The application of section 388 [2] of the MRCA absolves the Commonwealth's or a potentially liable member's liability to common law claims for a service injury or disease or the damage to, or loss of, a medical aid.  This restricts the common law compensatory avenues that the MRCA is intended to replace.

Delegates need to be mindful of the restricted application of this provision.  The restrictions provided by this section do not apply to:

• Common law action relating to non-economic loss suffered by a person with a service injury or disease (see 4.2.2 [4]); or
• Common law damages pursued by a dependant of a deceased member or former member relating to a service death (see 4.2.3 [5]).

In these two situations there are less restrictions placed on the pursuit of common law damages.  However, as with all common law damage outcomes, any damages received by the dependant of a deceased member are recoverable upon receipt of the damages and eligibility to further compensation (including treatment eligibility) under the MRCA can cease or be restricted upon the receipt of the damages.

The restrictions on common law damages against the Commonwealth or a potentially liable member do not apply if a person wishes to pursue common law damages for the non-economic loss effects of a service injury or disease.

This avenue of common law damages is in replacement of Permanent Impairment (PI) compensation payable under sections 68 [2], 71 [2] or 75 [2] of the MRCA (see Chapter 5 [7] of this manual for more information on PI compensation).

Section 389 [2] provides that a member or former member to whom PI compensation is payable, but who has not yet been paid any PI compensation, can institute an action for damages against the Commonwealth or a potentially liable member at common law.

Once the member has elected to commence common law action, the choice is irrevocable and no PI compensation is payable after the date that the choice to sue is made.

The amount of damages at common law is restricted to a maximum of $110,000.  This restriction is intended to encourage the claimant to pursue the compensation outcomes available under the MRCA, rather than at common law.

Any amount awarded is for pain and suffering (non-economic loss) only and compensation payments other than PI compensation will remain payable only under the MRCA (e.g. incapacity payments).

The claimant should be advised that they are required to notify DVA in writing should they wish to pursue common law action rather than accept compensation under the MRCA.

Delegates must be mindful to inform the claimant that if no advice is received, they will be put into payment as though they have accepted the compensation, therefore losing the right to sue for non-economic loss.

Once PI compensation has been paid under the MRCA, the claimant loses their right to pursue common law action for non-economic loss.

If a dependant of a deceased member wishes to pursue common law damages against the Commonwealth or a potentially liable member related to the service death they are not restricted.

However, if the dependant recovers damages related to the service death then subsections 388(5)&(6) apply.  These provisions require the dependant to repay the Commonwealth the lesser of either the amount of compensation already paid to the person related to that service death or the amount of damages awarded.

The calculation of the amount of compensation awarded to the person under the MRCA for the purpose of determining the amount of the repayment, is not to include any compensation for:

• MRCA Supplement  paid under section 221 [2] or 245 [2] (as per the rate payable in accordance with section 118D [9] of the VEA); or
• Dependant compensation paid under sections 242 [2], 253 [2] or 255 [2] (bereavement payments and Eligible Young Person periodic payments).

These payments are specifically excluded from the amount of compensation recovered due to the influence of case law establishing that an expense for some cost incurred, allowances to cover expenses and reimbursements for costs incurred are not to be quantified for the purposes of general damages recovery, (Freudhofer v Poledano [1972] VR 287, Byron v Australian Capital Territory [1999] ACTSC 44).  Also, compensation payable to the dependants (not instituting the action) is not to be quantified in this sense either, hence the exclusion of dependant compensation.

Also once the person has been awarded any damages related to the service death, further compensation under the MRCA related to that death is no longer payable, including the excluded payments (listed above) from the recovered amount

Subsection 388(6) [2] states that “Compensation under this Act in respect of a service death is not payable to the dependant after the recovery of the damages”.  Section 5 [2] of the MRCA defines “compensation” to include medical treatment provided under Chapter 6.  Accordingly subsection 388(6) [2] precludes the plaintiff from receiving any compensation, including compensation for treatment provided under Chapter 6.  This has the effect of removing a person's eligibility for a Repatriation Health Card for all conditions (Gold Card) that may have been issued to the dependant following the service death.  In the event that the dependant had a personal entitlement to compensation and health care (unrelated to the service death) and had been issued with a Repatriation Health Card for specific conditions (White Card) then this entitlement would remain.

While there is no legislative requirement for the claimant to advise that they intend to sue the Commonwealth, subsection 390(2) states that the claimant must advise the MRCC of a claim under common law not later than 7 days after the common law claim is lodged.  This requirement is to allow for the proper application of any restrictions or cessations of compensation under the MRCA.

The need for this requirement to be met is to be communicated strongly in any communication that the delegate has with the claimant.  Currently there are comment boxes and notes on the D2051 MRCA claim form highlighting the need for the claimant to inform DVA of any common law action or awards damaged.  However, there is no mention of the sanctions that are imposed for a failure to meet these requirements.

Subsection 390(3) [11] provides that a failure to notify the MRCC within the 7 day time period is an offence and carries a penalty of 5 penalty units (one penalty unit stands at $210 as of 1 July 2017. However, the amount of the penalty unit is automatically indexed every three years in line with inflation. The indexation occurs by reference to the March quarter CPI figures of the year in which indexation occurs. Hence the amount of a penalty unit will increase over time).  This offence is also identified as an offence of strict liability by subsection 390(4) [11].

Strict Liability

An offence of strict liability, such as that committed by a failure to notify the MRCC of a common law action, is used to remove any fault elements from the action that causes the offence.

In plain terms, this means that if a claimant fails to inform the MRCC within the 7 day timeframe, they are guilty of an offence and the defence of a lack of knowledge, intention, recklessness or negligence does not stand.  The prosecution does not need to prove fault for an offence of strict liability.

For example, if a claimant failed to notify the MRCC within the 7 day timeframe and the delegate pursued the penalty, the claimant could not claim that they were unaware of the requirement to notify the commission as a valid defence.

An offence of strict liability is prescribed by section 6.1 of the Criminal Code Act 1995.

There is an avenue of defence against an offence of strict liability, that being a mistake of fact.  This is where the claimant before or at the time of the conduct (the failure to notify the MRCC) had considered whether or not facts existed about that action, and as a result is under a reasonable but mistaken belief about those facts.  If those mistaken facts had existed, the conduct would not have constituted an offence.

Simply put, if the claimant can prove that at or before the time of not notifying the MRCC of the common law action they had considered the ramifications of not notifying the MRCC, and had come to a reasonable (though mistaken) conclusion that it wasn't required, then they are not guilty of committing the offence under subsection 390(3) [11].  This lack of guilt would have to be contested in court, with the reasonable nature of the claimant's misconception being accepted by the court and the prosecution failing to negate the hypothesis.

A mistake of fact is described in section 9.2 of the Criminal Code Act 1995.