Assistant Treasurer Senator Helen Coonan today released the final report of the Review of the Law of Negligence.
The Review, chaired by the Honourable Justice David Ipp, was established as one of the measures agreed by the second Ministerial Meeting on Public Liability Insurance in May.
The panel, comprising Justice Ipp, Professor Peter Cane, Associate Professor Donald Sheldon and Mr Ian Macintosh, was asked to inquire into the law of negligence and to develop a series of proposals which provide a principled approach to reforming the law of negligence.
"The Commonwealth, and all States and Territories, are grappling with ways of implementing responsible reform which will take the pressure off insurance premiums while providing adequate protection for consumers," Senator Coonan said.
"The Review of the Law of Negligence provides a range of significant proposals and outlines a principled approach to reforming tort law which impose a reasonable burden of responsibility on individuals to take care of others and to take care of themselves.
"There is strong community support for actions by Governments at all levels to ensure our system of compensating injuries is balanced and does not contribute to a culture of blame.
"Australians are clearly saying to their leaders that some of the payouts coming from the courts just don't seem to make sense and they want some balance restored to the system.
The final report incorporates the first report by the panel released in early September and recommends a range of additional significant reforms including:
Forseeability of Risk
- Defendants should only be responsible for a risk that is not insignificant rather than far fetched or fanciful risks;
Contributory Negligence
- Allowing courts to find that a plaintiff who contributed to his or her own injury can be held 100 per cent responsible;
Public Authorities
- Providing a limited defence for public authorities, such as local councils, where they have taken a decision on policy grounds not to perform a specific public function, such as a road inspection.;
Mental Harm
- Changing negligence law so that plaintiffs who suffer a physical injury can only claim for consequential psychiatric harm if they have suffered a recognised mental illness and not simply because an injury may have led to vague feelings of depression;
Limitations on Legal Costs
- Abolishing orders for legal costs when the award of damages is less than $30,000 and limiting legal costs to $2500 in cases where the award of damages is between $30,000 and $50,000;
Caps and Thresholds
- A cap for general damages payouts of $250,000 and thresholds to remove small claims from the system;
- A cap for loss of earnings of twice average full time adult ordinary time earnings.
"The proposed changes are about reforming a system which has become unaffordable and meeting the expectations of the community while balancing the interests of those who are injured with those of the community at large," Senator Coonan said.
"The goal should be a system that imposes a reasonable burden of responsibility on individuals to take care of others and to take care of themselves.
"As the panel has pointed out, only a small proportion of the sick, injured and disabled are in a position to be compensated through the courts and under the current system.
"Those who are able to frame a legal action arising from their misfortune are often able to receive compensation which is very much higher than others who have suffered the same fate."
Senator Coonan said the 61 recommendations had the potential to significantly reform the legal system underlying medical negligence, public liability and professional indemnity claims and to provide a platform for national consistency.
The final report has been distributed to all State and Territory Ministers with responsibility for public liability insurance and will be discussed at today's Ministerial Meeting on Public Liability Insurance in Sydney.
Senator Coonan said that although many of the panel's recommendations required action by State and Territory Governments, the Commonwealth would look closely at what more it could do to encourage and facilitate a nationally coordinated response.
"I would like to thank Justice Ipp, Professor Cane, Professor Sheldon and Mr Macintosh for their hard work on this important report in such a tight timeframe," Senator Coonan said.
The full report is available at http://revofneg.treasury.gov.au