In Secretary Department of Communities and Justice v Soulos [2026] NSWCA 185, the NSW Court of Appeal upheld a $1,389,457.74 damages award against a government employer after a caseworker suffered total psychiatric incapacity following a two-minute segment in an SBS documentary about her former client’s death. The Court found it was reasonably foreseeable that she would identify the client and perceive the broadcast as blaming her for his death. The decision carries important implications for employers, insurers and underwriters managing psychiatric injury claims in the workplace.
How did a two-minute television segment give rise to a $1.39 million psychiatric injury claim?
The respondent, Luiza Soulos, was a caseworker employed by the Department of Communities and Justice (DCJ). In 2017, she became a 14-year-old Aboriginal boy (YP)’s DCJ caseworker.
About a month before his death, YP called her saying: “I feel like I’m going to harm myself. I need some help.” She drove to see him and checked that he was safe. They later arranged to meet about his accommodation. However, before that meeting, on 18 May 2019, YP died from an accidental overdose. The respondent took several days off and attended five DCJ-funded psychology sessions. She later, however, returned to full duties which included sorting through YP’s personal belongings – including his journal.
In September 2021, the DCJ encouraged staff to watch The Department, an SBS documentary about its work (Documentary). The respondent watched the Documentary on 10 October 2021, without being told that it included YP’s case. A two-minute segment of the Documentary quoted YP’s journal, referring to “his suicide notes” and stated, “I think we really failed this little boy”. The respondent recognised YP from the material.
The respondent attended work the next day, discussed the Documentary with her supervisors and never returned. She suffered a psychiatric injury that totally incapacitated her.
What legal test did the Court of Appeal apply in Soulos?
The appeal concerned reasonable foreseeability under Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 – whether the risk of psychiatric illness was “not far-fetched or fanciful”. The DCJ accepted that liability would follow if it was reasonably foreseeable that:
- the respondent would identify YP as the subject of the discussion (Issue 1); and
- she would perceive the panel as blaming her for his death (Issue 2).
The Court upheld both findings.
The Civil Liability Act 2002 (NSW) did not apply because of s 3B(1)(f). Section 3B(1)(f) excludes certain civil liability claims from the Act’s protections, including claims arising in the workers compensation context. The claim arose in the workers compensation context. Had the Act applied, s 32 would have required consideration of whether psychiatric illness was foreseeable in a person of normal fortitude. The statutory factors may have created greater difficulty for the respondent – she did not witness YP’s death, was not present at the review panel and had a professional rather than familial relationship with YP. The claim was instead governed by the more permissive common law test in Koehler.
Was it reasonably foreseeable that the caseworker would identify her former client?
The Court held that it was reasonably foreseeable that the respondent would identify YP.
The Documentary quoted words from YP’s journal that the respondent had read after his death. That material was available to the DCJ, and the respondent, as YP’s caseworker, could reasonably be expected to have read it.
The Court also relied on the following:
- Internal DCJ emails created on 11 and 12 October 2021 in which a DCJ Manager of Client Services emailed the respondent and her manager advising that YP’s case had been discussed in the documentary and proposing a debrief. The respondent replied that it “would have been nice to be told beforehand rather than watching it”, to which the DCJ Manager of Client Services responded that he had “the same thought”; and
- Evidence from the DCJ Executive Director was that the DCJ Area Director and the same DCJ Manager of Client Services had “pieced together” that the review panel discussion concerned YP, without prompting from the respondent.
The Court found that this showed that DCJ staff with knowledge of the case could identify YP from the segment. It was therefore reasonably foreseeable that the respondent might do so.
Was it reasonably foreseeable that the caseworker would perceive the documentary as blaming her for her client’s death?
The DCJ argued that “we” and “us” referred only to the Department as a system or to senior staff participating in the review panel, not to caseworkers.
The Court rejected that submission. The opening words – “as we all know” – referred to people rather than an impersonal system. The discussion referred to people who had failed to listen to YP, respond to his suicidal thoughts or take appropriate action. The DCJ’s senior counsel also accepted on appeal that “we” included the respondent.
In reaching that conclusion, the Court also rejected two arguments advanced by DCJ.
