Punitive Damages and Aggravated Damages

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Aggravated Damages Definition:
Statutory benefits provide for compensation in the form of income loss; medical and other treatment expenses and attendant care services. However, according to one view, aggravated damages are ordered with a view to requiring the defendant to compensate the plaintiff for mental distress suffered on account of the way in which the defendant injured the plaintiff. Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service. No, I do not want Mondaq to share my personal data with Contributors. The capital costs of modifications to accommodation to meet the needs of a disabled plaintiff are recognised as recoverable out-of-pocket expenses and no allowance is to be made for the increase in the capital value of a property modified for that purpose: While there was no separate award of aggravated damages in Mosley for instance, aggravating conduct was relevant to the assessment of the award of general damages. Preferred Contact Phone Email Please leave this field empty.

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11. Remedies and Costs

In coming to his award of general damages for non-economic loss, the Privacy Commissioner considered:. Following his award of general damages, the Privacy Commissioner examined whether he should make an award for aggravated and punitive damages. Examining punitive damage first, the Privacy Commissioner held that he didn't have the power to award punitive damages under the Privacy Act because it doesn't fall within the "by way of compensation" requirement of s 52 1 iii.

However, the Privacy Commissioner followed authority, holding that aggravated damages does fall within the scope of s 52 1 iii. He then restated the guiding principles set down in 'BO' v AeroCare Pty Ltd [] AlCmr 32 to determine whether or not an award for aggravated damages is warranted:. Unlike previous cases, after considering these principles the Privacy Commissioner found that an award of aggravated damages was just justified.

Importantly, in coming to this conclusion, the Privacy Commissioner noted it was the manner in which Freelancer carried out its improper conduct, not the conduct itself, that was the basis for the award.

The Privacy Commissioner stated that aggravated damages in this case was appropriate, despite the compensation being for injury to feelings which was compensated for in HW's claim for general damages. The Commissioner also noted aggravated damages were justified even though Freelancer had not ignored the complaint made to the Office of the Australian Information Commissioner nor refused to conciliate and negotiate with HW.

This was due to Freelancer's high-handedness during the period of its improper conduct and its apparent indifference to the effect of its conduct toward HW. In other words, aggravated damages can be awarded as a result of the conduct itself, not only due to the conduct in subsequent proceedings. This decision demonstrates that going forward the Privacy Commissioner will award aggravated damages where it is appropriate to do so.

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Are you liable for aggravated damages in privacy actions? Background Freelancer is a large online freelancing marketplace where employers post work they need to be done and freelancers offer quotes to complete the project. General damages In coming to his award of general damages for non-economic loss, the Privacy Commissioner considered: The relationship between the assessment and the consequence is fixed by Parliament. To assess the proportion of a most extreme case by reference to the consequence in monetary terms would be to adopt a legally erroneous course.

Consistent with the Dell approach, a trial judge, assessing the proportion of a most extreme case, is not required to arrive at an unrealistic level of precision provided the percentage falls within a reasonable range of assessment: The age of a plaintiff may have an effect on the assessment of non-economic loss under the Civil Liability Act. In Reece v Reece 19 MVR , the Court of Appeal remarked upon the need, when assessing, on a proportionate basis, the severity of injury, to consider the age of a plaintiff and the likely length of the period over which the pain and suffering of progressive disability would be suffered.

The court held that the consequence of particular injuries were likely to be more severe in the case of a younger person than that of an elderly plaintiff who had a much shorter period of life expectancy. The principles adopted in Reece v Reece and Varga , above, did not apply to claims under the Motor Accidents Compensation Act or the Motor Accident Injuries Act where damages are not assessed by reference to a proportion of a most extreme case: Holbrook v Beresford 38 MVR However, where the plaintiff suffered injury in multiple accidents, the assessment is to be made by reference to the injuries suffered in each individual accident: Muller v Sanders 21 MVR He said the Competition and Consumer Act did not purport to, nor did it, have the effect of excluding recovery of non-economic loss under the Civil Liability Act notwithstanding that causes of action were available to the plaintiff under both Acts.

