Australian tort law
Encyclopedia
Tort law in Australia is the body of precedent
s and, to a lesser extent, legislation
, that together define the operation of tort
law in Australia
. A tort is a civil wrong, other than a breach of contract. Tort law is a way in which the law can interfere with relationships between private individuals to correct a form of conduct or wrong. A large number of torts exist, and they generally derive their legal status from the common law
. Since a court can define an existing tort or even recognise new ones through the common law, tort
law is sometimes regarded as limitless and adaptable to modern circumstances.
Australian tort law is heavily influenced by the common law in other countries, principally the United Kingdom
, by virtue of Australia's colonial heritage. However, this has since been modified by statutes such as the various state's Civil Liabilities Acts
In addition,There is also a strong and recent trend for the Australian High Court
to cite with approval many principles from the United States
. However, as the High Court noted:
There are some sharp distinctions in torts between the UK and Australia:
:
As a general rule, the limitation period on:
Recently the changes have attracted strong criticism, with consumer groups and respected legal officers such as judges saying the pendulum has swung too far the other way, risking public safety and providing inadequate compensation for serious injuries.
The insurance industry points out that the changes have reduced claims, but has been unable to demonstrate a reduction in premiums.
This has been criticised by senior legal officers, because it effectively gives "people the right to be negligent and injure someone up to a given level before they become liable."
Punitive damages have been completely eliminated in some states.
Major restrictions have been placed on all other payments, including for pain and suffering.
A cap has also been placed on payments.
If a person is injured, in essence the party that injured them only has to 'cover their expenses', because payments can now only be awarded for:
unless the claim for non-economic damages is over a certain limit (in N.S.W, 15% of the new maximum payment of $384,500: that is, around $57,675).
No other payment - such as for pain and suffering - can be made unless that threshold is reached.
This means that, even though an injury might normally be so severe as to require a payment for pain and suffering of over $50,000, such an injury would only require the payment of lost wages and medical bills. No other compensation can be paid. That includes any payment for pain and suffering.
This has been criticised on the basis that:
In many cases, the amount of any pay-out might be quite small compared to the cost to government bodies and corporations of preventing injuries.. In other words, government agencies and corporations might make decisions that endanger public safety similar to that claimed about the 'Ford Pinto fuel tank controversy': it would be more economically rational to allow substandard work even if it endangered the public, because only substantial injuries can be litigated.
Justice Spigelman has said:
The Chief Justice of Queensland, Paul de Jersey AC, said the laws have "brought about marked erosion of a fundamental right to adequate compensation" for injury and that the critical issue now is "the need for active reconsideration of whether the so-called reforms have proven justified, or should be wound back" (February 2006 address to the Australian Lawyers Alliance).
The Australian Lawyers Alliance, the Law Council of Australia and the Tort Reform Institute have called for reviews or repeal of Civil Liability laws. The Insurance Reform Association has called for an inquiry into the conduct of insurers and their manipulation of the "Insurance Crisis".
They say an economic effect of Civil Liability laws is to transfer of the financial burden of reckless conduct from the at-fault party and its insurer to the victim. It is also argued that the exemption of reckless enterprises from having to pay the true cost of injuries they cause amounts to a subsidy of those businesses.
The aggregate of Australian insurance profits since the introduction of Civil Liability laws has exceeded $15 billion. In August 2007, QBE posted an annualised profit of $1.84 billion. Suncorp posted an annual record profit of $1.064 billion after-tax for the year to the end of June 2007. IAG booked profit of over $552 million compared to $759 million for the 2006 year.
Civil Liability laws are claimed to have eliminated 70-80% of Australian personal injury claims payments on business and household insurance policies.. Whilst as a result of Civil Liability Laws there has unquestionably been a substantial decrease in personal injury tort claims since 2002 (and numbers will continue to dwindle as pre-2002 causes of action pass their limitation periods), insurance premiums have continued to rise.
This and the perceived threat to public safety posed by the lack of penalties for anything but extremely serious injuries, has led to renewed calls for reversal of recent "reform" in the area, particularly from plaintiff's lawyers, consumer groups and others outside the insurance lobby, who perceive that valid claims are unable to succeed, that the new regime imposes unfair additional costs on claimants and other detriments.
