2005 > HOT TOPICS 51
TOPICS
HOT
L E G A L
I S S U E S
I N
P L A I N
L A N G U A G E
This is the fifty-first in the series Hot Topics: legal issues
in plain language, published by the Legal Information
Access Centre (LIAC). Hot Topics aims to give an
accessible introduction to an area of law that is the
subject of change or public debate.
AUTHOR: Stella Tarakson
EDITOR: Cathy Hammer
DESIGN: Bodoni Studio
ACKNOWLEDGEMENTS: The publisher would like
to thank the NSW Parliamentary Research Service for
permission to draw on Briefing Papers 7/2002 and
11/2002 on Public Liability by Roza Lozusic to
produce this Hot Topics issue; also to the the Australian
Competition and Consumer Commission (ACCC) for
permission to use the graph on p 3.
Personal injury
1
Overview
2
The law of negligence
3
Public liability insurance
5
The public liability crisis
Dispute as to the causes – contributing factors – responses to the crisis
– arguments for and against the need for reform
9
Changes to the law in New South Wales
Stage 1 reforms – stage 2 reforms – recent legislation on personal injury
15
Sporting bodies
The law before the reforms – waivers and warnings – what the
law is now
17
State Library of NSW
Cataloguing-in-publication data
Hot Topics, ISSN 1322-4301, No. 51
1. Insurance, Liability – Law and legislation – Australia.
2. Insurance, Liability – Law and legislation – New South
Wales.
3. Personal injuries – Australia.
4. Personal injuries – New South Wales.
I. Tarakson, Stella.
II. Hammer, Cathy.
III. Legal Information Access Centre. (Series: Hot topics
(Sydney, N.S.W.) ; no. 51)
346.940865
346.9440865
© Library Council of New South Wales 2005. All rights
reserved. Copyright in Hot Topics is owned by the Library
Council of New South Wales (the governing body of the State
Library of New South Wales). Apart from any use permitted
by the Copyright Act (including fair dealing for research or
study) this publication may not be reproduced without written
permission from the Legal Information Access Centre.
Public authorities
Wide exposure – changes to the law – cases on councils’ duty of care
20
Medical negligence
The law before the reforms – arguments for and against reform –
new laws
22
Conclusion: Are the reforms working?
The impact on insurance premiums – have the reforms gone too far?
24
Contacts and further reading
Hot Topics is intended as an introductory guide only
and should not be interpreted as legal advice. Whilst
the Legal Information Access Centre attempts to
provide up-to-date and accurate information, it makes
no warranty or representation about the accuracy or
currency of the information it provides and excludes, to
the maximum extent permitted by law, any liability
which may arise as a result of the use of this
information. If you are looking for more information on
an area of the law, the Legal Information Access Centre
can help – see back cover for contact details. If you
want legal advice, you will need to consult a lawyer.
view
Over
It was like a balloon that kept inflating. Claims
and compensation payouts were getting bigger
and bigger. Insurance premiums kept rising.
Public liability insurance became harder to
obtain. Many community events were cancelled
and many small businesses (such as adventure
tourism operators) were unable to carry on.
Everyone knew the balloon would burst. But
how? And what would happen next?
This issue of Hot Topics looks at personal injury law,
negligence, and the unprecedented reforms that have
been driven by the public liability crisis. It looks at the
causes of and responses to the crisis, before examining the
legal reforms that took place in New South Wales. It then
goes on to consider the major players in more detail:
sporting bodies, p 15; public authorities (including local
government), p 17; and medical practitioners, p 20.
In recent years, Australia has struggled through a situation
popularly tagged as a ‘public liability crisis’. There are
competing views as to why insurance premiums grew so
fast: see p 5 the Public Liability Crisis. Whatever the
reasons, the hike in premiums resulted in many groups
limiting or not offering certain activities and events. Most
notably, many community-run events such as street fairs,
country shows, and sporting activities were discontinued.
The information in this issue is limited to personal
injuries arising from public and product liability, sporting
accidents and medical negligence. Information on injuries
that arise out of or in the course of employment, which
are dealt with under workers’ compensation law, is
available in The Law Handbook, Chapter 24
‘Employment’ 9th ed. 2004 Redfern Legal Centre
Publishing. Information on motor vehicle accidents is
covered on pages 72-88 of The Law Handbook. This book
is available in all public libraries in NSW.
This perceived crisis prompted reforms by governments
to the law of negligence and restrictions on people’s right
to sue. Recently, senior members of the judiciary have
spoken out about the possibility that reforms have gone
too far1:
For all these issues to make sense, we first need to examine
the law of negligence. What is a negligent action and
when does it give rise to legal liability?
We have to be careful that we do not reject just
claims and unfairly reduce the mutual sharing of
risks when things go seriously wrong.
High Court Judge, Michael Kirby
Those who act negligently are partially relieved of
the consequences of their default, as is their
insurer, to the detriment of the victim of
negligence and possibly the broader community
Chief Justice of the Queensland Supreme Court,
Paul de Jersey
image unavailable
1. ‘Judge joins attack on insurers over personal injury’ by Michael Pelly, Sydney Morning Herald, 23 March 2005.
Overview
1
The
law
of negligence
Negligence comes under a large body of law
called ‘torts’. Torts are wrongdoings that give
injured individuals or organisations the right to
sue other individuals or organisations on their
own behalf. (Note: organisations include
businesses.)
Torts can be compared to crimes, where it is the Crown
who takes legal action on behalf of the community. In
other words, a tort is a type of ‘civil’ wrong as opposed to
a criminal wrong. Other types of civil law matters include
contract disputes and family law.
Tort law evolved over a long period of time as part of the
common law of England, which we inherited. Common
law is judge-made law, as opposed to legislation or statutes,
which are created by parliament. Statutes cannot cover
every single aspect of the law, of course, and even where
they do exist, courts still have to interpret them. It is these
decisions that shape the ever-changing common law.
Courts can only make decisions on cases that are brought
to them. Parliament does not face such restrictions, and is
able to create statutes within the powers defined for it by
the Constitution. Legislation passed by parliament over­
rides the common law to the extent that the two are
inconsistent.
There are various kinds of torts. Defamation, trespass and
nuisance are torts, but the most common is negligence.
Broadly speaking, negligence involves carelessness, or a
image unavailable
2. This is a UK case that is not freely available on the internet.
2
HOT TOPICS 51 > Personal injury
failure to take reasonable care
for other people’s safety. An
individual or organisation can be
sued for their negligent acts or
omissions that result in injury,
death or property damage.
For negligence to be established,
the plaintiff (the person bring­
ing the action), must be able to
prove each of three things:
> there was a duty of care – that
is, there was an obligation on
behalf of the defendant to
take reasonable care to pre­
vent injury arising from their
act or omission
> this duty was breached – not
only did the duty of care exist,
there must have been an
actual failure to use reason­
able care
> this breach caused the injury
– the injury was due to the
breach of the duty of care, not
to some intervening factor.
HOT TIP
In the past, it was difficult
to establish a duty of care
in the absence of a
contractual relationship.
But the landmark case
Donoghue v Stevenson
[1932] AC 562, extended
the duty to anyone who can
‘reasonably be foreseen’ as
likely to be injured by an
act or omission. In that
case, a woman who fell ill
and suffered shock after
drinking a bottle of ginger
beer with a decomposing
snail in it was able to sue
the manufacturer, even
though she had not bought
the drink herself (that is,
she had no contract with
either the manufacturer or
the retailer). Available at
www.scottishlawreports.org
.uk Select ‘Key Scottish
cases’ and then ‘Donoghue
v Stevenson’.
So, the question that arises is – was the risk of injury or
damage ‘reasonably foreseeable’? This test rules out
damage that is too remote, but past cases have shown that
the test can be applied narrowly or widely. Courts have
stated that the kind of damage must be foreseeable, not
necessarily the actual damage or its extent. In Hughes v
Lord Advocate 2 [1963] AC 837, workers dug a manhole in
a public street. They left the site after securing the
manhole and placing paraffin lamps around it as a
warning. Two young boys caused a paraffin lamp to fall
into the hole, resulting in an explosion. One of the boys
fell into the manhole, and suffered severe burns. The
House of Lords decided that a child being injured by
falling in the hole or being burned by a lamp was a
foreseeable risk. Although the explosion was unforseeable,
the injury fell within the kind of injury that could be
foreseen, even though the severity was unexpected.
Public liability
insurance
People who owe a duty of care generally cannot
afford to pay compensation for all the risks to
which they are exposed. To cover themselves,
they take out insurance.
Insurance transfers the possible risk of loss arising from
particular future events from a person or organisation (the
insured) to the insurer. A person who wants insurance
pays a sum of money (called a premium) to the insurer. In
return, the insurer promises to compensate the insured if
the event occurs and causes loss or damage. The event
must occur during the policy period in order to be
covered.
Both sides to an insurance contract are taking on a risk.
The insurer takes the risk that if a particular event occurs,
they will have to pay out money in compensation. But the
insured also accepts a risk. Their risk is that they will
continue to pay premiums without ever receiving any
financial benefit from doing so. If an insurance policy is
not taken out, however, the person or organisation in
question takes on the entire risk of loss.
Liability insurance covers the risk of causing personal
injury and death, as well as related loss or damage. These
policies usually require the insured to take all reasonable
precautions to prevent the liability from arising in the first
place. There are various types of liability insurance – as
well as public liability insurance, there is liability
insurance for workers’ compensation, motor vehicle third
party, product liability and professional indemnity.
Public liability insurance protects the insured from the
financial risk of being liable to a third party for death,
injury or damage to property resulting from the insured’s
negligence. The protection can relate to a location, the
use of property, or the activities of individuals or a group
of people.
Most people have public liability insurance as a
component of their home and contents insurance policy.
This is relatively minor, however, and is not the concern
of the public liability crisis. Rather, problems have arisen
with the stand-alone public liability policies that are sold
to individuals and organisations for commercial purposes.