- First, although the respondent knew that YP had died from an accidental overdose, the documentary conveyed an apparent suicide narrative. The Court considered that the references to suicide could reinforce her perception that the panel was blaming her for failing to respond to YP’s suicidal thoughts, and that any belief that the panel was mistaken about the circumstances of his death could heighten her sense of injustice at being blamed; and
- Second, the Court rejected DCJ’s argument that the criticism related only to events occurring before the respondent became YP’s caseworker. The references to a “continual voice” of wanting to die and material evident “the whole way through the report” meant it was reasonably foreseeable that she might understand the criticism as extending to the period during which she was responsible for YP’s care.
Objectively, the panel discussion had a “strong flavour of blame”. It was not far-fetched or fanciful that the respondent might perceive the criticism as extending to her.
What forensic concession shaped the outcome of the Soulos appeal?
Ultimately, the outcome was shaped not only by the Court’s findings on foreseeability, but by the way the case was conducted at first instance. In particular, the DCJ’s forensic concessions narrowed the issues on appeal and effectively determined the path to liability. Specifically, the DCJ did not separately contest whether psychiatric injury itself was foreseeable from watching the documentary. It accepted that, if identification and perceived blame were foreseeable, psychiatric injury followed.
- McHugh JA described this as a separate issue that the DCJ had chosen not to litigate. The appeal was instead confined to the two factual questions of identification and perceived blame.
- Ward P regarded the result as surprising and extraordinary, given that the documentary was relatively innocuous, lasted approximately 90 minutes and devoted only two minutes to YP’s case. Neither YP nor the respondent was publicly identified. The Court nevertheless held that the State was bound by its forensic position.
Importantly, that limits the decision’s broader significance. Soulos does not establish that psychiatric injury is automatically foreseeable whenever an employee recognises a former client in workplace-related media. It establishes the consequences of the particular findings and concession made in this case.
What does Soulos mean for professionals, insurers and underwriters?
Soulos is both a psychiatric injury decision and a warning about forensic discipline.
- The Court found it reasonably foreseeable that the respondent would identify her former client and perceive the documentary’s criticism as extending to her. But the substantial award survived because the DCJ accepted that those findings were enough to establish foreseeability of psychiatric injury; and
- The decision should therefore be read cautiously. It is not authority for automatic liability arising from brief or indirect exposure to workplace-related media. Its broader lesson is that sensitive communications require careful risk assessment, and that concessions about what must be proved can determine the result long before an appeal is heard.
Soulos provides three practical lessons:
- Psychiatric injury can arise from workplace related media. Staff closely involved in sensitive cases may recognise supposedly anonymous material, even where the relevant exposure is brief and neither the employee nor the client is named;
- Damages in total incapacity claims can be substantial. In a total incapacity claim, where there is no realistic prospect of a return to work, future economic loss may produce a significant award; and
- Forensic concessions matter. Concessions about what must be established to prove liability can remove a contested issue from the case and may be difficult, or impossible, to unwind on appeal.
For insurers and underwriters: Claims arising from exposure to workplace related media may be less foreseeable in standard risk assessments, but Soulos shows they can generate significant awards. When assessing employer liability or workers compensation risks involving psychological injury, consider whether the insured has protocols for managing staff communications around sensitive workplace media. For claims managers, the decision is a reminder to review the scope and effect of concessions made at trial, particularly concessions about foreseeability that may remove issues from the available defences on appeal.
For professionals and their insurers: Soulos is not confined to the public sector or social work. Professionals across fields including healthcare, law, education and counselling routinely manage sensitive cases involving vulnerable clients. Where a professional suffers psychiatric injury following exposure to workplace-related media about a former client, however brief or indirect, the reasoning in Soulos may be engaged. For professional indemnity insurers, the decision warrants consideration when assessing whether an insured has adequate protocols for managing staff communications around sensitive case material. It also reinforces the importance of carefully evaluating, at the outset of any defence, which elements of liability are conceded, and which are contested, because as Soulos demonstrates, those decisions can determine the outcome long before the matter reaches an appellate court.
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The material contained in this publication is in the nature of general comment only, and neither purports nor is intended to be advice on any particular matter. No reader should act on the basis of any matter contained in this publication without considering, and if necessary, taking appropriate professional advice upon their own particular circumstances.
