People more seriously injured in a motor accident can make a claim for lump sum compensation (also called common law claim for damages). Only people who are not at fault can apply for lump sum compensation. You must apply within certain time frames.
What is it?
Under NSW Common Law the injured person has the right to claim lump sum compensation for damages from the at-fault driver responsible for the accident that caused their injuries.
The CTP scheme allows for the injured person (or their representative) to lodge the claim through the at-fault driver’s insurer or, where there is no at-fault driver or they cannot be identified, through what's called the 'Nominal Defendant’. The Nominal Defendant is an insurer assigned responsibility by SIRA for such cases.
The amount of damages awarded may be reduced if the injured person was partly responsible for their injuries. This is called ‘contributory negligence’. An example is if you were injured and another driver was at fault but you were not wearing a seat belt.
Who can apply?
Lump sum compensation is only for people who:
- have more than minor injuries
- were not at fault in the accident.
When must I apply?
Claims for damages must be made within three years of the date of the motor accident.
If your injuries are 10% or less ‘whole person impairment’, you must make your claim between 20 months and three years after the accident.
If your injuries are more than 10% ‘whole person impairment, you can make your claim any time within three years.
What can I claim for?
There are two types of damages that may be awarded as compensation for injury in a motor vehicle accident:
- damages for economic loss
- damages for non-economic loss.
Did you know? Future medical costs cannot be claimed in a common law claim for damages. Medical treatment and care are provided under statutory benefits (personal injury benefits) on an ongoing basis, for life if necessary.
1. Economic loss
This is usually past or future loss of earnings or reduced ability to earn due to your injuries. This may include any impact on your superannuation income.
- damages for past economic loss due to loss of earnings
- damages for future economic loss due to the deprivation or impairment of earning capacity
- damages for costs relating to accommodation or travel incurred or likely to incur as a result of injury (not being the cost of treatment and care)
- damages for the cost of the financial management of damages that are awarded
Read The Act for a full definition
2. Non-economic loss
Non-economic loss specifically includes pain and suffering, loss of amenities of life, reduced life expectancy and/or disfigurement (see s1.4 MAIA). Only a person with a whole person impairment of more than 10% can claim for non-economic loss as well as economic loss.
Common law claims and weekly income payments
The longest you will receive weekly income payments for is two years, unless you make a common law claim for damages
The amount of extra time that weekly income payments continue for depends on the degree of injury which is either measured by a ‘whole person impairment’ (WPI) assessment or the insurer being satisfied that the person is over 10% whole person impaired.
A person with 10% or less whole person impairment:
- Can only make a common law claim for damages 20 months after the date of accident. If they still require ongoing support for loss of earnings, they can make a common law claim for past and future economic loss.
- Their weekly income benefits can continue for up to three years in total (from the date of injury) allowing time for their common law claim to settle.
- Once the common law claim is finalised there are no further weekly income payments .
Did you know? Weekly income payments are based on a percentage of the person’s pre-injury weekly earnings.
A person with more than 10% whole person impairment:
- Can make a common law claim for damages at any time which may include compensation for past and future economic loss and non-economic loss (eg pain and suffering).
- Their weekly income benefits can continue for up to five years in total (from the date of injury) if they lodge a common law claim for damages.
- Once the common law claim is finalised there are no further weekly income payments but the person may continue to receive reasonable medical and treatment benefits and commercial attendant care on an ongoing basis, for life if required.
How to apply
Did you know? We can find out for you which insurer you need to claim with. See who do I claim with?
1. Fill out the form: Complete the application for damages under common law form and submit to the insurer. If you haven’t done so already, you will also need to complete personal injury benefits claim form. You may engage a lawyer to help you with your application for common law or contact the Law Society of NSW for further information about getting a lawyer.
2. Attach documents: You must provide necessary information in the forms so that the insurer can assess your claim. If you have not already provided this information, this can include proof of your accident (eg any photos, police/ambulance reports), proof of your medical expenses (eg receipts) and Certificate of Fitness, and proof of earning (eg payslips/income statements). The insurer will explain what you need to provide, and how to get it.
3. Send to the insurer: You must sign the declaration and authority before you send it to the insurer. Your signature shows that your statement is true and honest. If you need help completing the form, please contact CTP Assist on 1300 656 919 or email@example.com.
What happens next?
1. The insurer will contact you after you have lodged a claim, acknowledging receipt and will let you know about the next steps in the process. This will include a claim number and the contact details for the insurer. It is important you understand the law as it applies to CTP. There are specialist lawyers who can help you. You can contact the Law Society of NSW.
2. The insurer will investigate your claim including reviewing the police report and other evidence such as medical reports you have given. You may be asked to see other medical specialists for further assessment or provide additional information. If you don’t provide the information required by law your claim may be rejected or delayed.
3. The insurer must tell you if they're accepting or denying the claim (along with a full explanation of their reasons). This must include the consequences of the decision (eg effects on your entitlements and when it will take effect), a list and copies of the information used by the insurer in making the decisions (if not already given), how the decision can be reviewed, and where to go for further help.
4. You get a settlement amount.