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20.15.1 Client's obligation to mitigate damages


The basis of this doctrine – i.e. that the employee has an obligation to minimise the effects of injury – were discussed by the High Court in Fazlic v Milingimbi Community Inc (1982).

The Court said:

'The doctrine of mitigation of damage.....permits of the same considerations being applied in the area of workers' compensation as are habitually applied in tort where personal injuries cases are in question. It is noteworthy that in standard texts the operation of the doctrine of mitigation of damages is illustrated by cases drawn from the area of workers' compensation......... If the rule relating to unreasonable refusal is regarded as giving effect to the obligation to take reasonable steps to mitigate damage ...[the rule has]... a more certain operation'

Thus, the Court found that there is a legal basis for requiring clients to take reasonable steps to mitigate their incapacity (i.e. reasonable medical treatment) as a condition of entitlement. This means that where clients who are in receipt of weekly incapacity payment refuse to seek treatment or a course of therapy having the potential end or limit that incapacity, delegates should 1) investigate whether that refusal is reasonable and 2) cease payments, if not.

The question therefore arises, as to what circumstances render a refusal of treatment (mitigation of damages) 'reasonable' or not. Obviously, such a refusal may be considered reasonable where medical advice identifies substantial risks to the procedure and/or it is of doubtful or limited benefit. Although what is an acceptable risk or a worthwhile result must be judged on the medical advice and medical circumstances at each individual case.