Calculating lost superannuation entitlements

Najdovski v Crnojlovic [2008] NSWCA 175

The NSW Court of Appeal recently considered the issue of calculating past and future awards for loss of superannuation.

Section 15C of the Civil Liability Act 2002 (NSW) applied.

It has generally been assumed that the calculation required takes as the “relevant percentage” the figure specified in the Superannuation Guarantee (Administration Act) 1992 (Cth).  At the present time this is 9% of an employee’s gross ordinary time earnings.

When calculating lost earnings this is always expressed as a net figure.  The approach in the past has been to calculate loss of superannuation on 9% of the net earnings.  Does this mean there is a cap on superannuation losses of 9% of net earnings?

The Court of Appeal has rejected this interpretation.  JJ Basten and Allsop determined that in fact the correct approach is to calculate 9% of loss of gross earnings.  This is equivalent to 11% of loss of net earnings.  Justice Windeyer dissented, preferring a figure of 9% of net loss of earnings.

The decision is good law in Queensland as Section 56 of the Civil Liability Act 2003 (Qld) is expressed in identical terms.

This case seems to be now finding favour with the plaintiff law firms who are quoting it in schedules of damages.

The difference of 2% will be felt by insurers on claims involving large awards for economic loss.

If you have any queries regarding this issue or would like to discuss any other matters related to insurance law, please feel free to contact a member of our Insurance team on 07 3231 2444.