If a plaintiff suffered no loss as a result of the defendant's conduct, no liability arises, no matter how careless the defendant has been. Thus a plaintiff who has been exposed to dangerous chemicals as a result of the negligence of another must show actual injury rather than the mere risk of injury.

The plaintiff must also show that there is a reasonably close connection between the defendant’s conduct and the injuries suffered by the plaintiff. The courts are unwilling to award damages for unforeseeable losses, particularly in relation to property damage. However, compensation is sometimes paid for unusual and unforeseeable types of personal injuries, when the ultimate injuries have resulted from some initially foreseeable injury to the plaintiff caused by the defendant. In one case, this principle allowed an injured worker to recover from his employer for massive brain damage and/or psychiatric illness resulting from a small scratch on his hand which had become infected.

Mitigating Damage

A plaintiff in a negligence action is under a duty to mitigate their damages. This means that if steps can reasonably be taken to reduce the extent of any loss, these must be taken. The defendant will not be liable for any loss which might have been mitigated. For example, a sales representative whose motor vehicle is damaged in a road accident due to another's negligence cannot claim a loss of sales for the period the vehicle was off the road if the loss could have been mitigated by the temporary hire of another vehicle. In this situation, the negligent party will, of course, be liable for the hire charges.

Assessing Damages

The Civil Liability Act 2002 (Tas) was intended to limit the amount of damages recoverable for personal injury. The common law was amended in three key areas: future loss of earning capacity; non-economic loss; and mental harm. Currently, Tasmanian courts can still award exemplary, punitive or aggravated damages. This means that where a breach of duty has been particularly egregious, or it is in the public interest to demonstrate condemnation, the court can impose extra penalties on a defendant.

Non-economic loss

Non-economic loss refers to things such as pain and suffering. There is no cap on general damages, or non-economic loss. This refers to physical injuries. The legislation was intended to prevent minor harms being litigated. The amounts to which the Act refers changes yearly with the consumer price index (CPI). Currently, if the general damages are assessed at or below Amount A: $4,000, no award of damages will be made. Between $4,001 and $20,000 the amount awarded is calculated with this formula:

Award = 1.25 x (amount assessed – Amount A ($4,000)

So, if Terry’s damages are assessed at $19,000 for two broken legs, the award will be 1.25 x (19,000 – 4,000) = $18,750.

Future loss of earning capacity

Economic loss awards of damages are limited by the average weekly earnings as published by the Australian Bureau of Statistics (ABS). The limit is set at three times the adult average weekly earnings. This means that a plaintiff who claims damages above three times the average adult weekly earnings must bear the losses above that amount on their own.

For example, if Terry claims he has lost $20,000 a week in earning capacity, but the average adult weekly earning is $1,333.40, Tasmanian courts can only award Terry the amount of $4,000.20. Anything above that cannot be awarded, and Terry must either have insurance or wear the loss himself.

Mental Harm

Loss resulting from mental harm requires that the mental harm be a recognised psychiatric illness. This need not be ongoing, such as schizophrenia. It can be a condition, such as Post-Traumatic Stress Disorder (PTSD), which in some cases is curable. This limits claims for mental harm, and ensures consistency of approach by the courts, as the courts must decide to the objective standard of a recognised psychiatric illness. 

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