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Where am I now? Lawlink > Supreme Court > Speeches > The Politics, Purpose And Reform
Of The Law Of Negligence
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The Politics, Purpose And Reform
Of The Law Of Negligence
THE POLITICS, PURPOSE AND REFORM
OF THE LAW OF NEGLIGENCE [1]
Justice David Ipp AO*
In recent times, indemnity insurance has had to grapple with two features of the law of negligence that are endemic and which materially affect the insurance market. The first is the inconsistencies that have become the bane of the law of negligence. The second is the political influences of the different groups who have interests affected by the law of negligence. The second feature is a major cause of the first.
When, in 1932, the modern law of negligence was created by Donoghue v Stevenson, [2] the notion that it would develop its own universe of conflicting, hard-nosed, political interests was inconceivable. But that is what has occurred. The politicisation of negligence now ranges from the various State laws that regulate the negligence system to national structures. In many ways, Australia resembles the USA, where negligence law differs substantially from State to State and where tort reform is a recurring political issue. In the last New South Wales State election, the major parties were lobbied for their support for and against tort reform and leading politicians made public statements about the law of negligence. In the USA, tort reform is a continuing major political question. In the last US presidential election, stopping tort reform was part of the political manifesto of Senator John Edwards, the Democrat vice-presidential candidate, and it seems that it will feature again in the coming election.
Disparate groups are involved in the politics of negligence. The dominant figure is government, which has shown a readiness to make far-reaching laws that have transformed the law. Government is directly interested as a frequent defendant that, on a regular basis, is held liable in negligence to pay large sums of damages. Government is also required to finance public authorities of all kinds that are often defendants in negligence actions. In New South Wales, government is financially involved in the payment of awards to plaintiff workers in common law negligence claims governed by the Workers Compensation Act 1987 (NSW). This direct involvement causes government to be concerned with the niceties of the law of negligence to a degree equalled by few other areas of the law.
Government, however, has wider interests. It has become obvious that the law of negligence is capable of influencing votes and, hence, political power. Looked at in more altruistic terms, government is, or should be, concerned with making just laws, ensuring the fair workings of society, and promoting national characteristics of independence and personal responsibility. Thus, government has become deeply concerned with how the law of negligence affects the insurance industry, health issues and local authorities.
The insurance industry wields a powerful influence in the politics of negligence. The 2002 insurance crisis demonstrated that insurance is the lifeblood, not only of commerce and industry, but of medical and other professional services, and many aspects of everyday life. The events of 2002 showed that, without the availability of reasonably priced indemnity insurance, the fabric of society is at risk.
Insurers are the most frequent defendants in negligence claims. But, while it is to their general advantage for the potential liability of insureds and damages awards to be reduced, this should not be taken too far. Too great a reduction in risk results in reduced demand for insurance. Moreover, insurers are able to cope with any risks that are capable of reasonable assessment. All that is then necessary is for insurers to calculate and charge premiums appropriate to the risk. Of course, the amount of the premiums will influence the extent of the market for cover. So, we are dealing with a situation of some complexity.
Public authorities are another group involved in the politics of negligence. At the time of the insurance crisis, they wielded considerable influence and were successful in their arguments. The reforms have gone to great lengths to protect them; some would say, further than is desirable.
The interests of the medical profession and other professions, apart from the legal profession, largely coincide with the interests of insurers and public authorities. The medical profession has proved to be a powerful and influential body as society needs to protect the essential services they provide. The 2002 reforms have ameliorated their position, however, and, although they remain potentially important players, they are not presently active in the debate. Similar considerations apply to other professions such as accountants and engineers.
There are two principal counterweights to these forces, namely, lawyers and injured persons.
Lawyers often claim altruism as their reason for seeking to roll back tort reform, but they have difficulties with the media and the public in conveying this message. They have a basic handicap as the maintenance and increase of litigation is in their financial interest. Measures that reduce litigation reduce their income, and the converse is also the case. This produces, fairly or unfairly, scepticism amongst the community. There can be no doubt, however, that bodies such as Councils of the Bar Associations, Law Societies, the Law Council of Australia and the Australian Lawyers Alliance genuinely attempt to advance the rule of law and express legitimate concern for the less advantaged members of our society. It would be a serious error to discount their arguments without giving them careful consideration. Lawyers are not to be under-estimated in the politics of negligence.
