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A recent NSW Court of Appeal decision highlights both the scope of an employer’s duty to guard against reasonably foreseeable psychiatric injury and the importance of the way issues are framed and concessions made during litigation.

The NSW Court of Appeal’s decision in Secretary Department of Communities and Justice v Soulos [2026] NSWCA 185 provides an interesting example of the circumstances in which an employer may be liable for psychiatric injury suffered by an employee, even where the immediate trigger for that injury occurs outside the workplace.

The case concerned a Department of Communities and Justice (DCJ) caseworker who suffered psychiatric injury after watching an SBS documentary about DCJ’s child protection work. The Court of Appeal dismissed DCJ’s appeal against a District Court judgment awarding the employee damages. However, the decision also provides an important reminder that the way a case is conducted at trial can significantly affect the issues that remain open on appeal.

What happened?

The respondent was a caseworker employed by the appellant, DCJ, who had responsibility for a 14-year-old young person, referred to in the proceedings as “YP”. In May 2019, YP died from an accidental overdose. The respondent was distressed by his death, took a short period away from work and subsequently attended five sessions with a psychologist arranged and paid for by DCJ.

In September 2021, DCJ employees were encouraged to watch The Department, an SBS documentary about DCJ’s child protection work. The documentary included approximately two minutes of footage from a serious case review panel discussing YP’s case.

Although YP was not named, the segment referred to his circumstances and included a quotation from his journal. The respondent recognised the material as relating to YP. The panel also used expressions such as “we” and “us” when discussing perceived failures in his care. The respondent understood the discussion as implicating her in those failures.

Importantly, the respondent had not been warned that YP’s case would feature in the documentary. It was common ground that watching the documentary caused her to suffer psychiatric injury. She attended work the following day but did not subsequently return.

The respondent commenced negligence proceedings against DCJ and was awarded $1,389,457.74 in damages for past and future economic losses by the NSW District Court (Soulos v Secretary, Department of Communities and Justice (Family and Community Service) [2025] NSWDC 548 per Catsanos SC DCJ)

What did the Court of Appeal decide?

The central issue on appeal concerned whether the risk of psychiatric harm was reasonably foreseeable.

The parties had conducted the case on the basis that reasonable foreseeability of psychiatric injury would follow if two matters were established:

1. it was reasonably foreseeable that the respondent might identify YP as the young person discussed in the documentary; and
2. it was reasonably foreseeable that she might perceive the panel as blaming her for YP’s death.

The Court of Appeal held that both were reasonably foreseeable.

The distinctive reference to YP’s journal supported the finding that the respondent might identify him. There was also evidence that other DCJ employees had independently identified YP as the subject of the documentary.

The Court also rejected the argument that references to “we” and “us” would simply be understood as referring to DCJ institutionally. There was a reasonably foreseeable risk that the respondent would understand the identified failings as extending to YP’s caseworkers, such as herself.

Accordingly, the appeal was dismissed. The Court applied the principles in Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44; [2005] HCA 15 concerning reasonable foreseeability of psychiatric injury.

An important qualification

Some caution is required in considering the broader significance of the decision, given the way in which the case was conducted at first instance and the issues ultimately before the Court of Appeal.

McHugh JA noted that DCJ had not separately litigated whether the psychiatric injury itself was reasonably foreseeable. Instead, the case had been conducted on the basis that if the two factual matters identified above were reasonably foreseeable, foreseeability of psychiatric injury followed.

Ward P described the outcome as “extraordinary”, while McHugh JA described it as “surprising” in light of the issues the parties had chosen to litigate.

For that reason, the decision should not be understood as establishing a broad proposition that an employer will necessarily be liable whenever workplace-related media or other material causes an employee psychiatric injury.

What does this mean for employers?

The decision nevertheless highlights the importance of considering the potential psychological impact of workplace-related material, particularly where employees may recognise sensitive cases or events with which they were personally involved.

It is a useful reminder that questions of psychiatric injury can arise in circumstances extending beyond an employee’s immediate day-to-day workplace activities. It also demonstrates the importance of carefully identifying and preserving issues at trial, as concessions or forensic decisions made at first instance may significantly constrain an appeal.

Disclosure and important note: This article is based on our own legal research and thinking. Some of its content has been drafted with the assistance of artificial intelligence. The authors have checked and approved this article, including the AI generated content, for publication.

This article was published on 4 October 2026 by Carroll & O’Dea Lawyers and is based on the relevant state of the law (legislation, regulations and case law) at that date for the jurisdiction in which it is published. Please note this article does not constitute legal advice. If you ever need legal advice or want to discuss a legal problem, please contact us to see if we can help. You can reach us on 1800 059 278 or via the Contact us page on our website. (www.codea.com.au). If you or a loved one has been injured, use our Personal injury Claim Check now.