In the late 1990s, insurance premiums for such policies
rose alarmingly for councils, community organisations,
Percentage change in real average premiums –
public liability – 1998 to 2004*
The real average premiums fell by 15 per cent in the period between
year ending 31 December 2003 and half year ending 30 June 2004,
reversing the trend of substantial increases since 2000. The real
average premium decreased for most insurers.
50%
40%
30%
20%
10%
0
–10%
–20%
1998
1999
2000
2001
2002
2003
2004*
Underwriting year ending 31 December
Notes:
*1 January to 30 June 2004
Data is shown in real terms adjusted to 30 June 2004 values using
average weekly earnings.
Derived by ACCC from responses provided by seven insurers.
sporting event organisers and adventure tour operators.
This resulted in many events being cancelled and some
businesses being forced out of operation. Even ‘not-for­
profit’ bodies were unable to afford the increased
premiums, resulting in the cancellation of various
fundraising activities.
HOW ARE PREMIUMS SET?
Premiums vary between insurers, and depend on the
particular type of risk being insured. They also depend to
a large degree on the competition faced by the insurance
companies and their relative market share. However, the
very nature of public liability insurance causes some
difficulties when it comes to setting appropriate
premiums.
Public liability insurance
3
HOT TIP
‘Long tail’ insurance
Public liability insurance is
referred to as ‘long tail’ insur­
ance. This means there can be a
large time gap between when a
policy is taken out and when the
financial outcome of a claim is
finally realised. Claims can be
made years after an accident
(depending on the statute of
limitations), even if the policy
has since expired. As a result, it
can be hard for insurers to
estimate future claims costs with any great degree of
accuracy. This makes it difficult to set suitable premiums.
A statute of limitations
provides for a limit on the
time that can elapse
before legal action is
taken. In NSW, the
Limitation Act 1969
provides for a limitation on
wide-ranging causes of
action brought about in
NSW courts, including
personal injury actions.
The Insurance Council of Australia (ICA) noted that: ‘If
a child of one year of age in NSW was injured, legal
action could be commenced some 25 years after a policy
has expired. There is no need to commence legal action
until the child achieved majority at 18 years of age when
the statute of limitations of three years applies. A further
extension of five years may also be granted.’ (Source: ICA,
Public Liability Submission to Ministerial Forum, March
2002, p 10)
Unpredictability
Public liability insurance is also characterised by
unpredictability. Some events are relatively predictable,
such as people falling over in shopping centres. Others,
however, are much harder to predict. Major accidents and
disasters can happen without warning and take
everybody, including the insurance industry, by surprise.
For example, the terrorist attacks in the United States on
11 September 2001 shocked the world. Many
commentators agree that the global repercussions of the
attacks have contributed to the Australian public liability
insurance crisis.
image unavailable
4
HOT TOPICS 51 > Personal injury
The public liability
crisis
Between 2001 and 2003 the average public
liability premium rose from just over $800 to just
under $1400 according to the Australian Com­
petition and Consumer Commission3. The reasons
for that rise, however, are not clear-cut.
Stakeholders disagree as to the main cost drivers,
placing the blame on different factors. Even where
they agree as to some common causes, they place
different emphasis on their relative weights.
> aggressive competition between insurers in the 1990s,
which led to premiums falling to unsustainable levels
> the collapse of HIH and industry mergers
> increased reinsurance costs
> changes in the international risk environment
> reduction in investment earnings
> renewed focus on profitability
> increased costs associated with prudential regulation
DISPUTE AS TO THE CAUSES
On 27 March 2002, the first of several national
ministerial meetings examining the public liability crisis
was held. At this meeting, discussions revolved around
the increase in premiums, the contributing factors for
these increases, and proposals for reform.
In their submission to the ministerial meeting, the
Insurance Council of Australia (ICA) stated that the
causes of the premium increases included:
> industry cycle of insurance profitability (which is influ­
enced by the stock market)
> taxes and levies.
So what view finally arose from the Ministerial Meeting?
A Joint Communique 4 was issued, and it found that both
sides of the argument had valid points. It held that the
premium increases were due to a combination of factors,
the most significant being:
> changing community attitudes to litigation
> an increase in the number and size of claims
> changes in what constitutes negligence
> changes in society’s attitudes regarding the making of
claims
> increased damages payouts for bodily injury claims
> changes to regulations covering lawyers, which have led
to more active pursuits of class actions
> advertising by lawyers promoting a ‘no win, no pay’
system, which encourages claims that might have not
been pursued in the past
> legal expenses involved in assessing claims
> higher risk recreational activities
> reinsurance costs
> insurance taxes.
The Australian Plaintiff Lawyers Association (APLA) –
now known as the Australian Lawyers Alliance –
disagreed. In their submission to the March 2002
Ministerial Meeting, they argued that the increases in
premiums were the result of market forces. These market
forces included:
THE HIH COLLAPSE
On 15 March 2001, the major companies in the HIH Insurance
Group (HIH) were placed in provisional liquidation. Questions
about corporate mismanagement within HIH saw the
appointment of a Royal Commission in August 2001. The
Royal Commission’s report The Failure of HIH Insurance was
publicly released on 16 April 2003 together with the
Government’s response.
The collapse of HIH is likely to be the largest corporate
failure in Australia to date. The collapse was not due to fraud
or embezzlement. The primary reason for the failure was that
adequate provision had not been made for insurance claims
and poor commercial decisions were made. The ultimate
shortfall is likely to be in the billions of dollars.
Research Note no. 32 of 2002-03
Report of the Royal Commission into HIH Insurance
BRENDAN BAILEY, Law and Bills Digest Group
Available at http://www.aph.gov.au/library/pubs/rn/
3. ACCC Public Liability and professional indemnity insurance – fourth monitoring report, 15 February 2005.
4. Available at www.lgsa.nsw.gov.au
The public liability crisis
5
CASE STUDIES
> past under-pricing and poor profitability of the insur­
ance industry
SWAIN v WAVERLEY COUNCIL
> the collapse of HIH
One such case involved a surfer who was rendered a
quadriplegic after diving into surf at Bondi Beach, striking a
sandbar. The case was heard in the Supreme Court of New
South Wales. The arguments revolved around whether
Waverley Municipal Council owed swimmers a duty of care
and the extent of that duty. The issues included whether
warning signs should have been put up, whether the risk of
diving into such waters was obvious, and whether the flags
were placed improperly. After an allowance for contributory
negligence of 25 per cent (meaning he was that much to
blame), the plaintiff obtained a judgment of $3.75 million. The
council later successfully appealed against the judgment to
the Court of Appeal: Waverley Municipal Council v Swain
[2003] NSWCA 61. Mr Swain appealed to the High Court,
which overturned the appeal decision and reinstated the
original damages award: Swain v Waverley Council [2005]
HCA 4. The cases are available at http://www.austlii.edu.au/
au/cases/nsw/NSWCA/2003/61.html (NSW Court of Appeal)
and http://www.austlii.edu.au/au/cases/cth/high_ct/
2005/4.html (High Court).
> insurance companies being more selective about the
risks they cover.
COLE v SOUTH TWEED HEADS RUGBY LEAGUE
FOOTBALL CLUB LTD
Another much-publicised case involved a woman who sued a
club because she was hit by a motor vehicle shortly after
leaving the club’s premises. She was intoxicated when she
left, with an alcohol blood level of 0.238. This case was also
heard in the Supreme Court of New South Wales. Arguments
focused on whether the club owed customers a duty to take
reasonable care to monitor and moderate the amount of
alcohol served, even when the customer voluntarily and
deliberately decided to drink to excess. Furthermore, did the
club owe a duty to take reasonable care that the customer
travelled safely away from the premises, and did the offer of
a courtesy bus/taxi satisfy this duty? The court found in
favour of the plaintiff. It apportioned responsibility as follows:
30 per cent to the driver, 30 per cent to the club, and 40 per
cent to the plaintiff herself. The injured woman was awarded
approximately $172,000 against the driver and approximately
$251,000 against the club. (Cross-claims between the club
and driver were also awarded). The defendants appealed to
the Court of Appeal, and won. The injured woman then
appealed to the High Court seeking to overturn the Court of
Appeal’s judgment, but her appeal was dismissed: Cole v
South Tweed Heads Rugby League Football Club Ltd [2004]
HCA 29. Decision available at http://www.austlii.edu.au/
au/cases/cth/high_ct/2004/29.html
HOT TIP
A cross-claim is a claim made in response to another claim –
for example, a defendant accused of causing an injury when
failing to stop at a red light might cross-complain against the
mechanic who recently repaired the car, claiming that
negligence resulted in the brakes failing and, hence, that the
accident was the mechanic’s fault. This means the matters
may be heard and decided together.
6
HOT TOPICS 51 > Personal injury
HIGH PROFILE COURT CASES
Some cases received a great deal of media attention, not
least for the large compensation payouts awarded by the
courts. Although some were later overturned on appeal,
the cases highlighted the willingness of the courts to find
that negligence existed and to award high sums in
damages. High media coverage of these cases perhaps
contributed to the changing of community attitudes
towards litigation.
CONTRIBUTING FACTORS
Insurance premiums, therefore, increased due to a
complex interaction of various factors. Some of these are
explored in more detail.
Increase in number and size of claims
Figures released by the Australian Prudential Regulation
Authority (APRA) in 2002 showed increases to costs of
claims:
1998-2000
Number of public liability claims
55,000 – 88,000
Costs of public liability premiums Up 14%
Overall cost of claims
Up 52.5%
The Australian Plaintiff Lawyers Association (APLA)
suggests it is misleading to look at claim numbers in
isolation. They say there is a proportionate relationship
between the number of claims and the numbers of
policies written, and that it is important to look at the
ratio of claims to policies. In other words, if there is an
increased number of policies written, there will be an
increase in the number of claims. Based on their own
ratio figures, they maintain that the real increase in claims
from 1996 to 2001 was only 2.63 per cent.
