Jeff Sher interview 18 November 2009

You did a lot of damages work over the years as a practising barrister. I would like to talk a little bit about Todorovic v Waller.

Okay. Well, Todorovic v Waller is not the case I was in. I was in a case of a different name, but Todorovic v Waller and the case I was in were heard in the High Court at the same time. The issue, which is very important, is known as the decision in Todorovic v Waller. What actually happened was that I had been doing personal injury work for quite some years, for both plaintiffs and defendants, and it always struck me that the award of damages that plaintiffs were getting were miserly in the extreme. They should have been much higher, but for some reason they never were. So I sat down one day, literally, and thought to myself, well, why is it that these cases are going the way they're going? Because in Victoria I think the highest award at that stage for a very seriously injured plaintiff had been in the range of $400,000. I realised there were two things that were happening: the first one was that with serious injured people, paraplegics, quadriplegics, brain-damaged people, there's a huge raft of necessities that over a lengthy period of time add up to very large sums of money which weren't being claimed. So, I would get instructions of every single item that you could possibly need and add them all up, and there were a lot. I mean, just using pads for people that didn't have control of their bowel or bladder, you can spend a fortune on pads. Anyway, then the second and the more important thing, and this is the point that went to the High Court, was that when you calculate the present value of a future loss you have to use what is called a multiplier and the figure you use depends upon the interest rate that's taken into account in calculating what a person with a damages award can do with their money, because if you get awarded $1,000 and you invest it, if you get 10% on your investment, you can be awarded in effect 10% less to get you the same amount of money, but if you only get 2%, then it's much more. I realised that what was happening was that interest rates that were being used in the calculation of these multipliers were far too high. The reason they were high is because inflation was being taken into account, because interest rates reflected inflation. If you took the real interest rate and eliminated the inflation component, you got down to 2%, 3%, 4%. I conferred with an actuary about this, who was a very smart fellow, and got him to give evidence in the next case I did in front of a judge called Gray. His name is Ian Gray, but everyone for some reason called him Sam. Sam, he was not a great jurist, he'd be the first to admit that, but he was a courageous judge, and I thought, well, this is a good judge for this. So I ran a test case in front of Sam Gray and I ran this argument and Sam bought it and he calculated the damages by reference to an interest rate, I think it was either 4% or 5%, or 3% perhaps, but a very low interest rate compared with past cases, and awarded this plaintiff nearly $1 million, $900,000 and something. It was sort of a ground-breaking decision, more than double the previous highest award, and all over the papers and everything. Well, of course, the defendants appealed; they didn't like this at all. We went to the Court of Appeal where, I can't recall what happened in the Court of Appeal, but I think we were successful there and then they took it to the High Court. In the meantime, somebody had run the same point in Sydney in Todorovic v Waller, so they both came on for hearing in the High Court at the same time and the High Court bought the argument. Not only did they say that the interest rates in the past that had been used were too high, they actually, I can't remember the actual decision, but I think they opted for 3% and it was an almost unanimous decision. The Court was unanimous in saying the interest rates had to exclude the inflation component. Well, as a consequence, damages awards throughout the country just went through the roof and people started to get millions of dollars. Now, if you're concerned about proper compensation for seriously injured people - that was a very important decision.

And one of your proud moments, I would imagine.

Well, I was very happy to be associated with that.

What year were we talking when this all came out?

Well, if I had a set of the Commonwealth Law Reports with me, I could check it out. I think it was probably in the 80s. It's a long while ago now and of course nobody questions it. Once the High Court decides a point, that's it.

I know you're not actively practising now, but would it be nice, do you think, to do something similar for, say, people who work in the caring profession, given the huge amount of work and time they put into caring for such people, something similar of that magnitude of what you achieved in personal injuries?

Well, there is a decision that was given, I think even before Todorovic v Waller, to the effect that injured plaintiffs who need care and attention and have the care and attention provided by the family are nonetheless entitled to be compensated by reference to commercial rates for that care and attention, albeit they're not paying for it. Then they're under some sort of moral obligation at least to compensate the carers out of the damages they receive. That's been the law for a long time. I don't think anything needs to be done about that, or I didn't think so when I was practising in that field. Towards the end of my career I was doing virtually no personal injury work at all, although one of the cases I did, I did two interesting cases towards the end of my participation in these sorts of cases. One was the test case for medically acquired AIDS. I acted for the Red Cross in the test case in which a haemophiliac had got AIDS through blood products, because in the days when they were collecting blood before they discovered it was a virus and they developed the test to screen blood, a lot of the blood collected ended up having the AIDS virus in it, and haemophiliacs, there were quite a few of them, got AIDS as a result of using blood products. An action was brought, a test case was brought, on behalf of the haemophiliacs. I acted for the Red Cross and in this rather sad case, there was a very funny moment which I'll tell you about. The Red Cross's defence was 'we are in the forefront in the world in screening for AIDS, we screen people who are in notorious risk groups such as homosexuals and drug addicts'. The funny incident in the case was, we called witnesses from all round the world to seek to prove that the Red Cross was doing as much as anyone, if not more than most, in screening people and we called a doctor from Austria, from the Red Cross in Austria. He spoke like Donald Duck's uncle, "zis" and "zat" and whatever. He was giving evidence about the screening processes in Austria and he said, "Vell, ve asked ze people vezzer they were bisexuals and I got this question one day from this man who said to me, 'Doctor, if I have a vife and a mistress, am I a bisexual?'" It brought the house down. Anyway, the Red Cross was exonerated, but the hospital I think was found to blame for failing to give adequate warnings.

Conducted for the Victorian Bar oral history project by Juliette Brodsky, and filmed by Stewart Carter on 18 November 2009