Nervous Shock Claims in Australia: The Current Position

The prevalence of nervous shock claims, which relate to pure mental harm, has increased significantly in Australia over the past decade. This includes claims brought by close family members of primary victims, for example in cases of delayed or missed cancer diagnoses, sudden patient deaths, or birth trauma. As understanding and awareness of mental health grows, more family members may seek treatment and become aware that they may have an entitlement to compensation if the death or injury of a loved one has arisen as a result of negligence.

In October 2025, the Insurance Council of Australia published its second annual Insurance Catastrophe Resilience Report titled ‘A Sustainable Public Liability Insurance Market in Australia: The Case for Civil Liability Reform’. The Report notes that it has been approximately 23 years since the last significant review of civil liability in Australia and suggests that Australia is due for further reform to minimise increasing claim costs.

Internationally, there have already been some reforms to restrict the extent of these claims. For example, in the UK the Supreme Court recently held that secondary psychiatric injury claims can generally only be pursued by individuals who witness an accident where a close relative is killed or injured due to negligence (Paul and another v Royal Wolverhampton NHS Trust [2024] UKSC 1).

In contrast, Australian law does not require the injury to result from a sudden shock or direct witnessing of the event, provided the risk of psychiatric injury was reasonably foreseeable (Tame v New South Wales (2002) 211 CLR 317; Gifford v Strang Patrick Stevedoring Pty Ltd (2003) 214 CLR 269; Annetts v Australian Stations Pty Ltd [2000] WASC 104).

In order to bring a successful claim for nervous shock in Victoria, a Plaintiff must establish that they have a “significant injury” – defined in the Wrongs Act 1958 as either a psychological injury that is assessed at greater than 10% or more whole person impairment. This must be formally assessed by a psychiatrist, creating a gateway that must be met before a claim for pure mental harm can proceed and ensuring that claims are only brought by those who have a recognised impairment. The significant injury assessment can be a lengthy and difficult process, often involving a review by an independent Medical Panel.

We therefore consider that calls for further restriction of nervous shock claims are likely to negatively impact families who are already navigating a difficult system with many in-built hurdles, while dealing with the death or serious injury of a loved one.

At Brave Legal, we work with many families whose lives have been impacted by the death or significant injury of a loved one, and who have sustained a recognised psychiatric injury as a result.  We see the profound impact that these situations have in the real world and assist clients to navigate the personal injury claims process with care and a trauma informed approach.

Should you wish to speak with one of our lawyers about the loss or injury of a loved one, please contact us for more information.