Proportionate liability 'needs speedy resolution'

The shortcomings of proportionate liability legislation across Australian jurisdictions are extensive and need speedy resolution, Queensland barrister Richard Douglas has told the annual AILA Geoff Masel Lecture.

The lecture considered the ramifications of changes to civil liability legislation, generated by the release 16 years ago of a report by a panel chaired by former judge David Ipp. 

Mr Douglas QC said the Ipp report's recommendation for proportionate liability was welcomed, but jurisprudence had "developed at a snail's pace".

He blamed "drafting complexity, with disparate drafting yielding varying jurisprudence". That fuelled "the reach for certainty by compromise".

"While compromise of contentious litigation is desirable, it ought not be foist on parties by dint of uncertainty as to the law," Mr Douglas said.

Proportionate liability enables courts to apportion responsibility for damages claims among wrongdoers in proportionate amounts.

Mr Douglas said procedural provisions enacted to identify wrongdoers were "cumbersome and readily circumvented".

Apportionments were often unpredictable and unsatisfactory, particularly when one wrongdoer was a fraudster and the other a professional "whose remit extends to detection or avoidance of such wrongdoing".

Mr Douglas said enacting well-drafted, uniform legislation was "in prospect [but] the lack of alacrity in pursuit suggests scant appetite for reform".

The Law, Crime and Community Safety Council – formerly the Standing Council on Law and Justice – had had template legislation drafted that corrected many of the shortcomings. But the council had deferred it as an agenda item since 2013.

Mr Douglas said even if adopting reform were accelerated, the shortcomings would "remain for litigious navigation for some time" because legislative amendment would be prospective, not retroactive.

In question time after the lecture, Mr Douglas said consistency across jurisdictions was "a pipe dream", but proportionate liability "should be fixed and fixed soon".

Disquiet prompted report

Mr Douglas said civil liability legislation enacted after the Ipp report came at a time of "public disquiet" with civil litigation outcomes and insurance industry upheaval. "Many insurers reduced the extent of indemnity cover they were prepared to extend to renewing or proposing insureds or simply refused to offer certain types of cover. Even some state bar associations struggled to find willing professional indemnity underwriters."
 
He said laws enacted in the states and territories, along with cognate federal legislation, were directed at balancing the scales in proof of liability in negligence claims and moderating the assessment of personal injury damages. 

Mr Douglas said the laws, with some exceptions, achieved a good balance.

The panel's principal recommendation was "model statutory provisions that could be adopted in any and every Australian jurisdiction". 

But that did not happen. Mr Douglas said the "disparate approach could be fairly characterised as a failure of collaborative federalism".

However, on a positive note, "almost all the liability provisions in the legislation were expressed to apply also to property and economic damage claims founded on a duty of care cause of action".

Obvious risk defences

Mr Douglas said the Ipp legislation of the states, but not the territories, introduced a statutory concept of "obvious risk". It operated not as a defence of itself, but as a precondition to invoking other provisions concerning diminished duty content, voluntary assumption of risk, and liability for dangerous recreational activity.

However, "much ink has been spilled construing what constitutes an obvious risk".

He said the Ipp legislation in NSW, Qld, Western Australia and Tasmania contained an absolute defence to a liability claim in circumstances where the injured or deceased person engaged in a "dangerous recreational activity" and the obvious risk materialised. "The legislature in those states saw fit to enact a specific provision for such circumstances, rather than leave it to the general breach and causation provisions to defeat the claim."

Mr Douglas said the statutory "obvious risk" provisions had been a positive contribution to jurisprudence for proof of claims at the fringe and were not confined to personal injury claims.

Five states – NSW, Victoria, Qld, SA and WA – included a provision absolving a person from liability in negligence "for harm suffered by another person as a result of the materialisation of an inherent risk". "The jurisprudence construing such provision has made it plain it affords no advance on the common law," Mr Douglas said.

The verdict

Mr Douglas said the core effect of the Ipp legislation, for negligence causes, was to impose a much tighter general adjudicative framework, augmented by defences addressed to specific liability and damage assessment circumstances.

"Has the pain of such legislation been worth the effort, or should perhaps a New Zealand-style compensation system have been introduced? Did the legislation go too far or not far enough?

"In my view, with two exceptions, a reasonable balance was achieved by the federal, state and territory legislatures. The exceptions were the advent of disparate legislation and the poorly drafted, unremedied provisions [for] proportionate liability."

He said despite the disparate legislation, a significant body of jurisprudence construing the key provisions had been assembled in the High Court and intermediate appellate courts. 

"The ability of those at conventional liability risk to now gain cover certainly has seen a return to the halcyon days of the last millennium. Even Australian barristers now have five insurers competing for their professional indemnity cover."

AILA hosts the annual lecture to honour Geoff Masel (1928-2004) who was a founder of the Victorian AILA chapter; the first recipient of AILA's Insurance Law Prize in 1995; and one of the association's first life members.