When and how to take legal action for compensation

Last updated: 
16 January 2020

This page describes the circumstances under which common law action against the Commonwealth (including an Australian Defence Force (ADF) member), or against a third party may be instituted to obtain compensation for loss due to service related injuries and diseases. This page explains the impacts this action may have on your entitlements.

What is common law action?

If you are entitled to receive compensation due to service related injuries or diseases under either the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (DRCA) or the Military Rehabilitation and Compensation Act 2004 (MRCA), you may have the option to take common law action. Also referred to as a common law claim, this action involves suing the Commonwealth or a third party through the courts to obtain financial compensation.

Common law damages can only be awarded where it can be proven that the Commonwealth or third party were at fault in causing the injury or disease. This is different from workers’ compensation schemes like those of the DRCA and MRCA, which are essentially ‘no fault’ schemes.

Your right to claim common law damages depends on whom you are suing. You can only make claims against the Commonwealth (or another ADF member) for non-economic loss you have suffered (the impacts of your condition on your physical or mental wellbeing) as a result of the injury or disease in question.

If you can prove that a third party (that is, someone other than the Commonwealth or another ADF member) is responsible for your condition, then both economic (lost wages or ability to earn) and non-economic aspects of that loss can be claimed for. For example, you may receive an amount covering all past and estimated future medical costs, rehabilitation needs, lost wages, etc., as well as for non-economic loss (pain and suffering).

When do I need to decide whether I take common law action against the Commonwealth?

You must decide whether or not you will make a common law claim against the Commonwealth (or another ADF member) before you have actually received any permanent impairment (non-economic loss) compensation from DVA under either the DRCA or the MRCA. Once you have received any such compensation for a particular condition or conditions, you will lose your right to make a common law claim against the Commonwealth for those conditions. Before compensation is paid, you will be informed of a date by which you need to advise DVA by if you intend to sue.

How will I find out how much permanent impairment compensation I am entitled to?

If you have made a claim for, and are entitled to, permanent impairment compensation for one or more conditions, you will receive a permanent impairment letter outlining the amount of compensation you are entitled to. Under DRCA, this will be a letter advising of a lump-sum payment. Under the MRCA, this will be a letter advising of periodic payments with an option to convert to a full or part lump sum payment.

Why is my permanent impairment letter asking me about common law action?

If you are entitled to permanent impairment compensation then a letter will be sent to you with an election form. This form provides you with an opportunity to advise the Department if you intend to make a common law claim against the Commonwealth (or another ADF member). The information provided with the letter will advise you on your rights and obligations including those available to you under common law.

If you advise the Department that you intend to take common law action, this election cannot be revoked, even if your common law claim is unsuccessful. Once you make this election, your eligibility for permanent impairment compensation for the claimed condition/s is removed. Equally, once permanent impairment compensation has been paid, common law action against the Commonwealth can no longer be taken. You should seek independent legal advice before deciding to take common law action.

What is the maximum payment I can receive in a successful common law claim against the Commonwealth for non-economic loss?

If your claim against the Commonwealth (or another ADF member) is successful, you may receive a payment up to the maximum of $110,000.00 for non-economic loss. This amount is not indexed.

Do I need to inform DVA of my common law claim against the Commonwealth?

If you decide to make a claim for common law damages against the Commonwealth you must notify DVA of this in writing no later than 7 days after the claim was lodged. Penalties may apply if you do not meet this time-frame.

Can I still receive other compensation benefits from DVA?

Once you have made a claim for common law damages against the Commonwealth, you will no longer be entitled to receive compensation for non-economic loss (permanent impairment payments) for the condition/s you claimed for. Energy supplement associated with the permanent impairment payment is also not payable. However you may still be entitled to receive other benefits such as incapacity payments, medical treatment, rehabilitation and various allowances. This is different for third party claims (see below).

What are third party claims for damages?

Third party claims can be made where liability for an injury or disease does not lie fully with the Commonwealth. For example, a member injured in a two car accident whilst driving home from duty may take third party common law action against the driver of the second car if that driver had contributed to the accident. It could also be the case that the member’s injuries in this example would be accepted as being service related, since the member was driving home from duty. However, because there has been a third party contribution by the driver of the second car, the member may choose to seek compensation through the Courts.

How do third party claims differ from claims against the Commonwealth?

Under a third party action, you can seek compensation for all aspects of the injury or condition, not simply the non-economic loss component. For this reason, if damages are recovered as a result of this action, there are wider-ranging implications and restrictions to the amounts and types of compensation you can no longer receive under the DRCA or MRCA.

If your third party claim is successful in any degree, regardless of the amount received, liability to all compensation under the DRCA and MRCA related to the condition/s that the action relates to is permanently removed. This includes your medical treatment eligibilities.

What are my obligations to DVA if I choose to take third party action?

If you choose to take third party action, you must inform DVA within 7 days of your claim being lodged. This will allow time for any required restriction or cessation of benefits from DVA. Penalties may apply if you do not meet this time-frame.

If your claim is successful and you are awarded damages, you must notify DVA within 28 days after these damages are recovered. DVA will then recover the lesser of the amount of damages awarded to you by the court or the total amount of compensation already paid to you by DVA for the claimed condition/s.

Can I still receive benefits from DVA in relation to the claimed condition/s?

You will not be entitled to any further compensation after third party damages are recovered. You will also be required to repay the balance of compensation, including energy supplement, already received.

What if I do not pursue third party damages when there is third party fault involved?

If you do not pursue a third party claim, or you have lodged your intention to sue with the courts but have not yet had a hearing, DVA can either commence a claim or take over the conduct of the existing claim. If this happens, you will be required to sign documents allowing DVA to take this course of action. Penalties may apply if you do not comply.

Are there any cost implications if DVA initiates a third party claim or takes over my existing claim?

If DVA initiates a claim against a third party, all associated costs of that claim will be met by the Commonwealth.

If DVA takes over an existing claim, then the Commonwealth will meet all normal costs associated with the claim (e.g. reasonable investigation and lodgement fees), but not costs incurred by you which are considered to be unreasonable for the prosecution of the claim, such as excessive investigation costs or unreasonable travel costs.

What happens to any damages that are awarded if DVA takes over my claim or initiates a claim on my behalf?

All damages awarded are paid to the Commonwealth. DVA will then calculate the amount of compensation you have already received for the condition/s (with some exceptions), plus any costs incidental to the claim that were paid by the Commonwealth in the prosecution of the claim. The total amount will be deducted from the amount of damages received and you will receive any balance.

Seeking legal advice

Because of the complexity of common law claims and the possible ramifications of each individual case, you should seek independent legal advice before deciding to take common law action. This advice will be at your own expense.