Australia: The assessment of damages in nervous shock claims in NSW

As first published in Precedent Magazine

Nervous shock claims are not like ordinary personal injury claims. In circumstances where a person is suffering the ongoing psychological consequences of a life-changing event, it is often difficult to assess the amount of damages that any plaintiff could be awarded.

This article examines four recent cases that provide some guidance as to how the courts have approached the assessment of damages in nervous shock claims.

SORBELLO v South Western Sydney Local Health Network; SULTAN v South Western Sydney Local Health Network [2016] NSWSC 863

This case concerned the psychological impact of the defendant's negligence during the birth of the plaintiffs' son, Joseph Buksh, who is profoundly disabled and requires lifetime care.

Joseph's parents, Ms Sorbello and Mr Sultan, pursued damages for nervous shock. Each parent dealt with the realisation of the extent of Joseph's injuries and disabilities in different ways. They both demonstrated quite different levels of fortitude after Joseph's birth and this issue was brought to the forefront by the defendant during the proceedings. Ms Sorbello cared for her son full-time after his birth and did not return to work so as to continue her carer role. Mr Sultan left the family when Joseph was aged two and has very little contact with Joseph.

On the Friday before the hearing commenced, the Health Network admitted that it owed each parent a duty of care, that it had breached those duties, and that some damage had been caused. What was left for the Court to consider was the extent of the damage suffered by each parent and the quantum of any damages resulting from the negligence.

Ms Sorbello

The psychiatric experts for each party agreed in a joint report that Ms Sorbello suffers from a persistent depressive disorder. She later developed some symptoms of anxiety, including panic attacks, thought to be associated with becoming the sole carer for Joseph after Mr Sultan left.

Dr Brown (the psychiatrist instructed for the defendant) was of the view that Ms Sorbello demonstrated a high level of functioning in daily life, showed resilience in her approach to Joseph's care and that her 'anxieties and concerns about his future were within the realm of a normal level of worry, given her predicament'.1Dr Brown did not consider there was any likelihood of deterioration in her condition over time, as she was providing such devoted care to Joseph and this resilience was relevant to her future prognosis. Her stoicism and dedication provided her with a significant measure of protection, and together with the practical assistance that would now be available to her as a result of Joseph's settlement, he assessed her prognosis as good.

Two other psychiatrists disagreed with that view. They provided opinions that there was potential for Ms Sorbello's condition to deteriorate, given the chronic and complex nature of Joseph's disabilities. They also noted the increasing physical and emotional demands that would be placed on her as she aged and Joseph got bigger.

Their view was that treatment to ameliorate the consequences of ongoing stressors would not remove them.2Although the settlement of Joseph's claim took away the financial burden, they did not expect Ms Sorbello's daily psychological struggle to change.

Ms Sorbello had claimed damages for loss of earnings. The defendant suggested that she had made a choice not to return to work, so that she could care for Joseph, and that with time to develop trust in carers, it was possible that she could return to some form of work.

This issue was addressed by the psychiatrists, specifically the issue of Ms Sorbello's preoccupation with Joseph and her related anxiety and inability to trust others to care for him. She did not feel well cared for by the medical profession and felt strongly that she had to be available to her child.3 There was a constant risk that Joseph's condition would change (including seizures or hospital admissions), requiring a high level of vigilance and constant concern and attention. This heightened, ongoing stress was not conducive to recovery, and any work environment would require flexible work practices and a supportive employer.

Her Honour Judge Schmidt found that with treatment and support, Ms Sorbello could probably work part-time, but practical issues limited her return to work.4

She noted that the financial settlement of Joseph's claim would permit Ms Sorbello to obtain assistance with his care, but that those changes would not materialise for a further 18 months. Her Honour went on to assess Ms Sorbello's future earning capacity as no more than 50 per cent.

Significantly, despite the fact that the court found that Ms Sorbello had a theoretical earning capacity, no evidence was led by the defendant of the availability of work which would meet her capacity. In the absence of that evidence, 'it cannot be concluded that there will be jobs available to Ms Sorbello in the future, which would permit her to exploit the earning capacity she may recover.' 5

Her damages were assessed as follows:

Non-economic loss
35 per cent of a most extreme case $208,000
Past expenses
Medical treatment and travel
Future expenses
Medical treatment and medication
Economic loss
Past wage loss and superannuation (less the period of planned maternity leave of 12 months). Future economic loss and superannuation (as she had no ability to expend any residual earning capacity).

Mr Sultan

The defendant argued that Mr Sultan was not entitled to any damages as he had suffered no injury as a result of its negligence and was exaggerating and/or fabricating his symptoms.

