Quantum of compensation

Current law and practice

Statutory provisions

33.48 The benefits payable under the different workers’ compensation statutes vary. The Comcare scheme includes payment of the reasonable cost of medical treatment, income replacement for periods of incapacity for work, and payment of lump sums for permanent impairment.

33.49 Under the Comcare scheme, weekly compensation is payable where a worker is partially or totally incapacitated. Generally, for the first 45 weeks of incapacity, the weekly payments represent the worker’s normal weekly earnings minus the amount per week that he or she is able to earn in suitable employment. After this period, the amount is reduced to 75% of the worker’s normal weekly earnings minus the amount per week the worker is able to earn.^[53] Entitlement to incapacity payments continues until the age of 65 years.^[54]

33.50 Lump sum compensation is payable for death, permanent impairment and other non-economic loss resulting from a work related injury. The degree of permanent impairment and non-economic loss are determined in accordance with Comcare’s Guide to the Assessment of the Degree of Permanent Impairment.^[55]

33.51 Where a pre-existing or underlying condition is aggravated by a work-related injury, only the permanent impairment resulting from the aggravation is compensable. If the employee’s impairment is entirely attributable to a pre-existing or underlying condition, or to the natural progression of such a condition, the assessment for permanent impairment is nil.^[56]

Common law

33.52 Common law damages for personal injury are divided into economic loss and non-economic loss. Economic loss includes lost earnings and out of pocket expenses (special damages); lost earning capacity (including loss of superannuation entitlements); and reasonable costs for medical, care and other expenses. Assessment of lost earning capacity and future medical costs will sometimes involve consideration of life expectancy, which may be affected by the injury. Non-economic loss includes pain and suffering, loss of enjoyment of life (caused by partial or total invalidity), and shortened life expectancy.^[57]

33.53 When a pre‑existing disease is aggravated or accelerated by a workplace incident, compensation at common law is payable only for what is reasonably attributable to that workplace incident.^[58] The ‘egg shell skull’ rule provides that a wrongdoer must take the victim as he or she finds him or her. Therefore, the employer would be liable for the full extent of injuries caused even though the injuries would not have been as extensive if the worker had not been unusually susceptible.

33.54 As damages are awarded once and for all, in a lump sum, it is often necessary to consider whether the injured worker’s life expectancy is likely to be reduced by the injury. This may be done by reference to actuarial life expectancy tables. The courts may also admit other evidence relevant to the worker’s life expectancy.^[59]

Issues and problems

33.55 In future, employers or their insurers might seek to obtain genetic information from an injured worker for the purpose of assessing the quantum of compensation or damages payable following a work-related injury. For example, where a genetic test discloses that the injured worker has a genetic condition that is likely to lead to a reduced life expectancy, the employer or insurer might seek to have the compensation or damages award reduced accordingly.

Submissions and consultations

33.56 The Inquiry heard few comments about the potential use of genetic information in this context. In consultations, Comcare noted that this would not be an issue under the Comcare scheme because the legislation provides for payments to be made until the age of 65 years.^[60]

33.57 In its submission, the Commonwealth Department of Employment and Workplace Relations commented on the use of genetic information in relation to common law damages claims:

For the purposes of the ALRC inquiry, one of the more sensitive issues is the extent to which personal genetic information may be adduced which indicates that, notwithstanding the employer’s conduct, the employee’s life expectancy is less than the actuarial norm. Presentation of evidence more particular than actuarial tables—for example, the employee’s work history, and evidence regarding the employee’s past and present health, constitution and habits—may limit employer/insurer liability to only any additional loss in life expectancy caused by the employer’s breach of OHS duty.^[61]

33.58 The Human Genetics Society of Australasia commented that:

The HGSA does not endorse employers or insurers being able to access genetic information to determine the liability, or to assess compensation or damages, in relation to a worker’s compensation claim or a common law claim for work-related injury. To argue that the defendant’s duty of care to the client can be abrogated because of the susceptibility of the plaintiff, or that compensation to the susceptible plaintiff can be reduced, is to defy the established doctrine in tort law—the ‘eggshell skull’ rule, which provides that a defendant is liable for the full damages to a plaintiff, even if the extent of the damages in a ‘susceptible’ plaintiff is greater than they would be in a ‘normal’ plaintiff. The principles underlying the ‘eggshell skull’ rule should not be eroded.^[62]

Inquiry’s views

33.59 There appears to be little scope under various Australian workers’ compensation schemes for the use of genetic information in the assessment of compensation payments. Weekly and lump sum payments are paid according to statutory criteria rather than the worker’s own life expectancy or other personal circumstances.

33.60 There appears to be more scope for the use of genetic information in the assessment of common law damages. For example, once negligence has been established an employer could argue that the worker had a genetic predisposition to the injury suffered, and that compensation should be reduced accordingly. Alternatively, the employer could argue that compensation should be reduced where the injured worker has a pre-existing genetic condition that is likely to shorten his or her life expectancy. This may appear to be a windfall to a negligent employer, but it would be consistent with the compensatory principle that underlies the award of damages in tort. The plaintiff is to be placed in the same position, so far as money can do so, as if the wrongful conduct had not occurred: in making that assessment, the plaintiff’s pre-injury life expectancy is a relevant consideration.

33.61 As with the potential use of genetic information in other civil proceedings, the Inquiry considers there is a need for greater education of judges and legal practitioners in relation to evidence based on genetic information.

33.62 In Chapter 46, the Inquiry recommends that the National Judicial College of Australia and the Law Council of Australia develop continuing legal education programs for judges and legal practitioners, respectively, in relation to the use of genetic information in civil proceedings. The Inquiry recommends that these bodies provide ongoing guidance regarding genetic technology, reliability of genetic testing, interpretation of genetic test results, and presentation of evidence in civil proceedings. The Inquiry considers this recommendation is equally important in relation to the use of genetic information in actions for common law damages for workplace injury or death.