Personal Injury Claims Overview
CONTENTS
Introduction
The South Australian Government’s first stage in the reform process
Quantum-related issues
One category of claim – Claims arising out of recreational activities
The South Australian Government’s second stage in the reform process
Changes to liability principles
Duty and standard of care
Causation
Professional liability
Contributory negligence
Assumption of risk
Mental Harm
Categories of Claim (the SA Government’s second stage in the reform process, cont.)
Occupiers liability
Motor vehicle accidents
Workplace accidents
Road authorities
Liability for criminal conduct
Limitation periods
Conclusion
Introduction
All Australian jurisdictions undertook a process of reform to their personal injury legislation after the emergence of what was described as the “insurance crisis” in 2002. The nature of the changes in some states was regarded going much further that that in others.
This article summarises and outlines the major legislative changes that occurred in South Australia. It also summarises some of the main features that apply in South Australia in the areas that commonly come under the umbrella of general insurance.
Generally speaking, the South Australian amendments provide a reasonable amount of protection to plaintiffs and are not as far reaching as the reforms that occurred in Queensland, New South Wales or Victoria.
The reforms to the law of negligence in South Australia occurred in two stages.
The South Australian Government’s first stage in the reform process
The first stage of the insurance reforms in South Australia for general insurance occurred in late 2002. The Government’s objective was to attempt to ensure that public liability insurance (in particular) remained accessible and available to consumers.
On 1 December 2002, amendments to existing legislation came into operation as a result of the Wrongs (Liability and Damages for Personal Injury) Amendment Act, which impacted on personal injury claims, both in relation to issues of liability and quantum.
Quantum-related issues
Section 35A of the Wrongs Act was repealed and replaced.
Provisions that previously related only to motor accident claims were modified and extended so that they applied to all types of claims for personal injury. Whereas previously the position for personal injury claims varied depending on the nature of the claim, since this first round of reforms there has been uniformity in the way different types of claims are dealt with is so far as calculating the amount of damages is concerned. As such, in the event that a plaintiff is able to establish a liability, the assessment of damages in personal injury cases is to be dealt with uniformly, no matter how the claim arose (motor vehicle accident, occupiers liability and the like).
One important change was for the assessment of non-economic loss. Thresholds that previously applied since 1987 only for motor accident cases under section 35A of the then Wrongs Act (now the Civil Liability Act)
Section 52 provides that damages for non-economic loss are to be assessed in accordance with a scale from zero to 60. As it had been in existence since 1987 (for motor accident claims), this scale was not new. Accordingly, the law surrounding its interpretation and application was well established. As such the changes worked well in the sense that parties could reasonably predict where a certain injury or injuries would fall between zero and 60. Some examples of decisions were that whiplash had been held to be worth two on the scale; significant facial scarring and chipped teeth, 10; post traumatic stress disorder that greatly affected the ability to lead a normal life, 20; and the amputation of a hand and leg, 40.
One of the effects of this change was that for less serious injuries, claimants’ entitlements for non-economic loss were reduced when compared to the pre-2002 position, however for the more seriously injured, claimants’ entitlements are significantly increased.
The maximum payment for non-economic loss before the changes came into operation on the applicable sale in later 2002 was just over $100,000.
A specific dollar value per point is set for the multiplier. This dollar value is set for each 10-point section and increases incrementally at the commencement of the next 10-point threshold. A table setting out an overview of changes to entitlements at 10 point intervals is set out below.
Overview of non-economic loss entitlement in personal injury claims
|
|
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
|
10 |
$11,500 |
$11,920 |
$12,210 |
$12,570 |
$13,060 |
$13,240 |
|
20 |
$34,500 |
$35,750 |
$36,640 |
$37,720 |
$39,170 |
$39,710 |
|
30 |
$69,000 |
$71510 |
$73,280 |
$75,440 |
$78,340 |
$79,430 |
|
40 |
$115,000 |
$119,180 |
$122,130 |
$125,740 |
$130,570 |
$132,380 |
|
50 |
$172,500 |
$178,770 |
$183,200 |
$188,610 |
$195,860 |
$198,570 |
|
60 |
$241,500 |
$250,280 |
$256,480 |
$264,050 |
$274,200 |
$277,990 |
Restrictions were also introduced affecting the amount of damages that could be awarded in any personal injury claim. Guidelines were set for when these damages are to be awarded. For example:
- caps and thresholds were introduced for personal injury damages claims; for example, there is no entitlement for loss of earning capacity for the first week of incapacity; damages for future economic loss have been capped (adjusted annually per CPI)
[5] (among others) - damages for nervous shock could only be awarded to a person injured in the accident or present at the scene; or to a parent, child or spouse of the victim, and
- exemplary damages can be awarded against a person who is notified of a personal injury claim and who, knowing that the claimant might die before resolution of the claim, unreasonably delays resolution of the claim until after the claimant’s death.