Damages in such a case, therefore, are intended to take account of, in addition to the deprivation of liberty, the shock of the arrest and injury to feelings, dignity and reputation. This head of damage includes income loss, superannuation losses and out-of-pocket expenses such as voluntary and commercially provided care expenses.

The authorities make it clear that damages for lost income, past and present, are awarded for impairment to income-earning capacity when the impairment is productive of income loss: There are therefore three questions to be answered in assessing income.

Damages for past and future loss of income are allowed because diminution of earning capacity is or may be productive of financial loss: Graham v Baker , above.

Although the exercise involves assessment of lost earning capacity and not loss of earnings, evidence of wage rates, known for the past and likely in the future, provides a basis for assessment. Both the lost capacity and the economic consequences of that loss must be identified before it will be possible to assess the sum that will restore the plaintiff to his or her position but for injury.

What was earned in the past may be a useful guide to what might be earned in the future but it does not always provide certain guidance. Assessment of future income loss necessarily involves the consideration of future possibilities or hypothetical events.

The exercise is imprecise and carried out within broad parameters. Evaluation of the extent to which a plaintiff may in future lose time from work and of the proper compensation to be allowed depends on the evidence. An error of principle would be involved in concluding, in the absence of evidence, as a matter of certainty that a plaintiff will suffer future income loss.

The onus is on the plaintiff to provide evidence in support of the claimed diminution in earning capacity. Past income is relevant to this consideration but is not always determinative. The onus is on the defendant who contends that the plaintiff has a residual earning capacity to provide evidence of the extent of that capacity and of the availability of employment. Where it is clear that income-earning capacity has been reduced but its extent is difficult to assess, the absence of precise evidence will not necessarily result in non-recovery of damages.

The task is to consider a range of what may be possibilities only that a particular outcome might be achieved to arrive at an award that is fair and reasonable. There are cases where tax returns do not reflect the full amount of that capacity. For example, the case of a husband and wife partnership, where income is divided equally although one partner performs the work necessary to generate the income while the other undertakes the administrative tasks associated with the operation of the business.

The plurality of the High Court noted:. Malec v Hutton and Medlin v SGIO , above, were High Court decisions, the result of which was that, where a plaintiff demonstrates some loss of earning capacity extending beyond the date of trial, although difficult to assess, the courts are bound to award something unless, on the material before the court, it can be seen confidently that the damage suffered by the plaintiff will not in fact be productive of income loss.

In general it was desirable for precise evidence to be called of pre-injury income and likely post-injury income. Absence of that evidence will not necessarily result in an award of no or nominal damages for impaired earning capacity.

In short, where earning capacity has unquestionably been reduced but its extent is difficult to assess, even though no precise evidence of relevant earning rates is tendered, it is not open to the court to abandon the task and the want of evidence does not necessarily result in non-recovery of damages. The task of the trier of fact is to form a discretionary judgment by reference to not wholly determinate criteria within fairly wide parameters.

Though the trier of fact in arriving at the discretionary judgment must achieve satisfaction that a fair award is being made, since what is involved is not the finding of historical facts on a balance of probabilities, but the assessment of the value of a chance, it is appropriate to take into account a range of possible outcomes even though the likelihood of any particular outcome being achieved may be no more than a real possibility.

This was because the trial judge was required to estimate loss when precise calculation was not possible and the figure arrived at took into account a range of factors, including the changing value of money.

The court held that she was entitled to recover income loss during the lost years subject to the deduction of an amount to account for the expenses that she would have incurred in self maintenance.

No deduction was required for the expense of maintaining dependants. They pointed out that it was necessary to call evidence that suggested a plaintiff was less able than any other career-oriented person, whether male or female, to combine successfully a demanding career and family responsibilities. Childcare and domestic-care responsibilities, they said, did not always involve expenditure. This was a matter of choice for the family and the expense involved was of a private or domestic nature.

Specific evidence is required if a plaintiff proposes to work beyond retirement age: A certificate of assessment of whole person impairment issued under Motor Accidents Compensation Act s 61 is not conclusive in respect of economic loss: While the content of the certificate may have some relevance, extreme caution was required in relying on the content of the certificate in assessing damages for economic loss: It is an acknowledged principle that life is not always certain and that unpredictable events can affect future income.

