March 2020


Insurer loses PTSD appeal

by Resolve editor Kate Tilley

An insurer has lost its appeal against a $1 million payout to a police officer who suffered post traumatic stress disorder (PTSD) after attending a traumatic, fatal car crash.

The trial was explored in an AILA Qld seminar, detailed in the cover story of the June 2019 issue of Resolve. Read more here.

Justice Peter Flanagan’s 30 January 2019 decision in Caffrey v AAI Ltd [2019] QSC 7 awarded senior constable David Paul Caffrey $1,092,948.

On 17 February 2013, Mr Caffrey was a first responder at a single-vehicle crash. The driver, Byron Neil Williams, was alive when Mr Caffrey arrived, but died at the scene. Suncorp Group’s AAI was the vehicle’s CTP insurer.

Mr Caffrey subsequently sustained a psychiatric injury, PTSD, through witnessing the crash and its aftermath.

On appeal, AAI argued the appeal raised “a novel and policy laden question – whether tort law in Australia should recognise for persons who, in the course of their occupation, are exposed to the highly distressing aftermath of a traumatic event, an entitlement to recover for pure psychiatric injury against the person whose lack of care caused the traumatic event, the aftermath of which they were professionally responding to”.

Appeal Court President Justice Walter Sofronoff, with whom Justices Philippides and McMurdo agreed, said AAI’s appeal failed. He said the established principles governing liability for causing psychiatric harm to rescuers were:

(a) Damages are recoverable only for injury constituted by a recognisable psychiatric condition and not for emotional distress, alarm, fear, anxiety, annoyance or upset.
(b) It is not necessary to prove the plaintiff was of “normal fortitude”.
(c) It is not necessary to prove the injury was the result of a “sudden shock”.
(d) The ordinary principles of negligence apply to cases of pure psychiatric injury.

He said AAI did not challenge these propositions and accepted that Mr Caffrey had proved all the common law requirements that would render AAI liable for the injuries he had suffered. But AAI argued that, despite proving the conventional elements of the cause of actions, Mr Caffrey’s status as a police officer denied him a right to recover because of “policy considerations” which rendered the foreseeability of injury “unreasonable”.

The policy considerations were:

• If a police officer could recover, that would create an indeterminate class of prospective plaintiffs, including police officers, firefighters, paramedics, doctors, nurses, and some non-medical staff at hospitals.
• Extending the duty of care” to that class would be “an inapt tool” as a means of responding to loss constituted by psychiatric harm. An “obvious and apt tool” to deal with the prospect of such harm was via the liability of those prospective plaintiffs’ employers.
• If the respondent could recover, then such people would recover damages if the person who caused the damage was insured but would not recover if the person responsible was not wealthy or insured.

AAI also argued that, if a duty of care was owed to police officers, and others whose job it was to save people from injuries, that would lead to “capricious outcomes”.

Justice Sofranoff said he doubted it was the “proper function of an intermediate court of appeal, when deciding a question of law, to undertake a policy analysis of the common law of tort liability and to allow policy to determine the outcome rather than to apply the principles that have been established in relevant case law”.

He said defendants had, over the years, developed “different ingenious arguments for why they should not be found liable for negligently causing injury, physical or psychiatric, to police officers”.

He said trial judge Justice Flanagan did not fail or omit to consider the relationship between Mr Caffrey and Mr Williams before deciding whether psychiatric injury was reasonably foreseeable. He had applied the authorities about psychiatric harm suffered by rescuers and concluded correctly that Mr Williams owed a duty to Mr Caffrey.

Read Barry.Nilsson Lawyers’ commentary on the case here.

AAI Ltd v Caffrey [2019] QCA 293, 10 December 2019

Back to top

Resolve is the official publication of the Australian Insurance Law Association and
the New Zealand Insurance Law Association.