Changing attitudes to litigation
There is an assumption that litigation levels have boomed
in the past decade. Media reports of unprecedented large
lump sum payouts have fuelled such beliefs, even though
some of these large payouts were later reduced on appeal.
The APLA President warned against ‘… accepting
anecdote as truth and responding with unfair restrictions
on compensation, which both hurt the injured and do
nothing to solve the underlying problem of premium
increases.’ (Source: Plaintiff, Issue 49, pp 4-5)
Collapse of HIH
Civil actions commenced in Australia
The collapse of HIH in 2001 had a dual effect on
increasing premiums. First there was a reduction in the
availability of cover, and second, flow on costs resulted.
The ICA noted that HIH used to cover a large proportion
of the liability market, so its collapse resulted in a reduced
industry capacity to provide cover.
840 000
820 000
800 000
780 000
760 000
740 000
September 11
720 000
The terrorist attacks in the United States on 11
September 2001 also contributed to the increase in
insurance premiums in Australia. This is because
reinsurance costs increased. Reinsurance companies are
the insurers’ insurers – or the companies that insurance
companies go to to take out insurance cover. Global
reinsurance costs rose, putting pressure on Australian
insurance companies. This was passed to policyholders in
the form of higher premiums.
700 000
680 000
660 000
640 000
93/94
94/95
95/96
96/97
97/98
98/99
99/00
(Source: APLA, Submission to the National Ministerial Summit into
Public Liability Insurance, March 2002, p 15).
Some say that there has been a change in attitude to
litigation, a growing belief that someone had to pay. This
change in attitude may be partly due to the public being
better educated about their rights.
The APLA submission to the Ministerial Meeting
included data from the Australian Productivity
Commission, showing a slight overall decline in the level
of litigation since 1994/95, following a peak in 1996/97:
see graph. There is general agreement that there was a rise
in overall claims and in the ratio of claims to policies
written. However, the APLA did not believe that
increased claims necessarily translated to a rise in
litigation, as most personal injury claims are settled out of
court.
The advertising of conditional cost agreements is often
blamed as an exacerbating factor in an increased
willingness to commence
litigation. Also referred to as ‘no
HOT TIP
win, no pay’, lawyers can enter
Conditional cost agree­
agreements where their costs are
ments are often confused
conditional on a successful
with the contingency fee
outcome. If the case fails, the
system existing in the
client will not be charged for the
United States. Under the
American system, lawyers
lawyer’s ‘labour’. They may still
can charge a proportion of
be charged disbursements (the
the amount awarded in
lawyer’s out-of-pocket expenses
proceedings. In Australia,
such as filing fees) and court
practitioners can charge a
costs if so ordered by the court
premium on top of the
(called party/party costs). But if
legal costs otherwise
the case succeeds, the lawyer is
payable, subject to a
successful outcome. This
able to charge a higher fee than
premium is a percentage
they would otherwise. For more
of the legal costs (up to 25
information see Hot Topics 46:
per cent) – not a
You and Your Lawyer.
percentage of the final
sum awarded.
Underpricing premiums
Over the past decade, insurers have been cutting
premiums to gain a competitive edge in the market place.
So, rather than pricing premiums to reflect risk, they have
been pricing them to be competitive. The APLA claims
image unavailable
Disgraced businessman Rodney Adler leaves court for
Silverwater prison on 14 April 2005. He was sentenced to
41⁄2 years for his part in the collapse of HIH.
Nick Moir, SMH.
The public liability crisis
7
image unavailable
Amusement parks were one of the many business areas
threatened with closure due to insurance being
unaffordable or unobtainable.
that these lower levels proved to be unsustainable, and a
rise was inevitable.
The Negligence Review Panel was appointed in July
2002. The panel’s final report, The Review of the Law of
Negligence, is commonly referred to as the Ipp report. It
contained various recommendations for reform, and
created the basis for possible reform in all Australian
jurisdictions.
ARGUMENTS FOR AND AGAINST THE
NEED FOR REFORM
For information on the actual reforms, see p 9 ‘Changes
to the law in New South Wales’. But first, here are
some instances of the controversy that the reform process
itself raised.
Those pressing the need for law reform included the ICA,
medical representative bodies such as the Royal Australian
College of General Practitioners, sporting organisations
and adventure tourism operators. In its submission to the
Negligence Review Panel, the ICA stated that tort law
reform will ‘… go a long way to resolving the insurance
crisis and reducing the frequency and cost of claims. This
is expected to bring greater capacity into the market and
to stabilise or reduce premiums.’
8
HOT TOPICS 51 > Personal injury
Of course, not everyone was in favour of the proposed
reforms. One of the main concerns expressed by the Law
Council of Australia related to the amount of time the
Negligence Review Panel had to inquire into and report
on reforming negligence. The ACCC was concerned that
some of the far-reaching changes were ‘quick-fix’ reactive
solutions, without adequate attention being paid to long­
term effects.
The objections also went to the substance of the reforms
themselves. In a media release (dated 30 May 2002) the
Australian Plaintiff Lawyers Association stated that,
‘Market failure in the provision of insurance cannot be
solved by changes to tort law. Restrictions on the rights of
claimants shifts costs from insurers and defendants to
claimants and the community, but do nothing to address
the underlying market forces that drive premium
increase.’
Some commentators have pointed out that the trend in
judicial decision-making in recent years has been more
restrictive. That is, judges themselves have put a rein on
cases, lessening the need for legislative changes.
Changes to the law
in New South Wales
In New South Wales, the Government response to
the ‘public liability crisis’ (see p 5) involved
substantial change to the law through the
introduction of new legislation and amendment to
some existing legislation.
general damages and setting out maximum payouts for
loss of earning capacity.
The table below summarises these changes.
The Civil Liability Act placed a ‘cap’ (maximum limit) of
$350,000 on damages for non-economic loss. (This was
subsequently adjusted to $384,500 in line with
indexation.) Non-economic loss refers to damages
awarded for pain and suffering, commonly known as
general damages. Under the Act, the maximum amount
can only be awarded in a ‘most extreme case’. There is also
a threshold test for the award of non-economic loss,
which eliminates small claims. Section 16(1) states that:
‘No damages may be awarded for non-economic loss
unless the severity of the non-economic loss is at least 15
per cent of a most extreme case.’
Changes to the law have been implemented in two
separate waves. The first, known as Stage 1 reforms,
aimed primarily at decreasing the number of claims and
the cost of claims by placing limits on the amounts that
can be paid in various circumstances. The Stage 2 reforms
were far broader and involved a fundamental reassessment
of the law of negligence and personal injury.
STAGE 1 REFORMS
Most of the Stage 1 reforms were implemented through
the passage of the Civil Liability Act 2002 (NSW). The
remaining changes, which related to the way in which
lawyers can advertise personal injury services, were
effected by amending the Legal Profession Regulation
2002.
There is also a cap on economic loss, that is, loss of actual
earnings and of future earning capacity. The cap is
calculated at three times the average weekly earnings. This
is the case even if the person was earning more or
expected to earn more than that limit. Furthermore, the
discount rate to damages for
future economic loss increased
HOT TIP
from three to five per cent,
NSW legislation is
reducing the final figure
available at
awarded.
www.legislation.nsw.gov.au
Limits on damages
The Civil Liability Act 2002 (NSW) was assented to in
June, but commenced operation on 20 March 2002. This
is what is known as ‘retrospective’ legislation. The Civil
Liability Act restricts the level of compensation available
for personal injury negligence actions by placing limits on
Select ‘Browse in Force’
option.
Matter restricted
Cap or restriction
Section of Act
cap on non-economic loss
(general damages or pain and suffering)
$350,000
(later adjusted to $384,500)
s 16(2)
threshold for access to non-economic loss
15% of a most extreme case
s 16(1)
cap on economic loss
(loss of earnings and earning capacity)
3 � average weekly earnings
s 12(2)
discount to damages for future economic loss
5%
s 14(2)
exemplary, punitive and aggravated damages
cannot be awarded for negligence
s 21
family care (gratuitous attendant care)
reduced or not available
s 15
Changes to the law in New South Wales
9
The Act also specifies that aggravated, exemplary and
punitive damages cannot be awarded in personal injury
negligence cases. This means extra damages cannot be
awarded in an attempt to ‘punish’ the defendant for their
wrongdoing.
A new Part IA was inserted into the Civil Liability Act,
which was based on recommendations made in the Ipp
report (The Review on the Law of Negligence). The effect of
section 5B is that a person can only be found to be
negligent if:
Damages for gratuitous attendant care, that is, unpaid
care of a nursing/domestic nature generally carried out by
family members, are difficult to obtain. They are reduced
or in many cases not available.
> the risk was foreseeable (the person knew or ought to
have known of the risk); and
Advertising personal injury legal services
Parts of the Stage 1 reforms were aimed at reducing the
way that barristers and solicitors advertise personal injury
services. This was initially done by amending the Legal
Profession Regulation 1994 (NSW). This regulation was
subsequently repealed and replaced by the Legal Profession
Regulation 2002 (NSW).
Lawyers cannot advertise personal injury services, except
in some very restricted ways. For instance, they can have
a sign displayed at their place of business that states their
name, contact details, and accredited specialty. Similar
information can be published in a practitioner directory.
The restrictions do not apply in the case of advertising
services to existing clients, or to people on the lawyers’
premises, as long as the advertisement cannot be seen
from outside the premises. Other exceptions exist: see
sections 140 and 140A of the regulation. The regulation
stipulates that contravention of the advertising
restrictions can amount to professional misconduct.
