August 2004 - New laws welcome but impact uncertain
The Federal Government has passed the majority of the legislation to support state and territory tort law reform but the industry must wait to see how the new laws will work in practice.
The Treasury Legislation Amendment (Professional Standards) Act has ensured state and territory professional standards laws cannot be bypassed by litigants attempting to access uncapped damages payouts under Commonwealth law. Proportionate liability included in the Federal Government’s CLERP 9 corporate law package and the benchmark for personal injuries damages in the Trade Practices Act (Personal Injury & Death) No 2 Act will improve the affordability and availability of public liability and professional indemnity insurance.
The Trade Practices Act (Personal Injury & Death) No 1 Bill, amending Part IVA, Division 1A and 2A of Part V and Part VA of the Trade Practices Act, has not yet passed the Senate.
In the state arena, the Western Australian Government has introduced the Workers' Compensation (Common Law Proceedings) Bill to clarify 1999 amendments to the WA workers' compensation scheme and close loopholes (second gateway) used during the Dossett, Henderson and Mokta decisions.
The amendments state that only common law actions where court proceedings had begun or leave had been given for action to start before the assent date should be dealt with under the former provisions. However, the High Court's Dossett decision extended permitted proceedings to plantiffs who had applied for leave and the WA District Court's Henderson and Mokta decisions extended those proceedings to all actions involving injury before October 5, 1999.
APRA has released insurance statistics as at September 2003, which show the industry in a strong position with a combined ratio for the first time below 100%. All industry stakeholders hope for continued stability.
On insurance premiums, there were mixed pricing movements during the June renewal period. Some classes, including property, remained stable or dropped. Others, such as professional indemnity and public liability, delivered mixed results. Directors & officers' insurance was up and down, with capacity for more than $100 million difficult to obtain if there were American involvement, for example, a US stock exchange listing.
The Insurance Contracts Act review proposals paper on sections other than S54 has been released and, barring a federal election, the final report should be available before the AILA national conference in Perth from September 15 to September 17. The review will be the subject of a keynote address by Clayton Utz special counsel Fred Hawke.