legislative Council, 16 November 1995 at 3320.
11. See Pettersen v Bacha (NSW CA, No CA 40584/94, 9 March 1995, unreported) per Handley JA at 2-3.
12. The Act permits interim awards in respect of statutory compensation where it is clear that some compensation is payable under the Act, but the actual amount has not yet been ascertained because of various specified disputes between employers and insurers and employers and employers: s 112. Compare Workers Compensation Act 1926 (NSW) s 7B.
13. New South Wales, Parliamentary Debates (Hansard) Legislative Council, 31 May 1995 at 418.
14. This was despite considerable problems with construction and application of the section: Hadley v Michell (NSW SC, No 16178/90, Lee AJ, 17 December 1991, unreported); Tomkins v Deniliquin Nursing Home Foundation Ltd (NSW SC, CLD 14608/92, Wood J, 26 November 1993, 57 pages, unreported) at 38-56; and Tomkins v Deniliquin Nursing Home Foundation Ltd (NSW SC, CLD 14608/92, Wood J, 26 November 1993, 5 pages, unreported); as well as judicial calls for reform: Townsend v Greater Taree City Council (NSW SC, CLD 16368/92, Loveday AJ, 24 November 1994, unreported).
15. Para 3.4. See also Wilson v Wilbroco Pty Ltd (NSW SC, CLD 10652/91, Barr AJ, 8 September 1995, unreported) at 14.
16. As does s 58 of the District Court Act 1973 (NSW).
17. See Rules of the Supreme Court 1965 (Eng) O 29 r 9-18.
18. New South Wales, Parliamentary Debates (Hansard) Legislative Assembly, 14 March 1991 at 1021. It was also hoped that such arrangements would encourage earlier settlements in some cases.
19. Section 76H.
20. Section 76E(5).
21. Section 76E(6).
22. Section 76F.
23. Section 76G.
24. Frellsen v Crosswood Pty Ltd (1992) 15 MVR 343 at 348-349.
25. Supreme Court Act 1970 s 76H.
26. England and Wales, Law Commission, Structured Settlements and Interim and Provisional Damages (Law Com No 224, 1994) at 88-90.
27. NSW CA, No CA 40584/94, 9 March 1995, unreported, at 2-4.
28. P Taylor (ed), Ritchie’s Supreme Court Procedure NSW (Butterworths) at [31.2.5]. The English Court of Appeal cases cited in support of this proposition merely include dicta as to the desirability of postponement of assessment where there is an element of uncertainty as to the plaintiff’s future condition: Hawkins v New Mendip Engineering Ltd [1966] 1 WLR 1341 at 1347 per Winn LJ; Stevens v William Nash Ltd [1966] 1 WLR 1550 at 1554-5 per Winn LJ. Bulovec v Mealing (NSW SC, CLD 2110/76, Master Sharpe, 20 February 1980, unreported) also cited in support, is based merely on the citation of the same two English cases in the English Practice: I H Jacob (ed), The Supreme Court Practice 1979 Vol 1 (Sweet & Maxwell, London, 1978) at para 33/4/7.
29. In Hawkins v New Mendip Engineering Ltd [1966] 1 WLR 1341 the power to adjourn was contained in the then RSC O 36 r 34. Part 34 r 3 of the Supreme Court Rules 1970 (NSW) allows for adjournment of proceedings in New South Wales.
30. (1992) 15 MVR 343.
31. RSC O 29 r 11.
32. Supreme Court Act 1970 s 76E(3)(c). Cf RSC O 29 r 11(1)(c).
33. See Shearson Lehman Bros Inc v Maclaine Watson & Co Ltd [1987] 1 WLR 480 per Lloyd LJ at 488H-489B; Gibbons v Wall (English Court of Appeal, 12 February 1988, unreported); Ricci Burns Ltd v Poole [1989] 1 WLR 993; and Schott Kem Ltd v Bentley [1991] 1 QB 61.
34. In Schott Kem Ltd v Bentley [1991] 1 QB 61, Neill and Glidwell LJJ did not consider that the English rules relating to interim payment orders restricted such an order being made in the absence of evidence, need or prejudice. They did not see any need to place limits on the discretionary jurisdiction of the court to award an interim payment other than those set out in Order 29. They did acknowledge that the practice was for an interim payment in a personal injury action to be limited to sums for which a plaintiff can show a need. A different view was taken in Breeze v R McKennon & Son Ltd (1985) 32 BLR 41 at 50, where the court said a plaintiff’s evidence should explain why the order is required and cover the need for the plaintiff to have the money. See also Shearson Lehman Bros Inc v Mclaine Watson & Co Ltd [1987] 1 WLR 480 at 492.
35. Frellsen v Crosswood Pty Ltd (1992) 15 MVR 343 at 348.
36. Dust Diseases Tribunal Act 1989 (NSW) s 11.
37. Dust Diseases Tribunal Act 1989 (NSW) s 10(4).
38. This section was added to the Act by the Courts Legislation Amendment Act 1995 (NSW) and commenced on 1 August 1995.
39. See para 4.20.
40. New South Wales, Legislative Council, Parliamentary Debates (Hansard), 31 May 1995, at 416.
41. Dust Diseases Tribunal Rules (NSW) as amended by Rule No 560 of 1995 (published in Gazette No 110 of 9 September 1995).
42. RSC, O 37 r 7-10.
43. Dust Diseases Tribunal Rules (NSW) r 5(3).
