Summary

The High Court of Australia has delivered judgment in the matter of Kozarov v State of Victoria [2022] HCA 12 (Kozarov).

In this case alert, we summarise the appeal decision along with its implications to the assessment of common law liability for psychiatric injury sustained in the workplace.

In brief, the High Court has clarified the manner in which Courts will assess whether an employee’s risk of psychiatric injury in the workplace is reasonably foreseeable to an employer, and therefore whether an employer has a relevant duty of care to proactively reduce the risk of injury.

Where an employee is engaged to perform an occupation that presents an obvious and inherent risk of psychiatric injury, and the employer has knowledge that employees face this obvious and inherent risk in the performance of their regular duties, a duty of care arises on the part of an employer to take proactive steps in respect of all employees performing that role to reduce their risk of psychiatric injury.

Many will note this judicial guidance is timely, given it follows the Victorian Government’s release of the Proposed OHS Amendment (Psychological Health) Regulations (Proposed Regulations).

Context

An employee seeking to recover damages in negligence for a workplace injury must establish that their employer was on notice of a reasonably foreseeable risk of injury, failed to take reasonable steps to reduce that risk (i.e. breached its duty of care), and thereby caused the employee’s injury.

When claiming damages for psychiatric injury sustained due to the mere performance of ordinary duties or the mere “exigencies” of work (i.e. ‘work stress’), it is arguably by necessity that the test is slightly more demanding. An employee must show that their employer was on notice of a reasonably foreseeable risk of psychiatric injury specific to that employee, because of those duties or regular exigencies.

Put another way, an employee must establish that their employer knew they, as an individual, were at risk of sustaining psychiatric injury due to the ordinary performance of their work by way of evident signs to that effect. This notion is drawn from the High Court’s well-known decision in Koehler v Cerebos (Australia) Ltd, in which the plurality stipulated thatan employer “engaging an employee to perform stated duties is entitled to assume, in the absence of evident signs warning of the possibility of psychiatric injury, that the employee considers that he or she is able to do the job.”

In practice, this means that an employer cannot be viewed as negligent where an employee sustains psychiatric injury as a result of performing the very duties they agreed to perform (and in some way held themselves out as capable of performing) upon their commencement of employment.

Kozarov v State of Victoria [2022] HCA 12

Facts

The appellant, Ms Kozarov, claimed common law damages in negligence for psychiatric injury she allegedly sustained as a result of performing her ordinary duties as a prosecutor within the Specialist Sexual Offences Unit (SSOU) of the Office of Public Prosecutions.

Russell Kennedy defended the claim on behalf of the SSOU / State of Victoria.

At first instance before the Supreme Court of Victoria, Ms Kozarov succeeded in establishing that the State of Victoria breached its duty of care and thereby caused her psychiatric injury. The Court of Appeal of the Supreme Court of Victoria subsequently reversed this decision, by determining that the State of Victoria’s breach was not a cause of Ms Kozarov’s injury.

Ms Kozarov appealed to the High Court of Australia, where the key issues in dispute were as follows:

  1. Whether Ms Kozarov had put the SSOU on notice that there was a reasonably foreseeable risk she would sustain a psychiatric injury as a result of the ordinary performance of her work duties;
  2. If so, whether the State of Victoria breached its duty of care toward Ms Kozarov to reduce that risk of injury; and
  3. If so, whether the breach caused Ms Kozarov’s injury.

The State of Victoria submitted that it did not have any knowledge Ms Kozarov was at risk of a psychiatric injury until February 2012, at which point it discharged its duty of care to reduce any risk of injury (including by facilitating Ms Kozarov’s rotation out of the SSOU). The facts relevant to this issue included:

  • Ms Kozarov had been working within the SSOU since 2009, and had consistently completed her duties to the satisfaction of the SSOU;
  • Ms Kozarov had applied for promotions within the SSOU throughout the course of her employment; and
  • Prior to February 2012, Ms Kozarov had not specifically advised the SSOU that she was at risk of suffering from a psychiatric injury due to the nature of her work.

