In October 2002, the Review of the Law of Negligence Report (the Ipp Report),4 which become a foundation document for partial codification of the law of negligence and the law of damages, recommended5 that statutory thresholds be imposed for recovery of Griffiths v Kerkemeyer damages, and that the measure of damages be linked to average weekly earnings. It is therefore apposite to examine the jurisprudential basis and application of this species of compensatory damages.
The concept of damages at common law has a long history. In early medieval England, damages were essentially meant to be an inducement to the wronged party to forgo the right to take revenge. In the later medieval period, perhaps by analogy with the sale of church indulgences, the courts would award damages “for the benefit of the wrongdoer’s soul rather than of the victim’s pocket”, on the basis that “the conscience of the wrongdoer must be purged by making restitution”.6 Eventually, in the first part of the 19th century, the judiciary crystallised the concept of compensatory damages in terms of putting the claimant into as good a position as if no wrong had occurred, measured by the loss he or she had suffered.7 Lord Blackburn in Livingstone v Rawyards Coal Co  5 AC 25 observed (at 39) that an award of a lump sum:
it is believed, so far as money can, will put the injured person in the same position as he or she would have been in if the wrong had not been committed.
T h i s n o t i o n o f t h e p u r p o s e o f c o m p e n s a t o r y d a m a g e s h a s b e e n i n t e r p r e t e d t o m e a n t h a t , i n a n a c t i o n f o r d a m a g e s f o r p e r s o n a l i n j u r i e s , a p a r t f r o m g e n e r a l d a m a g e s , 8 p l a i n t i f f s c o u l d r e c o v e r d a m a g e s o n l y w h e r e t h e i r d i s a b i l i t i e s h a d b e e n o r m a y b e p r o d u c t i v e o f f i n a n c i a l l o s s i n r e l a t i o n t o l o s s o f e a r n i n g c a p a c i t y . 9 F o r A u s t r a l i a , t h e r u l e w a s a r t i c u l a t e d i n 1 9 5 6 , w h e n i n B l u n d e l l v M u s g r a v e ( 1 9 5 6 ) 9 6 CLR 73 the High Court had to determine whether the tortfeasor should be liable for hospital and ambulance expenses stemming from the accident. The expenses had been charged by the employer (the Navy Department of the Commonwealth) to the injured claimant’s pay account, although the employer had a statutory discretion to waive them. The High Court held that the costs or value of the s e r v i c e s i n a n a c t i o n f o r d a m a g e s f o r p e r s o n a l i n j u r i e s c o u l d n o t b e r e c o v e r e d u n l e s s t h e c l a i m a n t could establish there was, or would be, a legal obligation to pay or refund them. 1 0
In Teubner v Humble (1963) 108 CLR 491, Windeyer J discussed the need-based concept of compensation when he divided damages arising from personal injury into three categories (at 505):
Broadly speaking there are, it seems to me, three ways in which a personal injury can give rise to damage: First, it may destroy or diminish, permanently or for a time, an existing capacity, mental or physical: Secondly, it may create needs that would not otherwise exist: Thirdly, it may produce physical pain and suffering.
The case involved Mr Teubner, the plaintiff, who while on an assignment from his newspaper to photograph devastation caused by a violent storm in Adelaide on 12 May 1960, was crossing the road at around 11pm when he was hit by the defendant’s car on his left-hand side. Mr Teubner suffered
4 The Review of the Law of Negligence Report was written by an expert panel of eminent persons comprising the Hon Justice David Ipp (Chair), Professor Peter Cane, Dr Don Sheldon and Mr Ian Macintosh. The Panel was created on 2 July 2002 by the Commonwealth, State and Territory Governments to examine and review the law of negligence and its interaction with the Trade Practices Act 1974 (Cth). The Second Report, released on 2 October 2002, includes the First Report (released on 2 September 2002), and is available at http://www.revofneg.treasury.gov.au/content/reports.asp viewed 9 March 2005.
5 6 7 8 The Ipp Report, n 4, Recommendation 51. Williams G, ‘The Aims of the Law of Tort’ (1951) 137 Current Legal Problems 143. Robinson v Harman (1848) 1 Exch 850 at 855. The term “general damages” has different meanings in different contexts. Frequently, it refers to compensation for past and future “pain and suffering”, involving both physical pain as well as any psychiatric condition caused by the injury or emotional distress consequent upon the knowledge that the injury has caused a disability or disfigurement, and limitations imposed by the disability on future enjoyment of life.
9 Graham v Baker (1961) 106 CLR 340 at 347. In Griffiths v Kerkemeyer (1977) 139 CLR 161 at 166, Gibbs CJ adopted the Graham v Barker principle, stating: “In my opinion, in cases of this kind … the plaintiff is entitled to damages only to the extent that the need thus created is or may be productive of financial loss.” Gibbs CJ, however, was in the minority on this point.
10 The full court agreed on this principle. McTiernan, Williams, Webb and Taylor JJ in a joint judgment found on the facts of the case that the legal obligation existed, whereas Dixon CJ and Fullagar J found that it did not.