The recent decision in Chapman v Wide Bay Hospital and Health Service [2022] QDC 271 provides an interesting insight into the assessment of economic loss in circumstances where a plaintiff’s income has increased in the aftermath of an injury. Significantly, Her Honour Judge Rosengren held that the “relevant loss to be assessed is the loss of earning capacity, rather than the loss of earnings. There is still a loss of earning capacity if the plaintiff’s post-injury earnings would have been even higher without the subject events.”
In this alert, we outline the details of the claim and the key takeaways for future considerations.
Background
The Plaintiff brought a claim against the defendant for medical negligence relating to a laparoscopic hysterectomy in December 2015. Liability was admitted. It was not in dispute that the Plaintiff had suffered an injury to her bowel − scarring to her abdomen − and a psychological injury; namely, an adjustment disorder.
Quantum was in dispute. The parties widely differed in their respective assessment of damages, with the Plaintiff seeking some $620,000 and the defendant contending for an award of $45,000. The primary dispute was in relation to economic loss and care. In this alert, we focus on the Court’s findings with respect to economic loss.
Earnings and employment history
Pre-injury, the Plaintiff worked in an administrative role at Advanced Foot Care for 15 to 20 hours per week. The parties agreed that her average earnings in the 2013 to 2015 financial years ranged between approximately $465 and $515 net per week.
The Plaintiff’s surgery took place in December 2015 and she had intended to return to work in January 2016. The Plaintiff contended that as a result of the negligent surgery she could not return to work with her employer until four months later than she had planned.
The Plaintiff commenced work at Trio Automotive Group Queensland Pty Ltd in October 2016. In January 2018, the Plaintiff’s employment status at Trio Automotive changed to full-time and she was working 40 hours per week. She contended that she could not manage this with her symptoms − in particular, her significant fatigue − and needed to drop down to 35 hours per week.
The parties agreed that the Plaintiff earned approximately $375 net per week on average in the 2016 financial year and between approximately $565 and $800 net per week on average in the 2017 to 2022 financial years.
Past economic loss
The Plaintiff’s evidence was that she would have continued working 40 hours per week through to retirement age, if not for the injury. The question before the Court was whether the Plaintiff’s significant claim for past economic loss was maintainable, in circumstances where her post-injury earnings significantly exceeded her pre-injury average. The defendant also contended that the Plaintiff’s ongoing fatigue was explainable by reference to her unrelated diagnosis of obstructive sleep apnoea.
As noted above, Judge Rosengren made it clear that in a claim for past economic loss the relevant inquiry is whether there is a loss of earning capacity, as distinct from a loss of earnings. There is still a loss of earning capacity if the Plaintiff’s post-injury earnings would have been even higher without the subject events.
Her Honour was satisfied that it was probable that if the Plaintiff were not suffering from the psychological condition, she would have continued working full-time. Significantly, Her Honour had noted earlier in the judgment that that the Plaintiff presented as sincere and honest and she did not construe any deliberate intention to mislead.
With respect to the obstructive sleep apnoea, Judge Rosengren held that this would not attract a significant discount, as it appeared to be successfully treated with ongoing input from a sleep physician.
Past economic loss was assessed based on full loss of earnings between 1 February and mid October 2016 and loss of approximately $75 per week, being the difference between full time employment and 35 hours per week, from February 2020 to the date of judgment. The total allowance was $18,100.
Future economic loss
With respect to future earnings, the Court accepted that the major impediment to the Plaintiff returning to full-time work was the psychological condition. However, Her Honour was of the view that there were grounds for optimism about the condition improving, including:
- treatment for the Plaintiff’s condition was available, but yet to be trialled. In evidence, the Plaintiff expressed a willingness to consider engaging in further treatment; and
- the likelihood that the ongoing litigation was perpetuating the condition and had been a barrier to successful treatment.
Judge Rosengren allowed ongoing loss of the difference between full-time and part-time hours for a further two years to allow for treatment of the psychological condition. Thereafter, she made a global allowance of $35,000 for the remainder of the Plaintiff’s working life and in doing so, acknowledged that there was some artificial precision in the calculation of such loss. The overall award for this head of damage was $43,200.
Key takeaways
- Where a plaintiff’s post-injury earnings exceed their pre-injury earnings, that is not the end of the exercise in terms of calculating economic loss.
- Consideration needs to be given to the plaintiff’s evidence as to what they would have done had the injury not occurred, weighed against the likelihood of that transpiring, their employment history and their credibility as a witness.
- In assessing economic loss, the key inquiry is what the plaintiff could have earned but for the injury (i.e. earning capacity), as opposed to what the plaintiff actually earned.
For more information or to discuss your own circumstances, please get in touch with our Insurance and Risk team at HopgoodGanim Lawyers.