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Recovery of Damages under DRCA

Section 48 of the DRCA provides that compensation under the DRCA is not payable where damages have been recovered for the same injury or death. This section contains provisions to recover compensation already paid and also sets up a bar to future compensation for these clients under the DRCA.

Where compensation is for the death of a person, section 17(5) payments to dependent children are not paid back to DVA from damages recovered, however no further section 17(5) payments will be made following a damages payment.

The question to consider when determining if compensation should be recovered under DRCA is:

"Do the conditions for which compensation has been claimed under the DRCA and through some other avenue relate to the same injury?"

That is, "has compensation been received more than once for the same injury?"  The medical evidence will show this. If the third party action was successful and the person has recovered damages for the same injury under DRCA, the previously paid compensation is recoverable and no further compensation is available with respect of the injury.

Settlement Deeds

Occasionally, clients may settle their claim with the Department of Defence outside of court.

In these situations, any settlement that aims to:

  • purport that the damages are ‘general’ in nature and not attributable to a specific injury; or
  • exempt the injured party from the operation of s48 in some other way

will not operate to exclude the operation of s48.

Sub-section 48(4) of the DRCA provides that ‘Compensation is not payable under this Act to the employee in respect of the injury, loss or damage… after the date on which the damages were recovered by the employee’; and the term ‘damages’ is defined (in section 4 of the DRCA) to include ‘any amount paid under a compromise or settlement of a claim for damages, whether or not legal proceedings have been instituted…’ .

It then follows that, insofar as the medical evidence relating to the original claim for damages (that has now settled) can show that the injury for which the damages were claimed is the same, any settlement amount is still referrable to that injury.

In terms of the investigation into the injury “behind” the settlement deed, we would expect:

  • the relevant incapacities would be described in a Statement of Claim that was prepared to commence court proceedings – this settlement of claim would be referred to in any Deed of Release; or
  • if a matter was to settle before a Statement of Claim was issued, the incapacities to be described in correspondence provided by the claimant in order to justify the payment of a settlement sum.

Given that the DRCA deals with compensation on an injury specific basis it would assist the Department if all Deeds of Release prepared by Commonwealth agencies were prepared to clearly identify, or refer to an extrinsic document that clearly identifies, the incapacities, injuries etc for which a settlement sum is to be paid. Policy Support Branch is currently investigating what more can be done in this area.