Following Gray v Richards, two methodologies have developed for calculating fund management costs in personal injury matters. The Present Day Value and Actual Value approaches can produce materially different results, and understanding both is important for legal teams and their clients.

A large personal injury award placed under formal management will attract significant ongoing fees. The cost of fund management is a recognised head of damage that can add hundreds of thousands of dollars to a claim and must be carefully calculated.

A lump sum compensation award is not simply a weekly loss figure multiplied by the number of years remaining. Life expectancy determines the period over which future losses are projected, and small differences in that period can produce large differences in the final award.

Two sets of life expectancy data are commonly used in NSW personal injury matters: the ABS life tables and the Cumpston Sarjeant medium life expectancy figures. The difference between them can meaningfully affect the size of a lump sum award.

The Civil Liability Act 2002 limits the gross earnings that can be claimed in a loss of earnings assessment to three times the average weekly earnings in NSW. For higher-income plaintiffs, this cap can significantly reduce the damages available and must be correctly applied.