Wright v Government Insurance Office of New South Wales

The New South Wales Court of Appeal considered the appeal of the plaintiff, Mr. Wright, against the Government Insurance Office of New South Wales (GIO) concerning a claim for damages arising from a motor vehicle accident. Mr. Wright had suffered injuries in the accident and sought to recover damages from the GIO, which was the compulsory third-party insurer. The primary dispute revolved around the assessment of Mr. Wright's damages, specifically the extent to which his pre-existing conditions should be taken into account when calculating his loss of earning capacity.

The central legal issue before the Court of Appeal was whether the trial judge had erred in reducing the plaintiff's damages for loss of earning capacity by a proportion reflecting the likelihood that his pre-existing back condition would have impaired his earning capacity in the future, even in the absence of the accident. The court was required to determine the correct approach to assessing damages for loss of earning capacity where a plaintiff suffers from a pre-existing condition that is exacerbated or becomes symptomatic due to the injury sustained in the accident.

The Court of Appeal, in its reasoning, affirmed the principle that damages for loss of earning capacity should compensate for the loss of the *opportunity* to earn income. It held that the trial judge had correctly applied the "chance" or "contingency" approach. This approach involves assessing the probability that the pre-existing condition would have affected the plaintiff's earning capacity in the future, irrespective of the accident. The court found that the trial judge had made a proper assessment of this probability and had not erred in reducing the damages accordingly. The court distinguished this from a situation where the pre-existing condition merely made the plaintiff more susceptible to injury, which would not necessarily warrant a reduction in damages.

The appeal was dismissed, and the orders of the trial judge were affirmed.