The "reforms" have created notable controversy, because they were brought about following a concerted public relations and political lobbying campaign by insurance interests who claimed that there was a generalised 'litigation explosion' or 'litigation crisis' involving civil damages claims. Since this time, however, the Law Council of Australia
has shown that there was no significant increase in the amount of personal injury court action in the years leading up to the Ipp Report.
Since "reform" by the Civil Liability Acts (caused by the Ipp Report), all three of the component parts above have been substantially modified, although much of the legislation is yet to be properly tested in appellate courts. The primary changes made by the Civil Liability Acts (resulting from the Ipp Report) also apply to professional liability for personal injury, and serve to undermine the ratio decidendi of the High Court in 'Rogers v Whitaker', (for example in Qld by eliminating the High Court's requirement to disclose risks of particular concern to the individual patient rather than just the reasonably likely risks) in regard to negligent failure to advise, while reinstating the 'Bolam Test
' in cases of negligent professional treatment.
In particular, there is anecdotal evidence that the Civil Liability Act 2002 (NSW) led as much as 10% of NSW barristers to allow their practising certificate to lapse. This is said to have occurred because, without negligence claims to litigate, barristers actively sought out other briefs in areas such as criminal law. Subsequently, there was a saturation of barristers in the most profitable areas of the law. Moreover, some barristers lacked sufficient experience in other areas to be effective counsel, and therefore sought to use their skills in other areas.
These factors provided upward pressure on premiums. Insurers also claimed that the personal injury compensation payments relating to motor accident, workplace and public liability insurance policies were becoming unaffordable.
This contention gained wide media and government support and the term "Insurance Crisis" was coined to describe conditions in the insurance market. No evidence was produced then or since that personal injury compensation claim payments had contributed to the "Insurance Crisis". Indeed some commentators described the crisis as "at best unproved and at worst self-serving rhetoric".
The Commonwealth, State and Territory governments appointed panel of "experts" to review the law of negligence. It included a surgeon and a rural mayor. The panel was chaired by Justice David Ipp
, a judge of the New South Wales Court of Appeal
. The Review's primary purpose was to address the public view of escalating, "unsustainable" public liability insurance premiums and damages awards for those injured through another's fault."
The Terms of Reference for the panel's review were as follows:
The report and its recommendations were criticised by:
An article in the Australian Financial Review of 11 November 2002 stated "[t]he report displays an alarming lack of insight into the economic and social issues concerning legal liability for reckless conduct. It contains many 'unfounded inferences' and 'recommendations are thrown around with little or no assessment of their consequences...".
Despite widespread criticism, the recommendations were largely adopted by Australian state governments. The Federal Government also responded by closing "loopholes" which allowed plaintiffs to turn to federal consumer protection legislation to recover compensation where that was barred, or made less attractive, by the states' "reforms".
Since ABC v Lenah Game Meats, the question of whether the breach of privacy was a valid cause of action has been entertained in at least two states. The most adventurous decision is arguably that of the District Court of Queensland in Grosse v Purvis [2003] QDC 151, in which Judge Skoien awarded damages for invasion of privacy. Conversely, the existence of the tort was questioned by Justice Gillard of the Supreme Court of Victoria
in Giller v Procopets [2004] VSC 113, in which the Court doubted that the law had 'developed to the point where the law in Australia recognises an action for breach of privacy' (Giller v Procopets at para 181).
Both of these cases were settled out of court and, as a result, will not proceed to appeal. Until this tort receives the attention of an Australian appellate court, the precedential value of Grosse and Giller is limited.
and Tasmania
) required that comments be both true, and in the public interest or public benefit, to be protected.
Other changes created by the new uniform defamation laws include limits on the maximum payout available, limitation periods for defamation, and formal recognition to any apologies made by the wrongful party.
In May 2006, the majority of the High Court of Australia rejected wrongful life, refusing to accept that life can be considered a compensable harm. This means that children who are born disabled as a result of a doctor's (admitted) negligence cannot claim damages. Parents are able to pursue 'wrongful birth' claims if the child (disabled or not) is the outcome of a negligently performed sterilisation procedure. (see Cattanach v Melchior
). However, post Civil Liability Act, they cannot recover the costs of raising the child in New South Wales.
and other cases. Road accident victims are far more likely to make claims and receive tort compensation than any other group. This predominance is due not so much to the law of torts, but the fact that liability insurance is compulsory by statute in all Australian states.
