The state of tort reform and the law of negligence

by Mark Lindfield

In previous editions of Recall we have considered the potential effect of the recommendations of the Ipp Report in the sphere of product liability. In particular, the recommended amendments to the Trade Practices Act have significant potential impact on product liability claims. However the Commonwealth has yet to announce any proposal to implement such amendments. In the meantime, the States and Territories have announced and, in some cases, enacted, legislation reforming the laws of negligence as they will apply to product liability actions in those jurisdictions.

Commonwealth

The Trade Practices Act has been amended to allow recreational service providers to contract out of the implied warranties in s74. That is, a recreational service provider can exclude liability for personal injury or death that might otherwise arise from a breach of an implied warranty that the recreational services would be provided with due care and skill. This has relevance also to product liability as it also permits the provider to exclude liability arising from a breach of a warranty that any goods provided in respect of the recreational service (for example, saddles and other tack in the case of horse-riding) are fit for the intended purpose. This may increase the likelihood of claims being pursued directly against manufacturers.

More recently, the Commonwealth has introduced legislation proposing to amend the Trade Practices Act to limit the ability to bring personal injury damages claims based on breaches of those parts of the Act prohibiting misleading and deceptive conduct and false and misleading representations. Those reforms are currently being debated in Federal Parliament.

New South Wales

The Civil Liability Act was enacted on 18 June 2002, with retrospective effect from 20 March 2002. The Act was later amended by the Civil Liability (Personal Responsibility) Amendment Act on 6 December 2002. Although the parts of the legislation relating to proportionate liability have not yet come into effect (and no date has been announced), the following New South Wales reforms may in some respects make product liability claims more difficult to establish:

  • it is only in an 'exceptional case' that a court may determine that it is appropriate to impose liability on a party whose negligence was not a necessary condition of the plaintiff's harm;


  • not only in those 'exceptional cases' but in any event when determining the scope of liability, the court is to consider whether or not and why the responsibility for the harm should be imposed on the negligent party;


  • in determining whether negligence caused the particular harm, if it is relevant to consider what the plaintiff would have done in the absence of the negligence, the plaintiff's self-serving statements made after the harm is suffered about what they would have done are inadmissible;


  • the plaintiff always bears the onus of proving any fact relevant to causation;


  • a defendant does not owe a duty to warn a plaintiff of an 'obvious risk' (a risk that would have been obvious to a reasonable person in the plaintiff's position) unless:
    • the warning was required to be given by law;

    • the plaintiff requested advice or information about the risk; or

    • the risk is that of personal injury or death arising from the provision of professional services by the defendant.

  • no person is liable to another for harm caused by an 'inherent risk' materialising, which is a risk that cannot be avoided by exercising reasonable care;


  • recreation service providers receive additional protection from liability through the following reforms:
    • no liability in negligence arises from harm caused by the materialisation of an 'inherent risk' of a 'dangerous recreational activity';

    • no duty of care is owed to a participant in a recreational activity to take care of a risk of which the participant was warned as set out in the Act; and

    • if a person agrees to participate at his or her own risk, the provider has no liability in negligence for a breach of a warranty that the recreation services will be rendered with reasonable care and skill.
  • there are complementary provisions to the Commonwealth legislation relating to recreational activities;


  • damages for mental harm arising from nervous shock are only to be awarded to witnesses at the scene or to close family members and are to be reduced by the victim's contributory negligence; and


  • the Limitation Act 1969 is amended to prevent claims for personal injury damages being commenced more than three years after the date on which the cause of action is 'discoverable' by the plaintiff or, if earlier, 12 years from the time of the act or omission that allegedly caused the injury (special provisions apply to minors and disabled persons).


  • Queensland

    During 2002, the Personal Injuries Proceedings Act and amending legislation was enacted in Queensland and imposed caps and pre-court procedures on personal injury damages claims. The recently passed Civil Liability Act 2003, contains the following provisions relevant to product liability claims:

  • proposes similar reforms in relation to the standard of care, causation, 'obvious risks' and 'inherent risks' as detailed above in relation to New South Wales;


  • a sliding scale will apply to damages for personal injury; and
    like New South Wales, it proposes to introduce proportionate liability principles to claims for property damage and economic loss, but the Queensland reforms are different because:
    • they do not apply to claims for breach of duty resulting in personal injury or damages of less than $500,000;

    • the court must disregard the comparative responsibility of any other person not joined to the proceedings, unless deceased or wound-up; and

    • joint and several liability applies to principals of liable agents, to professional advisors in certain circumstances and to fraudulent defendants and those participating in intentional torts.

    Australian Capital Territory

    The Civil Law Wrongs Act commenced on 1 November 2002. The provisions of that Act relevant to product liability actions include:

  • where a wrongful act or omission causes death, the beneficiaries of the deceased's estate may pursue an action for damages against the defendant and the damages awarded are not to be reduced for the deceased's contributory negligence;


  • family members may recover damages for mental or nervous shock from a person who is liable for another's injury and the court is to decide how the damages are to be divided; and


  • after 30 April 2003, courts may refer any matter for neutral evaluation, with or without the consent of the parties, and may make orders about the payment of the costs of the neutral evaluation as it sees fit.


  • Northern Territory

    The Northern Territory has passed legislation enabling recreational service providers to contract out of the warranties of due care and skill implied by legislation. The Personal Injuries (Liabilities and Damages) Act 2003 , which was passed recently, and the Personal Injuries (Civil Claims) Bill, which is currently before the Northern Territory parliament, propose the following reforms relevant to product liability:

  • early notification and pre-court procedures in relation to personal injury claims; and


  • the imposition of thresholds on personal injury damages claims and the assessment of damages on a 'permanent impairment' basis.


  • South Australia

    On 1 December 2002, amendments to existing legislation were made by the Wrongs (Liability and Damages for Personal Injury) Amendment Act which have potential impact on product liability claims in the following way:

  • caps and thresholds now apply to personal injury damages claims, in conjunction with a scale of damages;


  • damages for nervous shock may 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 may 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.


  • Tasmania

    Tasmania enacted its Civil Liability Act on 1 January 2003. The Act is brief and is unlikely to have any particular relevance in the product liability context, although, like legislation enacted in other States, it contains provisions (such as those which state that an apology is not an admission) which may have some utility to defendants in product liability actions.

    Victoria

    The Victorian parliament modified that State's Wrongs Act by legislation enacted on 23 October 2002. The potential relevance of the amending legislation to product liability matters is as follows:

  • some caps now apply to personal injury damages claims;


  • food donors are protected from liability for personal injury arising from the donation of safe food; and


  • although not yet enacted, the legislation includes complementary amendments to the Goods Act relating to recreational services and the ability of providers to contract out of liability for personal injury arising from implied warranties in certain circumstances.


  • Western Australia

    On 1 January 2003, the Civil Liability Act introduced caps on personal injury damages awards. An amending Bill was introduced into the Western Australian parliament on 20 March 2003. The reforms proposed by the Bill include:

  • a similar statement of basic negligence principles as is contained in the New South Wales legislation;


  • similar provisions relating to obvious risks and risk warnings as in New South Wales, although the Western Australian proposed provisions relating to inherent risks will only apply to dangerous recreational activities;


  • the existence of a duty to take care to avoid mental harm is determined by the circumstances of the case including the relationship of the parties (not limited to family members, for example) and the test to be applied is that of a person of normal fortitude in those circumstances;


  • proportionate liability principles similar to those proposed in New South Wales; and


  • parties may contract out of any of these provisions by signed written agreement.


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