One category of claim – Claims arising out of recreational activities
The Recreational Services (Limitation of Liability) Act 2002 was assented to on 5 September 2002 and came into operation on 1 July 2003.
Its intention was aimed to address the problem for individuals, small businesses and not-for-profit organisations that provide recreational services throughout South Australia in obtaining affordable liability insurance.
This Act enables providers of extreme or dangerous sports or events to avoid liability for injury if they have approved Code in place (on condition the Code is adhered to when the injured person undertakes the activity). The Act has not been able to achieve its aims in practice as the requirements for registering the code have proved to be quite onerous for providers. Accordingly in the later part of 2008, a new system has now been proposed to manage the liability of recreational service providers, the Civil Liability (Recreational Services) Amendment Bill 2008, (the Bill). If successful, it will repeal the Recreational Services (Limitation of Liability) Act 2002 and amend the Fair Trading Act 1987 to allow providers to limit their liability for personal injury and death through the use of waivers. As at November 2008 the Bill is before Parliament.
The South Australian Government’s second stage in the reform process
In 2002 the Commonwealth Government appointed a panel of experts, chaired by the Honourable Justice David Ipp, to review the law of negligence as it related to claims for personal injury and death in Australia. The result was the Ipp report, the conclusions of which led to significant changes in the law in all Australian jurisdictions.
On 1 May 2004 the Law Reform (Ipp Recommendations) Act 2004 was proclaimed. It amended the law as it related to torts (civil wrongs). This amending Act related specifically to the following pieces of legislation:
- the Wrongs Act 1936 (which as mentioned was renamed the Civil Liability Act);
- the Motor Vehicles Act 1959; and
- the Limitations of Actions Act 1936.
Not only was the Wrongs Act renamed the Civil Liability Act, but it was also remodelled so that it applies to negligence actions in cases where negligence includes a “failure to exercise reasonable care and skill, and includes a breach of a tortious, contractual or statutory duty of care.”
These amendments did not operate retrospectively. Under the Civil Liability Act, the right to damages for past claims is preserved unchanged in accordance with the earlier damages regime. However, injuries from the date of proclamation of the legislation are covered by the law as amended in the Civil Liability Act.
In theory, Australian jurisdictions were meant to enact the reforms proposed by the Ipp Review (the Law Reform (Ipp Recommendations) Act 2004, the “Ipp Act”) so as to give uniform legislation Australia-wide. This did not occur and the South Australian amendments do not mirror amendments that have been made in other jurisdictions.
Changes to liability principles
Duty and standard of care
Part 6 of the Civil Liability Act deals with amendments to the law of negligence. Sections 31 and 32 deal with when a duty of care is owed and the standard of care required.
Important changes were made to the manner of identifying the appropriate standard of care, intoxication and the circumstances in which a failure to take precautions against a risk of harm will be regarding as a breach of the standard of care.
When determining whether a defendant was negligent the standard of care is that of a reasonable person in the defendant’s position who was in possession of all the information that the defendant either had or should have had at the time of the incident. As this involves an assessment of both objective and subjective factors, the applicable standard can only be determined by reference to the facts in each case.
In so far as intoxication is concerned, unless prescription drugs taken in accordance with medical advice caused the person to become intoxicated, a defendant’s state of intoxication is to be ignored. If the defendant is intoxicated by such circumstances then a lower standard of care applies. The standard is to be assessed against a reasonable person suffering that intoxication.
