Opinion
TAC amendments allowing professional administration fees may fail
8th Nov 2018
The High Court in Willet v Futcher [2005] HCA 47 delineated the amount of expenses claimable in tort for expenses incurred administering a trust fund for an individual under disability as a consequence of that tort. The amount of this head of damage can be significant because it covers the present value future administration expenses for a potentially large sum of money for the claimant's lifetime. For example, the amount claimed in Willet v Futcher itself was close to $1m.
The Treasury and Finance Legislation Amendment Bill 2018 was recently introduced into the Victorian Parliament, purporting to remove the right to claim this head of damage by making it payable instead under the statutory no-fault compensation scheme run by the Transport Accident Commission (TAC). A proposed new s62A of the Transport Accident Act 1986 (Vic) (TAA) requires the TAC to pay professional administration costs where the administrator carries on the business of administration of estates. However, s62A(b) limits liability only to administering benefits received under the statutory compensation scheme (‘this Part’). Section 76B expands upon but essentially confirms this. It further provides that TAC will not pay such expenses if damages have already been recovered in respect of professional administration costs, clearly to avoid ‘double dipping’.
The introduction of s93(10)(ba) of the TAA appears to preclude recovery of these expenses at common law if they are payable by TAC under the statutory compensation scheme. However, whether the Bill achieves its purpose of doing away with Willett v Futcher damages at common law is arguable because s62A does not seem to cover the following:
- The proceeds of the common law claim itself (which is often the biggest part of the fund).
- Fees payable to someone other than a professional administrator. This may include bank fees, brokerage, accounting fees and plausibly a wide variety of other items (these are likely to be relatively small).
- Fees incurred in administering the claimant’s other assets (if any) which have been accumulated independently of the transport accident (the amount of these fees will depend upon the relative wealth of the claimant before the transport accident).
The categories of Willet v Futcher damages currently claimable at common law are broad; see, for example, Kaye J's decision in VWA v Asixa (2010) VSC 467 (21.10.10). The proposed amendment far from covers the field. Lawyers acting for TAC claimants will need to be careful to ensure that any categories of administration expenses not payable directly by TAC are claimed in the common law claim for negligence.
Harry Gill won the Solicitors Prize for Young Solicitors in Injury Law in 1989 and was accredited as a Specialist in Personal Injury Law since 1994. He later served on the Personal Injury Advisory Committee which sets the accreditation exams for several years. He also had a stint on the TAC Legal Liaison Group. Harry was admitted into partnership at Robinson Gill in 1998. He was Chair of the LIV’s Workers’ Compensation Committee from 2004 to 2013, a time when the WorkCover scheme achieved far greater stabilisation after two decades of turbulence. His persistent lobbying was largely responsible for an amendment to the Accident Compensation Act. He continues to serve on the Workers’ Compensation Committee and the VWA’s Legal Liaison Group.
The views and opinions expressed in these articles are the authors' and do not necessarily represent the views and opinions of the Australian Lawyers Alliance (ALA).
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