Comprehensive Australian Program of Law Reform - Essay Example

? Comprehensive Australian Programme of Law Reform Table of Contents Table of Contents 2 0Introduction 3 2.0The law reforms 4 2.1Establishing liability 4 2.1.1Contributory negligence and the assumption of risk 5 2.1.2Proportionate liability for economic claims 7 2.2Damages reforms 7 2.2.1Caps on professional liability 8 2.3Procedural reforms 9 2.3.1Limitation periods 9 2.3.2Pre-litigation procedures 9 2.3.3Legal conduct 10 2.3.4Legal costs 10 3.0Impact of these reforms to health system at a clinical and an administrative level 10 4.0Conclusion 11 References 12 1.0 Introduction The past decade has experienced enactment and implementation of the recommendations that were put forward by the IPP Committee in Australia. The move brought into fore unprecedented amount of law reforms that touched on state, private sector and territory government levels in the legislations dealing with negligence, liability and damages. This move has been geared towards ensuring that the scope of potential liability is narrowed, for example through the limiting of personal liability borne by medical practitioners who give assistance to those people at a higher risk of injury or who need emergency medical help; and reducing the damages that may be awarded in such cases so as to confine the exposure of underwriters so that they could be able to give better and more affordable cover to those who need it. One important element to point out at this stage is the fact that most of these reforms actually did contrast with the recommendations put forward by the IPP Committee Report, which was in favour of national and uniform law response to the jurisdiction crisis on cases of liability, negligence and award of damages (Ellison, 2005). Indeed various governments that have come up since 2002 have tried to enact and implement law reforms that addressed liability, negligence, and damages. This paper tries to establish these comprehensive law reforms since 2002 and analyses them in terms of the impact they have created on the healthcare system at both clinical and administrative levels considering the many challenges that managers within the healthcare service sector face while delivering quality and safe services within a highly regulated environment (International Comparative Legal Guide Series, 2011; Wynn, 2010). 2.0 The law reforms 2.1 Establishing liability The liability laws take into consideration the common law and statutes of federal and states governments. In these provisions, a person who is injured or has suffered a loss or otherwise incurred damage may institute an action aimed at compensation on the basis of the tort of common law of negligence that is based on fault; breach of contract; and breach of the provisions stipulated in the Australian Consumer Law that was effected in 2011 that replaced provisions of the Federal Trade Practices Act 1974 relating to product liability and safety of produce. In establishing the liability of a person in tort, the issue of foreseeability comes into play. A person has a duty of care to another person as per the law of tort. The defendant had a case to answer if he was in a position to see in advance reasonably, that the injured person would suffer loss or was at risk of doing so but the defendant failed to take necessary preventive action (Australian Government Treasury; 2002; 2004; Harlow, 2005). This component of contributory negligence is comprised of two components namely the foreseeability of risk relating to harm and a calculation of the level of negligence also called the ‘negligence calculus’. Based on the above provisions, a person is free from liability for failing to take precautions if the risk in question is unforeseeable and can be established as being so. To know whether a risk is foreseeable or not, it is provided that such a risk should not be so probable to an extent that any reasonable person or someone in his or her common senses would ignore it (Trowbridge & Deloitte, 2002). Having already established the aspect of foreseeability according to the provisions, it was now possible to apply the negligence calculus. This test was meant to help in deciding the preventive measures that a reasonable person in the same condition that the defendant was in would have taken to avoid the occurrence. In applying this negligence calculus, various factors are considered including the likely seriousness that the harm posed; the possibility of the occurrence of the harm in case good care was not exercised; the burden present if precautions were taken to avoiding the harm; and finally, the social utility of that activity making up the risk, in which cases it can be proven that it is worth taking risks for some of the activities than it is the case for others. This test of foreseeability was done eliminated and replaced with the test that people could take liability for those risks that are not insignificant. This was established by the case involving Wyong Shire V Shirt. It was prompted by the fact that it was hard determining whether a risk was fanciful or far-fetched (Conde, 2004). In the reforms, it was also made clear that the necessity of foreseeability could not be ignored. However, this was seen as not being sufficient ground for finding one to be negligible and thus a person cannot be liable just based on the fact that the risk was foreseeable. A negligence calculus was thus legislated so as to prescribe the issues that courts need to take into account in establishing negligence. The above discussion is based on Review of the Law of Negligence recommendation 28 and the Reform of liability insurance law in Australia section C1 (Australian Government Treasury; 2002; 2004), 2.1.1 Contributory negligence and the assumption of risk Contributory negligence and assumption of risk analysis is based on Review of the Law of Negligence recommendations 30-32 and Reform of Liability Insurance Law in Australia Section C8. Contributory negligence is simply the failure by the plaintiff to exercise care considered reasonable for the sake of personal