These events or vicissitudes are dealt with by of the application of a discount to the sum assessed as compensation for future income losses. For instance, where the plaintiff is of advanced age with a relatively short period over which the assessment of future income loss is to be made, the percentage applied for vicissitudes may be reduced. Care should be exercised to avoid double counting. After all, the average person can hardly be regarded as a paragon of virtue when it comes to heavy drinking.

The Workers Compensation Act places stringent limits on the recovery of common law damages from an employer, except where the claim is the result of a motor accident. Damages are payable only to pension age as defined by the Social Security Act No damages for pure mental harm, or nervous shock, may be claimed where the injury was not a work injury: This provision disallows any claim for nervous shock by, for instance, a relative of an injured worker.

The calculation based on those assumptions must be discounted against the possibility that those circumstances might not eventuate.

The court is required to state the assumptions on which the award is based and the percentage by which it has been adjusted. Notwithstanding these requirements, common law principles relating to the assessment of income loss, vicissitudes or contingencies continue to apply: Section requires the court to deduct from payments on account of income loss expenses paid to the plaintiff under the Victims Compensation Act repealed, now Victims Rights and Support Act or by the insurer or Nominal Defendant.

The maximum recoverable for the loss of employer contributed superannuation is that required by law to be paid by the employer: This element of income loss arises in situations where a plaintiff has received weekly payments for loss of income under the workers compensation legislation upon which tax has been paid. The plaintiff when recovering common law damages is required to repay to the workers compensation insurer the gross amount of weekly payments received.

In many cases where liability is not in issue, the insurer will pay for or reimburse out-of-pocket expenses that meet these requirements. Payment of these expenses is commonly raised as a defence to a claim. In general, claims for out-of-pocket expenses centre on needs for treatment, past and future, rehabilitation and aids to assist a plaintiff in overcoming disability arising from injury. As with income loss, in determining the amount to be awarded, it is often necessary to take account of future requirements for treatment, particularly in the case of orthopaedic injuries that may involve ongoing degeneration and the need for surgery for fusion or replacement of joints.

In addition, allowance may be made for the cost of providing special beds, tools or equipment designed to assist an impaired plaintiff in the functions of everyday living. Thus, the cost of repair or replacement of these items is compensable. Other items held to be compensable include clothing damaged in the course of the accident or treatment. As to the Motor Accident Injuries Act , see [ ].

The plaintiff claimed the considerable cost of a C-leg prosthesis, a specialised computerised device. He explained that he did not, prior to trial, use his conventional prosthesis regularly or for extended periods because it caused him pain. The evidence established that prior to his accident, the plaintiff suffered from symptoms of osteoarthritis and it was inevitable that he would at some stage require hip replacement that could have been undertaken in a public hospital at no expense to him.

The Court of Appeal accepted that the replacement that would have been required as a result of the pre-accident progressive condition was unlikely to involve the urgent intervention necessitated by the injury suffered in the accident. Accordingly the plaintiff was entitled to recover the cost. The capital costs of modifications to accommodation to meet the needs of a disabled plaintiff are recognised as recoverable out-of-pocket expenses and no allowance is to be made for the increase in the capital value of a property modified for that purpose: In most cases, the cost of the basic accommodation itself is not recoverable.

In Weideck , the injured plaintiff could no longer live in the caravan he occupied prior to his injury. He was allowed the full capital costs of modifications required to deal with his disability.

In addition, he was allowed the costs of land and a basic house, heavily discounted to set off the rent he otherwise would have continued to pay and the income that ordinarily would have been diverted to the provision of a capital asset, such as a house. In such circumstances, the additional costs of rearing and maintaining the child are recoverable.

There are two varieties of attendant care: The issue that has been most productive of judicial and legislative scrutiny is that arising out of claims for services provided on a gratuitous basis.

The argument was that the loss was in truth suffered by the person who provided the services. The character of the benefit that the plaintiff received by the gratuitous provision of services was such that it ought to be brought to the account of the wrongdoer.

The fact that a relative or stranger to the proceedings is or may be prepared to provide the services gratuitously is not a circumstance which accrues to the advantage of the appellant. If a relative or stranger moved by charity or goodwill towards the respondent does him a favour as a disabled person then it is only right that the respondent should reap the benefit rather than the wrongdoer whose negligence has occasioned the need for the nursing service to be provided.

