It is now well established in Australian law that a defendant can be liable for negligent conduct that results in psychiatric harm to a plaintiff. Of course the plaintiff must still be able to establish the causal link between that harm and the defendant's conduct. This may be difficult when the opinion of medical experts differs.
For example, it is common for some experts to testify that the plaintiff is suffering from psychiatric harm while others suggest the harm is imaginary or feigned. And even when it is agreed that a plaintiff suffers from psychiatric harm, the experts may not agree on its cause.
Each such case therefore requires careful investigation of the facts.
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