Economic Loss
Savings in personal maintenance
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When a plaintiff is to be compensated for their lost earning capacity in the years after their expected death, a deduction is made for their savings in personal maintenance from the date of their expected death, until the date of their death, but for the tort.1
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The application of this deduction have changed over time, below are some examples the deduction's evolution:
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1977 - Outgoings necessary for the realisation of earning capacity (costs of clothing and transport to work are included examples)2
1996 - Expenses such as rent, food, clothes, fares, gas, electricity and other accommodation expenses3
1999 - Living expenses which would enable the plaintiff to earn4
2017 - ABS statistics used to calculate amount. Deduction would apply to age pension (if it were compensable). 'Just as it is necessary to pay for everyday expenses to stay alive to work, it is necessary to pay everyday expenses to stay alive to receive the passive income of the age pension.'5
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Calculation
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There is no set amount for a deduction for savings in the lost years, as it is an amount specific to each particular plaintiff. The amount deducted by judges has varied case by case. Forensic accountants will often use ABS statistics to estimate an amount, as to determine what a person would spend on their personal maintenance based on their past expenditure, is often problematic.
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1. Sharman v Evans [1977] HCA 8 [22] (Gibbs and Stephen JJ).
2. Ibid.
3. Commonwealth of Australia v W L McLean [1996] NSWSC 657 (Handley & Beazley JJA).
4. James Hardie & Coy Pty Limited v Roberts & Anor [1999] NSWCA 314 [2] (Sheller JA, Spigelman CJ, Meagher, Giles and Stein JJA).
5. Dib v Amaca Pty Limited [2017] NSWDDT 6 [186] (Russell J).