Victims’ associations are made up largely of persons who have been harmed by the negligence of others. They are a powerful lobby group. It is not difficult for these associations to produce individuals who have not been treated in a consistent way and who deserve and elicit considerable public sympathy. They, together with lawyers, are conducting an enduring and highly visible campaign for tort reform.
There is another large group that has not often made its voice heard. This is the vast number of persons who have been injured or disabled without having anyone to sue. They are interested in the politics of negligence as much money is expended in the negligence system that could be used to alleviate their problems. This group favours the abolition of the personal injuries tort system and supports a no-fault system of compensation for personal injuries.
They emphasise that victims of accidents who receive damages are fortunate when they have someone to sue, in comparison with many other victims of accidents or similar misfortunes who have no remedy. Those born with congenital disabilities have virtually no chance of recovering damages. It is often difficult to prove that disabling illnesses are the fault of someone else. Many are injured due to the negligence of others but cannot succeed owing to the absence of witnesses. [3] There are other anomalies. Take the situation where a careless driver injures his own wife. She sues him and his insurer pays. He, thereupon, shares in the damages awarded for his own negligence. There are other examples of this kind.
However, the question whether a no-fault system of compensation should be introduced is complex and difficult. It is open to question whether such systems have proved effective. Where they have been introduced, they appear to be beset by high administrative costs and lack of resources. Their own rigid categories of injuries can be productive of injustice and inconsistencies. As they are administered bureaucratically, with minimum involvement of the courts, there is little room to correct individual errors by decision-makers. There are ideological issues involved. Should the scheme be based on private enterprise or government bureaucracy? Questions of personal responsibility and the effect of social welfare on society colour the debate.
Lawyers, generally, oppose no-fault schemes. I have not seen any policy statement by the insurers on this question. Government, at present, does not appear to be in favour of an all-embracing system of no-fault compensation for personal injuries. Nevertheless, the New South Wales government has established a lifetime care and support scheme under the Motor Accidents (Life-Time Care and Support) Act 2006 (NSW). By this scheme, treatment, rehabilitation and attendant care will be provided to persons who have been severely injured in motor accidents, regardless of who was at fault. Essentially, the introduction of a no-fault scheme is a political issue in the larger sense. Although largely dormant, it is very much alive.
These disparate views, opposing interests and continuing arguments raise the question: what is the purpose of the law of negligence?
Usually, it is said that the true purposes of the tort of negligence are corrective justice and deterrence. Corrective justice aims, by ordering wrongdoers to pay injured persons money, to correct the injustice that has occurred. The difficulty, however, is that the guilty individual hardly ever pays the damages or even the insurance premiums. Most tort liability for personal injuries is imposed on insurers or employer corporations or public authorities. The insurers pay the damages and the corporations or authorities pay the premiums, or act as self-insurers. The notion that tort law ordinarily requires negligent individuals to pay for the consequences of their negligence is not true. [4] Furthermore, only a very small percentage of injured persons receive tort damages. Most receive assistance solely through social welfare.
The purpose of deterrence is self-evident. Some say that by holding defendants liable and making them pay compensation, others will be deterred from causing injury. The growth of insurance, however, is destructive of this argument. Defendants seldom pay compensation themselves. Payment of damages is, therefore, not a major deterrent.
Nevertheless, almost all persons, especially those who are concerned with their professional or business reputations, have a great dislike of being found to be negligent. In the course of the tort reform process, I became convinced, for example, that the fear of being sued and found to have been negligent was causing those involved in medical practice, particularly hospital managers, to focus very carefully on their procedures and standards. This fear applies to almost all persons and entities and is an important deterrent against negligent conduct.
Additionally, the existence of the tort of negligence, and the open court process in adjudicating upon negligence, satisfies a deep need of society, namely, the public exposure of negligent conduct, irrespective of the political importance or economic or social standing of the defendant. The curial process promotes the sense of justice being done without fear and favour. The law of negligence should protect and attribute liability to all, and in an equal way, irrespective of the identity, race, religion, politics and occupation of the parties. In this way, the law of negligence is an essential part of democratic society and the rule of law. These matters bear on the current inconsistencies in the laws of negligence and the way in which parts of those laws are administered.