Section 32 provides that a person will not be negligent if they fail to take precautions against a risk of harm unless:
- the risk was reasonably foreseeable; and
- the risk was not insignificant; and
- a reasonable person in the same position would have taken precautions.
This provision means that just because there is foreseeable risk, negligence will not necessarily attach. The section also sets out factors to be considered in determining whether a reasonable person would have taken precautions. Among other relevant factors, these include:
- the probability that the harm would occur if the precautions were not taken;
- the likely seriousness of the harm;
- the burden of taking precautions to avoid the risk of harm, and
- the social utility of the activity that creates the risk of harm.
Causation
Sections 34 and 35 deal with causation.
Section 34 provides that two considerations are to be taken into account when assessing whether an individual’s failure to exercise reasonable care and skill caused the harm complained of. The first is known as ‘factual causation’. This requires that the negligence was a necessary condition of the occurrence of the harm. The second consideration is referred to as the ‘scope of liability’. This requires that it is appropriate for the scope of the negligent person’s liability to extend to the harm so caused.
The manner in which these factors are interpreted will no doubt give rise to interesting legal argument. However, when determining the scope of liability, section 34(3) requires the court to consider, among other things, whether or not and why responsibility for the harm should be imposed on the negligent party.
Professional liability
Sections 40 deals with the standard of care expected of a professional.
The standard to be applied by a court in determining whether the defendant who holds himself out as possessing a particular skill (a professional), acted with due care and skill is to be determined by reference to:
(a) what could reasonably be expected of a person possessing that skill; and
(b) the relevant circumstances as at the date of the alleged negligence and not a later date.
It would appear that section 40 merely restates the common law (from Rogers v Whitaker
Section 41 creates a new defence to a negligence claim against professionals. The section reads as follows:
“(1) A person who provides a professional service incurs no liability in negligence arising from the service if it is established that the provider acted in a manner that (at the time the service was provided) was widely accepted in Australia by members of the same profession as competent professional practice.
(2) However, professional opinion cannot be relied on for the purposes of this section if the court considers that the opinion is irrational.
(3) The fact that there are differing professional opinions widely accepted in Australia by members of the same profession does not prevent any one or more (or all) of those opinions being relied on for the purpose of this section.
(4) Professional opinion does not have to be universally accepted to be considered widely accepted.
(5) This section does not apply to liability arising in connection with the giving of (or the failure to give) a warning, advice or other information in respect of a risk of death of or injury associated with the provision of a health care service.”
Section 41 takes the position further than the previous common law position. The effect of section 41 of the Civil Liability Act is to introduce a modified Bolam rule (a strict application of the Bolam rule requires a Court to defer to expert opinion of a responsible body. See Bolam v Friern Hospital Management Committee
However the departure from a strict application of the Bolam rule is evident in section 41(2) when it provides that “professional opinion cannot be relied on … if the court considers that the opinion is irrational”. So, provided that a Court does not find such an opinion irrational, section 41 creates a defence to negligence if the defendant can prove, on the balance of probabilities, that their actions are widely accepted by a substantial body of professional opinion.
The legislative use of the word “irrational” was cause for concern when it Bill was debated, as the term had no legal or judicial connotation
Contributory negligence
Section 44 provides that the principles that apply in determining whether a defendant has been negligent also apply when determining whether a plaintiff has been guilty of contributory negligent.
Pursuant to section 46 of the Act, there is to be a presumption of contributory negligence where the injured person was intoxicated, other than by prescription medication. In these circumstances there will be an automatic reduction in damages by at least 25%.
Assumption of risk
Division 3 of the Act creates a defence for people who fail to warn of what is described as “an obvious risk”.
Section 36 defines “obvious risk” as “a risk that, in the circumstances, would have been obvious to a reasonable person in the position of that person”. Yet again, this will require case-by-case consideration of what is an obvious risk. Snow-skiing, canyoning, base jumping, water-skiing, horse riding, swimming (in a residential pool, at the beach, in the Murray) – are these all obvious risks? To what extent should the age or the state of health of the plaintiff be taken into account in deciding whether the risk was “obvious” in the circumstances? We expect that Courts will have to consider a wide variety of factors in arriving at a decision about whether, in each case, the risk was “obvious”.
