Assessing economic loss – institutional abuse matters

assessing economic loss

By Michael J Lee and Andrew Keep

Economic loss is often a significant component of a personal injury claim. Legal professionals practising in this area can be challenged by the need to have a detailed understanding of the myriad of issues that arise from assessing economic loss in institutional abuse matters.

Assessing economic loss in institutional abuse matters is complicated predominantly by the length of time that has elapsed since the abuse. Below, we detail some areas we consider when assessing loss in institutional abuse matters:

“But For” Career Path

Generally, the matters that form the basis of the action occurred prior to the claimant undertaking any form of employment, and accordingly, they are “untested” in the workforce. Obviously it is a question of fact what career the claimant would have undertaken, and there is no one definitive test, however we consider things such as:

(i)         What have been the career paths of other members of the claimant’s family? For example, what have been the claimant’s parents’ / sibling’s occupations?

(ii)         Did the claimant demonstrate a particular skill or excellence in any field of education prior to the abuse that may tend to suggest they were likely to attend university or were more suited to another career path (eg. a trade)?

Source of Information

In assessing the “but for” earnings, in our experience, there is no one single set of data that can be used for all cases.  Instead the source of information will depend on the claimant’s intended career path and whether the source of information is reliable and / or likely to give a reasonable estimate of earnings over time. This can include primary (e.g. employment agreements and awards) and secondary (e.g. salary surveys, Australian Bureau of Statistics data, industry organisation publications) sources.

In addition, a review of the claimant’s historical, actual earnings and career path may provide guidance in relation to their notional earnings.

Same “But For” and Actual Career Paths

If the claimant would have “but for” and actually undertaken the same career path, in our experience, the impacts of institutional abuse may include:

(i)         Working reduced hours;

(ii)         Inability to expand their business;

(iii)        Inability to seek promotion, undertake roles with higher seniority levels;

(iv)        Extended periods away from work; or

(v)        A delay in the commencement of their career.

Limited Financial Documents?

Given the extended period of loss undertaken, it is possible that a complete set of financial documents cannot be provided, therefore the actual earnings of the claimant is difficult to ascertain. In estimating a claimant’s actual earnings during periods in which documents cannot be provided, it may be appropriate to adopt a variety of assumptions and approaches. These may include:

(i)         Adopting average historical earnings;

(ii)         Adopting the commercial earnings specific to the type of work the claimant undertook during the period; or

(iii)        Relying on specific instructions.

Residual Earnings

In our experience, the assessment of residual, likely earnings is complicated in matters relating to institutional abuse as a claimant’s historical earnings may not be the most appropriate basis for residual earnings. Accordingly, we may consider the following:

(i)         Will the claimant be “forced” to retire earlier than they would have “but for” the abuse?

(ii)        Will the claimant be impacted more severely in the future (e.g. requiring periods away from work or working reduced hours)?


By no means is the above list exhaustive, generally speaking, “key” considerations can vary dependent on the individual circumstances of the claimant.  The experts at Vincents have extensive experience in assessing the past and future economic loss and are knowledgeable across a variety of industries and occupations. Whether you’re acting for a plaintiff or defendant, the experts at Vincents are able to assist with you with the litigation process.

Want to know more?

If you would like to know more about the issues raised in this article, please contact Michael Lee our Forensic Services Director for assistance.

An Important Message

While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents.  Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.



Related Posts
cloud computing