Indexation of Non-Economic Loss Damages under the Civil Liability Act 2002 (NSW)

In liability claims under the Civil Liability Act 2002 (NSW), depending on the severity of a Claimant’s alleged injuries and disabilities, aside from the heads of damage for economic loss, domestic assistance and care, non-economic loss damages can form a significant component in the assessment of the quantum of a claim and overall damages potentially awarded to a Claimant.

Under section 16 of the Civil Liability Act 2002 (NSW), damages are not to be awarded for non-economic loss unless the severity of the non-economic loss is at least 15% of a most extreme case. If the severity of the non-economic loss (as a proportion of a most extreme case) is equal to or greater than 15% of a most extreme case, the damages for non-economic loss are to be determined as a proportion of the maximum amount that may be awarded for non-economic loss.

In accordance with section 17 of the Civil Liability Act 2002 (NSW), indexation of the maximum amount takes effect from 1 October each year.

Pursuant to the Civil Liability (Non-economic loss) Amendment Order 2017, from 1 October 2017 the new maximum amount for non-economic loss damages under the Civil Liability Act 2002 (NSW) is $612,500.

Schedule_of_Non-Economic_Loss_Pursuant_2017-2018 (4)

Insurers, self-insurers, underwriters, brokers and corporates should all take into account the new maximum amount for non-economic loss damages when assessing claims and determining or adjusting reserves accordingly.

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