Five years ago, the law of negligence was out of balance. The perception was that plaintiffs were succeeding far too easily and receiving damages so high that the community was disturbed. Some insurers had left Australia. Others refused to provide indemnity cover. Premiums were extremely high. Society was suffering. This led to tort reform legislation, designed to limit liability and damages, being passed in the Commonwealth and in every State and Territory; a striking demonstration of government interest and power in the law of negligence.
Far-reaching changes were made. The more important included raising the standard of care, defining the general principles applicable, limiting liability for dangerous recreational activities, giving increased importance to obvious risks and risk warnings, imposing limits on claims for future economic loss and claims for gratuitous care, providing thresholds for non-economic loss, abolishing exemplary, punitive and aggravated damages, providing for structured settlements, and imposing limits on claims for pure mental harm. A modified Bolam [5] test was introduced that now applies to all professions, not only doctors. The Trade Practices Act 1974 (Cth) and the Fair Trading Acts were amended to prevent individuals bringing actions for damages for personal injury and death by reason of misleading or deceptive conduct. Consumers once more have to prove that their personal injury damages were caused by fault. The laws relating to limitation of actions relating to negligent personal injury claims have been transformed. The critical date for limitation purposes is now the date when plaintiffs first learn that they have been harmed and that some other person was responsible. Subject to certain safeguards, time runs against children and mentally incapacitated persons.
Significant changes were made to the assessment of damages. Throughout the country, there are now various legislative provisions relating to thresholds and caps. Many of these thresholds and caps are arbitrary, but there is no way, based on recognised legal principle, that could inform the selection of thresholds and caps.
One of the main purposes of the caps and thresholds was to weed out small claims. In 2002, small claims and their administrative and legal costs formed almost half of amounts paid by defendants and this, legislatures thought, was out of proportion to the overall benefit to the community. The view was taken that it was more important to provide for compensation for those who were more seriously injured and to keep premiums at a reasonable level. The reforming legislation contains several provisions designed to discourage small claims. These provisions appear to have served their purpose. Many injured persons, for whom it is now not economically worthwhile to sue, strenuously object to these laws but, at this stage, the impetus to remove them is not strong.
In some important respects, the reforms went substantially further than the recommendations of the Panel appointed in 2002 by the Commonwealth, State and Territory governments to review the law of negligence. This can readily be seen from an examination, for example, of the New South Wales Civil Liability Act 2002.
By that Act, protection far beyond that recommended by the Panel was afforded to public authorities. The Panel had recommended that decisions, based substantially on factors of policy, should not be used to support findings of negligence against public authorities, unless the policy decision of the defendant authority concerned was so unreasonable that no reasonable public functionary in the defendant’s position could have made it. Section 43 of the Act, however, provides that any act or omission of a public authority, of whatever kind, does not constitute a breach of statutory duty unless the act or omission was so unreasonable that it could not be regarded as a reasonable exercise of the functions of the authority. The point I am making, that does not seem to have been generally understood, is that s 43 does not merely protect public authorities against liability for policy decisions. It limits liability for breach of statutory duty resulting from any act or omission of any kind – whether it be a policy decision or not. It is a hurdle in the way of all claims (not only those based on policy decisions) against public authorities for breach of statutory duty. It is substantially inconsistent with the notion that the Crown and government authorities should be treated before the law in the same way as an ordinary citizen.
A further protection the Civil Liability Act affords specifically to road authorities, not recommended by the Panel, is non-feasance protection that, in effect, reverses Ghantous v Hawkesbury City Council.[6] This is a classical political decision of a kind that, in our system, is left to parliament to undertake. Contrary to the recommendation of the Panel, the Civil Liability Act contains several provisions conferring limited protection on volunteers for their negligent acts. Also, contrary to the recommendations of the Panel, the Act confers protection from personal liability on “good Samaritans”. Other legislative changes that the Panel did not recommend include the presumption of contributory negligence where the plaintiff was intoxicated and limitations on liability in respect of criminals. These changes, while they have a populist flavour and involve treating categories of persons differently to others, also fall within the traditional powers of parliament. They affect a limited number of plaintiffs and do not cause recurring difficulties stemming from inconsistencies in the law such as those created by the multiplicity of statutes governing negligent conduct.
