Commercial Union Assurance Company of Australia Ltd v Pelosi

The New South Wales Court of Appeal considered an appeal by Commercial Union Assurance Company of Australia Ltd against a decision of the District Court. The dispute concerned a claim for damages for personal injuries sustained by Mr. Pelosi, who alleged he had suffered a psychiatric injury as a result of his employer's negligence. The employer, Commercial Union, was the insurer of the plaintiff's employer.

The primary legal issues before the Court of Appeal were whether the employer owed a duty of care to the plaintiff to prevent psychiatric injury, and if so, whether that duty had been breached. The court also had to determine whether the plaintiff's psychiatric injury was a reasonably foreseeable consequence of the employer's conduct.

The Court of Appeal affirmed the principles governing the employer's duty of care in relation to psychiatric injury. It held that an employer owes a duty to take reasonable steps to avoid psychiatric injury to an employee where it is reasonably foreseeable that the employee might suffer such an injury. The foreseeability of harm is assessed by considering the nature of the work, the employee's characteristics, and any signs of distress or vulnerability exhibited by the employee. The court found that the evidence supported the conclusion that the employer had been aware of the plaintiff's deteriorating mental state and had failed to take reasonable steps to mitigate the risk of psychiatric harm.

The appeal was dismissed.