STAGE 2 REFORMS
The Stage 2 reforms were much broader, having a
fundamental impact on the law of negligence itself. They
were not confined to those issues arising solely from public
liability insurance increases; they also had an impact on
other personal injury actions such as those relevant to
medical indemnity insurance. The Civil Liability
Amendment (Personal Responsibility) Act 2002 (NSW)
made changes to various Acts, in particular, the Civil
Liability Act 2002. Some parts commenced operation on
6 December 2002, others on 10 January 2003.
It is not possible to provide a comprehensive analysis of
every reform, but major areas are outlined. Further details
can be obtained by reading the legislation. See also the
further reading section on page 24. A discussion of
whether the reforms have been effective can be found in
‘Conclusion: Are the reforms working?’ (see p22).
General principles of negligence established
The amendments set down various provisions that in
some cases confirm the common law, in other cases
override previous inconsistencies in the common law. For
an outline of the common law of negligence see page 1
Overview.
10
HOT TOPICS 51 > Personal injury
> the risk was ‘not insignificant’; and
> a reasonable person in that position would have taken
precautions against the risk of harm.
To assist courts in deciding whether a reasonable person
would have taken precautions against a risk of harm in
those circumstances, the court is to consider:
> the probability that the harm would occur if care were
not taken;
> the likely seriousness of the harm;
> the burden (ie, costs and difficulty) of taking
precautions to avoid the risk of harm;
> the ‘social utility’ of the activity that creates the risk of
harm (whether it can be seen as a ‘worthwhile’ activity).
Section 5C states that the fact that a risk of harm could
have been avoided by doing something differently does
not of itself give rise to liability for the way things were
done. Taking action that would have avoided the risk,
after an action has occurred, does not in itself constitute
an admission of liability in connection with the risk.
General principles are also set down with regard to
causation – the link between a breach of the duty of care
and the injury suffered that is required by common law.
Under section 5D, two components are required to
determine that negligence caused the harm:
> ‘factual causation’ – the negligence was a necessary
condition of the occurrence of the harm; and
> ‘scope of liability’ – that is, it is appropriate for the
scope of the negligent person’s liability to extend to the
harm so caused.
Section 5E places the onus of proof regarding any fact
relevant to the issue of causation onto the plaintiff.
Assumption of risk principles established
Sections were added to the Civil Liability Act to deal with
the assumption of risk. This was an area that seemed to
have been watered down by the common law over the
previous decade. Section 5H states that there is generally
no duty to warn of ‘obvious risks’, unless the plaintiff has
requested such information from the defendant; or there
is a law requiring a warning; or where the defendant is
providing professional services.
Obvious risks are defined by s 5F to mean risks that
would have been obvious to a reasonable person in that
position. A risk of something occurring can be an obvious
risk even though it has a low probability of occurring.
Risks can be obvious even if the risk (or a condition or
circumstance giving rise to the risk) is not prominent,
conspicuous, or physically observable.
Injured people are presumed to be aware of obvious risks.
It is enough to be aware of the type or kind of risk, even
if they are not aware of the precise nature or extent of the
risk. Similarly, s 5I says there is no liability in negligence
for harm suffered as the result of the materialisation of an
‘inherent risk’. An inherent risk is a risk of something that
cannot be avoided by the exercise of reasonable care and
skill. However, the section does not exclude liability
regarding the duty to warn of such risks.
Determining standard of contributory negligence
Section 5R states that the principles applying to whether
a person has been negligent also apply to contributory
negligence. That is, the standard of care required of the
injured person is that of a reasonable person in that
position. The matter is determined on the basis of what
that person knew or ought to have known at the time.
Section 5S holds that it is open for a court to determine a
reduction in damages of 100 per cent if it thinks it just
and equitable to do so. The result of this would be that
the claim for damages is defeated.
Creation of a presumption
of structured settlements
Compensation for personal
injury caused by negligence
was typically awarded by the
courts as a single lump sum.
This was also generally the case
for settlement agreements.
However, the Stage 2 reforms
included calls for an alternative
to lump sums.
HOT TIP
Contributory negligence
refers to the issue of
whether the person injured
was partly (or wholly)
responsible for their injury
due to their own
negligence. That is, they
themselves may also have
been to blame for failing to
take precautions against
the risk of harm. Not
looking where they were
going, running over a wet
surface while wearing
slippery shoes, swimming in
dangerous waters – these
are all examples of possible
contributory negligence.
‘Structured settlements’ involve
a small lump sum payment plus
periodic payments for life.
These periodic payments are
funded by an annuity,
purchased by the defendant (or
its insurer) on behalf of the
plaintiff. An annuity is a
financial product provided by life insurance companies,
and makes regular payments. The advantages and
disadvantages of structured settlements are summarised in
the following table.
Advantages of structured settlements
Disadvantages of structured settlements
> plaintiff benefits from an increased after-tax award of
compensation and a cash flow that can be guaranteed
for life
> annuities that make up part of structured settlements
incur tax, whereas lump sum payments are non­
taxable (this has since changed – see note below)
> a structured settlement can be linked to inflation
ensuring its adequacy over the years
> lump sums provide greater flexibility and choice in
determining how a compensation payment is best
spent than structured settlements
> compensation payout is not susceptible to the
fluctuating investment returns of an investment lump
sum
> structured settlements are flexible
> defendant’s insurer will have to pay less money overall
in compensation if it is paid in instalments rather
than in a lump sum (estimates range between 10 to
15 % lower cost than lump sum)
> plaintiffs who deplete their lump sum early often
turn to the social security system, therefore the
Federal Government will benefit from the use of
structured settlements through reduced welfare
payments (despite lower tax receipts)
> structured settlements shift the risk of living too long
from the plaintiff to life insurance companies, which
are better able to handle that risk
> a lump sum payment offers a plaintiff greater
potential to change his or her lifestyles or career after
an injury, which is critical to recovery for many
patients
> lump sum payments provide certainty and finality to
litigation
> possible psychological benefit in receiving a lump
sum payout, in terms of empowering a plaintiff to
take control of his or her life
> possible associated costs of administering structured
settlements
> risk that the provider of an annuity may go bankrupt
(Source: Lozusic R, Public Liability – an update: Briefing Paper
11/2002, Parliament of New South Wales, pp 21-2)
Changes to the law in New South Wales
11
Note: one of the main disadvantages of structured
settlements was that they attracted tax, whereas a lump
sum didn’t – this has since changed. The Taxation Laws
Amendment (Structured Settlements and Structured Orders)
Act 2002 (Cth) amended the Income Tax Assessment Act
1997 (Cth), the Income Tax Assessment Act 1936 (Cth),
and the Life Insurance Act 1995 (Cth).
Periodic payments derived from structured settlements
and structured orders entered into on or after 26
September 2001 are tax-exempt.
Structured settlements and
orders must meet various
criteria in order to receive the
Structured settlements are
favourable tax treatment. There
the result of an agreement
between parties, while
is a compulsory component – a
structured orders are the
personal injury annuity that
result of a court order,
provides the injured person with
often without agreement by
a minimum level of monthly
the parties.
payments for as long as they
live. The minimum level of the
annuity is equal to the basic age pension and pension
supplement. This component is basically for the payment
of future medical treatment, nursing care and other living
expenses. There are also optional components, including
an immediate cash component. This is a lump sum paid
immediately so it can be used to pay costs, debts,
purchase equipment and so on. Another option is to
include a personal injury lump sum – a single premium
paid by the defendant or their insurer in return for an
agreement to pay a tax-free lump sum at an agreed future
date or dates. This can be used to cover expected future
costs, such as the upgrading or replacement of
equipment.
HOT TIP
With the taxation disadvantage settled, structured
settlements are gaining popularity. New provisions were
added to the Civil Liability Act to further encourage the
making of structured settlements.
Section 23 requires the court to give the parties to
proceedings a reasonable opportunity to negotiate a
structured settlement. Section 24 allows the court to
make consent orders for structured settlements. And
section 25 places an obligation on legal practitioners to
advise plaintiff clients in writing as to the availability of
structured settlements and the desirability of their
obtaining independent financial advice.
Mental harm
Mental harm means impairment of a person’s mental
condition. Part 3 of the Civil Liability Act deals with
mental harm arising in connection with personal injury.
Section 29 states that plaintiffs are not prevented from
recovering damages simply because the personal injury
arose wholly or in part from mental or nervous shock. But
then section 30 goes on to outline the limits that exist on
12
HOT TOPICS 51 > Personal injury
recovery for pure mental harm arising from shock.
Plaintiffs are not entitled to damages for pure mental
harm unless:
> the plaintiff witnessed, at the scene, the victim being
killed, injured or put in peril; or
> the plaintiff is a close family member of the victim (that
is, parent, spouse, partner, child, or sibling).
The nature of the duty of care owed is further explained
in section 32. A person does not owe a duty of care to not
cause mental harm unless they ought to have foreseen that
a person of ‘normal fortitude’ might, in the
circumstances, suffer a recognised psychiatric illness if
reasonable care were not taken.
Strengthening defences regarding intoxicated
plaintiffs
‘Intoxication’ refers to being under the influence of
alcohol or a drug, regardless of whether the drug is taken
for a medicinal purpose and whether it is taken lawfully.
The effect of intoxication on the duty and standard of
care is covered by section 49, which states that:
> in determining whether there is a duty of care, it is not
relevant to consider the possibility that intoxication has
exposed someone to increased risk because their ability
to exercise reasonable care and skill is impaired;
> a person is not owed a duty of care merely because they
are intoxicated;
> the fact that someone is intoxicated does not of itself
increase the standard of care owed to them.
Section 50 goes on to add that, if the person’s capacity to
take reasonable care and skill is impaired due to
intoxication, a court is not to award damages unless it is
satisfied that the injury is likely to have occurred even if
the person had not been intoxicated. In such situations, a
person is presumed to have been contributorily negligent
unless the court is satisfied that the person’s intoxication
did not contribute in any way to the cause of the injury.
This section does not apply if the intoxication was not
self-induced.