The Civil Liability Act introduces proportionate liability in respect of claims for economic loss and damage to property, only. Under a proportionate liability regime, because a plaintiff bears the risk of one defendant’s insolvency, a person who is harmed by two people may be worse off than a person who is harmed by one. Conversely, a person who negligently causes harm to another will be better off merely because someone else also caused the harm. Parliament, nevertheless, decided that it was appropriate for proportionate liability to apply to economic claims.
Five years after the reforms, there has been a metamorphosis. The insurance crisis has abated. There has been a substantial increase in the number of public liability risks written across Australia. [7] Insurers are declaring far greater profits and there is a newfound air of confidence in the insurance industry. A Commonwealth government review of medical indemnity has found that doctors can now obtain affordable indemnity insurance cover. Medical indemnity rates have reduced significantly. [8] Local authorities no longer complain that insurance problems prevent them from providing essential services. The cost and difficulties of obtaining cover are no longer the subject of media comment.
There is, however, a perception amongst some that the pendulum has swung too far in the opposite direction. Judges at the highest level have expressed unease. The legal profession and victims’ associations are unhappy and are clamouring for change. They are conducting a well-orchestrated campaign for reform. This brings about an atmosphere of uncertainty and instability.
A noteworthy aspect of this campaign is that it is not directed against the provisions of the Civil Liability Act. There appears to be an acceptance that those provisions, on a general basis, are reasonable, balanced, and not unfair. The campaign is, rather, directed against inconsistencies and procedures in other negligence-related legislation and the unfairness that they produce. The Civil Liability Act, in fact, is being used as a model against which the other legislation is being unfavourably compared.
The major areas of contention are the different ways thresholds are used under the Civil Liability Act, the Workers Compensation Act (insofar as it applies to common law claims) and the Motor Accidents Compensation Act 1999 (NSW).
Under the Civil Liability Act, the threshold for damages for non-economic loss is 15% of a most extreme case. [9] Under the Workers Compensation Act, no damages may be awarded to an injured worker unless the injury results in permanent impairment of at least 15% and no regard is to be had to secondary psychological injuries. [10] Under the Motor Accidents Compensation Act, no damages may be awarded for non-economic loss unless permanent impairment is greater than 10%.
Permanent impairment is a very different concept to a percentage of the most extreme case as laid down by the Civil Liability Act. The concept of permanent impairment is based on the American Medical Association Guide to the Evaluation of Permanent Impairment and relates to “whole of body”. Peculiarly, decisions under the Workers Compensation Act are based on the fifth edition whereas those under the Motor Accidents Compensation Act are based on the fourth edition. [11] There are differences between the two editions. The Guide, although laying down objective criteria, is based on arbitrary standards without reference to the concept of pain and suffering. By way of illustration, by the Guide, a back injury requiring a fusion operation is to be assessed substantially below the threshold of 10% permanent impairment. This kind of injury will ordinarily prevent workers whose work involves physical activities from being able to continue performing that work. But, by the application of the Guides, the thresholds will not be met.
A curious aspect of the differences in the legislation is that the most onerous threshold for plaintiffs, by far, is that imposed on workers by the Workers Compensation Act. That is, on the most productive group in the community; arguably, the group most in need of protection against the negligence of others. The reason for this discrimination has not been given, although there is cause for suspicion. As detectives say in the movies: follow the money.
The schemes for the measure of damages as provided by the Workers Compensation Act and the Motor Accidents Compensation Act are far removed from a balanced system of objective criteria, the achievement of which might be thought desirable. Essentially, these schemes constitute a table of maims, a system with which ancient and medieval life was familiar, but which disappeared for hundreds of years from civilised societies. It is not something that developed legal systems based on the common law have generally accepted, largely because it has no regard to the circumstances of the individual case. It does not cater for the fact that, for example, the loss of a leg may mean far more to a ballerina than a computer operator.
It is now possible, for example, for three victims who sustain like injuries in one accident to receive vastly different damages awards (and, if one of the three is a worker whose claim is governed by the Workers Compensation Act, he or she may receive no damages at all). The point is that a claimant may receive a different award for the same injury, depending on whether the injury was sustained at work, in a motor accident or in the course of some other activity.
Then, again, different caps and thresholds apply in the different States and Territories so that a plaintiff in one State will receive a different amount for the same damages as plaintiffs with the same injuries in other States. The divergences in legislation can produce differences amounting to hundreds of thousands of dollars.
