The only way is up - current trends in the Australian personal injury landscape

Personal injury claim numbers remain strong, encouraged (at least in part) by a proliferation in plaintiff personal injury firms competing for work. At Sparke Helmore it is becoming rare to see a claim for physical injuries that does not also include a psychiatric injury. We are increasingly seeing multiple nervous shock claims brought across a family following an incident, where previously there may have been a single claim for a spouse or parent.

In the historical abuse space, the boundaries of the doctrines of vicarious liability and non-delegable duties are being tested and expanded. A trend that is likely to have consequences for injury claims more broadly.

Finally, the High Court’s reinforcement of the compensatory principle in Stewart v Metro North Hospital and Health Service [2025] HCA 24 will inevitably lead to an increase in the quantum for claims for future care. The combination of these factors means that claim numbers will remain strong, and settlement costs are likely to increase.

In this article, we explore these current trends in the Australian personal injury landscape.

Psychiatric claims

The fact of increasing numbers of psychiatric claims is not new. This trend has been lamented by income protection and TPD insurers for some time, with insurers paying out more than $2.2 billion in mental health claims in 2024 alone[1]. However, we are seeing an increase in the number of psychiatric injury claims attaching to claims for physical injuries across the public liability and medical negligence space more broadly.

Where previously, following an adverse incident or workplace death, a nervous shock claim may have been brought by the closest living relative (spouse or parent), we now see claims for children, grandparents, and even grandchildren – increasing the number of claims 3 or 4 fold (or more). Often those claiming in nervous shock have not sought treatment or (prior to the claim) been diagnosed as suffering from a psychiatric disorder.

Increasing claim numbers and claim costs are leading to increasing premiums and higher deductibles, placing additional stress on businesses in an already difficult market.[2]

Psychiatric claims can be more difficult to investigate due expert assessment being reliant on symptom reporting, which is subjective in nature. Tools such as surveillance are also rendered moot due to the fluctuating nature of many psychiatric conditions enabling a ‘good day’ to explain away behaviour and actions inconsistent with the stated injury.

Whilst there has been some tinkering around the edges of personal injury legislation recently aimed at claims farming practices, there have been few significant developments since the Ipp reforms of the early 2000s. This has led to the Insurance Council of Australia (ICA) calling for new reforms directed to restricting the class of persons who can bring nervous shock claims or excluding access to claims for nervous shock entirely.[3] At this stage, the federal and state governments have not taken up the ICA’s recommendations.

Expanding scope of non-delegable duties

The ICA has also called for reform in the worker-to-worker (WTW) claims space. These claims are often brought against a third party alongside a common law workers’ compensation claim against an employer. In many jurisdictions they enable a worker to plug statutory gaps in the heads of damages that can be awarded under the relevant workers’ compensation scheme. A real difficulty for third party recipients of these claims is that they often only emerge two or three years after the original incident, severely hampering investigations into an incident so long after an event.

The claims are usually complicated by the interplay between different pieces of legislation. Claims costs are also increased by the necessity for the injury worker to repay statutory benefits to the workers’ compensation insurer (making them difficult to settle commercially), and the nature of multi-party litigation. However, these claims appear likely to increase in number following the recent High Court decision in AA v Trustees of the Roman Catholic Church for the Diocese of Maitland-Newcastle[4].

The scope of liability for negligence is quite narrow. If a person or organisation commits a wrong, generally speaking, they will only be liable for their own actions. It is uncommon for a person or entity to be liable for the acts of another.

A non-delegable duty arises where a body owes a duty to a fixed class of people – a school to its students, a hospital to its patients. It is founded on the special and particular vulnerability of the class of persons to whom the duty is owed. Having assumed the care of those persons, it is reasonably foreseeable that they are especially vulnerable to harm and that reasonable care needs to be taken to protect them.

As such, where a non-delegable duty applies, it is not a defence to argue the relevant duty had been to a sub-contractor, and that the sub-contractor ought to have ensured that reasonable care was taken. The duty vests in and remains with the principle, even where it has engaged others to perform the relevant task on its behalf. As such, an established non-delegable duty imposes a kind of strict liability.

The nature and scope of non-delegable duties had been settled law in Australia since the High Court’s decision in New South Wales v Lepore [2003] HCA 4. There the High Court held that a non-delegable duty cannot arise in respect of harm caused by an intentional criminal act (such as a sexual or physical assault). With its decision in AA the High Court has removed the categorical exclusion of intentional criminal acts from the scope of common law non-delegable duties.

The effect of AA is that essentially, if the fact of an intentional tort is proven, that is in and of itself proof that any system that was in place was inadequate. Further, it is not necessary for plaintiffs to prove that a defendant ought to have known that the specific perpetrator posed a risk of harm to others. Rather, all that is required is that a reasonable person in the defendant’s position should have appreciated that circumstances existed that might involve a real risk of a class of harm being suffered by a class of people.

It is foreseeable, particularly in a WTW context, a worker could be said to be vulnerable in the relevant sense to parties other than their employer – their employment and livelihood is on the line so they can’t easily speak up, other parties control the place and method of work. As such, it could see a push by plaintiff firms for occupiers of sites where work is being performed, principal contractors and host employers to be found to owe such a duty (as has indeed happened in limited cases in the past – Love v North Goonyella Coal Mines Pty Ltd [2017] QSC 140).

AA may not necessarily increase claim numbers, rather it will result in more settlements, for more money. Confronting less risk of losing a case on liability when deciding whether to take matters to trial, plaintiffs are likely to be less inclined to reduce their settlement expectations for ‘litigation risk’. Claims costs within established categories of duty of care will no doubt increase as a result.

Decision in Stewart

In Stewart the Defendant had admitted liability in relation to medical care that saw Mr Stewart suffer catastrophic injuries including stroke and permanent brain damage. As a result of his injuries, Mr Stewart resided unhappily in an aged care residential facility following discharge from hospital. He wished to move back home to live with his son and the family dog, cared for by professional carers. The home care model came at a cost of $3.8 million more than the aged care model. The Queensland Court of Appeal had held that on a cost-benefit analysis it was reasonable for Mr Stewart to remain in care. The High Court unanimously disagreed.

The Court reinforced the compensatory principle that damages must restore a plaintiff, as far as money can, to the position that they would have been in but for the tort. This meant that Mr Stewart should be cared for at home with the increased amenity and quality of life that offered, irrespective of the significant additional financial burden on the Defendant.

Following this decision, we will see plaintiff firms push for in home care models for their clients, at significantly increased cost to insurers and defendants.

Conclusion

The inevitable consequences of the above factors is that absent legislative intervention, claims numbers and costs in Australia, and with them insurance premiums, will continue to trend steadily upwards for the foreseeable future.

[1] Mental ill health is straining Australia’s safety net - CALI

[2] Australian Prudential Regulatory Authority – Review of claims trends and affordability of public liability and professional indemnity insurance in Australia, May 2023

[3] Insurance Council of Australia, A sustainable public liability insurance mark in Australia: The case for civil liability reform, October 2025

[4]  [2026] HCA 2