Ms Kozarov argued the SSOU was on notice she was at risk of sustaining a psychiatric injury far earlier (in August 2011), due to a range of ‘signs’ that warned the SSOU of the possibility she would suffer injury by the performance of her normal duties. These signs included that Ms Kozarov:

  • Signed a staff memorandum in August 2011, together with many of her co-workers, regarding a range of health impacts suggested to have been caused by their high file loads;
  • Was reportedly outspoken at staff meetings and counselling workshops throughout 2011, regarding her hypervigilance and overprotective parenting practices as a result of her work;
  • Left work suddenly during a particularly complex trial in August 2011, due to an episode of dizziness;
  • Came into uncharacteristic conflict with her SSOU manager in late August 2011, effecting a breakdown in that relationship; and
  • Sought to combine a period of annual leave with long service leave in late 2011.

Decision

The High Court decided in favour of Ms Kozarov, by way of four separate but unanimous judgments.

Regarding the key issues in dispute:

  • Five of the seven justices observed the State of Victoria had a relevant duty to take proactive measures to reduce Ms Kozarov’s risk of psychiatric injury from the commencement of her employment. This was because Ms Kozarov’s work within the SSOU was “inherently and obviously dangerous to the psychiatric health” of each and every SSOU employee, such that the SSOU had a duty of care to “be proactive in the provision of measures to enable the work to be performed safely”.
  • The High Court identified this knowledge on the part of the State of Victoria in the form of the SSOU’s policy on vicarious trauma, which recognised vicarious trauma as ‘an unavoidable consequence of undertaking work with survivors of trauma’, and as a ‘process [that] can have detrimental, cumulative and prolonged effects on the staff member’. The terms of this policy showed that the State of Victoria “had a lively appreciation of [Ms Kozarov’s] serious risk” to psychiatric injury.
  • The State of Victoria’s duty to reduce Ms Kozarov’s risk of injury was otherwise engaged in August 2011, at the very latest.This was because the range of ‘signs’ elicited by Ms Kozarov were sufficient to have conferred the requisite notice on the SSOU, and to have thereby triggered a duty to proactively reduce Ms Kozarov’s risk of injury by way of reasonable steps.
  • The State of Victoria breached its duty of care by omission, in its failure to (inter alia) offer Ms Kozarov a rotation out of the SSOU in late August 2011.
  • On an analysis of the facts and expert evidence, it was more likely than not that an offer to rotate Ms Kozarov out of the SSOU in late August 2011 would have avoided Ms Kozarov’s psychiatric injury.

Implications for the assessment of liability for psychiatric injury in the workplace

On its analysis of the facts before it, the High Court observed that Ms Kozarov’s role within the SSOU involved an inherent and obvious danger to the psychiatric health of all SSOU employees such that the State of Victoria owed a duty of care to all employees to proactively reduce their risk of psychiatric injury.

Ms Kozarov’s role within the SSOU involved the everyday management of child sexual offence prosecutions. She was often exposed to visual material depicting the same. She frequently conferred with child victims. She had a reasonably ‘busy’ work schedule involving court attendances and case preparation. The SSOU’s policy on vicarious trauma stipulated that there existed a specific risk to psychiatric health by reason of the exigencies of this work – being vicarious trauma.

Having decided the matter on its unique facts, the High Court did not enumerate other forms of employment that ought be similarly characterised as presenting an ‘inherent and obvious danger to psychiatric health’. Nonetheless, given the exceptional characteristics of Ms Kozarov’s employment, it is arguable the ‘inherent and obvious danger’ threshold is equally exceptional.

Overall, Kozarov guides practitioners to be cognisant of the following factors when analysing common law liability for psychiatric injury in the workplace:

  • When assessing the point at which risk of injury is reasonably foreseeable, it remains necessary to establish the Koehler ‘evident signs’ warning of a specific risk of psychiatric injury unless the nature of employment presents an inherent and obvious danger to psychiatric health (which danger is known to the employer). We have yet to see which other occupations will reach the Kozarov threshold.
  • The High Court has not offered a statement of principle regarding the content of an employer’s duty to reduce risk of psychiatric injury when it is enlivened in these particular circumstances, or regarding breach of that duty. Accordingly, it remains necessary to enquire: “Having regard…to the magnitude of the possible harm and the degree of probability of its occurrence and, on the other hand, to the burden of alleviating action, what steps would a reasonable person in the position of the employer have taken in response?” These measures may, but will not always, include counselling, psychological screening, and rotations.
  • Finally, the question of causation is fact-dependant. A careful and holistic analysis of the factual matrix, expert evidence and lay witness evidence is critical to determine the probability of the avoidance of harm had the employer discharged its relevant duty.