safety thus contributing partly to the harm suffered. Australian jurisdictions do give provisions for apportioning damages, which does reduce the damages to be awarded to the plaintiff. The discretion given to the court in reduction of damages is wide as long as the court ties itself to the extent of providing justice and equity. The underlying basic principle in applying this reform is that there is need for everyone to take full responsibility and care for their safety and those of others. The onus of one proving that the claimant was liable for contributory negligence did rest fully on the defendant. It was observed that judges did apply a lower standard of care from the plaintiff. The high court did hold that reducing damages to 100% was neither practical nor permissible since this would be incompatible with the proof that the defendant was negligent. These reforms that came into force on tort law did apply to both contributory negligence and the negligence provisions and went as far as giving the courts the jurisdiction of reducing the damages of a plaintiff by 100% if only it did consider that this was just and equitable (Australian Government Treasury; 2002; 2004; McBride & Bagshaw, 2005). The negligence calculus thus did also apply here since the standard of care necessary for determining contributory negligence happened to be the same as that applied to negligence. The possibility of establishing a full defence exists when issues to do with voluntary assumption of risk are considered. This kind of approach would open a path for not giving any form of damages (100%) to the person injured. Aspects of precise knowledge of the risk and voluntary assumption came into play. At the end of it all, you realize that the voluntary assumption becomes useless since any form of conduct that amounts to it would also amount to having contributory negligence. The jurisdiction process received a major relief since these changes enabled quicker decisions on assumptions relating to risk. The process was done by reversing the requirement to provide proof of having had knowledge of obvious risks that would have happened (Australian Government Treasury; 2002; 2004; Clark & McInnes, 2004). 2.1.2 Proportionate liability for economic claims Those who were considered rich did claim that it was possible for them to be held liable for full loss even when they had made a minor contribution. The adjustments which were made on the tort law took into consideration the aspect of proportionate liability, relating to the claims for damages that involved monetary loss. The Corporate Law Economic Reform Program Act 2004 that was brought forward by the Australian Government gave way for application of proportionate liability in claims pertaining to economic loss and destruction of assets. This was as per the provisions of The Securities and Investments Commission Act 2001, The Corporations Act 2001 and The Trade Practices Act 1974. This raised a deceptive conduct. Various laws relating to economic loss and the proportionate liability in different states came into force starting from 2004 to 2006. These, for instance, included the Western Australia’s proportionate liability rules; Proportionate Liability Act of Tasmania, most especially Part 9A of the Civil Liability Act 2002; and South Australia’s Professional Standards Act 2004; among others (Australian Competition & Consumer Commission, 2002; Australian Government Treasury, 2004). 2.2 Damages reforms This section is discussed based on the Review of the Law of Negligence recommendations 47-48 and Reform of liability insurance law in Australia section C14. We have various damages that are addressed in these reforms. What underlies the awarding of damages to people who have undergone non-economic loss is the idea that monetary compensation could give partial consolation to the plaintiff for the injury suffered. As per claims attracting damages of between $20,000 and $100,000, 45% of them were taken to be caused by damages of general nature. For that reason, the new reforms to this tort law did impose a limit on awarding general damages with the view of cutting on the number of such claims and the costs involved in smaller claims (Australian Government Actuary, 2006). They also capped the general damages, a move which stabilized and assisted in the consistent application of calculations of those general damages that were considered to be below the cap, in which case every jurisdiction put into consideration its individual conditions. The amount awarded in regard to losses of personal injury or even death got covered by the reforms done on Trade Practices Act 1974. These were done by amending the Trade Practices Act (No 2) 2004 by the government. Other states such as Queensland, Tasmania, and Western Australia, among others did introduce these amendments but left out some while at the same time setting out their own provisions that they deemed fit (New South Wales Parliament Legislative Council General Purpose Standing Committee No. 1, 2005; Maitra, 2005). 2.2.1 Caps on professional liability As has been the practice, professionals have set standards schemes aimed at minimizing economic losses and damage to property claims lodged against these professionals. The gazetted schemes do demand risk management strategies to be put in place, compulsory insurance cover to be provided to professionals, provision of professional education, necessary complaints and disciplinary mechanism to practitioners, with the intention of giving continuous indemnity insurance to professionals. An alternative course of action was provided by these reforms, which has proved to be broader and thus unlimited. The enactment of Treasury Legislation Amendment Act 2004 was meant to change the Australian Securities and Investments Commission Act 2001, the Trade Practices Act 1974 and the Corporations Act 2001. This was to give room for capped liability. The professional standards schemes legislation and its implementation were not supported in the amendment done. These schemes set the upper limit of a professional’s liability for damages. On the other hand, the Tasmania’s Professional Standards Act 2005, establishes that an occupational association has the mandate of approving a higher optimal liability than the one stipulated in cases where its member has an intention to hold a higher liability and this was based on the reasoning that indemnity levels were matters of agreement between contracting parties based on commercial terms and the public did not hold the interest to intervening in such agreements (Australian Government Treasury; 2002; 2004; Commonwealth of Australia, 2006; United Medical Protection Limited, 2005). 