In General Compensation, General News, Medical Negligence Claims, Public Liability
Personal injury compensation laws in Victoria

It’s time for Victorian laws to change to facilitate justice for grieving families.

In 2003, personal injury compensation laws in Victoria were changed to limit who could access compensation and how much compensation could be paid. This relates to, for example, medical negligence claims, public liability claims, product liability claims etc. The changes were hotly contested at the time, and remain controversial.

Over the last 20 years, there have been a number of revisions to Victorian personal injury compensation laws, which have generally helped to limit their harshest effects on people who deserved to be compensated for lifelong injuries.

It’s now time to make a further change that would make a huge difference to a small number of families who have lost a loved one due to someone else’s negligence and have not had access to compensation they richly deserve.

Personal injury compensation laws in Victoria now

It is important to understand that the changes and laws that we’re discussing do not apply to injured workers (WorkCover/worker’s compensation claims), people with an asbestos-related condition or people injured in motor vehicle accidents in Victoria (TAC claims). These types of claims have different thresholds and rules.

Instead, we’re talking about the laws that apply most commonly to people injured during medical treatment and in public liability claims, both coming under the umbrella of the “Wrongs Act”.

One of the most controversial aspects of the 2003 changes to the Victorian Wrongs Act was the introduction of a “significant injury threshold”.

The purpose of this threshold was to prevent people with minor or temporary injuries from getting compensation for their pain and suffering.

The effect of that 2003 law change was that only people with a “significant injury” (as defined in the Act) caused by negligence, could lodge a personal injury claim for compensation for their pain and suffering.

In order to prove that a person had a “significant injury”, an approved medical assessor needs to examine the person, and refer to a set of permanent impairment guides (the AMA Guides, 4th Edition) to assess how injured the person was as a percentage of their “whole person”.

What are the current percentage impairment levels required to make a personal injury claim?

Under current laws, an injured person needs to establish that they have suffered:

  • a spinal impairment of 5% or more;
  • another physical impairment of 6% or more; or
  • a psychiatric impairment of 10% or more.

The most common example of the unfairness of a threshold like this is to imagine a piano player who loses their pinky finger during medical treatment and that loss was due to the negligence of the surgeon. While the impact on their enjoyment of life would be enormous, they would not be entitled to compensation for pain and suffering because the loss of a pinky finger does not attract more than 5% whole person impairment according to the AMA guides.

Exceptions to the “significant injury threshold” for the purposes of a personal injury claim

There are some exceptions to the requirement to prove a significant injury.

For instance, the thresholds do not apply:

  • to claims relating to assault (physical or sexual) or sexual misconduct;
  • if the injury is loss of a foetus; or
  • if the injury is psychological or psychiatric injury arising from the loss of a child due to an injury to the mother or the foetus or the child before, during or immediately after the birth; or
  • if the injury is loss of a breast.

It is easy to see why these exceptions apply and how they can assist people who have suffered greatly to avoid being forced to prove that their injuries and losses are significant.

Application of the significant injury threshold is unfair

The problem is that there are still too many badly affected people inadvertently retraumatised by the significant injury threshold because their loss or injury either does not meet the threshold or does not fit the exception.

Parents grieving the loss of a newborn are not required to prove that they have a significant injury.

Parents grieving the loss of a toddler, however, are required to explain and justify why their loss and grief is significant enough to allow them to seek justice, compensation and accountability via a negligence claim.

And if a medical assessor or a Medical Panel determines that their permanent injuries (excluding their grief reaction) are not significant, then in most cases, they have no legal avenue for redress.

Some years ago, we represented a person whose loved one died in their arms at home after they had been discharged from hospital in error. Their loss and suffering was indescribable. And yet, bafflingly, the Medical Panel responsible for determining whether the person should be able to bring a personal injury claim for their psychological injury, found that they should not be entitled to compensation for their pain and suffering because they had been taking a mild dose of antidepressants for many years before the death.

In an acknowledgement that making grieving families jump through the “significant injury” hoops is cruel and unjust, frequently insurers and their lawyers will “waive” the requirement for those family members to prove that their loss and suffering meets the threshold.

While this is always welcome, grieving families should not be required to rely on the goodwill of insurers and their lawyers in order to avoid the injustice of the legal system.

What changes should be made to personal injury laws?

A change to the law to prevent the injustices with certain personal injury claims in Victoria, is potentially very simple.

As it stands, a person is deemed to have sustained a significant injury where it is a:

“psychological or psychiatric injury arising from the loss of a child due to an injury to the mother or the foetus or the child before, during or immediately after the birth”

Changing this sentence could allow the exception to apply to anyone who has lost a child or spouse:

“psychological or psychiatric injury arising from the loss of a spouse or child due to an injury to the mother or the foetus or the child before, during or immediately after the birth”

Of course, there would need to be consideration given to whether a “child” should be defined to include children over the age of 18, but this is a fairly straightforward exercise.

Deleting a few words from the Wrongs Act would make an enormous difference for a few grieving families.

Would This Amendment “Open the Floodgates”?

Governments and insurers often express concern about a change in the laws of negligence (for example medical negligence and public liability claims), that would improve access to compensation for people who have been injured.

The most common concern is that a change would “open the floodgates” leading to an increase in claims, an increase in payouts and an increase in insurance premiums (inevitably passed on to groups such as health professionals and local rate payers).

The beauty of the change we propose above is that it would affect the lives of a small group of deserving people in a significant way, without “opening the floodgates”.

The Medical Panel is the body ultimately responsible for determining whether a person has suffered a permanent significant injury. Their data confirms that only about 150 people each year are assessed by the Medical Panel in circumstances where the primary injury is psychiatric.

Of those 150, only a small proportion would relate to the loss of a spouse or child (perhaps about 10% but let’s allow 20%).

So perhaps 30 people each year are forced to attend the Medical Panel to justify why the loss of a loved one has caused them to suffer a permanent significant injury.

Imagine that 10 of them are unsuccessful in establishing that their loss is “significant”.

If the Wrongs Act were amended, that is 30 grieving people who would not have been traumatised by a harsh and unjust legal process and 10 people who now have access to compensation and accountability that they did not have before the change to the law.

The change in no way affects what a Court might award as fair and reasonable damages. So, it does not necessarily follow that the change would result in any increase in the amount of compensation being paid (and might actually save money because making grieving people jump through these legal hoops costs the government and insurers time and money).

Why Change Victoria’s personal injury compensation laws?

If it does not automatically mean more compensation for a greater number of grieving family members – why make the change?

Right now, family members are put through a harrowing process to justify why the death of their loved one has caused them a significant injury. In the process of seeking justice for their loss (including compensation and accountability for the negligence), the legal system is retraumatising them.

This small change could make a huge difference for a small number of people who deserve better from the legal systems that are meant to provide them with a measure of justice. This on its own is priceless.


1300 383 825 or email [email protected]

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