Work injury (common law) damages

Injured workers may sue for modified common law damages in certain circumstances. These are known as "work injury damages" claims.

Damages is the term used to describe a sum of money that may be awarded "to compensate for the loss, harm or injury suffered".

In New South Wales most workers are limited to claiming past loss of earnings and future loss of earning capacity only and that is why they are referred to as modified damages.

Claim for work injury damages

To claim work injury damages, the following criteria must be met: 

  • the work injury must be the result of the negligence
  • the injured worker must have at least 15 per cent permanent impairment as assessed by a specialist trained in the use of the WorkCover Evaluation of permanent impairment guidelines and this has been accepted by the insurer or determined by the Workers Compensation Commission
  • court proceedings can only be started at least six months after the injury is reported to the employer
  • proceedings must start within three years of the date of injury, unless the worker has leave of the Court, and
  • the worker must have received all statutory lump sum entitlements for permanent impairment to which they are entitled before a work injury damages claim can be settled

A work injury damages settlement cancels all further entitlements to workers compensation benefits including weekly payments, medical, hospital and rehabilitation expenses in respect of that injury.

The amount of weekly compensation that has already been paid to the worker must be repaid out of the settlement amount agreed or awarded. The amount of damages can also be reduced if the worker's own negligence contributed to the injury.

It is common for work injury damages matters to settle 'inclusive of costs'. In practical terms, this means that if a worker enters into an individual costs agreement with their solicitor (and most work injury damages matters in NSW do proceed on this basis), then these legal costs are deducted from the worker's settlement amount.

Process for a work injury damages claim

Before you can start mediation or court proceedings for work injury damages, you must serve a pre-filing statement setting out the particulars of the claim and the evidence you will rely on to establish or support the claim on your employer or the insurer.

In most cases, the claim must be referred for mediation in the Workers Compensation Commission (WCC) before starting court proceedings.

The WCC attempts to mediate and reach settlement through discussion with all parties. If an agreement cannot be reached, work injury damages claims are most commonly heard in the District Court.

If a work injury damages claim is not successful, you can continue to receive workers compensation under the statutory scheme, but you are likely to be liable for court costs incurred during the work injury damages claim.

Legal advice

If you think you may be eligible to lodge a work injury damages claim and would like to proceed, you should first seek independent legal advice.

If you are unsure of how to locate a suitable legal representative, you may like to contact:

Workers Compensation Independent Review Office

If you are dissatisfied at any stage with the management of your injury, you can contact the Workers Compensation Independent Review Office (WIRO) at or call them on 13 94 76.

The Workers Compensation Independent Review Office fact sheet contains general information about workers compensation entitlements and procedures. This fact sheet is not a detailed explanation of the law as it applies to claims made by individual workers.