Avril Woodstock v Hospitality Industry Insurance Limited (NSWDC 2024)

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Key Takeaways

In this work injury damages claim, Judge Fitzsimmons of the District Court of NSW has confirmed that when assessing a worker’s past and future economic loss, it is necessary to consider:

1. What the worker might have earned if they had not suffered the injury
2. What the worker is likely to earn in their injured state

Insurers and employers must consider a worker’s future earning potential, and not simply their earnings at the time of injury, when assessing economic loss.

Brief Facts

At the time of her injury, the worker was a third year university student studying a combined Bachelor of Creative Arts/Bachelor of Commerce. She aspired to work in marketing and/or graphic design for an international fashion house. The worker had maintained excellent grades.

During her studies, the worker was working at a Leagues Club as a waitress. On 30 March 2016, she slipped on a combination of water and oil on the floor of the commercial kitchen whilst carrying plates from the restaurant, sustaining a serious back injury. Mats were normally positioned from the start of the kitchen entry door extending across and past the sink, but there were no mats in the area on the date of her injury.

Following her injury, the worker underwent spinal surgery. The worker’s evidence, which was consistent with the medical evidence, was that she continued to experience pain in her lower back, pain when sitting, pins and needles down her left leg and numbness in her thigh. She also developed psychological symptoms, with scores consistently in the severe or extremely severe range for depression, anxiety and stress.

The worker deferred her studies for the remainder of the year and returned in 2017 on a part-time basis. She continued to achieve academically in the context of reduced progression and special provisions. In January 2018, the worker obtained part time employment as a graphic designer and marketing assistant, but was dismissed in May 2018. She secured a position as a full time digital marketing coordinator in May 2019, but resigned from the position in February 2020 in circumstances where she found the position too challenging due to her restrictions.

The worker is now working on a freelance basis and has three clients. She works approximately 15 to 20 hours per week.

During the hearing, one of her university lecturers gave evidence that she was in an elite group of students who demonstrated ‘perfection’ in academic capability, interpersonal skills, teamwork, ethics and integrity. He believed that uninjured, the worker was capable of reaching senior marketing roles.

Her former employer also gave evidence the worker was a ‘highly talented designer’ who would have been ‘incredible’ working in a multinational company. The worker’s difficulties in working in a demanding role were supported by her former employer.

Judgment

Judge Fitzsimmons found that given the nature of the work, spillages were likely to occur, and there was a real risk of wait staff experiencing a slip and fall from spillages on the floor. The employer failed to provide any safeguards, in the form of mats or otherwise, to minimise that risk. Judge Fitzsimmons was therefore satisfied the employer had breached its duty of care to the worker.

He was satisfied the worker had made genuine attempts to pursue a career in marketing with limited success, noting that her permanent disabilities impact on her ability to concentrate and focus on her work tasks, and sit for extended periods of time.

Judge Fitzsimmons concluded that the overwhelming evidence established the worker was likely to have succeeded in her chosen field and achieved a position of Senior Marketing Manager or Marketing Director had she not been injured. He accepted the worker was working to her full capacity.

On this basis, and in line with the forensic accounting report served by the worker, Judge Fitzsimmons assumed a residual earning capacity of 50% and a career progression to Senior Marketing Manager and/or marketing director, earning $170,000 per annum. His assessment of damages exceeded $1.4 million.

Implications

Noting the number of students that work part-time to support themselves whilst studying, this case serves as a reminder that a Court will consider a worker’s pre and post injury earning potential when calculating economic loss.

In matters where a worker had the potential to be a high income earner prior to sustaining their injury, and a breach of duty of care is found, the award for damages is likely to be significant even in circumstances where a large residual earning capacity is found.