Lazar v Government Insurance Office of New South Wales

In *Lazar v Government Insurance Office of New South Wales*, the New South Wales Court of Appeal considered an appeal concerning the assessment of damages for a motor vehicle accident. The appellant, Lazar, had suffered injuries in a motor vehicle accident and sought to recover damages from the respondent, the Government Insurance Office of New South Wales (GIO), which was the compulsory third-party insurer. The primary dispute revolved around the extent to which Lazar's pre-existing conditions should be taken into account when assessing his loss of earning capacity.

The central legal issue before the Court of Appeal was whether the trial judge had erred in reducing the appellant's damages for loss of earning capacity by a significant proportion to account for his pre-existing degenerative back condition. Specifically, the court had to determine the correct approach to assessing the impact of a pre-existing condition on an injured party's earning capacity in the context of a claim for damages under the relevant motor accidents legislation. This involved considering how to apportion the loss of earning capacity between the injury caused by the accident and the pre-existing condition.

The Court of Appeal, in its reasoning, affirmed the principle that when assessing damages for loss of earning capacity, the court must consider the injured party's capacity to earn income *but for* the accident. If a pre-existing condition would have limited that capacity irrespective of the accident, then the damages should reflect only the *additional* loss of earning capacity caused by the accident. The court found that the trial judge had correctly applied this principle, and that the reduction made for the pre-existing condition was justified based on the evidence presented. The appeal was accordingly dismissed.