Mr Sultan's credibility was clearly in issue. The defendant's psychiatric expert considered that the description and timing of his depressive symptoms were atypical. Dr Brown reported:

'Because Mr Sultan has not attended counselling and has apparently not reported psychological symptoms to a doctor, there may not be any corroboration for his account of developing these various complaints of emotional distress since Joseph's diagnosis with cerebral palsy. On this basis, the diagnosis of a psychiatric disorder is dependent on Mr Sultan's reliability as a historian'.6

Dr Brown considered that Mr Sultan had suffered a normal emotional reaction to Joseph's diagnosis when she first assessed him in 2012. However, two years later, when she reassessed him, he gave a history suggesting a significant deterioration in his condition. She was of the view that the symptoms described were out of proportion given that he was not regularly confronted by his son's disabilities (as by that time he had left the family and started a new relationship, thereby having very limited contact with Joseph).

Dr Allnutt (psychiatrist instructed for the plaintiff) considered that Mr Sultan exhibited symptoms consistent with a chronic post-traumatic stress disorder, having witnessed the distressing events of Joseph's birth and later seizures.

Mr Sultan, in his evidence, described among other things, that he felt guilty about what happened during Joseph's birth and that after his diagnosis, he did not want to be at home, or have anything to do with his wife and Joseph. He agreed that he felt judged by others and was angry with himself for not seeing Joseph.

The judge considered the evidence given by Ms Sorbello concerning her then husband's condition. She had corroborated parts of the history Mr Sultan gave, and it was accepted that Ms Sorbello had suffered considerable shock as a result of Joseph's birth and diagnosis, so why should it be accepted that Mr Sultan did not suffer a similar shock, given that they were exposed to those same stressors?

The fact that Ms Sorbello and Mr Sultan dealt with these experiences in different ways does not necessarily preclude the acceptance of both of their nervous shock claims.

Ms Sorbello devoted herself to Joseph and his care. Mr Sultan responded by working more, avoiding (and then leaving) his family and feeling fear, shame and guilt about what had happened.

Her Honour accepted that these symptoms of emotional withdrawal represented a diagnosable psychiatric disorder rather than Mr Sultan's 'personality', as suggested by Dr Brown.

The evidence given by Ms Sorbello described a happily married couple before Joseph's birth and that the pressures surrounding Joseph's condition and the care he required led to Mr Sultan leaving his family. Dr Allnutt accepted this proposition, explaining that Mr Sultan's avoidance of Joseph was because he found the situation too distressing to deal with. Her Honour concluded 'It was not a consequence of being a person not prepared to accept responsibility, or because he was a bad father, but because of his lack of adjustment, that he dealt with his distress by running away from his problems.'7

His damages were assessed as follows:

Non-economic loss
20 per cent of a most extreme case $21,000
Past expenses
Nil as no treatment sought
Future expenses
Medical treatment and counselling
Economic loss
His failure to pursue employment was not caused by his psychiatric condition and he would return to full-time capacity in 12 months.

The court held that Jones v Dunkel inferences were available to be drawn against Mr Sultan, as he failed to call his current wife to give relevant evidence about his alleged condition as well as his economic losses.8

McManus v Murrumbidgee Local Area Health Network [2016] NSWSC 1347

Ms McManus sued for damages for nervous shock following the death of her son, who passed away soon after birth. Liability was admitted and the issue to be dealt with at the hearing was a proper assessment of Ms McManus' damages.

The evidence in the proceedings consisted of statements from Ms McManus, her husband, mother and two friends, and reports from her treating psychiatrist and medico-legal experts.

Both parties accepted that Ms McManus had suffered a significant and serious psychiatric injury. Issues concerning her prognosis and treatment options were explored at hearing.

One of the matters to which the defendant pointed as suggesting probable improvement in Ms McManus's condition was the likely beneficial effect of the completion of the legal proceedings. This view received general support from some of the medical practitioners who had examined Ms McManus.

Dr Brown (psychiatrist for the defendant) reported that 'Mrs McManus acknowledged the exacerbating effect of her involvement in the legal proceedings and (sic) which because of its drawn out nature has led to repeated anticipatory anxiety and subsequent feelings of disappointment when the matter has been adjourned.'9

The use of this type of argument in litigation of this type is not new. However, in this specific case, Dr Brown pointed out the fact that Ms McManus had mentioned that on a number of occasions, at critical stages of the proceedings – for example, the mediation – she developed some of the warning signs of relapse and admitted herself to hospital.