Section 38 provides that there is no duty of care owed to another person to warn of an obvious risk unless:
- the plaintiff requested the advice or information about the risk from the defendant; or
- the defendant is required to warn the plaintiff of the risk by a written law or by an code under the Recreational Services (Limitation of Liability) Act 2002; or
- the risk is a risk of death or of personal injury to the plaintiff from the provision of a health care service by the defendant.
The first limb of this section could be seen as a mere codification of the common law. The practical effect of the third limb of this section is to exclude the operation of section 38 in the case of a medical practitioner’s failure to warn on the basis that no medical risk can be obvious risk.
Section 37 provides that if a defendant raises a defence of volenti non fit injuria (Latin for no wrong is done to one who consents), in that the plaintiff voluntarily assumed the risk and the risk is deemed an obvious one, then the plaintiff will be taken to have been aware of the risk unless he or she can prove otherwise.
For the purposes of section 37, a person is aware of the risk if they are aware of the type or kind of risk, even if they are not aware of the precise nature, extent or manner of occurrence of the risk.
Mental harm
“Mental harm” is defined as impairment of a person’s mental condition.
Section 33 sets out the conditions for when a person will owe a duty to avoid causing mental harm to another. There is no longer a duty to take care to avoid causing mental harm unless a reasonable person in the defendant’s position would have foreseen that a person of normal fortitude in the plaintiff’s position might suffer a psychiatric illness. It should be noted that the term “normal fortitude” is not defined.
In the case of pure mental harm a Court is to have regard to:
- whether or not the mental harm suffered was the result of a sudden shock;
- whether a plaintiff was witness to a person being killed, injured or put in peril;
- the nature of the relationship between the plaintiff and the person killed, injured or put in peril; and
- any pre-existing relationship between the plaintiff and the defendant.
Section 53 deals with the question who is entitled to make a claim for damages as a result of mental harm. Damages can only be awarded if the injured person was:
- physically injured in the accident; or
- was present at the scene of the accident when the accident occurred, or
- a parent, spouse or child of a person killed, injured or endangered in the accident.
Section 53 also provides that damages may only be awarded for pure mental harm if the harm consists of a recognised psychiatric illness (the meaning of which is not defined). In addition, damages may only be awarded for economic loss resulting from consequential mental harm if the harm consists of a recognised psychiatric illness.
Categories of Claim (the SA Government’s second stage in the reform process, cont.)
Occupiers liability
The Civil Liability Act provides that liability issues in occupiers liability claims are to be determined in accordance with the law of negligence. In determining the standard of care of an occupier the Court is to take into account the criteria are specified in the relevant provisions of the Civil Liability Act (sections 19-22).
These factors include:
- the circumstances in which the injury occurred;
- the age of the person and the person’s ability to appreciate the danger;
- the extent to which the occupier was aware of the danger (or ought to have been aware of the danger) and the entry of persons onto the premises, and
- the measures taken to reduce, eliminate, or warn against the danger.
“Dangerous” is defined in the Act as including unsafe.
This list is not exhaustive, however it provides some insight into the factors a Court is to regard as relevant in the circumstances. A Court is also given the power to take into account any other matter it thinks relevant.
Motor vehicle accidents
The motor vehicle accident scheme is South Australia is administered by the Motor Accident Commission under the Motor Accident Commission Act 1992. Section 25 of that Act requires the Commission to establish a Compulsory Third Party Fund to be maintained as a separate fund for the Commissions’ Compulsory Third Party Business. The income from Third Party Insurance Premiums forms part of the Fund.
One of the principal purposes of the Fund is to meet third party damages claims payments.
Allianz Australia Limited is the sole claims manager for CTP business in South Australia and has been since 1 July 2003 when it took over from SGIC General Insurances.
There are some specific provisions contained in the Civil Liability Act, which are of particular relevance in relation to claims arising in motor vehicle accident cases. Some of these are set out below.
Intoxication – whether by alcohol or drugs – is of particular relevance in motor vehicle accident cases.
