Workers Compensation, Common Law & Elections
If you have been injured at work, you may be wondering about how Common Law claims interplay with Workers Compensation claims.
Workers Compensation is a statutory scheme providing certain benefits to people injured at work. Workers Compensation is ‘no-fault’ and does not require anyone to be at ‘fault’.
Once you establish you were injured by work, the Workers Compensation scheme then provides compensation in the form of statutory benefits and largely on an ‘ongoing basis’.
Among other things, the scheme also imposes certain restrictions on making related Common Law claims - mainly when the claim is against your employer.
Common Law claims are a separate action. In certain circumstances, Common Law can provide an alternate means to seek compensation for a work injury. Common Law requires someone else to be at ‘fault’ or negligent.
Common Law provides compensation in the form of damages and in a ‘snapshot’ or once-off basis - calculated either at the time settlement is reached or the Court’s decision following a trial.
For work accidents, Common Law claims are generally be made in two situations:
NON-EMPLOYER: Your injury was caused by the negligence of someone other than your employer;
ELECTION: You meet certain Workers Compensation criteria and ‘elect’ (choose) to leave the Workers Compensation system to pursue your employer in Common Law.
In the case where your injuries is from the negligence of a non-employer, you can start a Common Law action separate to your Workers Compensation claim at anytime. Common Law claims are independent of Workers Compensation claims; however, if you are successful in a Common Law action you will generally need to repay any Workers Compensation benefits.
In the case of an ‘election’, you must choose to leave the Workers Compensation scheme to pursue your employer in Common Law - and provided certain conditions are met.
When considering a Common Law claim, you may need to consider the following.
You Are Making a Choice Between Two Systems
If you obtain Common Law damages, your are generally obliged to repay Workers Compensation benefits. If you have been injured at work, choosing to pursue Common Law is really choosing between Workers Compensation and Common Law.
Be sure that Common Law will be better for you.
Common Law Can Offer Better Compensation
Depending upon your losses, you may get more compensation under Common Law than under Workers Compensation. Generally speaking, work injuries with smaller losses often end up being similar under both systems. But for injuries with greater losses, Common Law can start to become more attractive.
If Common Law didn’t offer better compensation, or if Common Law always offered significantly better compensation, then the choice would be easy.
Unfortunately, the choice isn’t easy. If can be difficult to determine what you may be entitled to under each claim type. A good work accident lawyer can provide valuable advice on this issue.
It is often best to pursue Common Law when the benefit is going to be more than a marginal benefit.
Common Law Can More Expensive
Common Law almost always involves litigation. Work has to be done to prove losses and to provide losses. Lawyers are often needed, and legal costs can become significant. Even if you win your case and get a costs contribution toward your costs, you will likely be out-of-pocket for the remainder of your legal bills. The out-of-pocket costs can be significant.
When there is a dispute, Workers Compensation can have costs too. However, the work is more limited (focussing on losses only) and the rate your lawyer can charge you is heavily regulated.
When comparing Common Law to Workers Compensation, you will want Common Law damages to be greater than Workers Compensation damages by at least your likely out-of-pocket costs. Unfortunately, your likely legal costs can be difficult to predict because they depend largely on how the other party reacts.
As best you can, be the benefit offered by Common Law will justify the likely cost of pursuing it.
Common Law Typically Longer, More Stressful
Workers Compensation entitlements often begin quickly. Even if there is a dispute, disputes tend to be simpler and the dispute resolution process faster than under Common Law. You may also be entitled to compensation while the dispute process is being carried out.
Common law claims can take longer to resolve - sometimes years. Disputes are more complex, necessarily resulting in a more involved and protracted Court process. Consequently, Common Law is more stressful and a greater hassle.
If you elected, your Workers Compensation benefits will either be cut off or taper off, and you will need to be able to otherwise sustain yourself while the dispute is progressed too.
Be sure the value of pursuing Common Law is worth the extra time, hassle and stress to you.
Common Law is Fault-Based
Under Common Law, you will need to establish fault (negligence). If you are unsuccessful establishing negligence, you are not entitled to compensation and will be liable to make a costs contribution to the other party.
Be sure you can establish negligence.
Common Law Limitation Period
Generally, the limitation period for a person pursuing a Common Law claim for a work injury is 3 years. If you do not commence in Court within that time, you are at risk of losing all or part of your claim.
Keep in mind the 3 year limitation period.
For Elections, Once Out You Can’t Return
If you leave the Workers Compensation Scheme to pursue Common Law, you can’t change your mind and re-enter the Workers Compensation scheme. If your Common Law claim is risky, you may wish to keep what you’ve got rather than risk if for something that you might not get.
Be confident your Common Law claim will succeed.
For Elections, 15% WPI or More
To leave the Workers Compensation scheme, you will need to prove you are at least 15% Whole Of Person Impaired (WPI) or more. If you can’t, you cannot leave.
Importantly, at a trial you will ALSO need to show that you remain 15% WPI at that time. If you are only just over 15% WPI and elect, you run the risk that you improve between the election and trial. Even if successful establishing negligence, you will not be entitled to damages.
Be sure you will remain at least 15% WPI if you go to a trial.
For Elections, Limited Choice Period
You only have a limited time to file an election, a year from starting your claim - although if can be extended up to another year with a special report from an appropriate doctor. The initial date you can elect to is the Termination Day - which the insurer needs to advise you of.
Importantly, to elect you need to file a special report. If you are thinking about electing, you want to organise a review for the report BEFORE your time runs out. You should be able to have the report cost met by the insurer.
Act quickly if you are electing.
Common Law Overall
If you are claiming against a non-employer or electing, be sure that:
- you can establish negligence
- Common Law benefits will exceed your Workers Compensation benefits (“excess”)
- the excess is worthwhile, in terms of legal costs
- the excess is worthwhile, in terms of time and stress
If you are electing to pursue Common Law, additionally be sure that:
- you prepare to elect within time
- you will not recover to less than 15% WPI at trial
- the excess is worthwhile, in terms of being without benefits between election and possibly trial
If you need any further assistance with this matter, please feel free to call us for a free, no-obligation initial advice session with our expert work accident lawyer.