Instituting an action for damages against the Commonwealth for non-economic loss
The restriction on common law damages against the Commonwealth or a potentially liable member does not apply, if a veteran entitled to MRCA PI compensation chooses to institute an action for common law damages for non-economic loss for a condition.
A veteran to whom MRCA PI compensation (or from 1 July 2026, DRCA PI compensation) is payable, but who has not yet been paid that compensation, can institute an action for damages against the Commonwealth or a potentially liable member for non-economic loss.
This avenue of common law damages for non-economic loss from the Commonwealth, is in replacement of MRCA PI compensation payable for the condition (or from 1 July 2026, DRCA PI compensation for the condition). That is, once the veteran chooses to institute such an action for non-economic loss, no MRCA PI (or DRCA PI, if applicable) is payable for that condition.
Does an action for damages against the Commonwealth for non-economic loss impact other compensation?
An action for damages for non-economic loss does not affect veterans’ other compensation payments, such as incapacity payments, medical treatment, etc.
Is the choice irrevocable?
Where a veteran chooses to institute such an action for damages for a condition, the choice is irrevocable. This applies to veterans entitled to MRCA PI compensation and, to veterans entitled to DRCA PI compensation who make their choice to institute such an action from 1 July 2026.
How must the choice be made?
The veteran must notify of their choice to institute an action in writing. Procedurally, the delegate will provide the veteran an administrative election form for this purpose. However, this does not prevent a veteran from providing their written choice via a different method if they wish.
Limit to dollar amount of damages for non-economic loss
Where the damages claim against the Commonwealth is instituted by the veteran before 1 July 2026, the MRCA prescribes the cap on damages is $110,000. Where instituted after, the MRCA prescribes the cap is $177,000.
Is there a time limit to making a choice?
No, there is no timeframe in which a veteran must make a choice. However, the choice to convert weekly MRCA PI to a lump sum must be made within 6 months of a determination that compensation is payable. Therefore, in most circumstances, a veteran will decide whether to institute an action against the Commonwealth during that time.
Other considerations
Delegates must not commence weekly MRCA PI compensation (or DRCA PI compensation after 1 July 2026, if applicable), until they are satisfied that the person does not intend to make a choice to institute an action against the Commonwealth for non-economic loss for the condition. This is because once PI compensation has been paid for the condition, the person loses their right to choose to institute a common law action against the Commonwealth for non-economic loss for the condition.
Key 1 July 2026 considerations – PI decisions under the old DRCA
From 1 July 2026, the DRCA closed to new compensation claims for veterans. Section 389 of the MRCA is amended to continue the same rights a DRCA veteran had under section 45 of the DRCA.
That is, despite the closure of the DRCA, a DRCA veteran entitled to permanent impairment compensation under the DRCA, may choose to institute an action for damages for non-economic loss against the Commonwealth, before receiving that DRCA compensation for a condition, but their right to do so is under MRCA section 389, as opposed to DRCA section 45 (if the choice is made after 1 July 2026).
This also enables this cohort to benefit from the increased cap in non-economic loss damages of $177,000, introduced to the MRCA on 1 July 2026.
Despite this key change, delegates are not required to consider anything differently; section 389 of the MRCA and section 45 of the DRCA are analogous provisions, operating similarly.
Note: where delegates require additional support about common law actions against the Commonwealth, they should seek assistance via the Delegate Support Framework.