Common Law Claims – Implications of Settlement

TAC claimants who suffer a “serious injury” and can prove that the negligence of another person caused their injury, can bring a common law damages claim.

In our experience, most common law damages claims resolve within about 12 months of the accident victim retaining us to act.

When a common law damages claim resolves there are a number of implications that the claimant needs to be aware of.

The vast majority of TAC common law claims are resolved by negotiated settlement, rather than trial. It is rare these days to have to run a common law claim to trial before a jury. The resolution of most TAC common law claims take place at or after a TAC common law protocol settlement conference (“a voluntary settlement conference”).

TAC claimants need to know the following information before accepting a settlement offer from the TAC:

  1. Legal Costs: There will always be some legal costs that the accident victim will have to pay, despite the fact that the TAC makes a contribution towards the legal costs incurred. Your lawyer should always tell you, at the time of the settlement conference, what those costs will be so that you know what amount you will clear out of any settlement offer made by the TAC.
  2. Medical and related expenses: You will be entitled to retain the no fault hospital and medical coverage provided by the TAC. This means that the TAC will continue to pay for your accident related medical treatment for the rest of your life, subject to a right that the TAC has to terminate this entitlement if you have made a recovery from your injuries and/or no longer require treatment. It is rare to find such a situation in cases where an individual qualifies to bring a TAC common law claim, due to the serious injury requirement that has to be satisfied before such a claim can be brought.
  3. 3 Previous payments: You will be able to retain the benefit of any impairment lump sum paid as well as income benefits received after the 18 month anniversary accident, being the loss of earning capacity (LOEC) benefits paid by TAC. This is because TAC invariably makes settlement offers in a common law claim on a “plus keep” basis.
  4. If the common law claim is settled within the first 18 months following the accident, the claimant is also entitled to continue receiving the no fault income benefits, loss of earnings  (LOE) benefits, from the TAC up until the 18 month anniversary of the accident.
  5. Centrelink implications: There will nearly always be Centrelink implications, unless the common law claim is for pain and suffering damages only. If any allowance is made for  pecuniary loss damages (damages for lost earnings and loss of earning capacity) in the settlement offer, then the Centrelink Compensation and Recovery Rules will apply. This usually means that the accident victim will have to repay to Centrelink any benefits paid by Centrelink between the date of the accident and the date the common law claim is resolved. Further, subject to the amount of the common law damages, the accident victim may become ineligible to receive Centrelink benefits for a period of time in the future – the preclusion period. Your lawyer should be able to give you an estimate of the period of ineligibility/preclusion once the amount of the settlement offer is known.
  6. Finality: Your common law damages claim will be brought to an end once and for all. This means that under no circumstances whatsoever can you reopen the claim to seek additional damages. This does, however, work both ways. The TAC is also unable to reopen the claim to seek a refund of damages paid.

The once and for all rule is very important. In effect it means that you only get one opportunity to recover common law damages in respect of the subject accident.
Accordingly, it is vitally important that you obtain the highest quality legal representation you can.