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Workers’ Compensation Lump Sum Offer vs Common Law Claim – Risks and Benefits

When Queenslanders sustain an injury during the course of their employment, they are likely to have statutory and common law entitlements to receive compensation for the loss and damage they suffer as a result of their injuries.

For most people, the difference between statutory entitlements and common law entitlements are not clear, with the options and remedies available to injured workers nothing more than confusing concepts and legal jargon.

Statutory claims with WorkCover Queensland and common law claims have several key differences and purposes including the elements which must be established to obtain damages or benefits, the type and amount of damages or benefits available, and the timeframe in which damages or benefits can be obtained.

To commence a common law claim against an employer via WorkCover Queensland as the employer’s insurer, the injured worker must first have a statutory claim with WorkCover Queensland accepted.

In order for theWorkCover claim to be accepted, it is usually necessary for WorkCover to determine whether the worker sustained an injury that arose out of, or in the course of, employment with that employment being a significant contributing factor to sustaining the injury.  For many injuries, this threshold is established quickly and easily.

Once a statutory claim with WorkCover Queensland has been accepted, the statutory entitlements available to the injured worker can include medical and rehabilitative treatment, pharmaceutical expenses, lost wages, return to work assistance and travel expenses.

After the worker’s injuries are considered to be stable and stationary, WorkCover will issue a Notice of Assessment which will identify whether a permanent impairment has been suffered by the injured worker.  If so, the injured worker will be entitled to a lump sum offer of compensation.  This signals the conclusion of the WorkCover claim.

Once a Notice of Assessment has been issued by WorkCover, the injured worker may have a very important decision to make – whether to accept the lump sum compensation offered by WorkCover or pursue a common law claim against the employer via WorkCover as its insurer. This decision is known as an irrevocable election, as accepting the lump sum offer of compensation from WorkCover if the permanent impairment is less than 20% will remove any entitlements to pursue a common law claim for those injuries.

It is therefore imperative that injured workers seek legal advice from a personal injury lawyer as soon as they receive a Notice of Assessment to avoid missing any time limits attached to the document.

When presented with a lump sum offer in a Notice of Assessment, it may be tempting to accept the offer and make the often lengthy WorkCover claim a thing of the past.

However, several factors must be considered when deciding whether or not to accept the lump sum or commence a common law claim.

Firstly, a lump sum offer of compensation from a Notice of Assessment is calculated in accordance with the legislation, whereby each percentage of whole person impairment is assigned a dollar value.  Consequently, this calculation is a one-size-fits-all approach and does not take into account the individual circumstances of the injured worker.

This can mean that injured workers are not adequately compensated for a number of future damages which they are likely to incur, particularly in relation to ongoing loss of wages, future care and assistance, retraining expenses, and future medical treatment.  In contrast, these case-specific damages may be recovered via a common law claim.

Therefore, by accepting a statutory lump sum offer of compensation from WorkCover, an injured worker may be forgoing a substantial amount of damages that may otherwise be available to them under a common law claim.

Although the damages available through a common law claim can be more extensive than a statutory lump sum offer from WorkCover, a common law claim has no guarantee that the injured worker will be awarded a sum of compensation.  In this respect, a common law claim requires the injured worker to prove that their injuries were caused by the negligence of their employer.

In order to establish negligence against the injured worker’s employer, it is necessary to establish the following elements:

  1. The employer owed the worker a duty of care;
  2. The employer breached the duty of care owed to the worker; and
  3. The worker sustained damage as a result of the breach.

Although all elements must be established by the injured worker, it is often the second element that is the most difficult to prove.  Due to the increased risk associated with pursuing a common law claim, it is necessary to consider the circumstances of a worker’s injury to determine whether there are prospects that a common law claim would be successful.

Despite the increased risk associated with pursuing a common law claim, it is often worthwhile for injured workers to pursue a common law claim to access more individualized damages which can be substantially more valuable than any statutory lump sum offer of compensation.

As the circumstances of each person’s injury and consequential loss is different, there is no one-size-fits-all approach as to whether injured workers should pursue a common law claim after their statutory claim with WorkCover Queensland has finalized.  However, for injured workers to not only ensure their rights and entitlements are protected but also to ensure the amount of compensation recovered is maximized, it is imperative that injured workers receive legal advice to be able to make an informed decision.

vbr Lawyers offer free consultations to discuss your work injury and provide advice as to whether a common law claim could or should be pursued for your work injury.

Click here to submit an online enquiry form or call 1800 316 716 to discuss your work injury today.

Daniel is an Associate in our Brisbane office with degrees in Business and Laws from QUT.
Greg is widely regarded as one of Australia’s leading compensation law experts. Greg has a very healthy practice and enjoys providing his clients with superior personal service in every case. Greg is absolutely committed to achieving the best settlement outcomes for his clients while keeping the legal costs down.

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