From the early 1980s legislative intervention attempted to reduce the high volume of litigation involving motor vehicle and industrial accidents. Parallel to the rise of Thatcherism
in the United Kingdom, in all Australian states common law torts were significantly modified. Speedy "no fault" compensation was made available to workers and victims of motor vehicle accidents.
and medical negligence, the NSW proposals were adopted more widely throughout Australia. More on the Ipp panel, its report, the "Insurance Crisis" and Civil Liability laws above.
Precedent
In common law legal systems, a precedent or authority is a principle or rule established in a legal case that a court or other judicial body may apply when deciding subsequent cases with similar issues or facts...
s and, to a lesser extent, legislation
Legislation
Legislation is law which has been promulgated by a legislature or other governing body, or the process of making it...
, that together define the operation of tort
Tort
A tort, in common law jurisdictions, is a wrong that involves a breach of a civil duty owed to someone else. It is differentiated from a crime, which involves a breach of a duty owed to society in general...
law in Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
. A tort is a civil wrong, other than a breach of contract. Tort law is a way in which the law can interfere with relationships between private individuals to correct a form of conduct or wrong. A large number of torts exist, and they generally derive their legal status from the common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
. Since a court can define an existing tort or even recognise new ones through the common law, tort
Tort
A tort, in common law jurisdictions, is a wrong that involves a breach of a civil duty owed to someone else. It is differentiated from a crime, which involves a breach of a duty owed to society in general...
law is sometimes regarded as limitless and adaptable to modern circumstances.
Australian perspective
Generally, torts are not defined within specific statute or legislation and have evolved through judge-made law, or common law. However, each state has also created statutes to override the common law, especially in the areas of negligence, personal injuries and defamation.Australian tort law is heavily influenced by the common law in other countries, principally the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, by virtue of Australia's colonial heritage. However, this has since been modified by statutes such as the various state's Civil Liabilities Acts
In addition,There is also a strong and recent trend for the Australian High Court
High Court of Australia
The High Court of Australia is the supreme court in the Australian court hierarchy and the final court of appeal in Australia. It has both original and appellate jurisdiction, has the power of judicial review over laws passed by the Parliament of Australia and the parliaments of the States, and...
to cite with approval many principles from the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. However, as the High Court noted:
The history of this country and of the common law makes it inevitable and desirable that the courts of this country will continue to obtain assistance and guidance from the learning and reasoning of...other great common law courts. Subject, perhaps, to the special position of decisions of the House of Lords given in the period in which appeals lay from this country to the Privy Council, the precedents of other legal systems are not binding and are useful only to the degree of the persuasiveness of their reasoning.
There are some sharp distinctions in torts between the UK and Australia:
- In Australia, trespass to the person is dependent on the directness of the act interfering with the plaintiff's autonomy. Australian law does not require the wrongdoer to have intent to trespass (see Williams v Milotin). In the United Kingdom, intent is a crucial element (see Letang v CooperLetang v. CooperLetang v Cooper [1964] 2 All ER 292 is an English Court of Appeal judgment, by which it was decided that negligently caused personal injury cannot be recovered under the trespass to the person, but the tort of negligence must be tried instead.-Facts:...
).
- If an act is direct but unintentional, a plaintiff in Australia may pursue an action based on either negligent trespass or negligence. Because intent is a requirement for trespass under UK law, negligent trespass is not available in the UK.
- The onus of proof for trespass 'on the highway' is on the plaintiff at all times (see Venning v Chin). Consequently, in a public place the plaintiff must prove how there was a 'direct' and 'substantial' interference with their personal autonomy.
- A breach of non-delegable duty is not automatic on founding a cause of action against the primary tortfeasor. Fault on the part of the contracting party must be shown.
- In cases of negligence, the Australian common law has, since 2002, used a criterion of 'salient features' to determine whether a duty of careDuty of careIn tort law, a duty of care is a legal obligation imposed on an individual requiring that they adhere to a standard of reasonable care while performing any acts that could foreseeably harm others. It is the first element that must be established to proceed with an action in negligence. The claimant...
should be imposed on the defendant. In contrast, the UK common law currently uses a three-stage test.
Limitation of actions
Another example of statutory modification of torts is the various Limitation of Actions Acts, which prescribe time limits within which litigation must be commenced, and extinguishing the cause of action (the legal basis for the claim) after the period lapses. The rationale of limitation periods was elucidated by McHugh JMichael McHugh
Michael Hudson McHugh, AC, QC is a former justice of the High Court of Australia; the highest court in the Australian court hierarchy.-Judicial Activity:...