Under section 46(1) contributory negligence on the part of a injured person is presumed if that person was intoxicated at the time of an accident. That presumption can however be rebutted under section 46(2). For example, if the injured person is able to establish that the intoxication did not contribute to the accident. However, if the injured person is unable to rebut the section 46(1) presumption, section 46(3) then provides that damages must be reduced by a minimum of 25%.
Section 46(4) deals with a situation where the claimant is a driver of a vehicle and whose blood alcohol limit was greater than 0.15% or where the driver was so much under the influence of intoxicating liquor or a drug to be incapable of exercising effective control of the vehicle. In such a case, the minimum reduction of the plaintiff’s damages on account of contributory negligence is to be 50%.
Section 47(5) directed towards an injured person who relied on a driver who was known to be intoxicated. It provides that if the evidence establishes that the concentration of alcohol in the driver’s blood is 0.15% or more or that the driver was so much under the influence of alcohol or a drug as to be incapable of exercising effective control of the vehicle, the claimant’s entitlement to damages is to be reduced by 50%.
Intoxication is specifically defined in section 3. It states that a person is intoxicated if that person is under the influence of alcohol or a drug to the extent that the person’s capacity to exercise due care and skill is impaired. It should be noted that the requirement is not for “substantial impairment” or “significant impairment”, but simply “impaired”. This will no doubt lead to interesting issues of how this is to be applied in practice.
Section 49 states that in the event that a claimant who is 16 years of age or more at the time of the accident and was not wearing a seatbelt or a safety helmet or was not in the passenger compartment of the vehicle at the time of the accident, contributory negligence of the claimant will again be presumed. Subject to one exception, the presumption is irrebuttable. The Court then is required to apply a fixed reduction of 25% in the assessment of damages.
This presumption will not however apply if the claimant is able to establish, on the balance of probabilities, that he or she could not reasonably be expected to have avoided the risk. This will of course be a question of fact in each case.
Workplace accidents
Significant restrictions apply in South Australia for bringing common law actions for damages for personal injury as a result of injuries suffered in the workplace. Under the South Australian Workers Rehabilitation and Compensation Act 1986 a worker (employee) is precluded from bringing any action for damages against his or her employer. The only claim a worker can make against his or her employer for personal injury is a claim for compensation under that Act. Accordingly, a worker has no right to claim damages for personal injuries in the for the injuries were suffered as a result of his or her employers negligence. This rules out the vast majority of claims that otherwise would have been brought.
There is however no such preclusion if a worker suffers injuries in the course of employment that are caused by the negligence of a person other than his or her employer. In this event the worker has a right of action against the other party (who is described as “the third party wrongdoer”).
It should be remembered that in such a case the worker will also have received workers compensation; this is because the original injury would have arisen in the course of work.
If a worker has a right to bring common law damages proceedings against a third party and the Court holds that the worker has been guilty of contributory negligence in the circumstances of say 50%, the normal principles apply and the worker’s damages are reduced to that extent. In view of this factor, combined with one other, it is important for workers to carefully consider whether they should proceed with a claim for damages following work injury.
This second factor that must be borne in mind is that if a worker succeeds with a damages action against a third party wrongdoer, the worker must repay the compensation already paid from the award of damages. Obviously this is to ensure that a situation of double compensation does not arise.
In addition, the worker must also repay the compensating authority (WorkCover or a self-insured employer) the likely amount of future compensation payable (up to the limit of damages actually awarded).
If the total of the compensation already paid and the compensation likely to be paid in future exceeds the amount of damages awarded, the amount repayable to the compensating authority is limited to the amount of damages awarded. Understandably, a worker is not obliged to repay the compensating authority the estimated future compensation over and above any damages he or she is awarded.
All of this highlights the importance of carefully considering the appropriateness of pursuing such a claim. If there is likely to be a significant reduction in damages on account of a worker’s contributory negligence, it would probably be inappropriate to issue common law proceedings against the “third party wrongdoer”.
Further, an effect of the first stage of the Government’s reform package was that where a worker is entitled to damages following a workplace injury caused by the negligence of a third party, those damages are to be assessed in accordance with Part 8 (outlined in detail elsewhere in this article).