2.3 Procedural reforms 2.3.1 Limitation periods The limitation periods relate to the Review of the Law of Negligence recommendations 23–27 and Reform of liability insurance law in Australia section C21. These limits the time allowed for a potential plaintiff to institute a court action. Before the reforms, the limitations did vary from one state to the other, some being more generous thus throwing defendants into long periods of uncertainty and in that case disadvantaging them. The reforms set the commencement as date of discoverability; they put this period to three years from the commencement date; a twelve year stop period was introduced; the court was given discretion to extend the period to a limit of 3 years; gave the court issues to be considered before awarding such an extension; and gave special protection to people with disability (Australian Government Treasury; 2002; 2004). 2.3.2 Pre-litigation procedures The pre-litigation procedures are as per the Review of the Law of Negligence recommendation 9 and Reform of liability insurance law in Australia section C22. Every jurisdiction did control its own court procedures through laws, rules established by the courts, and other court regulations deemed applicable. These reforms were geared towards eliminating tactical delays when notifying claims; failure to notify the insurer of a claim way before proceedings are started; and the reluctance to give necessary details of the claim and proof before court. These reforms made on tort law thus changed and improved procedures of pre-litigation. 2.3.3 Legal conduct Activities of the legal profession were regulated. Aggressive advertising and touting by law firms was put to a stop. 2.3.4 Legal costs There was an increase in the number of claims and legal expenses became a major component of costs associated with personal injury. The reforms thus did put a limit to the amount of legal costs awarded by the courts (Australian Government Treasury; 2002; 2004; Abelson, 2004). 3.0 Impact of these reforms to health system at a clinical and an administrative level The reforms put a lot of pressure on the healthcare providers since they have become more concerned with the legal consequences of their medical practice as is opposed to the need for attending to patients under all circumstances to save lives. The medical practitioners are basically put in a dilemma and no clear direction is found when they have to deal with certain sensitive cases. This has been a greater challenge when trying to provide healthcare (Rogers, 2005; Maitra, 2005). On administrative level, the headache has been dealing with many cases involving claims of personal injury. Some of the damages awarded to patients have actually been on the rise due to basing the blame on the healthcare institutions. This gives such managers a very hard time in managing healthcare system (Amery & Moran, 2005). 4.0 Conclusion The comprehensive law reforms did bring about major changes in the Australian government. However, much still need to be done in order to fine-tune these reforms to cover specific cases, especially those related to professions. The IPP report recommended reformation of the principles relating to negligence of common law and the damages’ assessment by use of legislation. This move was expected to ultimately reduce the costs of insurance premiums paid and thus forward these costs to the wider community instead (Australian Government Actuary, 2006). Interestingly, most of these recommendations by the IPP were based on the predicted introduction of the National Framework for Reform, which still needed the full cooperation of all states in Australia as per the requirement of the constitution. These hopes of a unified approach were dashed with the rejection of this unified scheme by the Federal and State Governments in November 2002 (Ipp, et al., 2002). However, they did adopt a quasi-consistent approach across the different forms of jurisdictions, which are now seen as a comprehensive approach to law reforms. References Abelson, P., (2004). Is Injury Compensation Excessive? Australian Product Liability: retrieved on 16th October 2011, from http://www.appliedeconomics.com.au/pubs/papers/pa04_injury.htm Amery, C. & Moran, G. (2005). Actuarial assessment of the impact of tort law reforms on medical indemnity premiums, paper for the Medical Indemnity Policy Review Panel, AM Actuaries, Melbourne Australian Competition & Consumer Commission, (2002), Insurance Industry Market Pricing Review. 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The Foresight Saga: Risk, Litigiousness and Negligence Law Reforms Policy. Retrieved on 16th October 2011, from http://www.cis.org.au/policy/spring04/spring04-5.htm Ellison, M., (2005). Tort law reform throughout Australia: A Brief Review of Recent Amendments. Special Report, Minter Ellison Harlow, C. (2005), Understanding Tort Law, 3rd edn, London: Sweet & Maxwell International Comparative Legal Guide Series, (2011). Product Liability. Retrieved on 16th October 2011, from http://www.iclg.co.uk/index.php?area=4&country_results=1&kh_publications_id=193&chapters_id=4505 Ipp, D., A., Cane P., Sheldon, D. & Macintosh, I., (2002). Final Report of the Review of the Law of Negligence. Canberra Maitra, S., (2005). Public liability tort reform — assessing the impacts, (Paper presented to the Institute of Actuaries XVth general insurance seminar 16-19 October 2005) McBride, N.J., & Bagshaw, R., (2005). 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