:
- As time goes by, relevant evidence may be lost.
- It is oppressive to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed.
- Limitation periods give certainty to people (especially businesses and insurers) in arranging their affairs and provisioning for their liabilities within a definite period.
- The public interest requires that disputes be settled as quickly as possible.
As a general rule, the limitation period on:
- property damage cases is six years in all jurisdictions;
- personal injuries is three years in New South Wales, Queensland, South Australia and Tasmania, and six years in all other jurisdictions; and
- there are other limits on actions arising from e.g. contracts and building and construction cases.
Some common torts in Australian law
- TrespassTrespassTrespass is an area of tort law broadly divided into three groups: trespass to the person, trespass to chattels and trespass to land.Trespass to the person, historically involved six separate trespasses: threats, assault, battery, wounding, mayhem, and maiming...
es- against the person (assaultAssaultIn law, assault is a crime causing a victim to fear violence. The term is often confused with battery, which involves physical contact. The specific meaning of assault varies between countries, but can refer to an act that causes another to apprehend immediate and personal violence, or in the more...
, batteryBattery (tort)At common law, battery is the tort of intentionally and voluntarily bringing about an unconsented harmful or offensive contact with a person or to something closely associated with them . Unlike assault, battery involves an actual contact...
and false imprisonment) - against chattels (personal property)
- to land
- against the person (assault
- Occupation or possession of land
- Private nuisanceNuisanceNuisance is a common law tort. It means that which causes offence, annoyance, trouble or injury. A nuisance can be either public or private. A public nuisance was defined by English scholar Sir J. F...
- Cattle trespassTrespassTrespass is an area of tort law broadly divided into three groups: trespass to the person, trespass to chattels and trespass to land.Trespass to the person, historically involved six separate trespasses: threats, assault, battery, wounding, mayhem, and maiming...
- Liability for animals (Scienter)
- Private nuisance
- NegligenceNegligenceNegligence is a failure to exercise the care that a reasonably prudent person would exercise in like circumstances. The area of tort law known as negligence involves harm caused by carelessness, not intentional harm.According to Jay M...
- Breach of public and statutory duties
- Public nuisance
- Breach of statutory duties
- Interferences with the judicial process
- Misrepresentation
- Deceit
- Innocent misrepresentation/negligent advice
- Defamation
- Injurious falsehood
- Passing offPassing offPassing off is a common law tort which can be used to enforce unregistered trademark rights. The tort of passing off protects the goodwill of a trader from a misrepresentation that causes damage to goodwill....
- Intentional damage to economic interests
- Interference with contractual relations
- ConspiracyConspiracy (civil)A civil conspiracy or collusion is an agreement between two or more parties to deprive a third party of legal rights or deceive a third party to obtain an illegal objective....
- Intimidation
- Interference with employment and family relations
- Actions per quod servitium amisit (injuring an employee rendering them unable to perform services for their employer)
- Loss of consortium of a spouse
Controversial changes to reduce insurance premiums may have led to greater risks to public safety
Major changes were made to negligence laws in a number of states from 2002 after the media reported a 'public liability crisis' - ballooning insurance premiums and a threat to 'publicly beneficial' activities like sporting events.Recently the changes have attracted strong criticism, with consumer groups and respected legal officers such as judges saying the pendulum has swung too far the other way, risking public safety and providing inadequate compensation for serious injuries.
The insurance industry points out that the changes have reduced claims, but has been unable to demonstrate a reduction in premiums.
Criticism by judges and other legal professionals
The changes have effectively made it impossible in many states to litigate for anything but extremely serious injuries (in N.S.W, an injury must be deemed worthy of requiring a payment of more than $57,675).This has been criticised by senior legal officers, because it effectively gives "people the right to be negligent and injure someone up to a given level before they become liable."
Punitive damages have been completely eliminated in some states.
Major restrictions have been placed on all other payments, including for pain and suffering.
A cap has also been placed on payments.
If a person is injured, in essence the party that injured them only has to 'cover their expenses', because payments can now only be awarded for:
- economic loss (such as lost wages)
- medical bills (which are often covered by Medicare)
- peripheral costs for 'family care' - which have also been reduced and are often unavailable
unless the claim for non-economic damages is over a certain limit (in N.S.W, 15% of the new maximum payment of $384,500: that is, around $57,675).
