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The Analysis Of The Case Of The Largest Asbestos Compensation

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Amaca Pty Limited v Latz; Latz v Amaca Pty Limited

The largest asbestos compensation pay-out in Australian history has been handed down. This case was about an entitlement to damages, replicating the loss of a right to a superannuation pension and an age pension as an outcome of a reduced life span of 16 years. [1: Amaca Pty Limited v Latz; Latz v Amaca Pty Limited [2018] HCA 22 (13 June 2018) (‘Amaca v Latz; Latz v Amaca’). ]

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Background Facts

Mr Latz was a 71-year old male who was diagnosed with terminal malignant mesothelioma on October 2016. During 1976 – 1977, Mr Latz had inhaled asbestos fibre, while working for Amaca installing fencing. He had retired from the public service and was receiving two pensions; a superannuation pension and an age pension. Previously, Mr Latz had cut and installed fencing 40 years prior to initiating action against Amaca, who was the manufacturer of asbestos fencing. Amaca had negligently manufactured this fencing and the negligence of Amaca caused Mr Latz’s superannuation and age pensions to reduce. [2: Superannuation Act 1988 (SA) Part 5.] [3: Social Security Act 1991 (Cth) Part 2.2.]

Decision

On the first occasion, Mr Latz was awarded damages of $1,062,000. This figure, included exemplary damages of $30,000 and $500,000 for future economic loss.[footnoteRef:4] [4: Amaca v Latz; Latz v Amaca at [13]. ] The majority of the South Australian Full Court held the losses Mr Latz suffered were compensable losses. Although, the revisionary pension was considered by the Court which Mr Latz’s de-facto partner would receive on his death and so the award of $1,062,000 was reduced by the majority of the Court.[footnoteRef:5] [5: Above n 2, s38 (1)(a)].

Issues

Two main issues were presented on the appeal to the High Court: the first issue was due to the reduced life expectancy was a) the superannuation pension and b) age pension, a compensable loss or not. Secondly, assuming the superannuation pension was a compensable loss, should the damages that was awarded for the loss be withheld from the revisionary pension that was available to the claimant’s partner.

Decision

Justice Bell, Gageler, Nettle, Gordon and Edelman JJ which, held that Mr Latz’s superannuation pension was a compensable loss. However, agreed that the right of Mr Latz’s partner to the revisionary pension needed to be reduced upon Mr Latz’s death. The dissenting judgement by Kiefel CJ and Keane J held Mr Latz should not be entitled to damages from loss suffered from his superannuation pension. All judges concluded that Mr Latz’s age pension loss was not a compensable loss as it was not a capital asset. The age pension was not the outcome of or inherently associated to an individual’s earning capability or a type of property [6: Amaca v Latz; Latz v Amaca at].

A claimant has a right to damages from the loss of superannuation benefits if the injury sustained happens during employment. [7: Todorovic v Waller (1981) 150 CLR 402.] Mr Latz’s superannuation benefits were inherently related to his earning ability and was the result of his ‘capital asset’. The injury Mr Latz sustained which was caused by Amaca, meant that the rate of the capital asset established by his entitlements were reduced. Mr Latz’s entitlements would have possessed more value, if it was not for Amaca’s conduct. Consequently, if the harm was discovered prior to Mr Latz retiring, he would have been granted the value of those entitlements. [8: Amaca v Latz; Latz v Amaca at [94]. ] [9: Superannuation Act 1988 (SA). ] [10: Amaca v Latz; Latz v Amaca at [102].]

The Defendant, Amaca contended that the plaintiff did not undergo any harm and that only loss could be experienced following the plaintiff’s death by his family. This meant that the loss suffered was not Mr Latz’s loss. Yet, this was not accepted as it was found by the majority that the Plaintiff suffered personal loss, containing a present value that could be calculated.[footnoteRef:11] He argued, as the injury was caused tortuously, the loss of Mr Latz’s pension was not recognised under the common law, hence not recoverable. Amaca’s argument was based on a previous 2005 decision. [11: Ibid at [101]. ] [12: CSR Limited v Eddy [2005] HCA 64.]

Analysis

This case settled that a revisionary pension must be subtracted from a claimant’s damages for the loss of a superannuation pension and confirmed that the age pension is not compensable. It delivered transparency to claimant’s in evaluating potential economic loss claims for lost years. This means all future claims will be assessed on a case by case basis and substantial damages will be awarded where appropriate. The purpose of exemplary damages is to punish the Defendant and to deter future offenders. Exemplary damages are moderately uncommon in Australia because Australia’s legal structure is concentrated on compensation rather than punishment. [13: Clayton UTZ, The Reports of my Death are Greatly Exaggerated; Exemplary Damages in Australia (10 December 2007) < https://www.claytonutz.com/knowledge/2007/december/the-reports-of-my-death-are-greatly-exaggerated-exemplary-damages-in-australia>. ]

However, the Court determined awarding exemplary damages to Mr Latz will have a narrow effect in acting as a deterrent because Amaca does not manufacture or supply asbestos products. Although, it will act as a prevention to future businesses and such conduct will not be tolerated and accused persons and companies will not avoid punishment. This case acknowledges and permits a new category of damage in Australia and underlines that safety must be a priority over profits. It will significantly change the way compensation is calculated in the future for claimants whose life expectancy has been reduced from the negligent conduct of another. This decision can be distinguished to previous cases that held there is no right in Australia that the incapability to receive an age pension would be a compensable damage. Therefore, this case has taken a distinctive approach and concluded a loss of a pension is a compensable loss at common law in Australia. [14: Londos v Amaca Pty Ltd [2017] NSWDDT 7].

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