From 1 July 2025, the statutory cap on general damages (non-economic loss) in defamation proceedings under section 35 of the Defamation Act 2005 has been indexed to $500,000.
Background: The Statutory Cap
The cap was introduced as part of the uniform defamation legislation enacted across Australian jurisdictions in 2005–2006 to prevent disproportionate awards for non-economic loss. It is indexed annually by each jurisdiction in line with movements in the Consumer Price Index, meaning the cap increases incrementally over time.
When the uniform legislation commenced, the cap was set at $250,000. Annual CPI indexation has progressively increased it to the current $500,000 figure. The cap applies to the award for non-economic loss — sometimes called general damages — which encompasses injury to reputation, hurt to feelings, and the natural grief and distress caused by the defamatory publication.
What the Cap Does Not Cover
It is important to note the limitations of the cap. It applies only to general (non-economic) damages. It does not limit:
- Aggravated damages — available where the defendant's conduct warrants an additional award (such as a failure to apologise, repetition of the publication, or improper conduct in litigation). Aggravated damages can exceed the general damages cap and are awarded in addition to it.
- Special damages for proven financial loss — uncapped and must be specifically pleaded and proven with evidence of actual financial harm caused by the defamatory publication.
- Exemplary damages — available in the rare case where the defendant's conduct is particularly egregious.
Historical Context: Rush v Nationwide News
In Rush v Nationwide News [2019] FCA 496, the Federal Court awarded $850,000 in general damages (including aggravated damages) plus approximately $1.98 million in special damages for past and future economic loss — totalling approximately $2.87 million, one of the largest defamation awards in Australian history. This illustrates that the statutory cap on general damages does not limit total recovery where financial loss can be proven.
The Rush case also demonstrates the availability of aggravated damages where defendant conduct is found to have been improper — in that case, the recklessly irresponsible nature of the journalism and the failure to verify allegations before publication were relevant to the aggravated damages component of the award.
Practical Implications
For plaintiffs:
- The $500,000 cap represents a meaningful increase from previous years and should be reflected in any current costs and prospects assessment.
- Where the defendant's conduct warrants aggravated damages, total recovery can significantly exceed the cap.
- Claims involving proven financial loss remain uncapped — the cap only limits general damages.
For defendants and their insurers:
- Updated figures should be used in all risk assessments and insurance coverage reviews for matters commenced or continuing from 1 July 2025.
- The increasing cap underscores the ongoing importance of early resolution, genuine apology, and appropriate offers to make amends.