No other payment - such as for pain and suffering - can be made unless that threshold is reached.
This means that, even though an injury might normally be so severe as to require a payment for pain and suffering of over $50,000, such an injury would only require the payment of lost wages and medical bills. No other compensation can be paid. That includes any payment for pain and suffering.
This has been criticised on the basis that:
- it provides perverse incentives against preventing risks to public safety
- it does not provide compensation to the individual for even quite substantial pain, suffering and loss of life-functioning (because it merely 'covers the costs' of medical bills and lost wages)
In many cases, the amount of any pay-out might be quite small compared to the cost to government bodies and corporations of preventing injuries.. In other words, government agencies and corporations might make decisions that endanger public safety similar to that claimed about the 'Ford Pinto fuel tank controversy': it would be more economically rational to allow substandard work even if it endangered the public, because only substantial injuries can be litigated.
Justice Spigelman has said:
"The introduction of a requirement that a person be subject to fifteen percent of whole of body impairment – that percentage is lower in some states – before being able to recover general damages has been the subject of controversy. It does mean that some people who are quite seriously injured are not able to sue at all. More than any other factor I envisage this restriction will
be seen as much too restrictive."
The Chief Justice of Queensland, Paul de Jersey AC, said the laws have "brought about marked erosion of a fundamental right to adequate compensation" for injury and that the critical issue now is "the need for active reconsideration of whether the so-called reforms have proven justified, or should be wound back" (February 2006 address to the Australian Lawyers Alliance).
The Australian Lawyers Alliance, the Law Council of Australia and the Tort Reform Institute have called for reviews or repeal of Civil Liability laws. The Insurance Reform Association has called for an inquiry into the conduct of insurers and their manipulation of the "Insurance Crisis".
Original report author Justice Ipp criticises law and predicts public backlash
In 2007, Justice Ipp, the main author of the report that recommended the changes said:“Certain of the statutory barriers that plaintiffs now face are inordinately high. ... Small claims for personal injuries are a thing of the past. Establishing liability in connection with recreational activities has become difficult. Stringent caps on damages and costs penalties make most plaintiffs think twice before suing. Public authorities are given a host of novel and powerful defences that are in conflict with the notion that the Crown and government authorities should be treated before the law in the same way as an ordinary citizen. It is difficult to accept that public sentiment will allow all these changes to remain long-term features of the law.”
Criticism by consumer groups
Consumer groups contend the following consequences have resulted:- businesses who refuse to invest in injury avoidance practices face no economic penalty when an injury results
- those who do invest in safety are penalised because of their increased cost of production relative to that of the unsafe competitor
- people who are injured through no fault of their own bear the lifelong cost of the injury
- some of the costs are transferred to the taxpayer through Medicare and public hospital treatment of victims
They say an economic effect of Civil Liability laws is to transfer of the financial burden of reckless conduct from the at-fault party and its insurer to the victim. It is also argued that the exemption of reckless enterprises from having to pay the true cost of injuries they cause amounts to a subsidy of those businesses.
The aggregate of Australian insurance profits since the introduction of Civil Liability laws has exceeded $15 billion. In August 2007, QBE posted an annualised profit of $1.84 billion. Suncorp posted an annual record profit of $1.064 billion after-tax for the year to the end of June 2007. IAG booked profit of over $552 million compared to $759 million for the 2006 year.
Effects on insurance premiums and legal practice
Shortly after the reforms were introduced, there was a drop of about 30% in the number of civil cases in Australian courts at the District/County Court level, according to statistics published for in 2002-03 by the Productivity Commission. In N.S.W, where the reforms began, the drop in District Court cases over that time was 56%.Civil Liability laws are claimed to have eliminated 70-80% of Australian personal injury claims payments on business and household insurance policies.. Whilst as a result of Civil Liability Laws there has unquestionably been a substantial decrease in personal injury tort claims since 2002 (and numbers will continue to dwindle as pre-2002 causes of action pass their limitation periods), insurance premiums have continued to rise.
This and the perceived threat to public safety posed by the lack of penalties for anything but extremely serious injuries, has led to renewed calls for reversal of recent "reform" in the area, particularly from plaintiff's lawyers, consumer groups and others outside the insurance lobby, who perceive that valid claims are unable to succeed, that the new regime imposes unfair additional costs on claimants and other detriments.