In the course of the 2002 negligence review, many stressed the desirability of bringing the law in all the Australian jurisdictions as far as possible into conformity. The Panel unqualifiedly supported this aspiration. It warned that if it were not fulfilled, perceptions of injustice would result. [12] The Panel pointed out that there was no reason, for example, why a person should receive less damages for an injury sustained in a motor accident than for one suffered while on holiday at the beach.
While consistency and coherence in the law of negligence are of fundamental importance to justice, generally, they are of particular importance to insurers. Insurers have made it clear that the lack of national consistency in the law relating to the quantum of damages make it more difficult for them to predict reliably the likely extent of liability of insureds. This translates into difficulties in setting premiums and probably results in higher premiums.
It is as well to remember that a major cause of the insurance crisis that led to the Civil Liability Act was inconsistency in judicial decision-making. The differences in the legislation now give rise to new inconsistencies that are, potentially, as serious – if not more so. They lie at the heart of the present dissatisfaction constantly and vociferously being aired by lawyers and victims’ associations. The basic problem is that the law is not treating all citizens equally. Grievances of this kind make the law of negligence unstable. Community pressure is liable to produce changes.
There are other important differences between these three statutes that have given rise to other, but equally heartfelt, criticism. These go to rule of law issues.
Under the Civil Liability Act, the courts determine the damages thresholds in the traditional and normal way. This is to be contrasted with the workers compensation legislation (insofar as it applies to common law claims) and the Motor Accidents Compensation Act.
Under the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the “1998 Act”), medical practitioners, appointed by the President of the Workers Compensation Commission as “approved medical specialists”, determine the threshold of permanent impairment. [13] Their assessment is crucial to the success of a plaintiff’s claim as, if the threshold is not met, the plaintiff’s claim cannot proceed. I reiterate that, although the assessment is a requirement of the Workers Compensation Act, it has nothing to do with workers compensation. It applies to claims for common law negligence under the Act.
In matters of pure workers compensation, where liability is purely statutory (and strict), it has long been customary, in virtually all jurisdictions, for the physical and mental condition of worker claimants to be assessed by medical practitioners appointed by the State. No complaint is made about that. The troubling aspect of the system, however, is that the same system is being applied to determine crucial elements of common law negligence, which is a cause of action of an entirely different character.
The so-called “approved medical specialists” have no security of tenure. They may be appointed for a specific case or a specific period. Although the State has a financial interest in damages awards under the Workers Compensation Act, it nevertheless appoints, on a contract basis, the medical practitioners who determine issues that condition liability to pay damages. A disinterested observer may think this power of continuing appointment is capable of influencing the decisions of those medical practitioners who wish to have their contracts renewed. This is the test in law for perception of bias on the part of an adjudicator. The perception arises even if the adjudicator is a person of the highest integrity.
The legislation does not expressly prevent the approved medical specialists – concurrently with undertaking their assessments – from practising privately as medico-legal advisers, even though they may have done, or actually be doing, other work for the solicitors or even a party to the dispute. In other words, the approved medical specialists may be in receipt of considerable income from solicitors or a party to a threshold dispute. This is another factor that goes to the perception of bias. Who would feel secure knowing that the person deciding their case is being paid for doing other work for the opposition?
The legislation does not require the medical practitioners to have any particular training or qualification. They do not even have to be medical specialists recognised by the established medical colleges (despite the appellation conferred on them by the statute). They may be retired from practice and not up to date in the field of the injuries in question in the case before them. They may be appointed to decide issues in regard to which they have no particular medical expertise. The legislation does not require assessments by approved medical specialists to be made in the equivalent of open court.
Moreover, an approved medical specialist may “consult with any medical practitioner or other health care professional who is treating or has treated the worker”. [14] The Workers Compensation Act seems to assume that such a consultation may take place behind closed doors without any representatives of the parties being present, or even without the parties knowing that the “specialist” is being given advice. These factors would not give the parties any confidence in the decision-making process.
