When people talk about “pain and suffering” after an accident, the law in NSW usually calls it non-economic loss. Under legislation like the Civil Liability Act 2002 (NSW) and the Motor Accidents Injuries Act 2017 (NSW), non-economic loss is meant to compensate you for the impact of your injuries on your life
What is non-economic loss in compensation law?
In most NSW personal injury claims, compensation is split into two broad categories:
- Economic loss, including items you can put a receipt or pay slip to (lost wages, medical bills, care costs).
- Non-economic loss the intangible impact of the injury on your life.
Non-economic loss usually includes:
- Physical and psychological pain
- Suffering and emotional distress
- Loss of enjoyment of life and hobbies
- Loss of amenities (what you can now do day-to-day)
- Disfigurement or scarring
- Loss of expectation of life
Different legislation uses slightly different language, but it’s essentially the same idea: compensating you for how your injury has changed your quality of life, not your financial situation.
The legal framework in NSW
Which rules apply depends on how you were injured:
- Public liability / medical negligence / many other negligence claims are usually covered by the Civil Liability Act 2002 (NSW)
- Motor accident injuries are mainly covered under the Motor Accidents Injuries Act 2017 (NSW) and SIRA guidelines
- In the case of Workers compensation, non-economic loss is often dealt with via separate lump sum impairment benefits, and common law damages can be restricted or excluded depending on the type of claim.
The key point: not everyone with genuine pain and suffering is allowed to claim non-economic loss. Both the Civil Liability Act and the motor accidents scheme have strict thresholds.
Thresholds: why many people miss out
Civil Liability Act – 15% “most extreme case” test
Under section 16 of the Civil Liability Act, a court cannot award damages for non-economic loss unless the severity of your non-economic loss is at least 15% of a “most extreme case”.
If you meet that threshold:
- Your case is placed on a scale from 15% to 100% of a “most extreme case”.
- You then receive an amount corresponding with the percentage of a most extreme case. The amount is not linear, and scales very heavily upwards in cases of 30% or greater.
Motor accidents – >10% whole person impairment
For most post-2017 NSW motor accident claims, non-economic loss is only available if your injuries result in more than 10% whole person impairment, assessed under the scheme’s medical guidelines.
SIRA’s published guides make it clear that:
- Many injured people will never qualify for non-economic loss.
- You can still receive income support and treatment benefits even if you don’t meet this threshold, but no lump sum for pain and suffering.
How insurers and courts actually assess non-economic loss
Because non-economic loss can’t be calculated with a calculator, insurers and courts focus on evidence and comparison.
1. Evidence about how your life has changed
Common sources used to evaluate your loss include:
- Specialist and GP reports describing your symptoms and prognosis
- Independent medical examinations arranged by the insurer or your lawyer
- Your own statements about sleep, mood, mobility, relationships, work and hobbies
- Statements from family, friends or colleagues
- Photographs, social media and everyday records (for example, activity data, calendars)
Courts then form an overall picture of how serious and long-term your loss really is, on that scale from minor inconvenience through to catastrophic injury.
2. The “most extreme case” scale
For Civil Liability Act claims, section 16 sets out a step-by-step process:
- Decide where your case sits as a percentage of a most extreme case.
- Confirm the current indexed maximum in dollars.
- Use the statutory table to convert the percentage into the percentage of that maximum you receive.
Judicial commentary and practitioner guides explain that this involves comparing your circumstances with other decided cases and with what the courts consider the “worst imaginable” injuries.
3. How insurers think about it
In practice, insurers will:
- Look closely at medical impairment ratings and whether you pass the relevant threshold.
- Compare your claim with previous settlements and court decisions for similar injuries.
- Examine consistency between what you tell doctors, what’s in the records, and what surveillance or online material shows about your day-to-day function
If they think your presentation is inconsistent, they may push for a lower percentage – or argue you don’t meet the threshold at all
What non-economic loss does not cover
It’s also important to understand what non-economic loss doesn’t do:
- It doesn’t replace your income or pay your medical bill, which are separate heads of damage.
- It isn’t a punishment of the defendant. NSW personal injury law generally excludes punitive or exemplary damages.
- You can’t bypass the thresholds by relabelling pain and suffering under other heads of damage.
Getting clear advice about your entitlements
Non-economic loss can significantly increase the value of a claim, but only if you qualify and the evidence is there to support a strong assessment. At Law Advice, personal injury and compensation law is what we do every day. Our accredited specialists in personal injury law can:
- Explain whether non-economic loss is available in your type of claim
- Help you gather the right medical and lay evidence
Negotiate with the insurer for a fair assessment of your pain, suffering and loss of enjoyment