The plaintiff might, or might not, reimburse the provider. According to the repeated authority of this Court, contractual or other legal liability apart, whether the plaintiff actually reimburses the provider is entirely a matter between the injured plaintiff and the provider. It is, as has been repeatedly stated, to provide the injured plaintiff with damages as compensation for his or her need, as established by the evidence. The anomaly arose from the departure from the general rule that damages, other than damages for loss not measurable in money, were not recoverable unless the injury involved resulted in actual financial loss.

The controversy arose because the result could be disproportionately large awards when compared to sums payable under traditional heads of damage.

He also accepted that in appropriate circumstances a deduction for vicissitudes might be appropriate when assessing a claim for attendant care costs. There are some substantial differences between these provisions. Sackville AJA held that only one six-month qualifying period was involved and it was not a continuing requirement.

The result was that compensation was payable for services provided both before and after the threshold requirements were met. As to services that would have been provided in any event, the High Court in Van Gervan v Fenton , above, recognised that in the ordinary course of a marriage there is an element of give and take in the provision of mutually beneficial services. The qualification is that such services will be taken out of the area of the ordinary give-and-take of marriage to the extent that the injuries to the wife or husband preclude her or him from providing any countervailing services.

To that extent, the continuing gratuitous services provided by the spouse assume a different character and should be treated as additional services which have been or will be provided by that spouse to look after the accident-caused needs of the injured plaintiff. Nor is it permissible to aggregate the needs created by successive breaches of duty, for example, where those needs are generated by successive accidents, in order to meet the threshold requirements of the legislation: Thus, it was argued, the need for services did not arise solely out of the aggravation of the condition for which the defendant was responsible.

Beazley JA, although she said the section was not without difficulty, preferred a construction that was based on the definition of injury. Where care is not provided on a gratuitous basis, the reasonable cost of reasonably required commercially provided services is recoverable both for the past and future: There was a considerable difference between the cost of hour care in a rented apartment, as claimed by the plaintiff, and the cost of nursing-home care that the defendant argued would meet her reasonable requirements.

A plaintiff is only entitled to be recouped for such reasonable expenses as will reasonably be incurred as a result of the accident. It does not follow that every expenditure which might be advantageous for a plaintiff as an alleviation of his or her situation or which could give him or her happiness or satisfaction must be provided for by the tortfeasor.

The touchstone of reasonableness in the case of the cost of providing nursing and medical care for the plaintiff in the future is, no doubt, cost matched against health benefits to the plaintiff.

If cost is very great and benefits to health slight or speculative the cost-involving treatment will clearly be unreasonable, the more so if there is available an alternative and relatively inexpensive mode of treatment, affording equal or only slightly lesser benefits. When the factors are more evenly balanced no intuitive answer presents itself and the real difficulty of attempting to weigh against each other two incomparables, financial cost against relative health benefits to the plaintiff, becomes manifest.

Tobias AJA rejected the argument, as without legal basis, that the court must be satisfied that the amount awarded would actually be spent. In Perisher Blue Pty Ltd v Nair-Smith ALR the Court of Appeal accepted that the plaintiff was entitled to recover damages for the cost of commercially provided services at the established market rate rather than at the lower rate she paid for domestic assistance at the time of trial.

The court continued its practice of preferring the commercial rate on the basis that it was not known how much longer the current service provider would continue to work at the lower rate. It was therefore necessary to consider the particular needs of the dependants involved. The right to damages addressed the needs of the dependants that would, but for injury, have been satisfied by the claimant and the question of whether those needs were reasonable in the circumstances.

If damages are awarded under the section, the assessment of non-economic loss must not include an element to compensate for loss of capacity to provide services to others: Other matters to be taken into account in the assessment of compensation are: Campbell JA, after reference to extensive authority dealing with the many aspects of dependency, said that the nature and extent of the care provided by the claimant to the children were such that a finding of dependence was open.

On the same basis, he rejected the claim that the services were in fact provided to the parents and not to the children. The defendant argued that these services were not services of a domestic nature so that they were not compensable.