The "reforms" have created notable controversy, because they were brought about following a concerted public relations and political lobbying campaign by insurance interests who claimed that there was a generalised 'litigation explosion' or 'litigation crisis' involving civil damages claims. Since this time, however, the Law Council of Australia
Law Council of Australia
The Law Council of Australia is an association of law societies and bar associations from the States and territories of Australia, and the peak body representing the legal profession in Australia. The Council was formed in 1933 to unite the various state legal associations, in order to represent...
has shown that there was no significant increase in the amount of personal injury court action in the years leading up to the Ipp Report.
Since "reform" by the Civil Liability Acts (caused by the Ipp Report), all three of the component parts above have been substantially modified, although much of the legislation is yet to be properly tested in appellate courts. The primary changes made by the Civil Liability Acts (resulting from the Ipp Report) also apply to professional liability for personal injury, and serve to undermine the ratio decidendi of the High Court in 'Rogers v Whitaker', (for example in Qld by eliminating the High Court's requirement to disclose risks of particular concern to the individual patient rather than just the reasonably likely risks) in regard to negligent failure to advise, while reinstating the 'Bolam Test
Bolam Test
Bolam v Friern Hospital Management Committee [1957] 1 WLR 582 is an English tort law case that lays down the typical rule for assessing the appropriate standard of reasonable care in negligence cases involving skilled professionals : the Bolam test...
' in cases of negligent professional treatment.
In particular, there is anecdotal evidence that the Civil Liability Act 2002 (NSW) led as much as 10% of NSW barristers to allow their practising certificate to lapse. This is said to have occurred because, without negligence claims to litigate, barristers actively sought out other briefs in areas such as criminal law. Subsequently, there was a saturation of barristers in the most profitable areas of the law. Moreover, some barristers lacked sufficient experience in other areas to be effective counsel, and therefore sought to use their skills in other areas.
Background to the changes: public liability 'crisis' and the government response
Negligence is a cause of action generally broken down into four component parts:- a duty of care
- a breach of the duty of care through an action or omission
- harm
- a causal connection between the breach of duty and the harm
The Ipp Report
In 2002 the following factors affected the profitability of Australian insurers:- The worldwide increase in re-insurance costs after the World Trade CenterWorld Trade CenterThe original World Trade Center was a complex with seven buildings featuring landmark twin towers in Lower Manhattan, New York City, United States. The complex opened on April 4, 1973, and was destroyed in 2001 during the September 11 attacks. The site is currently being rebuilt with five new...
attack on 11 September 2001; - The collapse of discount Australian insurer HIH;
- Competitive pricing among Australian insurers producing lower premium income trends;
- A reduction in the value of and returns from global assets and investments; and
- High salaries paid to insurance executives.
These factors provided upward pressure on premiums. Insurers also claimed that the personal injury compensation payments relating to motor accident, workplace and public liability insurance policies were becoming unaffordable.
This contention gained wide media and government support and the term "Insurance Crisis" was coined to describe conditions in the insurance market. No evidence was produced then or since that personal injury compensation claim payments had contributed to the "Insurance Crisis". Indeed some commentators described the crisis as "at best unproved and at worst self-serving rhetoric".
The Commonwealth, State and Territory governments appointed panel of "experts" to review the law of negligence. It included a surgeon and a rural mayor. The panel was chaired by Justice David Ipp
David Ipp
David Andrew Ipp AO QC is the Commissioner of the NSW Independent Commission Against Corruption.Ipp was formerly a judge of the Court of Appeal of the Supreme Court of New South Wales, the highest court in the State of New South Wales, Australia, which forms part of the Australian court...
, a judge of the New South Wales Court of Appeal
Supreme Court of New South Wales
The Supreme Court of New South Wales is the highest state court of the Australian State of New South Wales...
. The Review's primary purpose was to address the public view of escalating, "unsustainable" public liability insurance premiums and damages awards for those injured through another's fault."
The Terms of Reference for the panel's review were as follows:
The award of damages for personal injury has become unaffordable and unsustainable as the principal source of compensation for those injured through the fault of another. It is desirable to examine a method for the reform of the common law with the objective of limiting liability and quantum of damages arising from personal injury and death.