Strengthening defences regarding injuries
received in course of crime
Under the common law, no duty of care is owed to
someone who is engaged in criminal activity. This
provision was codified in the Civil Liability Act as section
54, and then further amended by Civil Liability
Amendment Act 2003. Criminals are not to be awarded
damages if the injury or death occurred at the time of or
following conduct that, on the balance of probabilities,
constitutes a serious offence, where that conduct
contributed materially to the injury or risk of injury. If a
mentally ill patient commits a serious offence, damages
are limited: see section 54A.
RECENT LEGISLATION ON PERSONAL INJURY*
Name of Act
Act amended
Date of Effect
What the changes mean
Commonwealth
Taxation Laws Amendment
(Structured Settlements and
Structured Orders) Act 2002
Income Tax Assessment 19 Dec 2002
Act 1997
removes tax barriers to structured settlements
Trade Practices Amendment
(Liability for Recreational
Services) Act 2002
Trade Practices Act 1974 19 Dec 2002
allows people to sign waivers and assume the risk of
participating in risky recreational activities
Commonwealth Volunteers
Protection Act 2002
Trade Practices Amendment
(Personal Injuries and Death)
Bill 2003
24 Aug 2003
Trade Practices Act 1974 13 July 2004
exempts Commonwealth volunteers from liability
prevents claims for damages for injuries or death
resulting from contraventions the Trade Practices Act
1974
New South Wales
Civil Liability Act 2002
20 March 2002
> upper limits imposed for non-economic loss
($350,000) and lost earnings (three times NSW
average weekly earnings)
> application of a threshold of 15% impairment for
general damages
Civil Liability Amendment
(Personal Responsibility)
Act 2002
Civil Liability Act 2002
6 Dec 2002 for
most, Sch 1[5]
1 Dec 2003
> allows people to sign waivers and take personal
responsibility for risk
> protects volunteers and ‘good Samaritans’
> ensures that saying ‘sorry’ does not represent an
admission of guilt
> imposes new limitation periods for personal injury cases
Civil Liability Amendment
Act 2003
Civil Liability Act 2002
19 Dec 2003,
except Sch 2 on
1 Dec 2004
> no damages to be awarded for the costs of rearing
a child (unless child has disability)
> criminals cannot be awarded damages
Civil Liability Amendment
(Offender Damages) Act 2004
Civil Liability Act 2002
> deals with damages for negligence for death or injury
suffered by offenders in custody
Civil Liability Amendment
(Offender Damages) Act 2005
Civil Liability Act 2002
> deals further with damages for negligence for death or
injury suffered by offenders in custody
*Note: This table does not include legislation relating to workers compensation accidents or motor vehicle accidents.
NEW LEGISLATION IN OTHER STATES
Australian Capital Territory
Queensland
Tasmania
> Civil Law (Wrongs) Act 2002
> Civil Liability Act 2003
> Civil Liability Act 2002
> Civil Law (Wrongs) Amendment Act
2003
> Personal Injuries Proceedings Act 2002
> Civil Law (Wrongs) (Proportionate
Liability and Professional Standards)
Amendment Act 2004
South Australia
Northern Territory
> Statutes Amendment (Structured
Settlements) Act 2002
> Consumer Affairs and Fair Trading
(Amendment) Act 2003
> Personal Injuries (Civil Claims)
Act 2003
Victoria
> Wrongs (Liability and Damages for
Personal Injury) Amendment Act 2002
> Recreational Services (Limitation of
Liability) Act 2002
> Law Reform (Ipp Recommendations)
Amendment Act 2000
> Wrongs and Other Acts (Public Liability
Insurance Reform) Act 2002
> Wrongs and Limitation of Actions Acts
(Insurance Reform) Act 2003
> Wrongs and Other Acts (Law of
Negligence) Act 2003
Western Australia
> Civil Liability Act 2002
> Civil Liability Amendment Act 2003
> Volunteers (Protection from Liability)
Act 2002
Changes to the law in New South Wales
13
As a related matter, the Civil Liability Amendment
(Offender Damages) Act 2004 introduced a new Part 2A
which came into effect from 19 November 2004. The
Part places limitations on the ability of offenders to claim
damages for personal injury against ‘protected defendants’
(such as the Crown and its servants) for injuries arising
while they are in custody.
Protection of good Samaritans who assist in
emergencies
image unavailable
The intention of this reform was to protect ‘good
Samaritans’ – people who voluntarily help in emergencies
– to ensure that such people are not at risk of being
judged after the event of not having helped well enough.
This was basically already the position at common law,
but nevertheless a new Part 8 was added to the Civil
Liability Act to specifically deal with good Samaritans.
Section 57 states that a good Samaritan does not incur
any personal civil liability regarding their act or omission
in an emergency when assisting a person who is
apparently injured or at risk of being injured. But there
are some situations where the protection does not apply:
> where it was the good Samaritan’s actions that caused
the injury or risk of injury in the first place; or
> where the good Samaritan failed to exercise reasonable
care and skill because their ability to do so was
significantly impaired because they were (voluntarily)
intoxicated; or
> where a person is impersonating a health care or
emergency services worker or a police officer, or
otherwise falsely represents that they have skills in
connection with emergency assistance.
Protection of community organisations and
volunteers
A related issue is the protection of volunteers and
community organisations for the purposes of ‘community
work’. That is, work that is not for private financial gain
performed for charitable, sporting, educational or cultural
purposes.
Section 61 holds that a volunteer is not liable for any act
or omission done in good faith when doing community
work organised by a community organisation or as an
office holder of a community organisation.
The protection does not apply if (among other things):
> the volunteer was engaged in a criminal offence at the time
> the volunteer was intoxicated
> the volunteer was acting outside the scope of his/her
activities or contrary to the community organisation’s
instructions.
Also, the requirement for incorporated associations to
have $2 million of public liability insurance was repealed
14
HOT TOPICS 51 > Personal injury
from the Associations Incorporation Regulation 1999, on
10 May 2002.
Apologies
The provisions of Part 10 state that an apology made by
a person does not constitute an express or implied
admission of fault or liability. Evidence of an apology is
not admissible in civil proceedings as evidence of fault or
liability in connection with that matter.
Statute of limitations
A limitation period works by limiting the time within
which a plaintiff can commence proceedings. Changes to
the Limitation Act 1969 (NSW) mean that a case cannot
be brought after the expiration of whichever is the first to
expire out of:
> three years running from the date on which the cause of
action is discoverable to the plaintiff; or
> twelve years from the time of the act or omission that is
alleged to have resulted in the injury.
See section 50C; exceptions exist for minors (section 50E)
and cases of disability (section 50F).
Recreational activities and risk warnings
The reforms to the law in this area are described under the
section headed ‘Sporting bodies’.
Statutory immunity for public authorities
This is dealt with under the section headed ‘Public
authorities’.
Changes to the medical negligence test
For details, please refer to section headed ‘Medical
negligence’.
Sporting bodies
THE LAW BEFORE THE REFORMS
Traditionally, participants in sporting games and activities
were not able to sue for negligence for injuries received.
This was because the law recognised that sport contained
certain inherent risks: if people are prepared to be
involved in the sport, they are prepared to take on the risk
that they might suffer certain injuries.
However, a High Court case in the late 1960s changed
the law significantly. In Rootes v Shelton , the High Court
stated that just because an injury occurred while playing
sport, that was not enough to exclude it from the laws of
negligence. Also, the fact that the activity contained
inherent risks was not enough to eliminate a duty of care:
see case study.
Since that case, courts have found that, in the context of
sporting events, a duty of care can be owed to many
people. Various cases have held that a duty exists to other
participants (amateur or professional), volunteers,
coaches, trainers and even to spectators. But who exactly
owes the duty of care? Court cases have found that a duty
of care may be owed by:
> other participants in the sport
> volunteers
> coaches
> trainers
> sporting organisations (either directly or vicariously –
vicarious liability involves an employer being liable for
the actions of their staff )
CASE STUDY
ROOTES v SHELTON
In this case, a water skier was severely injured following a
collision with a stationary boat. The skier sued the driver of
the towing boat for negligence. More specifically, he sued the
driver for failing to take due care in the control of the boat
and for failing to warn him of the presence of the stationary
boat, which was standard practice.
The New South Wales Supreme Court (Court of Appeal) had
found that the boat driver did not owe a duty to the plaintiff.
This was because they were both participants in a sport,
who accepted the risks of injury that might be involved with
taking part.
However, the High Court overturned this on appeal. Chief
Justice Barwick made some statements on negligence and
sport in general, before turning to the specifics of this case:
‘By engaging in a sport or pastime the participants may
be held to have accepted risks which are inherent in that
sport or pastime: the tribunal of fact can make its own
assessment of what the accepted risks are: but this does
not eliminate all duty of care of the one participant to the
other. Whether or not such a duty arises, and, if it does,
its extent, must necessarily depend in each case upon its
own circumstances: but, in my opinion, they are neither
definitive of the existence nor of the extent of the duty;
nor does their breach or non-observance necessarily
constitute a breach of any duty found to exist.’
Rootes v Shelton [1967] HCA 39; (1967) 116 CLR 383
available at http://www.austlii.edu.au/au/cases/cth/
HCA/1967/39.html
> occupiers and owners of sports premises, due to the
laws of occupiers’ liability.
WAIVERS AND
WARNINGS
A more recent High Court case found that the duty of
care in sports, however, does not necessarily extend to
bodies that make the rules for the sport: Agar v Hyde
[2000] HCA 41. In this case, the question was whether a
duty of care was owed by a rugby union rule making body
to the players. Chief Justice Gleeson held that,
‘Undertaking the function of participating in a process of
making and altering the rules according to which adult
people, for their own enjoyment, may choose to engage in
a hazardous sporting contest, does not, of itself, carry
with it potential legal liability for injury sustained in such
a contest.’ available at http://www.austlii.edu.au/au/cases/
cth/high_ct/2000/41.html
The Stage 2 reforms included
the introduction of waivers and
warnings in the context of risky
activities. More specifically, the
reforms would allow clauses to
be inserted into contracts for the
supply of recreational services
that limit or exclude the liability
of the service providers. Also,
the provision of risk warnings
would be able to operate as a
good defence for risky entertain­
ment or sporting activities.
