The Chicken Treat hot chips case: Tabloid Pty Ltd v Pringle [2024] WASCA 152
During 2013 Ms Pringle went to a Chicken Treat in Bunbury with her young son and ordered hot chips. After eating the chips she suffered burning in her mouth and throat. She contacted Chicken Treat and was alarmed to find out that Chicken Treat had accidently sprinkled the chips with caustic soda, a very dangerous cleaning agent. Ms Pringle was rushed to hospital where she was treated for caustic burns. Luckily her burns resolved pretty quickly but unfortunately Ms Pringle was left with PTSD. She sued for compensation for her injuries. Chicken Treat admitted that they were at fault and the case proceeded to trial to assess proper compensation for Ms Pringle.
The Initial Compensation
At the heart of the case was a dispute about lost earnings: Ms Pringle argued that she had lost substantial earnings because she could not work the way she could before the accident. Chicken Treat disputed the degree of her incapacity for work. During the trial Chicken Treat showed that while initially Ms Pringle had to take 7 days off from work, she had then returned to work for nearly 2 years (until January 2015) when she accepted a voluntary redundancy. Then in 2019 and 2021 she had children and was raising her young family. Chicken Treat also argued that if after the accident Ms Pringle’s had had appropriate treatment from a psychologist that her mental health would have improved and she could have got back to work. Ms Pringle responded to that allegation by saying that she didn’t have the treatment because at the time she did not have the money to pay for such treatment.
The District Court Judge agreed with Ms Pringle. The Judge said that while Ms Pringle’s PTSD had partially resolved, nevertheless Ms Pringle was functionally incapacitated from work and should be compensated for her lost earnings. The Judge then calculated her lost earnings from the date of the accident to the date when she expected to retire (aged 67) and awarded Ms Pringle nearly $1,200,000.
Claiming Lost Earnings
It is well established in injury law that to claim compensation for lost earnings you must prove:
- Firstly: that because of the accident and the injuries you are less able to work and earn your usual wage (reduced capacity); and
- Secondly: that you lost earnings – you must quantify your loss.
A claim for lost earnings involves both steps. This case was particularly concerned with the “capacity” step. Capacity to work is a big issue that accident lawyers have to think about when dealing with a claim for lost earnings. An accident lawyer needs to work out whether the injured person:
- Cannot do any work at all – total incapacity;
- Can do some work, but not their usual duties and usual hours at work – partial incapacity; or
- Can get back to either their usual job, or a suitable other different job – full capacity.
It is important to note that when looking at capacity issues a Court will always look at factors beyond the particular job that the person was doing at the time of the accident ie: can you do your usual job, if not, how is that because of the accident and the injuries, and just because you can’t do your usual job can you possibly do a different job. This case showed how deeply the Court will examine capacity arguments.
Capacity To Work
It seems to us that in spite of what Chicken Treat argued in regard to Ms Pringle’s having returned to work, the redundancy, absence of treatment etc, that the Appeal Court looked at the case slightly differently. The Appeal Court chose to look very closely at the medical reports and ultimately said that the expert evidence was that while treatment was recommended and would have helped, that Ms Pringle’s capacity to return to work was not dependant on having the treatment ie: she already had some capacity to work, not total incapacity. They said that the District Court Judge was wrong to say that her capacity was dependant on the treatment. It was not conditional on treatment. The claimant having some capacity the Court had to reassess lost income.
So How Did The Appeal Court Sort Out Her Compensation Claim?
It is common in compensation claims that injury lawyers calculate lost earnings by:
- calculating what a claimant should have earned if the accident had not happened
- deducting what they actually earned, and
- claiming the difference as the lost earnings.
But in this case there was no way of knowing what Ms Pringle “actually earned” because while she could have worked, she didn’t. There was also no way of knowing what alternate work she could have done. To solve the problem the Appeal Court assessed a percentage to reflect her reduced capacity to work ie 50%. The Court then:
- took Ms Pringle’s pre-accident net weekly wage ($1,059/week),
- calculated the number of weeks from the date of accepting the redundancy up until the trial (423 weeks)
- multiplied the weekly rate by the number of weeks to give a figure for what she should have earned (about $420,000)
- The Court then then multiplied the loss by the assessment of 50% and awarded her about $210,000 for past lost wages.
Future earnings
But what about the future, what about future lost earnings? Ms Pringle was 36 years old at the time of the trial. She said that she intended to retire at age 67. The District Court Judge said that Ms Pringle would have reduced capacity for work until retirement and assessed her reduced capacity at 40% of her pre-accident capacity ie: because of her PTSD she only could only work at about 60% of her pre-accident capacity. The Judge then applied a straight-line calculation up to age 67 ie: 40% loss of pre accident wages up to age 67, and gave her $350,000.
The Appeal Court said that that was wrong. The medical evidence was that Ms Pringle would improve with treatment and would be able to start work again sometime in the next 6 months to 3 years. The Appeal Court calculated her future lost earnings for the next 3 years only, not to age 67, and then allowed 50% as being accident related, which reduced her claim from $350,000 to $90,000.
Lessons
Claiming lost earnings is not always straight forwards. Experienced accident lawyers consider multiple factors when advising and arguing “capacity” as part of a case for lost earnings. This case shows some of the things that the Court will look at:
- Often there is a mixture of reasons why a claimant is not working, factors relating as the injury and treatment, but also factors that are not easily attributable to the injuries (such as in this case things like continuing to work after the accident, being made redundant, pre-accident health concerns, having children etc). The Court will examine everything. It is important that you are prepared;
- A Court will not simply say that because a person didn’t work after an accident that the lost earnings is because of the accident. A Court will methodically examine the medical evidence to work out why not getting back to work is related to the accident and the injuries;
- If a doctor says that treatment will help, and you don’t have the treatment, then that may affect the calculation of lost earnings;
- On the other hand just because an insurance company says that you could have had treatment does not mean that the insurance company can avoid paying lost earnings. In this case the Court rejected Chicken Treat’s argument saying Chicken Treat failed to show how not having the treatment in any way affected her capacity to work.
- Chicken Treat tried to argue that Ms Pringle had pre-accident psychological conditions that were relevant to calculating her capacity for work. The Court rejected that submission saying that Chicken Treat had not show how her pre-accident history affected her capacity.
- Ultimately the medical evidence is critical. The Court picked apart the expert reports and drilled down to their exact meaning.
As an injury lawyer in Perth we are conscious of the complexity of claiming lost earnings in compensation claims. Careful consideration must be given to both capacity issues and proving the financial loss. If you have any questions please feel free to chat to us.