Criticism of the inquiry process by academics, consumer groups, the law profession and the media
The assumptions in the Terms of Reference have been criticised by pro-consumer groups who assert that they were unsubstantiated and that insurers manipulated the "Insurance Crisis" to create hysteria among the public and panic legislators into making laws that had been on their wish list for decades. In its report released in October 2002, the panel proposed wide-ranging changes to limit:- the circumstances in which damages can be recovered negligence;
- the types and quantum of damage that can be recovered; and
- further increases in public liability insurance premiums.
The report and its recommendations were criticised by:
- Academics
The final Ipp report ...repeats and aggravates earlier errors... in a mistake even a first year student of economics would recognise... Precluding lawsuits where the underlying grievances are legitimate is merely a way of making relatively poor people worse off. - Henry ErgasHenry ErgasHenry Ergas is a regulatory economist who has worked at the OECD, Australian Trade Practices Commission and the Australian Centre of Regulatory Economics Advisory Group...
, economist, Canberra
- Lawyers
The Ipp Panel has been asked to make recommendations regarding further limits on compensation for those injured through negligence. But we have still not seen any proof that negligence laws are the cause of the insurers' problems, and that cutting entitlements will improve the situation. There is still no evidence to show that cutting the compensation of injured citizens will reduce or contain insurance premiums. - Rob Davis, President, Australian Plaintiff Lawyers Association (APLA)
- Consumer organisations
The lack of competition in the Australian insurance market following the demise of HIHHIH InsuranceHIH Insurance was Australia's second largest insurance company. It was placed into provisional liquidation on 15 March 2001. The demise of HIH is considered to be the largest corporate collapse in Australia's history, with liquidators estimating that HIH's losses totalled up to $5.3 billion...
has seen predatory insurers slugging businesses, even those with no prior claims, with exorbitant premiums. Insurers are asking that they should be virtually claim proof but still want to collect huge premiums. The changes they want would leave individuals and families to suffer the consequences of reckless conduct while their profits will go through the roof. - Civil Justice Foundation
The Commission, in light of the lack of empirical data at present on the so-called 'litigation explosion' and associated claims ... recommends that caution should be exercised in implementing significant policy and other changes to address the situation. - The Australian Competition and Consumer CommissionAustralian Competition and Consumer CommissionThe Australian Competition and Consumer Commission is an independent authority of the Australia government. It was established in 1995 with the amalgamation of the Australian Trade Practices Commission and the Prices Surveillance Authority to administer the Trade Practices Act 1974...
(ACCC)
An article in the Australian Financial Review of 11 November 2002 stated "[t]he report displays an alarming lack of insight into the economic and social issues concerning legal liability for reckless conduct. It contains many 'unfounded inferences' and 'recommendations are thrown around with little or no assessment of their consequences...".
Despite widespread criticism, the recommendations were largely adopted by Australian state governments. The Federal Government also responded by closing "loopholes" which allowed plaintiffs to turn to federal consumer protection legislation to recover compensation where that was barred, or made less attractive, by the states' "reforms".
Invasion of privacy
In the case ABC v Lenah Games Meats in 2001, the High Court of Australia left open the possibility for development of a tort of invasion of privacy. The Court stated that it did not want to decide the matter at that time and only one member, Justice Callinan, gave any indication that such a tort may be acceptable http://www.austlii.edu.au//cgi-bin/disp.pl/au/cases/cth/HCA/2001/63.html. It held that Victoria Park Racing v Taylor did not inhibit the development of privacy law in Australia.Since ABC v Lenah Game Meats, the question of whether the breach of privacy was a valid cause of action has been entertained in at least two states. The most adventurous decision is arguably that of the District Court of Queensland in Grosse v Purvis [2003] QDC 151, in which Judge Skoien awarded damages for invasion of privacy. Conversely, the existence of the tort was questioned by Justice Gillard of the Supreme Court of Victoria
Supreme Court of Victoria
The Supreme Court of Victoria is the superior court for the State of Victoria, Australia. It was founded in 1852, and is a superior court of common law and equity, with unlimited jurisdiction within the state...
in Giller v Procopets [2004] VSC 113, in which the Court doubted that the law had 'developed to the point where the law in Australia recognises an action for breach of privacy' (Giller v Procopets at para 181).
Both of these cases were settled out of court and, as a result, will not proceed to appeal. Until this tort receives the attention of an Australian appellate court, the precedential value of Grosse and Giller is limited.