It caps only the hourly rate by which compensation is to be assessed. Following his diagnosis with mesothelioma, he lost the capacity to provide this care, and his wife was admitted to a nursing home. The Compensation to Relatives Act provides for actions to be brought on behalf of dependants of deceased victims of compensable injury to recover for loss of financial support and funeral expenses.

Only one such action may be brought so that all potential beneficiaries should be nominated as plaintiffs. Insurance, superannuation, payments from provident funds or statutory benefits are not to be taken into account in assessing an award of compensation: Although unanimously recognising changing social circumstances that cast doubt on prior authority, the High Court was divided on the issue. Gleeson CJ accepted that this contingency should be dealt with when determining an appropriate adjustment for vicissitudes.

He questioned the continued use of the term dependency to describe the right to compensation when, in modern society, it was common for both parties to a relationship to earn income and to have the capacity for financial self-support.

He accepted, however, that each party to the relationship might have expectations of direct financial support. He pointed to the anomaly involved in taking into account an established new relationship at the time of trial while making no allowance for repartnering when there was none. This was a factor to be proved in the usual way and there was no special legal or evidentiary status attaching to the Luntz tables. The Civil Liability Act makes no reference to actions of this nature.

They answered in the negative, the plurality pointing out:. It was not an exception or variation to the law of negligence but remained a distinct cause of action. The court indicated that caution should be exercised in expanding the scope of recoverable damages in such actions and confirmed that they did not extend to loss of profits or recovery of sick pay, pension or medical expenses payable to the employee. Statutory benefits provide for compensation in the form of income loss; medical and other treatment expenses and attendant care services.

The regime for the payment of statutory benefits for medical expenses and attendant care services applies to all claims. The statutory benefits payable for income loss extend to those claims that do not proceed to claims assessment or court.

Part 4 of the Motor Accident Injuries Act deals with awards of damages by a court and the assessment of damages by a claims assessor in respect of motor accidents. It provides for modified common law damages. A certificate may be issued when:. An injury to a spinal nerve root that manifests in neurological signs other than radiculopathy is included as a soft tissue injury for the purposes of the Act. Each of the following injuries is included as a minor psychological or psychiatric injury for the purposes of the Act:.

These expenses are dealt with through the statutory benefits regime. The Act expressly provides that no compensation is payable for gratuitous attendant care, leaving open the question of whether the loss of capacity to provide these services remains for assessment under the umbrella of non-economic loss: There is little change to the parameters for the assessment of loss of capacity to earn income: These limits do not apply to awards of damages in claims brought under the Compensation to Relatives Act Those claims are effectively unchanged by the Motor Accident Injuries Act.

Income loss is permitted only up to the maximum weekly statutory benefits amount, notwithstanding that this is a gross earnings amount: This amount is adjusted annually on 1 October: Credit must be given for any weekly payments made under the statutory benefits provisions: Assessment of non-economic loss remains essentially unchanged: At this stage this aspect remains unregulated.

Blameless accidents are now referred to as no-fault motor accidents. The issues in Gray v Richards , above, were whether the right of recovery extended to the cost of managing the sum awarded for management of the fund the fund management damages issue and whether it extended to the cost of managing the predicted future income of the managed fund the fund management on fund income issue. Expenses of fund management by whatever trust company was appointed were to be included in this assessment.

The court rejected the claim for the costs of fund management on fund income. Having applied the discount rate to damages awarded to cover future loss no further allowance should be made. It was inconsistent with this comprehensive dismissal of any further allowance to suggest that the cost of managing the income generated by the fund to ensure that it maintains a net income at a given rate was a compensable loss. The capital and income of the lump sum award for future economic loss would be exhausted at the end of the period over which that loss was expected to be incurred.

It would be contrary to the principles of Todorovic v Waller , above, to assume that the fund would generate income that would be reinvested and swell the corpus under management, an assumption that could not be made when drawings from the fund might exceed its income. In such actions, the worker may or may not join the employer. The provision applies where the worker takes or is entitled to take proceedings against both the third person and the employer: The need arose because, upon the introduction of the scheme for modification of the common law rights of a worker against an employer, it was no longer possible to determine the respective liabilities of an employer and a third party by reference simply to the proportions in which they were held to be responsible for the damage suffered by the employee.

