The difficulty in proving causation in claims of psychiatric injury and demonstrating true earning capacity of plaintiffs

A recent New South Wales Court of Appeal decision demonstrates the difficulty in contesting the causation of a psychiatric injury when the issue is left to only the subjective opinion of medico-legal doctors engaged by either party.¹

The decision is also a useful reminder to defendants that they bear the onus to adduce evidence that there are realistic employment opportunities available to the plaintiff when the plaintiff demonstrated an impairment for work arising from their psychiatric injury.

Background

This decision is an appeal from the primary judge's award of damage in the sum of $1,079,100.50 to the plaintiff based on a claim for "nervous shock".

The plaintiff gave birth to her son, Joseph, at the Bankstown Hospital in New South Wales. Joseph was born with significant disabilities requiring lifetime care and a significantly reduced life expectancy. The claim on behalf of Joseph had been resolved but the plaintiff's claim for pure mental harm and loss of earning capacity proceeded to hearing with the hospital having admitted negligence. Accordingly, the only issue for determination was the quantum or assessment of the plaintiff's damages.

There were two main grounds to the hospital's appeal. The hospital submitted that the primary judge erred by:

1. accepting the plaintiff's medical evidence over the hospital's evidence as to the cause of the plaintiff's psychiatric illness; and
2. placing the onus on the hospital to prove suitable employment for the plaintiff.

The assessment of psychological symptoms

The hospital had relied on several reports from Dr Lisa Brown, a psychiatrist the hospital had retained to examine the plaintiff in 2012 and 2014. The plaintiff relied on the examination reports of Dr Stephen Allnutt, psychiatrist, and Ms Rafaela Luca, psychologist.

Whilst all of the examining experts were largely in agreement on the plaintiff's diagnosis, being a chronic adjustment disorder, and the severity of the condition, their opinion diverged on the issue of causation and work capacity. On account of examining the plaintiff in 2012, Dr Brown acknowledged that Joseph's diagnosis of cerebral palsy had contributed to the plaintiff's psychiatric condition, but she was of the opinion that the plaintiff's mild mood symptoms were insufficient to impair the plaintiff from returning to her previous work as an administration assistant. Dr Brown considered that the plaintiff's inability to return to work was not due to her psychological symptoms, but due to the need to provide care to Joseph.

When the plaintiff was examined by Dr Brown again in 2014, the plaintiff had remarried but this marriage had also failed (for reasons unrelated to Joseph). Dr Brown believed Joseph's condition and care were no longer the main contributing factors to the plaintiff's on-going mood symptoms, and any contribution was only minor. Dr Brown believed that the breakdown of the plaintiff's second marriage, personality factors, other relationship issues, and an underlying vulnerability to depression were the major factors of the plaintiff's depression.

Dr Allnut examined the plaintiff in 2015. He noted that the plaintiff's constellation of anxiety and depressive symptoms manifested after Joseph was born and had persisted to date. He opined that the plaintiff's most significant on-going stressor was the stress of caring for and coping with a growing child with serious disabilities. Dr Allnut acknowledged that the plaintiff had retained the ability and cognitive capacity to provide 24-hour care to Joseph, and so concluded that the plaintiff had retained a partial work capacity.

The plaintiff gave evidence of her on-going feelings of anxiety, broken sleep, and constant worry for Joseph, despite there being very little record of such complaints to her treating doctor. Nevertheless, she gave examples of being unable to complete online studies due to her deteriorating concentration, and denied that she chose not to work in favour of caring for Joseph. The plaintiff's evidence was not affected by any credit issues.

The decision in the Court of Appeal

The Court of Appeal upheld the primary judge's decision. It rejected the hospital's submission that Dr Brown's opinion should be preferred simply because she had examined the plaintiff on two occasions over a two-year period whereas Dr Allnut and Ms Luca had only seen the plaintiff once respectively. The Court considered this to be a "superficial basis" for the primary judge dealing with conflicting opinion. The Court reviewed Dr Brown's reports and considered that some of the reasoning upon which her opinion was based was not supported by the objective evidence, or had not been put to Dr Allnut and Ms Lucas in evidence. It was open to the primary judge to regard Dr Allnut's assessment of the plaintiff as more realistic.

As for the plaintiff's economic loss, "working capacity" was distinguished from "earning capacity". Whilst everyone believed that the plaintiff had retained some residual capacity for work, the Court emphasised that "earning capacity" recognised the "realities of the world of employment". The Court referred with approval to Nominal Defendant v Livaja [2011] NSWCA 121 which held that while an individual can have the physical and mental ability to undertake certain tasks, it "does not necessarily follow that he has a significant residual earning capacity". Earning capacity was to be measured by reference to the individual plaintiff, and there "must also be a practical assessment of the likelihood of the individual obtaining employment in some such occupation".

Once the plaintiff had established a loss of earning capacity, the Court found that the primary judge was correct in shifting the onus to the hospital to prove the plaintiff's failure to exercise any residual earning capacity. The hospital was required to adduce evidence not only of what jobs the plaintiff was capable of performing, but also what jobs were open to her with such a residual capacity. The hospital had failed to adduce any such evidence, and the Court found that the plaintiff's prospects of exploiting any residual work capacity were essentially non-existent as it would have required her to have a highly sympathetic employer who would have allowed her to have time off work to care for Joseph.

Learnings for defendants

Unless there is compelling evidence to prove that the plaintiff's psychiatric condition was caused or significantly contributed to by other factors, or the plaintiff's credit can be substantially questioned so as to cast doubt over her claimed injuries, the decision demonstrated the difficulty in challenging causation.

Further, when assessing economic loss, it is clear that the defendant has to do more than prove that the plaintiff has a work capacity — it must also demonstrate there are realistic employment opportunities suitable and appropriate to the plaintiff's situation. Such evidence will often be difficult to obtain, even if a vocational assessment report is received, as the defendant would also need to overcome any claims by the plaintiff that they would be unreliable employees as a result of their condition, and require a high degree of flexibility in their working hours.

¹ South Western Sydney Local Health District v Sorbello [2017] NSWCA 201