Under the Motor Accidents Compensation Act, medical practitioners “and other suitably qualified persons” appointed as medical assessors by the Motor Accidents Authority of New South Wales decide disputes about the permanent impairment of a person injured in a motor accident and other aspects of the person’s health and treatment. [15] The decision as to the degree of permanent impairment determines whether a plaintiff may recover non-economic loss. Other decisions by the medical assessors are capable of materially affecting the amount of the award. Many of the comments I have made in regard to the appointment and use of approved medical specialists under the Workers Compensation Act apply to medical assessors under the Motor Accidents Compensation Act. [16]
The systems of adjudication under these Acts lack the institutional safeguards inherent in the traditional judicial system of deciding negligence claims. That is, involving decision-making in open court, without fear or favour, by independent professional judges appointed in the time-honoured way. This watering down of the functions of the courts, and perceptions of serious defects in the process as a whole, have given rise to grievances on the part of many claimants identified by bodies such as the New South Wales Bar Association in its public campaign.
I recognise that there is a possibility that, despite the problems with the legislation, some insurers may prefer the Workers Compensation Act or the Motor Accidents Compensation Act models to the Civil Liability Act. Firstly, calls to issues of judicial independence may not ring as loudly for insurers as they do for lawyers. Secondly, because of the past history of judicial over-generosity with plaintiffs’ claims, some insurers may be sceptical of the notion that judges are more reliable and consistent decision-makers than medical practitioners who have been made adjudicators. Thirdly, removing the medical practitioner adjudicators would mean more work for lawyers and greater transactional costs. These costs would be lawyers’ fees for conducting litigation before judges in connection with the issues that are presently being resolved in private by the approved medical specialists and medical assessors. The additional transactional costs would translate into higher premiums, and this might affect parts of the insurers’ business. These arguments need to be addressed.
As regards the rule of law issues that I have identified, I do not think it necessary to attempt to justify the desirability of a system of administration of justice whereby potentially life-altering decisions are made in the course of contested common law litigation by independent judges, rather than medical practitioners whose appointment and procedures are coloured by the problems I have identified.
As regards consistency questions, it is significant that the Civil Liability Act has been in force for some five years. Sufficient decisions have been given to enable insurers to determine whether an appropriate level of consistency has been maintained. I believe that the answer to this question is likely to be in the affirmative. Anecdotally, there has been no threshold creep. If that is correct, and consistency has been maintained, there is good reason to believe that the consistency will continue. In my view, the Civil Liability Act has produced a change of culture that has broken down the attitudes of former times. I would add that, in contrast, according to the lawyers’ complaints, there has been much inconsistency in the decisions of the medical practitioner adjudicators.
The question of increased costs and higher premiums is a difficult and complex issue, not only for insurers but for government as well. But, there seems to be room to move. Take the different spins the insurers and the lawyers put on the latest insurance statistics. The figures appear to be common ground. In 2006, average compulsory third party premiums dropped to $309 from $428 in 1999. Workers compensation premiums have reduced by 20% in 2005/2006. Since 2001, permanent impairment benefits for injured workers have increased by 10%. In 2006, workers compensation produced a surplus of $85 million compared with a deficit of $3.2 billion in 2002. Average public liability premiums have reduced from $994 in 2003 to $801 in 2006. Since 2003, the number of public liability premiums paid and received has increased from 610,000 to nearly 700,000 in 2005. Insurers are proud of these figures. They assert that they show that the system is working fairly. Premiums have dropped, cover has increased and so have benefits. The lawyers argue differently. They complain that insurers’ profits have increased substantially while payouts to injured persons have decreased substantially.
A disinterested observer might say there is merit in both points of view. Importantly, it appears from these statistics that there is space for negotiation and compromise with a view to attaining stability in the long term. That would be of great benefit to all: insurers, lawyers, and the general community.
While higher premiums would be an undesirable result, much may depend on how high the increase would be. One would have to balance the burden to the community in increased premiums against the quality of justice delivered.
It also has to be acknowledged that different insurers are involved in providing cover under the different statutes and their financial interests might differ. This is an obstacle to achieving uniformity of approach. I would suggest, however, that the obvious long-term benefits to all of consistency and stability might allow even this obstacle to be overcome.
This brings me to my final point. The lawyers’ campaign is treated generally as being one side of a conflict between lawyers and insurers. I doubt, however, when properly understood, that this is so. The campaign, essentially, is for consistency with the Civil Liability Act. The Civil Liability Act has long been supported, and approved by, those who represent insurers. Consistency in the law of negligence can only be to the benefit of the insurance industry. In 2002, this was a main plank of the insurers’ submissions. There is much room for common ground.
