This paper examines the recommendations of the Commission of Inquiry Into Workers' Compensation Common Law Matters, conducted by Justice Terry Sheahan. Justice Sheahan was asked to consider several matters in relation to common law claims for personal injury arising in the employment context. First, the appropriate threshold for 'serious and permanent injury' necessary to recover damages at common law. Second, more efficient ways to process common law claims. Third, ways to reduce unnecessary costs and inefficiencies in the processing of common law claims and fourth, ways to reduce the incentive for pursuing common law claims. The report of the Inquiry was presented to the Governor on 31 August 2001.

The report contains several recommendations addressing the Terms of Reference. The Inquiry grouped its recommendations into two main categories: those made in relation to Terms of Reference One and Four; and those made in relation to Terms of Reference Two and Three. The recommendations are summarised in Section Two of this paper. Section Three examines the recommendations in relation to Terms One and Four and Section Four examines the recommendations in relation to Terms Two and Three. Some submissions to the Inquiry addressing matters relevant to the recommendations are noted. Section Five examines the response to the Sheahan Inquiry recommendations. However, at the time of writing only a few responses have been made publicly available.

By way of background material, the relevant common law and the amendments proposed in the Workers' Compensation Legislation Amendment Bill 2001 will be briefly examined in Section One. This information is a prècis of relevant parts of an earlier briefing paper by the author: The Future of the New South Wales Workers Compensation Scheme, Parliamentary Library Research Service, Briefing Paper No 8/01.