HOT TIP
Occupiers and owners of
sports premises have a duty
to maintain safe premises,
for example in playing fields
and leisure centres. They
need to provide adequate
warnings, such as in the
form of signs pointing out
the relevant risks. The
existence of warning signs,
however, had been found to
not necessarily exempt an
occupier from their duty to
provide safe premises.
Sporting bodies
15
The Australian Plaintiff Lawyers Association (APLA, now
known as the Australian Lawyers Alliance) broadly
supported such changes. However, they did state that care
would be needed in the drafting to protect children and
people with mental disabilities. In their submission to the
Negligence Review Panel, they said:
image unavailable
APLA supports the exploration of the use of waivers or
disclaimers to enable fully informed adults to voluntarily
assume the risks inherent in certain activities. However,
it is essential that these disclaimers are only available
to those who can fully appreciate the nature and extent
of the risks that they undertake. They should only apply
to inherently risky activities and the risks involved
should be fully articulated before the assumption of risk
can be effective.
In their submission to the Negligence Review Panel, the
Australian Competition and Consumer Commission
(ACCC) expressed concerns that the reforms could lead
to risks being inappropriately transferred to consumers.
Their concern centred on the argument that consumers
are not as well placed as suppliers to gauge the risks
involved in recreational services and to insure against the
consequences of those risks.
WHAT THE LAW IS NOW
As part of the Stage 2 reforms, the Civil Liability
Amendment (Personal Responsibility) Act 2002 (NSW)
added some new provisions to the Civil Liability Act 2002
(NSW) dealing with recreational activities: Pt 1A Div 5.
‘Recreational activities’ are defined in Division 5 as
including any sport (whether organised or not), any
leisure pursuit, and any activity engaged in at a place
where people ordinarily engage in sport, leisure or
relaxation activities (such as parks, beaches, open public
space). A dangerous recreational activity is one that
involves a significant risk of physical harm.
Section 5L states that a person is not liable in negligence
for harm suffered due to the materialisation of an obvious
risk of a dangerous recreational activity – whether the
plaintiff was aware of the risk or not.
In line with the calls for change discussed above, changes
were made to the law regarding risk warnings and
exclusion clauses in contracts.
Section 5M deals with risk warnings. A person does not
owe a duty of care to someone engaging in a recreational
activity if the risk of the activity was the subject of a risk
warning to that participant. A risk warning must be given
in a manner that is reasonably likely to result in people
being warned of the risk before engaging in the activity. It
is not necessary to establish, however, that the person
received or understood the warning – or even that they
were capable of receiving or understanding it. Risk
warnings can be given orally or in writing, for instance, by
means of a sign. They need not be specific to the
16
HOT TOPICS 51 > Personal injury
particular risk. Rather, they can be a general warning of
risks that include the particular risk concerned, as long as
they warn of the general nature of the particular risk.
According to the section, there are some situations where
defendants cannot rely on risk warnings. These are where:
> the person who suffered harm was an incapable person
(unless they were under the control of or accompanied
by someone else who received the risk warning, or the
warning was to a parent of the incapable person)
> the warning was not given by or on behalf of the
defendant or the occupier of the premises
> there was a contravention of safety laws
> the warning was contradicted by any representation as
to risk made by or on behalf of the defendant
> the defendant had required the plaintiff to engage in
the recreational activity.
Section 5N deals with waiver of contractual duties of care
for recreational activities. It states that a contract for the
supply of a recreation service may ‘exclude, restrict or
modify any liability to which this Division applies that
results from breach of an express or implied warranty that
the services will be rendered with reasonable care and skill’.
It goes on to say that nothing in the written law of New
South Wales renders such a contract void or unenforceable,
or authorises a court to refuse to enforce the term, declare
it void or vary it. The section does not apply, however,
where there have been breaches of safety regulations.
This change acts in conjunction with an amendment
made to the Trade Practices Act 1974 (Cth). Section 74(1)
of that Act has long created an implied warranty that
services will be rendered with due care and skill, and
section 68 voids any contract terms that exclude this
warranty. However, a new section now deals specifically
with recreational services. Section 68B allows
corporations who provide recreational services to insert
clauses that limit their liability for death or personal
injury arising from the supply of those services.
The new laws appear to be very restrictive. Undoubtedly,
future cases will turn on the wording of the risk warnings
and the exclusion clauses.
Public authorities
Public authorities include the Crown, government
departments, local councils, and public and local
authorities constituted by legislation. Their
responsibilities are broad, and, particularly in the
case of local councils, encompass a wide range
of services into which the general public comes
into daily contact.
As an aside, it is worth noting that the Civil Liability
Regulation 2003 (NSW) regards private schools to be
public authorities for the purposes of the Civil Liability
Act 2002 (NSW). This means the same considerations
apply to public and private schools when it comes to
liability for negligence.
WIDE EXPOSURE
Although this discussion generally applies to all public
authorities, it focuses on local councils. This is because
the breadth of their activities and responsibilities tends to
give them the widest potential for exposure. Many of the
facilities provided by local councils are intended for
recreational and sporting activities. These include
swimming pools, sporting grounds, playgrounds and
community centres. Leisure and sporting activities by
their nature contain more risks than other activities, thus
increasing a council’s exposure to liability for personal
injury actions.
In addition, councils are responsible for maintaining
infrastructure such as roads and footpaths. These are
continuously used by members of the public – yet again
exposing councils to a high potential for liability for
negligence causing personal injury.
Looking at roads and footpaths in particular, in the past,
a highway authority (which can be a local council) did
not incur civil liability ‘… by reason of any neglect on its
image unavailable
Public authorities
17
HOT TIP
Malfeasance is a
wrongdoing that is
unlawful, it can be either a
crime or a tort for instance,
trespass. Misfeasance in
negligence is the doing of
something to a standard
that falls short of the
required standard. Road
authorities have always
been liable for misfeasance
if they actually created
dangers on the road.
Nonfeasance is the failure
to carry out a duty. The
nonfeasance rule
traditionally protected road
authorities from actions in
negligence regarding a
failure to either maintain or
repair the roads. It dates
back to the Middle Ages
when roads were privately
owned. The distinction
between nonfeasance and
misfeasance has been
disputed in many cases.
Distinctions were made
based on the facts of
cases, so over time the
so-called ‘highway rule’
eroded.
part to construct, repair or
maintain a road or other highway’: Buckle v Bayswater Road
Board 5. This principle was
known as the ‘highway rule’.
But a recent High Court case
abolished this immunity. In
Brodie v Singleton Shire Council 6
a bridge collapsed when a heavy
truck drove over it. The court
removed the highway rule and
replaced it with the ordinary
principles of negligence. The
court criticised the rule because
it had developed in a way that
gave rise to ‘illusory distinc­
tions’. They were referring to
the differences between non­
feasance and misfeasance, and
their consequences. The High
Court stated that this distinc­
tion provided no incentive for
highway authorities to take
action to repair damage.
CHANGES TO THE LAW
The issue of public authorities’
duties was one of the areas dealt
with by the Stage 2 reforms. The
broad range of duties of public
authorities was recognised, and
the limited resources available to them to perform such
duties. The reforms aimed to ensure that the existence of
a power does not necessarily imply a duty to exercise
that power; except where there is a statutory obligation
to do so.
The Civil Liability Amendment (Personal Responsibility)
Act 2002 (NSW) added Part 5 to the Civil Liability Act
2002 (NSW). Section 42 states that the following
principles apply in determining whether a public
authority has a duty of care or has breached a duty of care:
> the functions required to be exercised are limited by the
financial and other resources reasonably available to the
authority for the purpose of exercising those functions
> the general allocation of those resources by the
authority is not open to challenge
> the authority can rely on evidence of its compliance
with general procedures and standards as evidence of
the proper exercise of its functions.
Under section 43, an act or omission by an authority does
not constitute a breach of statutory duty unless it was ‘so
unreasonable that no authority having the functions of
the authority in question could properly consider the act
or omission to be a reasonable exercise of its functions’.
A public authority is not liable for a failure to prohibit or
regulate an activity unless it could have been compelled to
by a court: see section 44.
For example, an authority that does not use its regulatory
authority to close a fishery would not be liable unless the
courts could have compelled them to exercise that
function.
The nonfeasance rule for highway authorities is now
specifically covered by the legislation, which uses the term
‘roads authority’. Section 45 states that a roads authority
is not liable for harm arising from a failure to carry out
road work or to consider carrying out road work, unless
at the time it had actual knowledge of the particular risk
that resulted in the harm. If a roads authority did know
about a particular risk, it will still be able to rely on the
general protection of being able to allocate resources
without challenge.
Similarly, section 46 holds that the fact that a public
authority exercises or decides to exercise a function does
not of itself indicate a duty to exercise that function. Nor
does it indicate that the function should be exercised in
particular circumstances or in a particular way.
The Civil Liability Amendment Act 2003 (NSW) added a
further amendment. Section 43A relates to proceedings
against an authority based on the exercise of, or the failure
to exercise, its special statutory powers. These are powers
conferred by or under a statute, of the kind that are
generally not authorised without specific statutory
authority. The effect of this section is substantially similar
to s 43, and says there is no civil liability unless the act or
omission is ‘so unreasonable’ that no authority having
such powers could properly consider it to be a reasonable
exercise of (or a failure to exercise) such powers.
