(1) Subject to section 389, an action or other proceeding for damages does not lie against the Commonwealth, or a potentially liable member, in respect of:
(a) a service injury sustained, or a service disease contracted, by another member or a former member; or
(b) the loss of, or damage to, a medical aid used by another member.
Note: However, a person may choose to institute an action for damages for non-economic loss against the Commonwealth or the potentially liable member under section 389.
(2) Subsection (1) applies whether that injury, disease, loss or damage occurred before or after this section commences. However, subsection (1) does not apply if an action or proceeding in respect of the injury, disease, loss or damage is instituted before this section commences.
(3) Subsection (1) does not prevent a dependant of a deceased member from bringing an action in respect of a service death of the deceased member (whether or not the deceased member had chosen to institute an action under section 389 before his or her death).
(4) However, if such a dependant recovers damages (including damages payable as a result of the settlement of a claim) from the Commonwealth or a potentially liable member in respect of the service death, subsections (5) and (6) have effect.
(5) If the dependant has received compensation under this Act in respect of the service death before recovery of the damages, the dependant is liable to pay to the Commonwealth the lesser of:
(a) the total of all amounts of compensation paid to the person under this Act in respect of the service death before the recovery of the damages (except MRCA supplement under section 245 and compensation for dependants under section 242, 253 or 255); and
(b) the amount of the damages.
(6) Compensation under this Act in respect of the service death is not payable to the dependant after the recovery of the damages.