8. In August 1989, the Attorney General’s Department produced an Issues Paper on the system of tort liability in New South Wales, focusing in particular on the area of damages for personal injury. The paper was expressed to be “in response to reports of the cost of insurance and claims of excessive awards of damages and expansion of findings of liability” in the area of tort liability. The paper referred to the so-called tort liability crisis in the United States and raised the question of whether review of certain areas of tort law was necessary in this State in order to ensure the continued viability of the tort system and the availability of affordable tort liability insurance. Against this background, the Paper put forward a range of possible reforms to the present system of compensation for injury and requested submissions from interested parties.

9. Following the receipt of submissions, a further Paper “Tort Liability in New South Wales: Proposals for Reform” was distributed in May 1990. This Discussion Paper contained a number of specific proposals for reform aimed at containing the cost of awards for personal injury. The main recommendations were for a cap on the level of general damages (of $180,000) and the use of deductibles to discourage small claims. The impact of these proposals on the area of contribution will be considered in the Commission’s final report on this reference.

10. The Issues Paper had also raised the possibility of reform of the doctrine of solidary liability (therein referred to as joint and several liability). However, as stated above, it was subsequently agreed between the Commission and the Attorney General that the Commission would give consideration to the area of solidary liability within its contribution reference and that any proposals for reform would await the completion of this study. The Commission has had the advantage of reviewing the submissions made to the Attorney-General’s Department on this topic and has been assisted by the work conducted within that department. It is useful to set out the discussion of solidary liability in the Discussion Paper in full:

Joint and Several Liability



The Issues Paper discussed the effect of the doctrine of joint and several liability on risk minimisation and noted that the doctrine has been criticised as giving rise to the targeting of the defendant with the deepest pocket. A number of options for proportional contribution were raised.

All but one of the submissions received supported a system of proportional contribution to damages by defendants. The opposing submission stated that the “deep pocket syndrome” is not a problem in New South Wales and that the existing rights of plaintiffs should not be reduced.

A number of submissions argued that joint and several liability should be abolished in relation to damages for both non-economic and economic loss and proportional contribution should be introduced in respect of the total amount of damages awarded. Two other submissions supported proportional liability in respect of damages for non-economic loss only.

It is the last of these views which is favoured. However, a distinction needs to be made between actions in negligence for personal injury and other actions in negligence.

The position of plaintiffs in personal injury negligence actions is distinguishable from the position of plaintiffs in other negligence actions. The economic loss for which damages are sought in personal injury actions goes to the plaintiff’s ability to pursue his/her livelihood in the physical sense and to the expenses incurred as a direct result of the accident. In cases of serious injury the unavailability of damages for economic loss will mean that a plaintiff cannot obtain appropriate medical help and care and must rely on the social welfare system for basic living expenses. Damages for economic loss in non personal injury cases go to a plaintiff’s direct financial loss. There is no interference with a plaintiff’s physical ability to work and earn money and therefore no compensation for the loss of this capacity. The plaintiff will not be forced to rely on the social welfare system and will not require on-going medical and other care.

It follows that a particular approach is necessary for personal injury negligence actions as opposed to non personal injury negligence actions. The operation of the joint and several liability doctrine in relation to non personal injury actions will be the subject of a separate paper to be released shortly.

The arguments raised by defendants and their insurers that those who are not fully responsible should not be made to pay for the whole of a plaintiff’s injury, holds weight in relation to damages for pain and suffering and other non-economic loss. However, these arguments are overridden by the more compelling argument that in the event of availability of compensation through insurance a severely injured plaintiff should be compensated for past and future economic loss and medical expenses. The importance of ensuring compensation for economic loss for a severely injured plaintiff outweighs as a matter of policy the unfairness of an insured defendant who must pay more than his or her “share” of damages.

The fact of availability of insurance will mean that a defendant who bears responsibility for loss will not be out of pocket to a great extent. The only financial loss which would arise would be payment of an excess, if applicable, and possibly a slight increase in premium. On the other hand, a plaintiff who is seriously injured would, if inadequately compensated for economic loss, be forced to go without appropriate medical and other care and would be, to some extent, reliant on the social welfare system.

It is noted that the New South Wales Law Reform Commission was given a reference in 1985 on Contribution Between Persons Responsible for the Same Damage. This reference includes a study of proportionate liability and the Commission has been asked to produce a report on this issue. The Commission’s report will be awaited before proceeding to a firm proposal on this issue.