[Some of the information in this section is drawn from
the 2nd Reading Speech to the Civil Liability
Amendment (Personal Responsibility) Bill, Bob Carr,
23/10/2002. Available at www.parliament.nsw.gov.au]
> the functions required to be exercised are determined
by reference to its broad range of activities, and not just
the matter to which the proceedings relate
5. (1936) 57 CLR 259, Justice Dixon; http://www.austlii.edu.au/au/cases/cth/high_ct/57clr259.html
6. [2001] HCA 29; http://www.austlii.edu.au/au/cases/cth/high_ct/2001/29.html
18
HOT TOPICS 51 > Personal injury
CASES ON COUNCILS’ DUTY OF CARE
Councils have no duty to warn of a defect, for example in a footpath, if the defect is obvious to an ordinary user of
the path. If they have notice of a defect that is not obvious, or have created a hazard by, for example, commencing
repair work they have a duty to adequately warn pedestrians of the hazard. Many so-called ‘trip and fall’ cases,
which form the bulk of legal action against councils, look at whether the risk is obvious and whether the warning is
adequate – three examples follow. The fourth case, Timbs illustrates councils’ duty of care in relation to making
statements that are relied on because of their position of authority.
1. NEWCASTLE CITY COUNCIL v LINDSAY
[2004] NSWCA 198
image unavailable
An elderly woman fell after tripping on a slab in a
pathway, which had been raised by tree roots.
Council had partly repaired the defect at the time.
The Court of Appeal overturned the District
Court’s decision in favour of the injured woman.
The court decided that the defect was obvious,
and that Newcastle Council had not increased the
risk posed by failing to mark or protect the defect.
They affirmed that pedestrians have a duty to
keep a proper lookout for obvious and common
risks. Text of judgment available at
http://www.austlii.edu.au/au/cases/nsw/
NSWCA/2004/198.html
2. PENRITH CITY COUNCIL v PARKS [2004]
NSWCA 201
As with the previous case, this case concerned a
fall on a footpath. Council had identified the
defect and had undertaken partial repair by
cutting the path into two sections. This created a
dangerous situation by leaving two unstable
pieces of concrete. This defect was not
considered to be obvious to the ordinary
pedestrian. As council had created the risk, they
had a duty to warn pedestrians.
http://www.austlii.edu.au/au/cases/nsw/
NSWCA/2004/201.html
3. RYDE CITY COUNCIL v SALEH [2004] NSWCA 219
In another ‘trip and fall’ case, the Court of Appeal again overturned a decision awarding damages to the injured
party. The toe of Mrs Saleh’s shoe caught on a section of footpath that was raised 20mm. The judges’ decision
was that uneven pathways are an obvious risk and that pedestrians are best able to protect themselves by
keeping a lookout.
http://www.austlii.edu.au/au/cases/nsw/NSWCA/2004/219.html
4. TIMBS v SHOALHAVEN CITY COUNCIL [2004] NSWCA 81
Mr Timbs sought council permission to remove a large gum tree near his house. A council officer came to inspect
the tree and refused permission to remove the tree, saying it was ‘safe and sound’. During a storm the tree fell
onto Mr Timb’s house, resulting in his death. Further inspection showed that the roots were decayed, but this was
not easily seen. Mrs Timbs sued the council for negligence, and council were found to be liable for economic loss.
When the council officer stated that the tree was safe, the Timbs relied on his opinion because of his position, and
did not cut down the tree. The council officer did not have to provide expert opinion, and could have suggested
that the Timbs obtain independent advice about the condition of the tree.
http://www.austlii.edu.au/au/cases/nsw/NSWCA/2004/81.html
Public authorities
19
Medical
negligence
As part of the wave of law reform, changes were
made to negligence law regarding all profes­
sionals. The changes apply equally to doctors,
lawyers, accountants, engineers and so on – but
the discussion regarding doctors received the
most attention, and was arguably the centre of
the most heated debates. It is also the area that
touches most directly on personal injury. This
section focuses on the law of negligence as it
relates to the medical profession.
In the section headed ‘Public Liability Crisis’ we looked at
the problems associated with public liability insurance
premium hikes. This crisis had direct parallels in the
professional indemnity insurance industry, and most
particularly in the case of medical indemnity insurance.
Premiums for medical indemnity insurance kept rising to
the point that many medical practitioners – especially
surgeons – threatened to withdraw their services.
The causes of the rise in premiums mirror those that led
to the public liability crisis. That is, increased litigation
and larger payouts awarded by courts have been blamed
for the rise in medical indemnity insurance premiums. In
addition, the largest medical defence organisation, United
Medical Protection, collapsed. Contrary to popular belief,
medical defence organisations are not actually insurance
companies. They have a discretion as to whether or not
they will indemnify their members. As they are not
insurers, they are not subject to prudential regulation by
the Australian Prudential Regulation Authority (APRA),
and so may not have made sufficient provision for claims
nor maintained sufficient reserves.
The Commonwealth government stepped in with a
rescue plan, supporting medical defence organisations
and making co-payments for large claims. Even so, the
need for tort law reform was widely discussed. It was a
component in the New South Wales government’s Stage
2 reforms on personal injury law.
THE LAW BEFORE THE REFORMS
As explained in the overview, a finding of negligence
requires three things:
> the defendant owed the plaintiff a duty of care
> that duty was breached
> the breach caused the injury that is the subject of the
dispute.
Applying these general principles to the area of medical
negligence, there is no dispute that a doctor owes his or
her patient a duty of care. Most cases of medical
negligence turn on whether the doctor breached that duty
by failing to take reasonable care.
Traditionally, doctors were not said to have breached their
duty of care if they acted in accordance with a practice
accepted by their peers – that is, by a body of practitioners
skilled in that particular field. This is known as the
‘Bolam’ test, after an English case: Bolam v Friern Hospital
Management Committee (1957) 1 WLR 5827. This case
was accepted and followed in Australia for some time.
The law in Australia changed, however, due to the
groundbreaking High Court case Rogers v Whitaker
(1992) 175 CLR 479: see case study. The essence of the
change lay in who it was that could determine that a
practitioner was negligent. Under the Bolam test, a
practitioner’s peers set the standard. But under Rogers v
Whitaker, the court replaced this with an objective test to
be determined by the court itself. In other words, the
court had to decide whether a reasonable doctor,
exercising reasonable care and skill, would have acted in
that way given the available material. So if a court decided
that a practitioner was acting unreasonably, the
practitioner would be liable even if he or she followed a
practice accepted as proper at that time by the medical
profession.
In Rogers v Whitaker, the case turned specifically on a
practitioner’s failure to warn of the risks involved in
undertaking treatment. A later case, Naxakis v Western
General Hospital took the objective test even further8.
7. Available at http://oxcheps.new.ox.ac.uk/casebook/cases.html Scroll down the alphabetical list.
8. [1999] HCA 22 available at http://www.austlii.edu.au/au/cases/cth/HCA/1999/22.html
20
HOT TOPICS 51 > Personal injury
Naxakis extended the court-determined objective test to
negligent diagnosis and treatment. This case involved a
schoolboy who had been hit on the head with a school
bag in a fight with another child. The victim was treated
in hospital and sent home, only to collapse a couple of
days later. He was then found to have a major intracranial
bleed from a burst aneurysm. The bursting of the
aneurysm caused permanent impairment. There was
evidence that, if an angiogram had been undertaken
before the hospital release, the aneurysm might have been
identified and treated.
Justice Gaudron stated ‘… it was for the jury to form
their own conclusion as to whether it was reasonable for
one or more of those steps to be taken. It was not for the
expert medical witnesses to say whether those steps were
or were not reasonable. Much less was it for them to say,
as they were frequently asked, whether, in their opinion,
the hospital and Mr Jensen were negligent in failing to
take them.’
ARGUMENTS FOR AND AGAINST REFORM
Medical practitioners have called for a return to the
Bolam test – that is, they maintain that the standard of
care should be determined by their peers rather than by a
court. This would mean that if a practitioner acts in
CASE STUDY
ROGERS v WHITAKER
The plaintiff had been blind in her right eye since sustaining
a childhood injury. Nearly 40 years later, she agreed to
surgery with the aim of restoring some sight to that eye and
improving its appearance by removing scar tissue. The
operation was not a success. It did not result in improved
vision to the right eye. Instead, it caused an inflammation in
her left eye as a result of sympathetic ophthalmia (which
generally has a one in 14,000 chance of occurring). This
ultimately led to loss of sight in her left eye. As her right eye
was not improved, she was left almost totally blind.
The issue was not that the surgeon had failed to conduct the
operation with the required care and skill. Rather, the case
turned on the failure to warn the patient of the risk of
sympathetic ophthalmia.
The trial judge in the Supreme Court of New South Wales
faced competing evidence from medical practitioners. One
body stated it would not warn of the risk, another stated it
would. The trial judge found for the plaintiff. The defendants
appealed, without success, to the Court of Appeal and then
to the High Court.
accordance with a practice accepted by a reasonable body
of medical opinion, it would be hard to find them liable
for negligence.
The Australian Plaintiff Lawyers Association (APLA) –
now known as the Australian Lawyers Alliance – argued
against such reform. They warned that such an approach
would insulate doctors and other professionals from the
consequences of negligence, and could result in a serious
decline in the quality and reliability of professional
services. APLA pointed out that professionals are highly
trained. As such, members of the public are entitled to
expect that they will exercise reasonable care in the
performance of their services.
The Law Council of Australia also voiced similar
concerns. It suggested that if the Bolam test is
reintroduced, it should be limited. That is, the standard
of care should be that which is established by a
responsible body of medical practitioners in the field,
unless there are cogent reasons to depart from it or it can
be shown that the practice is unreasonable or illogical.
THE NEW LAWS
The Civil Liability Amendment (Personal Responsibility)
Act 2002 (NSW) adds some provisions to the Civil
Liability Act 2002 (NSW). Section 5O sets the standard
of care for professionals. Note it refers to professionals in
general, not just medical practitioners.