Road authorities
Section 42 of the Civil Liability Act reinstates what is known as the ‘Highway Immunity’. The Act provides that a road authority is not liable in tort for a failure to maintain, repair or renew a road or to take other action to avoid or reduce the risk of harm that results from a failure to maintain, repair or renew a road.
After the High Court eradicated the highway immunity rule in the cases of Brodie and Ghantous
Liability for criminal conduct
Sections 43(1)(a) and (b) are based on the Criminal Injuries Compensation Act 1978 and exclude any liability for damages in cases where a person sustains injuries while engaged in conduct which constitutes an indictable offence and the injured person’s conduct contributed to a risk of injury.
Limitation periods
Under the South Australian Limitations of Actions Act 1936, a three year limitation period has for many years applied to claims for actions for damages for personal injury. The three year period commences on the date on which the cause of action, usually the injuries suffered as a result of the negligent act, occurs.
Section 48 of the Act however provides the Court with a discretion to extend the time within which the proceedings can be instituted. Before a Court can proceed to exercise its discretion, it is necessary for the claimant to show that he or she ascertained facts material to his or her case.
In the past, those material facts must have been ascertained by the plaintiff either within 12 months before the limitation period expired or, if they were ascertained after the limitation period expired, the action must be instituted within 12 months after those facts were ascertain by the claimant.
Importantly however section 48 of the Limitation of Actions Act was significantly amended by section 76 of the Law Reform (Ipp Recommendations) Act 2004.
The amendments saw the insertion of sections 48(3a) and (3b). These place a focus on the facts that are to be considered material to a plaintiff’s case when seeking an extension of the limitation period.
Although section 48 provides the court with an unfettered discretion to extend time, this power now is limited to circumstances where the court is satisfied that the specific criteria have been met. The court’s discretion is subject to the overriding requirement that “in all the circumstances of the case it is just to grant an extension of time.”
Section 48(3a) provides that a fact is not to be regarded as material to a plaintiff’s case unless it forms an essential element of the plaintiff’s cause of action or it would have major significance on an assessment of the plaintiff’s loss.
On the issue of the court’s general discretion, section 48(3b) sets out the guidelines that the Court should have regard to, namely:
- the period of extension sought and, in particular, whether the passage of time has prejudiced a fair trial; and
- the desirability of bringing litigation to an end within a reasonable period and thus promoting a more certain basis for the calculation of insurance premiums; and
- the nature and extent of the plaintiff’s loss and the conduct of the parties generally; and finally,
- any other relevant factor.
These guidelines contained in section 48(3b) really only repeat the common law position identified in Brisbane South Regional Health Authority v Taylor.
Section 48(3a) is however more likely to have a greater impact on the question of whether or not an extension of time is granted. While this provides examples of material facts that might be considered “essential elements” to the plaintiff’s case, its overall scope remains to be determined by the Courts. It is however likely that we will see a reduction in number of extensions of time granted if the Courts give effect to Parliament’s intention in respect to this section.
Conclusion
As will be apparent from the summary set out above, there have been significant reforms to the law of negligence since the early part of this decade.
If however the intention of the reforms to tort law was to reduce the expenses associated with claims for negligence by diminishing the requirement to litigate, it is doubtful that the reforms have achieved that goal. As will also be apparent from our summary above, there are still numerous provisions that not only recommend, but require a case-by-case consideration of the facts.
We doubt that the reforms will ultimately make much difference to the number of negligence claims made each year in South Australia. Time will however tell whether this predication is correct.
Revised November 2008
[1] In 2004 the Wrongs Act 1936 was formally renamed the Civil Liability Act 1936 as part of the second stage of the reform process
[2] For simplicity, we will describe the changes that were made in 2002 as changes to the Civil Liability Act (rather than as changes to the Wrongs Act 1936).
[3] Currently $3,280 in 2008
[4] Kidd, Damages SA: Assessing Personal Injury Damages in SA.
[5] Currently $2,626,020.00
[6] (1992) 109 ALR 625.
[7] [1957] 2 All ER 118.
[8] South Australian House of Assembly, Tuesday 11 November 2003.
[9] Brodie v Singleton Shire Council [2001] HCA 29 and Ghantous v Hawkesbury City Council [2001] 206 CLR 512.
[10] (1996) 186 CLR 541
