Settlement Deeds and other evidentiary requirements

Settlement Deeds

'Damages' are 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, but does not include an amount paid in respect of costs incurred in connection with the legal proceedings.

Any legal costs which are, or were, payable in relation to the action for damages, should be deducted from the total amount of damages awarded prior to any recovery action taking place.

Ideally, Settlement Deeds (or another similar document / evidence) will clearly identify the injury or injuries for which a settlement sum is paid. In these cases it will be fairly straight forward for the delegate to determine whether the recovery provisions under section 48 will apply.

Settlement Deeds will usually include all or some of the following information:

• The gross amount of damages awarded (exclusive of any added interest),
• The injuries or incapacities for which damages were awarded (generally provided in a ‘Statement of Claim/Particulars’);
• The date of payment of the damages to the claimant or for their benefit (i.e. payment to the claimant’s solicitors);
• Whether the total amount of the damages award included costs (i.e. not just costs awarded by the Court but also solicitor/client costs) and, if so, the amount of costs included;
• An amount of compensation recovered, or which is proposed to be recovered, by the Commonwealth; and
• Advice as to whether there was a finding of contributory negligence on the part of the claimant, and if so, full details of that finding.

What if a claim is settled and ‘general damages’ are awarded?

Occasionally, clients may settle their claims and recoup damages outside of court, with damages listed in the Settlement Deeds as general in nature and not attributable to a specific injury, or, set out in some way as to preclude the veteran from the operation of section 48. This does not necessarily exclude the veteran from recovery action under DRCA and needs further investigation.

In these cases, the veteran and/or their representative should be given the opportunity to provide further information, including any potential difference between the injuries for which the settlement was paid and the injuries for which liability has been accepted under the DRCA.

As an example, the delegate may decide to request the following information:

• A copy of the Statement of Claim that was prepared to commence court proceedings. Even though the settlement later occurred outside of court, this information may still be available.
• If the matter settled before a Statement of Claim was issued, the claimant should provide sufficient written evidence in order to justify the settlement sum, and include the particulars for which the settlement sum was paid.

Example

A veteran with major depressive disorder accepted under DRCA as a result of a workplace stressor during military service makes a successful claim against a third party. The Settlement Deed is not clear in relation to the injuries which gave rise to the claim against the third party or the exact particulars of the common law action.

The Settlement Deed states that the claim made against the third party alleged the following:

• while serving in the ADF, the veteran was subject to assault and bullying,
• the veteran suffered a psychological injury, non-economic and economic loss as a result, and
• the veteran is entitled to compensation from the third party.

The information available confirms that damages were awarded for a general psychological injury which creates difficulty in confirming whether the corresponding injury under DRCA is the ‘same injury’ and subsequently whether DRCA’s recovery provisions are enlivened. The delegate therefore requests additional evidence from the veteran and their representative and the evidence provided confirms that third party compensation was paid in respect of a different injury, being, post-traumatic stress disorder. In this example, compensation under DRCA is payable (and any compensation previously paid is not recoverable) because the third party damages have been awarded for a different injury than under DRCA.

If in this case however no further evidence was provided to the delegate and they subsequently were unable to determine the specific injury for which third party compensation was paid, the delegate may not be able to determine whether the recovery provisions under section 48 apply.

Delegates should seek advice from the Benefits & Payments Policy team when complicated cases like these arise.