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Apply for common law damages (lump sum compensation)

People who are not at fault and are more seriously injured in a motor accident may be eligible to make a common law damages claim and receive lump sum compensation.

Who can apply?

Common law damages for lump sum compensation is limited to people who:

  • have more than minor injuries, and
  • were not wholly at-fault for causing their injury or the accident.

When can I apply?

A claim for common law damages must be made within three years of the date of the motor accident.

If your injuries are assessed as 10% or less permanent impairment, you must make your claim between 20 months and three years after the accident.

If your injuries are assessed as more than 10% permanent impairment, you can make your claim any time within three years from the date of accident.

What can I claim for?

There are two types of lump sum compensation that may be awarded as damages for injury arising from a motor vehicle accident:

  1. damages for economic loss
  2. damages for non-economic loss (only for those with greater than 10% permanent impairment).

The amount of damages may be reduced if the injured person was partly responsible for causing the accident or their injuries. This is called ‘contributory negligence’, eg if you were injured and another driver was at fault but you were not wearing a seat belt.

Did you know? Future medical costs cannot be claimed as damages. Treatment and care expenses can be claimed under a claim for statutory benefits (also known as personal injury benefits).

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.

The legislation defines in detail the types of economic loss damages. Click here for a brief list.

  • 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 is compensation for pain and suffering, loss of amenities of life, reduced life expectancy and/or disfigurement.

Non-economic loss can only be claimed if the degree of permanent impairment caused by the accident is more than 10%.

Common law claims and weekly income payments

If you do not make a claim for common law damages, the longest period you can receive weekly benefits for loss of income is two years.

The amount of extra time that weekly benefits for loss of income can continue also depends on whether the degree of permanent impairment caused by the accident is more than 10%.

A person with 10% or less permanent impairment:

  1. Can only make a common law damages claim from 20 months after the date of accident.
  2. May be eligible to claim past and future economic loss.
  3. May continue to claim weekly benefits for loss of income for up to three years from the date of accident or until the common law damages claim is settled.

A person with more than 10% permanent impairment:

  1. Can make a common law claim for damages at any time.
  2. May be eligible to claim past and future economic loss and non-economic loss.
  3. May continue to claim weekly income benefits for up to five years from the date of accident or until the common law damages claim is settled.

Did you know? Reasonable and necessary treatment and care benefits may continue after you settle your common law damages claim.

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 an application for 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.

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 ctpassist@sira.nsw.gov.au.

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 (if you have not already lodged an application for personal injury benefits) and the contact details for the insurer. It is important you understand the law as it applies to CTP.


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.