The section states that a professional does not incur a
liability in negligence if they acted in a manner that, at
the time the service was provided, was ‘widely accepted in
Australia by peer professional opinion as competent
professional practice’. The fact that there are differing
peer professional opinions widely accepted in Australia
does not prevent any one or more of those opinions being
relied on. It also states that the peer professional opinion
does not need to be universally accepted in order to be
considered widely accepted.
There is a proviso, however. Peer professional opinion
cannot be relied on if the court considers that the opinion
is irrational. The test is therefore a return to the Bolam
test but with a limitation that leaves it open for a court to
conclude that the opinion relied upon was irrational.
Section 5P of the Act then goes on to say that the
provisions do not apply to liability arising from the duty
to warn of risks or provide information in respect of the
risk of death or injury associated with the provision of a
professional service.
The High Court found that the doctor was in breach of his
duty of care in not warning of the risk of sympathetic
ophthalmia. It stated that the Bolam test could not be applied
to the provision of information, and noted that a patient’s
consent requires that sufficient information be given.
Available at www.austlii.edu.au/au/cases/cth/HCA/
1992/58.html
Medical negligence
21
Conclusion:
Are the reforms
working?
Approximately two years have passed since the
bulk of the reforms came into operation. So the
question must now be asked: are the reforms
working?
The original impetus for the reforms arose from the
public liability insurance crisis. As stated earlier under
the heading ‘The public liability crisis’, insurance
premiums were rising rapidly, with the result that public
liability insurance often became unaffordable and in
some cases unavailable.
Has the problem been solved by the law reforms? In
other words, what has happened to the size and number
of claims and payouts? Have insurance companies
realised a drop in their costs, and have they passed the
benefit to their customers in the form of more affordable
insurance premiums?
THE IMPACT ON INSURANCE PREMIUMS
The Federal Government asked the Australian Com­
petition and Consumer Commission (ACCC) to monitor
premiums in public liability and professional indemnity
insurance in order to assess the impact of the reforms.
The ACCC published the results of their findings in their
third monitoring report, dated July 2004. The study
found that, as of 31 December 2003, most insurers had
begun to notice a drop in the frequency of claims.
However, most of those insurers thought that factors other
than the reforms had led to the drop. This is because they
had previously made changes to the type of risk they
insured against – moving away from the typically high
frequency small claims type of insurance business. In
addition, some insurers had increased their excess levels,
which again had the effect of reducing the number of
small claims. Because the number of small claims had
declined, the average size of claims had actually increased.
The insurers were also asked what they expected the
short, medium and long term impact of the reforms
would be on costs and premiums.
22
HOT TOPICS 51 > Personal injury
Generally, insurers expected premium rises to be
constrained in 2004 due to the impact of reforms.
Without the reforms, the expectation would have been
that premiums would have risen higher. As it turned out,
some insurers had lower than expected premium increases
that year, caused mainly by lower than expected expenses.
Other insurers had higher than expected premium rises,
due to a larger than anticipated rise in claims costs.
It takes some time for changes to the law to have a
definitive and identifiable impact. This is due to the long­
tailed nature of public liability insurance. That is, there
can be a long gap between when a policy is taken out and
when the financial outcome of a claim is finally realised
(this is discussed in more depth in the ‘Overview’). Most
insurers stated that they expected the reforms to have an
impact on claims costs and premiums over the medium
term, but this is yet to be seen.
But what of the long term? The ACCC study found a
level of uncertainty existed among insurers. Several
insurers expressed concerns that the reforms may be
eroded in the long term by plaintiffs circumventing the
intent of the reforms.
HAVE THE REFORMS GONE TOO FAR?
Various commentators express concerns that the reforms
have gone too far. Statistics published by the Productivity
Commission show that there has been an approximate
drop of 30 per cent in the number of civil cases in
Australian courts in 2002-03 at the District/County
Court level. In New South Wales, the drop in District
Court cases over that time was 56 per cent. (Source:
(2003) 20 (3) Policy 31-2.)
The threshold for general damages has received a large
share of the criticism. General damages refers to non­
economic loss such as pain and suffering and the loss of
enjoyment of life. As a reminder, in New South Wales the
general damages threshold is 15 per cent, the most
onerous in Australia. The effect of the threshold is that
general damages are not to be awarded if the impairment
is considered to be less than 15 per cent of a most extreme
case. In other words, many smaller claims are
automatically excluded. Many lawyers consider this to be
unsatisfactory. They argue that, in effect, it is giving
people the right to be negligent and injure someone up to
a given level before they become liable.
‘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.’
Justice Spigelman, ‘The new liability structure in
Australia’, Sydney, 14 September 2004. Available
at http://www.lawcouncil.asn.au/shared/
2404422274
A great deal will depend on how courts will apply the new
laws. They might apply them strictly, in accordance with
the ‘moderation in verdicts’ principle that underlies the
Civil Liability Act 2002 (NSW). Or they might be more
flexible in their interpretation of the law.
So far, there has been a mixture of both stances.
Penrith City Council v Parks 9 concerned a woman who
tripped and fell on a concrete footpath that the council
was responsible to maintain (see p19). The plaintiff’s injury
was assessed at 28 per cent of a most extreme case at the
initial trial, but this was reduced to 15 per cent on appeal
to the New South Wales Court of Appeal. This might
indicate a trend towards lower compensation awards.
Two other cases also illustrate a more stringent approach.
The cases Wyong Shire Council v Vairy and Mulligan v
Coffs Harbour City Council 10 were heard separately but
the court handed down a single judgment. Both cases
involved diving injuries that resulted in quadriplegia.
There were no warning signs or fences preventing diving.
The New South Wales Court of Appeal held that the
defendants had not acted negligently and that the risks
were obvious. It posed the rhetorical question: ‘… should
not a person who engages with the natural conditions of
the ocean or a tidal creek for the purposes of recreation
accept often inherent and obvious risks of injury
associated with his or her activities as part of the price of
enjoyment of the activity undertaken?’ An appeal against
this decision is currently before the High Court.
But then again, a recent decision regarding a plaintiff who
was injured after falling from a moving walkway shows
that not all cases are being considered so restrictively. In
Woolworths Ltd & Anor v Lawlor 11, the New South Wales
Court of Appeal applied a broad construction of a key
word in the legislation. The question concerned s 15(2)(b)
of the Civil Liability Act, relating to damages for gratuitous
attendant care. The word ‘solely’ (as in the need has arisen
solely because of the injury) was given a broad meaning,
with the result being in the plaintiff ’s favour.
It takes time for cases to
move through the court
system, and undoubtedly
cases will be appearing
before the High Court soon
that will further clarify the
situation. It is still too early
to identify the long-term
effect of the reforms.
image unavailable
Whether the reforms have
gone too far is really a matter
of personal opinion. Whether
insurance premiums will
finally drop, and whether
the courts will eventually
erode or uphold the strict
principles of the new laws
still remains to be seen.
9. [2004] NSWCA 201 available at http://www.austlii.edu.au/au/cases/nsw/NSWCA/2004/201.html
10. [2004] NSWCA 247 available at http://www.austlii.edu.au/au/cases/nsw/NSWCA/2004/247.html
11. [2004] NSWCA 209 available at http://www.austlii.edu.au/au/cases/nsw/NSWCA/2004/209.html
Conclusion: Are the reforms working?
23
Contacts & further reading
The Legal Information Access Centre (LIAC) can
help you find more information about the law,
including legislation and cases. The service is
free and confidential.
The LIAC Pathway provides an approach to finding more
information on an area of the law, structured from simple
to complex. The resources are up-to-date and in plain
English: http://liac.sl.nsw.gov.au/pathway For further
contact details, see the back cover.
Parliament of New South Wales
www.parliament.nsw.gov.au
Website has information about bills, reviews and
enquiries. Go to ‘Information resources’ then ‘Research
papers’ for the following papers:
Public Liability, Briefing Paper 7/2002, Roza Lozusic,
Parliament of New South Wales.
Public Liability – an Update, Briefing Paper 11/2002,
Roza Lozusic, Parliament of New South Wales.
Parliament of Australia – Parliamentary Library
Economics Internet Resources
Public Liability Insurance
www.aph.gov.au/library/intguide/ECON/publicliability.
htm contains links to other publications, including:
Liability Insurance Premium Increases: Causes and Possible
Government Responses
Briefing Paper, 19 March 2002, David Kehl,
Department of the Parliamentary Library, Parliament of
Australia.
Available at
www.aph.gov.au/library/pubs/CIB/index.htm click on
2001-02 and scroll down to number 10.
The Law Handbook
9th ed., 2004. Redfern Legal Centre Publishing –
available in all public libraries. Includes plain language
information on accidents and compensation, insurance
and community organisations.
24
HOT TOPICS 51 > Personal injury
Australian Business Law
CCH, 2005
See Chapter 4 ‘Tort in the Business World’ includes lots
of case examples. Available in all LIAC libraries – new
edition available each year. Check the LIAC website
www.liac.sl.nsw.gov.au for your nearest LIAC library.
Australian Competition and Consumer
Commission
www.accc.gov.au
The ACCC is responsible for monitoring costs and
premiums in the public liability insurance and
professional indemnity insurance markets. Monitoring
reports are published on their website every 6 months,
the most recent to date being:
Public Liability and Professional Indemnity Insurance,
Fourth monitoring report, 15 February 2005, http://
www.accc.gov.au/content/index.phtml/itemId/582500
Is Injury Compensation Excessive?
by Peter Abelson; (2004) 15 (7) Australian Product
Liability 97-104 Available at
http://www.appliedeconomics.com.au/pubs/papers/pa04
_injury.htm
Plaintiffs’ Rights of Recovery Not Extinguished
by Dr John Azzi; (2004) 42 (8) Law Society Journal 56­
59
The Foresight Saga: Risk, Litigiousness and
Negligence Law Reforms
by Caspar Conde; (2004) 20 (3) Policy 28-34 Available
at http://www.cis.org.au/policy/spring04/spring04­
5.htm