Judge calls for 'greater keenness to assist'

By Kate Tilley, Resolve Editor

A Queensland commercial list judge has called on insurers and their lawyers to show greater keenness to assist the courts in their triple aim of finding the truth, minimising costs, and doing so expeditiously.

Supreme Court Justice Thomas Bradley, in a presentation to the AILA Qld Insurance Intensive, said insurers, as the most common users of the civil judicial system, had more interest in civil litigation than any other community group, except government agencies. Insurers competed with large building and resources groups for having “perhaps the highest value claims in our courts”.

Insurers therefore had “a particular interest” in the operation of superior courts and courts had an interest in insurers’ conduct.

He said the courts’ three central tasks were:

Ascertaining the truth.
Proportionality. “The key touchstones are a focus on the real issues, achieving justice at a minimum of expense, avoiding undue expense and avoiding undue technicality.”
Timely dispute resolution. Delays can prejudice current litigants and those waiting for have their cases heard.

“These three general ambitions interact with each other. Generally speaking, expedition plays well with minimising expense,” Justice Bradley said.

“Occasionally, it can be more expensive to achieve a faster result. The interests of insurance though, should align with those of the courts and other litigants in avoiding undue delay and expense.

“I assume we’re now beyond the times when underwriters or agents would seek to delay proceedings and increase costs in the hope of wearing out those making claims.”

Insurer failures

Justice Bradley cited two workplace injury claims in which insurers “may have failed to play their proper role in assisting the courts, ascertaining the truth and minimising costs”. While both involved statutory insurers, “the implications might be applied across other fields”.

In Francis v MSF Sugar Ltd, Ken Francis alleged he suffered an arm injury in October 2013 while working at the Maryborough Sugar Factory in Qld and launched civil proceedings against his employer.

The claim moved to court in April 2017, and the employer filed an extensive defence, including denying it knew or ought to have known of the risk of injury to Mr Francis, who had limited intellectual capacity and had been employed by MFS Sugar in manual positions all his working life.

The claim was set down for hearing over four days in November 2019. A range of issues came to light with counsel seeking adjournments because of the late disclosure of a document by the employer, which included a record of Mr Francis’s GP’s advice to him that he had diagnosed a rotator cuff injury and the doctor’s recommendation he perform modified duties because of the injury.

“Now, the disclosure of this document was a problem for Mr Francis but, for the court, it was a bigger problem. It indicated that substantial parts of the employer’s defence were factually untrue,” Justice Bradley, who presided in the case, told delegates.

“It was clear the employer could not proceed on its longstanding defence because much of it appeared to be simply false.”

Justice Bradley said it was “a very disappointing exemplar of the failure of a party to comply with the implied undertaking in the rules”.

Fundamental error

It was “really concerning” that the conduct involved a statutory insurer that regularly participated in litigation, usually with authority to instruct directly the lawyers acting for the insured. “Something had fundamentally gone wrong in the process by which the insurer had approached its obligations as the effective entity, given instructions to those who appear and plead in the court.”

Justice Bradley adjourned the trial until 2.30pm on what would have been the second day and told the defendant’s counsel he expected an amended defence to be available by then. “By 2.30pm, I recall the matter had settled.”

In the Qld District Court case R v Illawarra Enterprises & Walsh, a bricklaying business Illawarra was doing block work on a Brisbane site in February 2018. Several excavations on the site included a 1.9m deep trench containing steel reinforcing bars next to a narrow ramp, which was not barricaded.

Company director Michael Walsh told workers to use the ramp to access the site. One worker who slipped told Mr Walsh he thought it was dangerous, but the director took no action. Just minutes later, another worker was travelling up the ramp when part of the path gave way. He fell into the trench, was impaled on a bar, and suffered serious injuries.

Mr Walsh and the company were prosecuted by Qld Workplace Health and Safety; both pleaded not guilty. At an April 2022 trial, a jury found the employer and the director guilty of reckless conduct. Judge Paul Smith said Mr Walsh was aware of the risk but had disregarded it. Illawarra Enterprises was fined $300,000 and Mr Walsh sentenced to four months’ jail, suspended for 12 months.

Justice Bradley said it was “extraordinary” that the case had reached the stage where a jury could convict an employer and the director of reckless conduct.

Three questions

It was “frankly disquieting that the only explanation seems to be a failure on the part of the insurers and perhaps, to some extent, those who advise and act for them to properly investigate and assess the facts”.

He asked three questions:

Should the court be able to assume an insurer will not advance a defence on behalf of their insured that pleads facts they cannot prove at a trial?
Should we be able to assume their defence will not deny as untrue matters they know to be true?
Should we be able to assume that, where evidence is sufficient to establish that a criminal offence is being committed, that in pre-litigation procedures an insurer will not seek to avoid paying compensation for the insured’s act?

If delegates responded yes, it followed that insurers and those who advised them must insist on access to all relevant documents and witnesses.

“Failure to do these basic things will increase the cost of litigation, lead to delays in its resolution, and … hinder the search of truth.”

Justice Bradley said insurers should be actively concerned about such behaviour because it endangered their reputation.

“This is important in an industry that is built on trust, on the consumer’s confidence their premiums will pay off in the end. Maintaining that bond between insured and insurer should be an ongoing priority.”

Scandalous conduct

While some might say the conduct in Mr Francis’s case was “scandalous”, Justice Bradley said neither case showed the statutory insurer was supporting Queensland workers and businesses and seeking resolution for the most appropriate amount at the earliest opportunity.

“The message though is not about insurers behaving badly. Rather it is about how important it is that insurers behave well in our adversarial system.

“The important decisions that affect civil cases are made by the parties. Parties decide fundamentally whether to litigate, what issues to dispute, and what evidence to call. This makes parties’ compliance with the rules and the implied undertaking very important,” Justice Bradley said.

He said frequent litigators should know the court expects them to cooperate with other parties, respond positively to reasonable requests for information, avoid deploying resources on points that do not matter, agree on as many aspects of the litigation process as possible, respond reasonably to requests for things like extensions of time, and engage positively and sensibly in settlement negotiations.
Insurers historically led the way in good behaviour in settlement negotiations, as they understood the real likely cost of litigation, could access reliable information on likely outcomes, and could make cool, commercial decisions.

“They understand giving up a portion of one’s entitlement for the sake of settlement is often a price worth paying to avoid the uncertainty and the cost risks in litigation. If only all other litigants share these insights,” Justice Bradley said.