Melanie Sills, an officer in the Tuggerah Lakes area between 2003 and 2012, was unsuccessful in the District Court when she sued the state of NSW arguing she'd suffered post-traumatic stress disorder.

But the NSW Court of Appeal on Thursday allowed her challenge, finding the state had breached its duty of care and was liable for $1.41 million in damages plus interest but minus the weekly compensation payments she'd already received.

The District Court judge found two psychologists retained by NSW Police diagnosed the then-officer as having PTSD and recommended she be provided with psychological counselling and other assistance to help her to cope with the trauma.

Although he found the recommendations were not implemented he ruled that wasn't unreasonable and entered a verdict for the state.

The traumatic events included Ms Sills attending suicides, a house fire where a child was burnt to death, fatal motor vehicle accidents and a domestic dispute involving a firearm.

The Appeal Court found NSW had breached its duty of care to Ms Sills in 2006 by returning her to general duties without implementing the recommendations made by the police medical officer and psychologist.

"At the time the decision was made the state was aware that the appellant was suffering PTSD and that placing her on general duties was likely to expose her to further traumatic incidents," the court ruled.

The state also breached its duty of care by its "entirely inadequate response" to a May 2009 report noting Ms Sills had been further exposed to five critical incidents within a relatively short period.

The court agreed with the District Court judge's finding that her reluctance to reveal the true extent of her difficulties was in part due to the stigma many police officers feel is attached to mental illness.

Australian Associated Press