Section 23 of the Civil Liability Act: Facilitating Structured Settlements

Jun 18, 2024 | Publication

In the realm of civil litigation concerning personal injury damages, Section 23 of the Civil Liability Act plays a crucial role in ensuring transparency and opportunity for negotiation in the process of awarding damages, particularly for future losses exceeding $100,000. This provision mandates that before a court finalises its decision on such awards, it must inform all parties involved about the proposed terms of the award.

Purpose and Scope

The primary objective of Section 23 is to afford the parties in legal proceedings a reasonable opportunity to negotiate what is known as a structured settlement. Unlike lump-sum payments, structured settlements involve payouts over time, often tailored to the specific needs of the injured party. This approach can provide financial security and stability, especially for those who have suffered significant injuries requiring ongoing care or support.

Notification Requirements

Section 23(2) stipulates that if the court intends to award personal injury damages for future loss exceeding $100,000 (excluding interest), it must first notify all parties of the proposed terms of the award. This notification is pivotal as it allows the parties to fully comprehend the basis and implications of the court’s decision and to prepare their responses accordingly.

Furthermore, Section 23(3) mandates that if the court identifies a party who may be considered a “person in need of protection,” it must notify the NSW Trustee & Guardian of the proposed award terms. According to Section 23(5), a “person in need of protection” is someone who may require legal intervention due to incapacity to manage their own affairs, as defined under the NSW Trustee and Guardian Act 2009.

Detailed Disclosure

The notification required under Section 23(4) must include a breakdown of each component part of the proposed award, adhering to the specific requirements outlined in relevant regulations and court rules. This level of detail ensures transparency and facilitates informed decision-making among the parties involved.

Implications for Negotiation

By providing advance notice of the proposed award, Section 23 empowers parties to engage in meaningful negotiations aimed at reaching a structured settlement that meets the needs and preferences of all parties involved. This process can potentially lead to agreements that are more satisfactory and sustainable in the long term, benefiting both the injured party and other stakeholders.

Conclusion

In essence, Section 23 of the Civil Liability Act serves as a safeguard to promote fairness and efficiency in the resolution of personal injury claims. It underscores the importance of transparency and negotiation in the awarding of damages, particularly for substantial future losses. By notifying parties and, where applicable, the NSW Trustee & Guardian, the court fulfills its duty to facilitate informed decision-making and foster the possibility of structured settlements that prioritise the well-being and financial security of those affected by personal injury cases.

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