Article by: Joseph Taouk and Sam Adair . 30th April 2009.
www.mondaq.com
Hickson v Goodman Fielder [2008]
As foreshadowed, the High Court has now considered the issue of whether
a worker who is injured by a third party, who receives compensation but
also recovers damages from the third party, is entitled to reduce his/her
compensation payback to reflect his/her contributory negligence.
The High Court has held in Hickson that where contributory negligence
was involved, a worker's payback is reduced proportionately in accordance
with his/her contributory negligence in causing the accident, including in
circumstances where the worker reaches an out of court settlement with
the third party.
Prior to enactment of the Law Reform (Miscellaneous Provisions) Act 1946
(LRA) in New South Wales, a worker's claim in tort against a third party
was liable to defeat upon proof of contributory negligence. No apportionment
was possible under the common law.
Readers will recall that the effect of the decision of the Court of Appeal in
Hickson (discussed in the December 2008 Deacons Insurance Update) is
that s10(2) of the LRA does not affect the amount of compensation
repayable by the worker where contributory negligence was in issue in
a settled action, but a Court did not deliver judgment making such an
apportionment.
The central issue upon which the Court of Appeal had focused was whether
a claimant (who is liable to repay compensation to his employer under s151Z
of the Workers Compensation Act 1987 (the 1987 Act)), was entitled to
reduce the amount of the payback to the same extent as the damages would
be reduced under s9 of the LRA, which provides that the damages recoverable
by a worker against a third party at common law are to be reduced by an
amount the Court considers to be "just and equitable".
The Court of Appeal had also held that the worker's concern that a
repayment action would be dramatically different to a tort action where in a
tort action the worker will deny or minimise any contributory negligence,
while in a repayment action the worker will attempt to admit or maximise
same. However, in dissent, Hodgson JA held that in a later hearing in respect
of the repayment action, the Court may come to its own view as to what a
Court hearing the case between the claimant and the tortfeasor would
reasonably have thought to be a just and equitable reduction.
Before the High Court, Goodman Fielder (the employer) submitted that
s10(2) of the LRA, which provides for apportionment of workers compensation
claims in respect of contributory negligence, when read with s151Z of the 1987
Act, operates to reduce the amount of the repayment by the worker to the
employer only in circumstances where the damages recovered by the worker
from the tortfeasor, as reduced under s9 of the LRA, are less than the amount
of the worker's compensation that is otherwise repayable.
The High Court rejected this submission and held that there is no incongruity
under a statutory no fault compensation scheme in treating the injured worker
differently from the tortfeasor.
Before recovering in his common law action, the worker had received
compensation payments from his employer. That situation was governed by
s151Z(1)(b). Section 10(2) of the LRA is linked directly to s151Z(1)(b).
The employer submitted that the closing words of section 10(2) could apply
to the circumstances of the present case, because the amount paid under a
settlement of Mr Hickson's claim against the tortfeasor for damages was not
"reduced under section 9" by a Court. However, in the High Court, Bell J held
that the closing words of s10(2) did not necessitate an apportionment by a
Court delivering a judgment, but rather described the measure of the reduction,
which is to such extent as the Court thinks just and equitable having regard to
the claimant's share in the responsibility for the damage.
With respect to the issue of a possible "trial within a trial" as discussed by the
Court of Appeal, Bell J held that the circumstance that in a repayment action
the Court may be required to determine the damages recoverable by the
worker and the extent of reduction under s9 are a reflection of the fact that
the parties in a repayment action under s151Z are not the same as in a common
law action and may very well involve a "trial within a trial". Bell J held that
the desirability of the finality of litigation does not justify reading s10(2) as
applying only to those cases in which the tortfeasor action proceeds to
judgment with a finding of contributory negligence by the Court (as opposed
to applying also to those cases in which contributory negligence is in issue
which are settled between the parties).
The High Court finally considered the meaning of the words "to the same
extent" in s10(2) of the LRA. The worker submitted that his liability to repay
the compensation was reduced by the amount by which the total damages
that would have been recoverable are reduced on account of the worker's
own contributory negligence. This, it was submitted, ensured that to the
extent the worker is under-compensated by the tortfeasor because it is his
or her own fault, he or she would not lose the benefit of his or her no-fault
statutory compensation.
The Court considered the following example:
A worker was 25% responsible for his injury. At the date of resolution of the
common law claim, the worker has received $800,000 in worker's compensation.
The worker's undiscounted damages were assessed at $4 million. Following
reduction for contributory negligence, the worker is entitled to an award of
common law damages of $3 million.
On the interpretation of s10(2), favoured by the worker, there would be no
liability to repay any of the compensation received, because it was less than
the amount by which the damages were reduced on account of contributory
negligence. The employer submitted that the worker's liability to repay the
compensation should simply be reduced by 25%, being the proportion by
which the damages were reduced. In this example, the worker would be
required to repay the compensation less 25% being an amount of $600,000,
and as a result, the worker would retain a total of $2.4 million in common law
damages. Bell J accepted the employer's submissions on this issue.
This case provides a useful outline of the effects of the contributory negligence
provisions under s10(2) of the LRA upon workers compensation payments.
The case also confirms that where contributory negligence is an issue, a
worker may adduce evidence on the issue in order to reduce the payback,
even where there is no judgment of a Court on the issue.
Hickson v Goodman Fielder Limited [2009] HCA 11
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WCV'S: I cant believe this ! When will the law stop punishing injured workers?
If I understand it correctly and please correct me if I am wrong, what this
article is saying is, " that if an injured worker can prove negligence caused by
a 3rd party, (which is usually your employer) it would by law entitle you to
do a contributory negligence claim against the employer as well as your
workcover compensation claim.
Then, any compensation you have or will receive from a contributory negligence
claim will then be applied to any compensation you will or do receive from
workcover and the workcover payment will then, be adjusted accordingly to
show the negligence payment made to you by the employer and in this case
the amount acquainted to $600,000 dollars or 25% of the 2 settlements.
25% of the payment for someone who will probably never work again is
alot of money towards their existence and my question is, why should the
injured worker have to pay anything, he did nothing wrong, all he did was
got hurt at work.
So it seems, that even though you are entitled by law, to be able to sue for
contributory negligence this case has not allowed you the injured worker
your right to compensation from all parties involved.
It seems that the more parties you involve the more you are going to pay!
Who has introduce this as law?
Why is a worker 25% responsible for his or her injury? What idiot thought
this one up? ( probably someone from the liberal party)
"Is a worker who climbs into a truck, owned by another, responsible for the
brakes failing?"I don't think so, regular maintenance is the responsibility of
the employer, not the driver.
This is a ridiculous sample for the courts it is not very realistic.
Why should an injured worker be discriminated against like this?
The law states that all workers are protected by our workplace relations
law and the accident compensation acts laws, so why do they insist on
diminishing our right to compensation?
If we are entitled to sue for our injuries then why, are they always trying
to deprive us of them? When is enough enough ?
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