The right of a worker to recover common law damages against an employer has been increasingly limited to the point where, commonly, no rights exist. If the threshold is not met, there is no right of recovery of any common law damages against the employer. This outcome has prompted the argument that there is no entitlement to take proceedings against the employer.

The Court of Appeal has consistently rejected this argument. Once established that an employer owed a duty of care that was breached, causing loss to the plaintiff, the entitlement was established. The right to recover damages was irrelevant: A worker who does not join the employer cannot be compelled to undergo assessment.

No compensation in the nature of aggravated or exemplary damages is recoverable through claims made under the statutory schemes: Damages under these heads remain available in the limited categories of personal injury claims that are not dealt with under these schemes.

It is very important to distinguish between aggravated and exemplary damages. In the past, courts have tended to award a single sum to account for both types of damage but it is now accepted that the better practice is to distinguish between amounts awarded under these heads and to provide reasons in each case.

In this regard it is relevant to note that the matters to which I have referred as justifying an award of exemplary damages are also pertinent, as is often the case, to an award of aggravated damages. The difference is that in the case of aggravated damages the assessment is made from the point of view of the Plaintiff and in the case of exemplary damages the focus is on the conduct of the Defendant.

Nevertheless, it is necessary, as I have noted above, to determine both heads of compensatory damages before deciding whether or not the quantum is such that a further award is necessary to serve the objectives of punishment or deterrence or, if it be a separate purpose, condemnation.

The award of damages under these heads is discretionary and caution is required to ensure that the circumstances in which they awarded are appropriate. There is no doubt that if a plaintiff is saying: This is relevant to the question of whether or not exemplary damages should be awarded, and, if so, how much. Accordingly, the position in Australia is that exemplary damages may not be awarded where substantial criminal punishment has been imposed.

However, the High Court in Gray did not preclude an award of exemplary damages where something other than substantial punishment was imposed, and in accordance with the authorities in this Court exemplary damages may be awarded in some circumstances notwithstanding that a criminal sanction has been imposed.

Her Honour concluded that conviction for assault and the imposition of a bond was a substantial punishment such that exemplary damages were not warranted on this basis. Her Honour did, however, accept at [] the other basis for the award of exemplary damages, namely, that the manner in which the appellant defended the claim for damages was unusual in the sense used in Gray v Motor Accidents Commission.

Damages under this heading may be awarded to a plaintiff who suffers increased distress as a result of the manner in which a defendant behaves when committing the wrong or thereafter. He expressed serious doubt about when they might be claimed in negligence actions or about the need for such damages when elements such as injured feelings and distress could be dealt with in an award for general damages.

In my opinion, the only principled explanation must be along the following lines. It is extremely difficult to quantify damages for hurt feelings. In cases of hurt feelings caused by ordinary wrong-doing, of a kind consistent with ordinary human fallibility, the court must assess damages for hurt damages neutrally, and aim towards the centre of the wide range of damages that might conceivably be justified.

However, in cases of hurt to feelings caused by wrong-doing that goes beyond ordinary human fallibility, serious misconduct by the defendant has given rise to a situation where it is difficult to quantify appropriate damages and thus where the court should be astute to avoid the risk of under-compensating the plaintiff, so the court is justified in aiming towards the upper limit of the wide range of damages which might conceivably be justified. Exemplary damages are awarded as a form of punishment: They may be awarded for a tort committed in circumstances involving a deliberate, intentional or reckless disregard for the plaintiff and his or her interests.

The objects of the award may include condemnation, admonition, making an example of the defendant, appeasement of the plaintiff in order to temper an urge to exact revenge, or the expression of strong disapproval.

It may include elements of malice, violence, cruelty, high-handedness or abuse of power. The amount should also be such as to bring home to those officials of the State who are responsible for the overseeing of the police force that police officers must be trained and disciplined so that abuses of the kind that occurred in the present case do not happen.

The award of exemplary damages is rare in actions for negligent conduct. Damages were assessed by reference to the sum paid for the dental services and interest. Although required to be proportionate to the circumstances, in an appropriate case, exemplary damages may exceed compensatory damages:

Damages, aggravated damages