Dr Gertler (psychiatrist for the plaintiff) commented, during the course of concurrent evidence:

'With a resolution of litigation the nature of the illness is such that it does have a fluctuating cause. Symptoms can be triggered or exacerbated by various factors, situations, triggers, if you like, and the ending of litigation certainly will relieve one level of anxiety or one possible trigger.'10

His Honour Judge Harrison rejected the argument that Ms McManus's suffering would be alleviated by the completion of the legal proceedings:

'The resolution of these proceedings will undoubtedly be beneficial to Ms McManus but that will not make a significant difference to her suffering in my opinion. In particular, it will neither shorten the duration of her condition nor significantly alter its intensity. The part to be played in ameliorating Ms McManus' otherwise unfortunate prognosis by conclusion of her case will be minimal.'11

The issue of future treatment was controversial. Dr Brown indicated that Ms McManus would likely benefit from therapy such as desensitisation sessions. She stated: 'It would be I think a great shame for her not to have the opportunity to undergo treatment which may make a significant difference to her outcome in the longer term.'12

Desensitisation therapy would require Ms McManus to revisit the death of her son with a view to reducing its significance as a source of her psychiatric difficulties.

His Honour considered that it would not be unreasonable for Ms McManus to refuse to submit to this type of treatment.13

Ultimately, the court rejected any argument that Ms McManus had any real or tangible prospect of improvement. Her post-traumatic stress disorder, depression and anxiety were said to be ongoing and unrelenting, preventing her from enjoying or participating in most activities of daily life.

Her damages were assessed as follows:

Non-economic loss
60 per cent of a most extreme case $356,500
Past expenses
Medical treatment and travel $112,155
Future expenses
Psychiatric consultations $56,571
($250 a session per month for life)
Psychologist consultations $117,672
($120 a session per week for life)
Inpatient expenses $195,500
(semi-annual admissions for life)
Travel expenses $50,000
Medication $55,000
Vocational/Supportive Counsellor $5,000
Domestic assistance
Past assistance $65,060
(between 7 and 14 hours per week)
Future assistance $192,200
(combination of 7 hours paid and gratuitous for life)
Economic loss
Past wage loss $152,410
Past superannuation loss $18,100
Future economic loss $365,860
(no improvement in income from current level)
Future superannuation loss $43,470

A total damages entitlement of $1,785,498 plus costs.

Lee v Carlton Crest Hotel (Sydney) Pty Ltd [2014] NSWSC 1280

The plaintiff, Ms Lee, was a passenger in a car being driven by her husband. He drove into a multi-level car park and she alighted from the vehicle while her husband attempted to reverse the car into a car space. She heard the engine rev and saw the car reverse towards the metal barrier, which disintegrated, and the car fell off the edge to the floor below. She rushed to the ground floor and found her husband fatally injured.

Ms Lee pursued a nervous shock claim, having suffered an almost complete psychological collapse after witnessing her husband's death. She did not move into the house that she and her husband had purchased, became suicidal and had to limit her working hours (as a speech therapist). She sought treatment from a counsellor, psychologist and a psychiatrist and took anti-depressant medication (she was taking five forms of medication for various symptoms at the time of the hearing).

Dr Phillips (psychiatrist for the plaintiff) explained that grief can be broken down into three stages:

Stage 1 – shock and disbelief which tends to conclude within minutes or hours.
Stage 2 – described as grief or pining which tends to last around six months.
Stage 3 – described as grief with restoration of a normal pattern of life. This stage generally concludes within two years.

According to Dr Phillips, Ms Lee 'had become arrested in the second stage of grief'. She was diagnosed as suffering a chronic and lasting psychiatric condition by her treating psychiatrist.

Dr Akkerman (psychiatrist for the defendant) suggested that there were various treatment options that might still be effective in treating Ms Lee's condition. However, his Honour accepted the evidence of her treating psychiatrist, who had been treating her for five years and described a range of treatment options that had been largely unsuccessful. Her psychiatrist's assessment of Ms Lee's prospects of recovery was gloomy and he suggested that she need ongoing domestic assistance and would be unlikely to have any greater earning capacity than the present time (at hearing).

Her damages were assessed as follows:

Non-economic loss
50 per cent of a most extreme case $275,750
Due to the likely permanence of her condition
Past expenses
Medical treatment and travel $53,882
Future expenses
Psychiatric consultations
($350 a session, 6-10 per annum for life)
Psychologist consultations
($230 a session, 8-10 per annum for life)
Inpatient expenses
(three hospital admissions and three day patient programs)
Medication ($33 per week)
Total of $186,343
Domestic Assistance
Past assistance $40,400
Future assistance (2.5 hours per week)
Economic Loss
Past wage loss and superannuation
Future economic loss and superannuation – Limited to a 50 per cent earning capacity with a deduction for vicissitudes of 17.5 per cent to reflect the limited potential for her to recover.