Defamation
Since 2006, all Australian states have adopted uniform defamation laws. One of the major and most discussed changes concerned defences to publication of defamatory statements. After the reforms, defendants can defend a defamation case on the basis of truth alone (i.e. their comments were true). Prior to the legislative changes, a number of states (including New South WalesNew South Wales
New South Wales is a state of :Australia, located in the east of the country. It is bordered by Queensland, Victoria and South Australia to the north, south and west respectively. To the east, the state is bordered by the Tasman Sea, which forms part of the Pacific Ocean. New South Wales...
and Tasmania
Tasmania
Tasmania is an Australian island and state. It is south of the continent, separated by Bass Strait. The state includes the island of Tasmania—the 26th largest island in the world—and the surrounding islands. The state has a population of 507,626 , of whom almost half reside in the greater Hobart...
) required that comments be both true, and in the public interest or public benefit, to be protected.
Other changes created by the new uniform defamation laws include limits on the maximum payout available, limitation periods for defamation, and formal recognition to any apologies made by the wrongful party.
Wrongful life
A Wrongful life claim is one in which a child plaintiff brings an action against a doctor who negligently diagnosed the plaintiff's mother. Usually, the doctor failed to diagnose rubella during the first trimester, for which there is no cure and which will inevitably cause profound disabilities in the unborn child. Had the mother been correctly diagnosed, she would have exercised her legal right to abortion.In May 2006, the majority of the High Court of Australia rejected wrongful life, refusing to accept that life can be considered a compensable harm. This means that children who are born disabled as a result of a doctor's (admitted) negligence cannot claim damages. Parents are able to pursue 'wrongful birth' claims if the child (disabled or not) is the outcome of a negligently performed sterilisation procedure. (see Cattanach v Melchior
Cattanach v Melchior
Cattanach v Melchior [2003] HCA 38; 215 CLR 1, was a significant case decided in the High Court of Australia regarding the tort of negligence in a medical context...
). However, post Civil Liability Act, they cannot recover the costs of raising the child in New South Wales.
Litigation
Tort law occupies much of the time of the various Magistrates', Local, District and County Courts and a substantial proportion of the time of the Supreme Courts of each of the states and territories. In addition, there are numerous specialist tribunals dealing with workers' compensationWorkers' compensation
Workers' compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence...
and other cases. Road accident victims are far more likely to make claims and receive tort compensation than any other group. This predominance is due not so much to the law of torts, but the fact that liability insurance is compulsory by statute in all Australian states.
1900s
Since the common law evolves slowly, legislative intervention has been necessary to keep torts in pace with social needs. The Workmen's Compensation legislation from 1897 is the most potent example of the necessity of tort reform. The combination of (a) increased risks for workers during industrialisation, and; (b) the refusal by common law courts to place the costs of workplace accidents on employers; forced parliaments to redress the defects and shift the costs of industrial accidents back to employers. Legislation such as the Trade Practices Act 1974 and the state Fair Trading Acts also impinged upon the traditional tort rules in commercial and property areas.From the early 1980s legislative intervention attempted to reduce the high volume of litigation involving motor vehicle and industrial accidents. Parallel to the rise of Thatcherism
Thatcherism
Thatcherism describes the conviction politics, economic and social policy, and political style of the British Conservative politician Margaret Thatcher, who was leader of her party from 1975 to 1990...
in the United Kingdom, in all Australian states common law torts were significantly modified. Speedy "no fault" compensation was made available to workers and victims of motor vehicle accidents.
The decline of HIH Insurance, the Ipp Review and beyond
Since 2002 there has been an acceleration of legislative change, driven by a perceived crisis in the price and availability of insurance, which was largely blamed on the law of negligence. The issue became charged politically, reinforced by the direct liability of government and its role as a re-insurer of last resort. New South Wales, the most litigious state, had commenced legislative change prior to 2002. Following the collapse of HIH Insurance and the related escalation in insurance premiums in public liabilityLiability insurance
Liability insurance is a part of the general insurance system of risk financing to protect the purchaser from the risks of liabilities imposed by lawsuits and similar claims. It protects the insured in the event he or she is sued for claims that come within the coverage of the insurance policy...
and medical negligence, the NSW proposals were adopted more widely throughout Australia. More on the Ipp panel, its report, the "Insurance Crisis" and Civil Liability laws above.