Steve Masselos & Co v Young [2011] NSWCA 35

In defending professional negligence actions against litigation lawyers, a crucial element is the fixing of the notional trial date.

The notional trial date is the date when the plaintiff's underlying cause of action would have gone to trial were it not for the negligence of the plaintiff's lawyers.

It is vital to fix that date, because only evidence which would likely have been available to the trial judge at that time, is to be considered when assessing damages. To take into account later facts and evidence, can lead to error, as this recent NSW Court of Appeal decision shows.

Background

In 2003 the plaintiff, Mr Young, was injured on Commonwealth property when working as a security guard for a private contractor.

Shortly after his injury, the plaintiff consulted solicitors, Steve Masselos & Co, regarding avenues of compensation. He promptly received workers compensation payments, including reimbursement of medical expenses and payment of weekly compensation amounts.

However, the solicitors negligently failed to commence common law proceedings in time against the occupier of the premises where the accident happened, the Commonwealth of Australia. Common law or 'work injury damages' proceedings could not be commenced against the employer, because the plaintiff's injuries were not sufficiently severe to overcome the 15% whole person impairment threshold.

After the limitation period expired, the plaintiff retained new lawyers and commenced professional negligence proceedings against the original solicitors. Those proceedings were defended and came to trial in the District Court of New South Wales in early 2010.

Trial judgment

At the conclusion of the trial, Levy DCJ found the notional trial date to be in February 2006, and the notional judgment date to be 1 May 2006. He used these dates in his consideration as to the value of the plaintiff's lost cause of action.

The medical evidence before Levy DCJ was to the effect that:

  • At April 2004 the plaintiff had physical injuries with a 'gross functional overlay'
  • As at August 2004 the plaintiff displayed evidence only of 'mood disturbance'
  • From October 2008 the plaintiff first started to suffer significant psychiatric symptoms, requiring treatment from a psychiatrist from February 2009 until at least September 2009.

There was also evidence that the plaintiff had been working (after the accident) until late November 2005 part time as a security guard. At that time his employment 'disappeared' when his employer lost the contract to provide security at the shopping centre where the plaintiff had been working. The plaintiff had not thereafter returned to work.

Court of Appeal

The Court of Appeal found that Levy DCJ had erred in the way he took into account evidence which would not have been available at the notional trial date of February 2006.

In particular, in respect of non-economic loss, the Court of Appeal noted that the trial judge had taken into account 'the physical and psychological evidence' (emphasis added) and had sought to compensate for the plaintiff's physical 'as well as his psychological problems'.

However, as set out above, there was no evidence of any psychiatric or psychological condition as at the notional trial date, rather the evidence was that the plaintiff's psychological condition was unremarkable until more than two years later.

In addition, in assessing the plaintiff's past and future economic loss claims, the trial judge had regard to the fact that the plaintiff had been unemployed from November 2005 until early 2010 in finding that, as at the notional trial date, the plaintiff was totally and permanently deprived of any earning capacity. The Court of Appeal found that it was much more likely that the trial judge at the notional trial date would have considered that the plaintiff was capable of working part time as he had been working until his job 'disappeared' just a couple of months before the notional trial date.

As a result of its findings regarding the assessment of the trial judge, the Court of Appeal reduced the plaintiff's verdict. Through a complex formula of adjustments to take into account the impact of the Workers Compensation Act, and the chance that the plaintiff may have failed altogether in his case against the Commonwealth, the plaintiff's verdict was reduced from $67,344.75 to $18,278.

Conclusion

In this case the Court of Appeal found that the trial judge had erred in taking into account evidence which would not have been available to the judge who would have heard the matter at the notional trial date in February 2006.

Occasionally evidence post dating the notional trial date may be of relevance. For example, it is permissible to use later medical evidence to reconstruct the sort of evidence which may have been available to present to the trial Judge, even if no medical reports had actually been prepared at around the time of the notional trial date. But at all times, caution must be exercised to ensure that such evidence is considered only to illustrate the situation which may have been before the trial judge, and not what occurred at a later time.

The notional trial date can have a significant impact on the outcome of a hearing. In this case if the notional trial date was February 2009 instead of February 2006, the plaintiff's worsening psychological condition would have been taken into account and would have seen him receive far higher amounts for non-economic and economic loss.

When defending and assessing a claim brought against litigation lawyers, it can pay to investigate carefully the likely trial date which would have ensued under counterfactual circumstances. Often expert evidence will assist in ascertaining this crucial element of the case.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.