Although claimed, no costs for funds management was awarded as none of the medical reports tendered by the plaintiff addressed her capacity to manage a fund.

Ingrid Margaret Stephenson v Parkes Shire Council; Natalee Stephenson v Parkes Shire Council; Jay Stephenson v Parkes Shire Council, South West Helicopters Pty Limited v Essential Energy (formerly Country Energy); Parkes Shire Council v South West Helicopters Pty Limited (No. 2) [2015] NSWSC 719

Ingrid, Jay and Natalee Stephenson pursued nervous shock claims resulting from the death of Mr Stephenson in a helicopter crash.

Ingrid (the deceased's wife) was alerted to the accident by her son and advised over the telephone by the police that three people had died. The expert psychiatrists who examined Mrs Stephenson agreed in a joint report that she had suffered a depressive reaction following her husband's death which went beyond the normal experience of grief or bereavement. Although her treatment was helping and she was progressing towards recovery, she was still suffering symptoms more than nine years after the accident.

Her damages were assessed as follows:

Non-economic loss
45 per cent of a most extreme case $257,490
Past expenses
Medical treatment and travel $45,065
Future expenses
For between two and three years $7,392
Economic loss
Past wage loss and superannuation $30,832
Future economic loss and superannuation – nil as no likelihood she will leave her present employment.

The plaintiff also claimed the costs of the coronial inquest, but these were held to be too remote to form part of any damages.14

Jay (the deceased's son) was 21 years old at the time of his father's death. He saw his general practitioner to discuss the fact that he was constantly thinking about his father and felt generally depressed. He did not engage in any formal treatment but began drinking hazardously and smoking more. He suffered nightmares and took a short period of time off work.

The expert psychiatrists agreed that Jay had suffered a depressive reaction beyond normal grief, but that he was in remission by 2013 and his prognosis was reasonably good.

His damages were assessed as follows:

Non-economic loss
30 per cent of a most extreme case $171,660
Past expenses
Medical treatment and travel $541
Future expenses
Drug and alcohol counselling $3,000
Economic loss
Past wage loss and superannuation $3,000
Future economic loss and superannuation – nil as his condition did not impair his capacity to work.

Natalee (the daughter of the deceased) was 18 years old at the time of her father's death. After learning of his death she formed a plan to leave Parkes as soon as possible and did so soon after her father's funeral. Her marriage broke down. She described symptoms of constant worry and fear that others close to her would die. She had occasional suicidal thoughts and felt helpless, hopeless and useless. She had trouble sleeping and she had put on weight (40kgs).

The expert psychiatrists agreed that Natalee had suffered a depressive reaction beyond normal grief. There was some evidence of a pre-morbid vulnerability, but no evidence of a specific pre-existing psychiatric illness. She required treatment but her condition did not impair her capacity to work.

Her damages were assessed as follows:

Non-economic loss
35 per cent of a most extreme case $200,270
Past expenses
Medical treatment and travel $2,000
Future expenses
Treatment and medication $5,000
Economic Loss
Nil as her condition did not impair her capacity to work.

Conclusion

What is demonstrated by these recent cases is the importance of the following evidence:

  • strong psychiatric expert opinion detailing diagnosis, prognosis and future treatment recommendations;
  • reports from treating psychiatrists or psychologists detailing history and treatment regime to date as well as the likelihood of success of future treatment;
  • statements from close friends and family who can describe the plaintiff before and after the incident and any care or assistance they have provided; and
  • documented work capacity, including the potential for future work and the likely availability of any future work.

It is clear that with the right evidence before the court, damages for nervous shock claims can be assessed at significant sums.

Footnotes

1Sorbello v South Western Sydney Local Health Network; and Sultan v South Western Sydney Local Health Network [2016] NSWSC 863, [79]

2 Ibid, [85].

3 Ibid, [88].

4 Ibid, [134].

5 Ibid, [145].

6 Ibid, [157].

7Ibid, [184].

8 Ibid, [22-4].

9McManus v Murrumbidgee Local Area Health Network [2016] NSWSC 1347 [53]

10 Ibid, [56].

11 Ibid, [58].

12 Ibid, [59].

13 Ibid, [63].

14 Ingrid Margaret Stephenson v Parkes Shire Council; Natalee Stephenson v Parkes Shire Council; Jay Stephenson v Parkes Shire Council, South West Helicopters Pty Limited v Essential Energy (formerly Country Energy); Parkes Shire Council v South West Helicopters Pty Limited (No. 2) [2015] NSWSC 719, [37].

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