Medical Negligence

How is your Medical Negligence Compensation Calculated?

As patients, we have the right to place our trust in doctors, nurses and other medical professionals to look after us by providing quality care. However, there are times when these medical professionals have caused their patients to suffer injury because of negligent medical treatment. In these cases, a patient may be eligible to file a medical negligence claim, and receive compensation for their injuries.

But how is your medical negligence compensation calculated in such circumstances? Read on to find out more what the key areas affecting a compensation payout.

Purpose of compensation

The purpose of any compensation is to put the patient back to the position they would have been in had they not received negligent medical treatment. Therefore, how much compensation is paid will vary between cases, and ultimately depends on the patient’s individual circumstances.  If the patient’s medical negligence claim is successful, compensation will be paid by the medical professional’s insurer.

Types of compensation

A patient may receive compensation for:

  • Past and future medical expenses
  • Cost of care (domestic assistance) provided by a professional, or by friends and family
  • Loss of past and future earnings
  • Pain, suffering and loss of enjoyment of life

Medical Expenses

A patient will be reimbursed for past medical expenses that arose because of the injury. Compensation for future medical expenses must be discounted by 5%, as per the Civil Liability Act 2002.

If, due to your injury, you have received any government benefits relating to medical expenses, (such as Centrelink) these benefits must be repaid from a compensation payout. Also, any medical expenses that were paid for by your private health insurer must also be repaid out of the compensation.

Cost of care (Domestic assistance)

Compensation for attendant care provided by friends and family (known as gratuitous care) can be awarded regardless of whether it was paid for or not. However, compensation in this area is subject to restrictions. Firstly, it must be shown that there was a reasonable need for the gratuitous care, solely due to the injury. Secondly, as per the Civil Liability Act 2002, the gratuitous care must have been given for more than six hours per week, for a period longer than six consecutive months.

For commercially paid for care, it must only be established that the need for care arose solely because of the injury, and that the amount sought is reasonable.


Loss of earnings

Compensation for the loss of past or future earnings is restricted. The Civil Liability Act 2002 limits the compensation payout, stating that any amount by which the patient’s gross weekly earnings exceeds three times the average weekly earnings of all NSW employees in the most recent quarter must be disregarded. Compensation for loss of future earnings must also be discounted by 5%, if paid in a lump sum.

Pain and suffering

To be eligible for pain and suffering compensation, there are injury thresholds that must be met. This threshold is measured as a percentage of a whole person impairment. The requirement is that the injury sustained must result in a permanent impairment of at least 15%. This will be assessed by medical professionals, who are under strict guidelines. Therefore only those injuries which significantly impact a person’s health status are eligible for compensation.

Unfortunately this means that some injuries, while significantly impacting the injured party, may not qualify for compensation. Injuries such as loss of fingers or toes, scarring or loss of taste often do not meet the threshold.

The Civil Liability Act 2002 has placed monetary caps on compensation for pain and suffering, stating that compensation cannot exceed $350,000, subject to indexation, and that interest is not recoverable.

Contributory negligence

A medical professional may argue a defence of contributory negligence. Contributory negligence occurs when the patient’s own negligence has contributed to the causation of their injury, due to a failure to take reasonable care for their health. For example, if a patient fails to take prescribed medication, fails to return to see their doctor when requested to or fails to inform their doctor of the true nature of their injuries, then they may be considered partly or fully at fault for their injuries. If this is the case, responsibility for the injury will be apportioned between the patient and medical professional, and compensation will be reduced accordingly.

Lump sum payouts

Compensation is most commonly paid out in a lump sum. However, sometimes inaccurate predictions about the long-term nature of the injuries can leave patients finding that this payout fails to meet their long-term needs. Therefore, it is best to seek legal advice in order to receive an appropriate compensation amount. For more information on medical negligence compensation, contact Schreuder Partners.

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