While the benefits of harmonisation, both within States and nationally, would be felt most obviously in the practical field of assessment of risks, there are other benefits. The present atmosphere of conflict, the heated language and the intense level of debate tend to harm the general goodwill of insurers in the community. The conflict is time consuming, expensive and undesirable. It tends to destabilise the industry and the law.
Nowadays, the main focus of attention in regard to inconsistencies in the law is State and territory legislation. But one should not lose sight of the federal government looming in the background. Comcare already undertakes the provision of workers compensation and Attorney-General (Vic) v Andrews[17] is an encouragement to the Commonwealth to expand its reach. Penetration by the federal government into the area of indemnity insurance has the potential to control, or at least influence, the elements of the law of negligence, and the direction of such control or influence is likely to depend on the ideology of whichever party wins the next Commonwealth election. Whether such penetration will occur may depend substantially on whether the present dissatisfaction and differences of opinion between lawyers and victims, on the one hand, and insurers, on the other, can be resolved. If lawyers and insurers wish to bring stability to the state of the law, and to use the Civil Liability Act as the standard, now is the time.
In many ways, there is now a window of opportunity to arrive at a united front comprising lawyers and insurers, difficult as that may be, initially, to envisage. Many of the other groups who played a vital part in the reforms of 2002 are not particularly interested in the present debate, as long as the status quo represented by the Civil Liability Act is maintained. This applies, in particular, to public authorities and the medical and other professions. Those who presently have a serious interest in the issues are only government, insurers, lawyers and victims’ associations. And, to an extent, there has been a change amongst those who wield legislative power in government.
Accordingly, there is scope for insurers to join forces with lawyers to make approaches to government, both within States and nationally, to achieve a greater degree of harmonisation of the law than is presently the case.
There is a clear clash of values and interests between the different participants in the politics of negligence. The clash, however, although clear, need not necessarily result in blindness to what is at stake. Clarity of vision, restraint, leadership, and wisdom are capable of leading to a fair, and reasonably harmonious, set of laws of negligence that will enable all to get on with the ordinary business of life.
It is obvious that unease with the current law of negligence remains, although it is now of a kind that is different from the dissatisfaction that prevailed before the reforms. In recent months, I have spoken about these issues to lawyers, insurers and others. This paper is my last shot at assisting the process.
End Notes
1. Edited version of paper delivered to conference of Australian Insurance Law Association at Noosa on 17 May 2007
*Judge of Appeal, Supreme Court of New South Wales
2. [1932] AC 562.
3. See the discussion in P S Atiyah, “Personal Injuries in the Twenty-First Century: Thinking the Unthinkable” in Peter Birks (ed), Wrongs and Remedies in the Twenty-First Century (1996, Oxford: Clarendon Press) at 22 in regard to the issues raised in this paragraph from which the examples given are derived.
4. See Atiyah, id at 13.
5. Bolam v Friern Hospital Management Committee [1957] 1 WLR 582.
6. (2001) 206 CLR 512.
7. See Australian Prudential Regulation Authority, National Claims and Policies Database (available at http://www.ncpd.apra.gov.au/Home/Home.aspx).
8. The Hon Tony Abbott MP, Minister for Health and Ageing, Media Release: ‘Medical Indemnity: more affordable, more secure’ (22 February 2007).
9. Section 16(1). Further, under the Civil Liability Act, thresholds are imposed for gratuitous attendant care services and for loss of capacity to provide domestic services. The Act provides for the maximum that might be claimed for past or future economic loss by reference to three times the amount of average weekly earnings at the date of the award.
10. Section 151H. Further, the threshold under the Workers Compensation Act is not met unless physical injury alone or primary psychological injury alone causes at least 15% permanent impairment. Limitations (different to those under the Civil Liability Act) are imposed on damages for future economic loss.
11. Information provided by Dr K Wilding.
12. Commonwealth of Australia, Review of the Law of Negligence, Final Report (September 2002) at paras 13.13 and 13.14.
13. Section 320.
14. See s 324(1) of the 1998 Act.
15. See ss 58 and 59 of the Motor Accidents Compensation Act.
16. The State is not involved in financing the insurance of defendants under the Motor Accidents Compensation Act.
17. [2007] HCA 9 (21 March 2007).
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