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A claimant pursuing a common law claim for damages, such as one arising out of a motor vehicle accident, may be entitled to damages for a number of different types of loss, referred to as ‘heads of damage’. Of particular significance in many matters are claims for future economic loss, given the potential quantum of such claims. The quantification or assessment of this head of damage can present some difficulties, given the ‘crystal-ball’ gazing that their assessment necessitates; how does one figure out what would have happened to a claimant, either in their career or otherwise, if the subject accident had not occurred?
This question has been considered at length by the courts, with the High Court of Australia considering it in the matter of Malec v JC Hutton (1990) 169 CLR 638.
The Appellant, Malec, was employed by the Respondent, JC Hutton Pty Ltd, as a labourer in a meatworks between October 1972 and April 1980. In July of 1977, the Appellant was diagnosed with brucellosis, an infectious disease acquired from animals. Possible sequela of the condition included the development of depressive illness, as well as the development of an organic condition which results in a degenerative-like condition in the spine. The Appellant brought a claim for damages against the Respondent.
The matter subsequently came before the Full Court of the Supreme Court of Queensland, which did not make an award for future economic loss, opining that the Appellant was only entitled to damages for economic loss up until May 1982.
On appeal, the High Court found in favour of the Appellant, opining that the Full Court of the Supreme Court of Queensland erred in holding that the Appellant was not entitled to damages for future economic loss.
The High Court considered the principles guiding the assessment of future damages. The Court noted that this process is distinct from that of an assessment of events that allegedly had already occurred, which involves determining whether, on the balance of probabilities, a certain event has occurred. In the court’s opinion, an assessment of a future or potential event should be done in terms of the degree of probability of those events occurring, with adjustments made to any award of damages accordingly; either upwards or downwards. As Dean, Gaudron and McHugh JJ state:
“[Q]uestions as to the future or hypothetical effect of physical injury or degeneration are not commonly susceptible of scientific demonstration or proof. If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high – 99.9 per cent – or very low – 0.1 per cent. But unless the chance is so low as to be regarded as speculative – say less than 1 per cent – or so high as to be practically certain – say over 99 per cent – the court will take that chance into account in assessing the damages.”
The parties to a proceeding, or a court tasked with adjudicating upon the matter if it is incapable of resolution, are not afforded the luxury of being able to peer into a crystal ball in order to determine what would have occurred in a claimant’s life had that claimant not sustained personal injuries. Instead, when determining damages for future economic loss, the alleged factual matrix underlying the claim must be assessed and adjusted according to the degree of probability of those alleged events occurring.