Assessment of economic loss
May 29, 2012
Hooper v King  QSC 324
The Queensland Supreme Court in Rockhampton recently awarded a 59 year old plaintiff who was unemployed for 13 years prior to the motor vehicle accident total damages in the sum of $501,000.14.
The plaintiff claimed damages for personal injuries suffered on 8 August 2006 in a motor vehicle accident. The first defendant’s vehicle ran into the rear of the plaintiff’s stationary Land Cruiser. Liability was admitted.
The plaintiff suffered injuries to her lumbar spine, facial scarring and psychological consequences as a result of the accident. The psychological problems included a post traumatic stress disorder and a driving phobia.
Further, all orthopaedic surgeons agreed the plaintiff had extensive pre-existing degeneration in the lumbar spine. However, the plaintiff alleged that in the years leading up to the accident she was asymptomatic and there is no medical record of the plaintiff complaining of symptoms in the lumbar spine.
The case is of most interest due to the treatment of the economic loss claim.
The plaintiff had been working as a hairdresser for the period 1971 to 1993, and had qualified as a senior hairdresser by 1993 when she ceased work to care for her children. She alleged that it had been her intention to return to employment once she was free of the demands of raising a family.
By 2006, the plaintiff’s youngest child was 14 years of age and she felt ready to return to the workforce. She commenced to make enquires about returning to work. She applied for two hairdressing positions, attended an interview and just prior to the accident, had been offered a part-time position working two days per week. The accident intervened before she could take up employment.
The Court accepted the following evidence from two hairdressers:
- The plaintiff had excellent prospects of obtaining employment as a hairdresser had she been fit to do so
- The plaintiff’s qualifications and experience would be highly sought after
- The plaintiff would be useful to any business, not only in using her skills as a hairdresser for clients, but also to train apprentices and young hairdressers.
The Court accepted that the plaintiff’s long absence from hairdressing would be a disadvantage and it was very likely that the plaintiff initially would be employed on part-time basis only to check her performance and skill, but that she would eventually command a full-time position.
The Court found that, whilst the plaintiff’s pre-existing degeneration of the lumbar spine probably would have come against her as a hairdresser; it was of much less significance should she pursue a career as a teacher in hairdressing.
The court accepted evidence that a senior hairdresser could earn a gross weekly wage of $1,050, with a net daily wage of $170. The court assumed initial employment at two days per week for about six months, then three days per week for about 18 months and then full time from early 2009. The above figured was discounted by 35% for contingencies (in particular the possible onset of significant back pain due to the pre-existing degeneration in the lumbar spine).
In relation to future loss of earnings, the court adopted a net weekly wage of $859 for six years to age 65, calculated from a gross weekly wage of $1,050. Although it was possible the plaintiff may have worked beyond 65, her underlying conditions were relevant, and the court discounted the future economic loss assess by 45%.
The other interesting aspect of the assessment of damages was the court’s treatment of General Damages. In Queensland, General Damages are determined by reference to the ISV or Injury Scale Value.
The parties agreed a maximum dominant ISV of 10 was appropriate (5% for each of the lumbar spine and the psychiatric condition).
The Court held there should be 50% uplift in the ISV assessment to a total ISV of 15 because the plaintiff’s symptoms of driving phobia are quite separate and distinct from the symptoms of the lumbar spine injury, and the ISV for the psychiatric and the lumbar spine injuries are closely comparable. That added an additional $7,000 to the plaintiff’s damages.
When calculating the plaintiff’s economic loss, it seems the court did not consider that the plaintiff had any residual earning capacity. This is despite the fact that the plaintiff only suffered a 5% whole person impairment from a soft tissue injury to the lumbar spine and a 5% impairment from a post traumatic stress disorder and a driving phobia. It was also surprising that the Court so readily accepted that the plaintiff would have successfully returned to the workforce after 13 years out of it, given that the evidence was she would have only worked part time, and that she had an underlying back condition that was likely to have interfered with the exercise of her earning capacity.
The decision was not the subject of an appeal.
Authored by Peggy Misztal, Lawyer, Brisbane.
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