Andrew Murray (WA, Australian Democrats) Share this | Hansard source

I, too, rise to speak on the Trade Practices Amendment (Personal Injuries and Death) Bill 2004. This is the latest in a long run of bills attempting to attend to this area of tort law and of trade practices law. The amendments in the bill relate to part V division 1 of the Trade Practices Act. Part V division 1 of the Trade Practices Act contains key consumer protection measures, the most commonly used ones being those that deal with misleading and deceptive conduct and false and misleading representations.

The Bills Digest No. 170 of 31 May 2005 had some concluding comments which well captured the nature of discussion on the bill. They said:

The amendments in this Bill implement Recommendation 19 of the negligence review, so that individuals will be prevented from recovering damages for personal injury and death brought about by a breach of Part V Division 1 of the TPA.

These amendments reduce consumer rights under the TPA. These amendments do however close a loophole in the law that has the potential to undermine the Ipp Report’s recommendations and hence the Government’s policy response to the insurance crisis.

The insurance crisis has abated and some may therefore argue that these amendments are unnecessary. Those who support these amendments suggest however that premium pricing may again increase if the reforms to negligence laws are undermined by claimants relying on other avenues of legal redress such as Part V Division 1 of the TPA.

The Bill is also a reminder of the broader policy issues at play and in particular whether the review of the laws of negligence has achieved the correct balance between premium affordability and access to compensation for those who are injured. This question is particularly pressing given the fact that the review that led to the overhaul of the country’s personal injury laws was completed within such a very short period of time and was a reaction to a crisis in the insurance market.

Missing in that conclusion is what should be the strongest criticism of all of this sort of legislation—that is, that it is built on assertion. It is built on assertion about the consequences to maintaining a provision in law which has identifiably not been abused. There is no record whatsoever that this provision in the Trade Practices Act has ever been abused and there is no credibility to the assertion that it will be abused. The departments are bound to say, ‘Such and such a case did such and such a thing.’ I am talking about wholesale, universal, systemic abuse. It just has not happened.

The Australian Democrats stridently, again, oppose the amendments in this bill because they further curtail the rights of people who have suffered an injury from pursuing legal action for damages for pain and suffering arising from their injuries. The government’s argument has been that unless it takes these steps there will be an increase in litigation to the level of countries like the United States and that insurance premiums will again rise exponentially. The government argues that this is the only way to curtail litigation: by taking away a person’s right to it. These proposed changes to the legislation have been achieved through successful lobbying from the insurance companies and through an overhasty response to a crisis to which the government has now doggedly stuck. In every state of Australia the large insurance companies did push tort law reform and were successful, even in the face of opposition from plaintiff lawyer groups, which they painted as greedy and bloodsucking. Some insurance companies and some plaintiff lawyers might indeed be greedy and bloodsucking, but certainly not all are. We need insurance companies and we need plaintiff lawyers, and we need to find a balance between their vested interests.

This legislation does not provide that balance and nor do its predecessors. Plaintiff lawyer groups were attempting to retain the rights of injured people to bring actions for damages while the insurance companies were attempting to maintain their profit margins and to keep their businesses as viable as possible. This amending bill has been introduced because there is a suggestion that people who have lost the opportunity to pursue damages claims under tort law will now use section 52 of the Trade Practices Act to bring actions to recover damages. The government argues that if this particular amendment is not passed there will be a flood of actions pursuant to section 52. There is no evidence to support this contention.

The Law Council of Australia made a submission to the Senate Economics Legislation Committee on 5 August 2003 which dealt with this issue at that time. At that time it identified nine cases where action had been taken pursuant to section 52 of the Trade Practices Act. It said: ‘None of these cases would appear to be frivolous. The council notes that the apparent volume of claims overall in this area could not be described as excessive given that the Trade Practices Act has been in force for almost thirty years.’ In his second reading speech, Mr Brough stated that this amendment was ‘to assist governments to formulate a consistent approach to the problems of rising premiums and reduced availability of public liability insurance’. This point was reiterated in Senator Minchin’s second reading speech. That was the argument that state governments also ran with in respect of changes to a plaintiff’s right to action for damages arising from negligence. Of course, there is vested interest always in these things because governments themselves are subject to those actions. However, the premiums have continued to rise and sections of the community have now lost their right to compensation commensurate with the injury done to them. This is typical of this government—decrease rights, decrease access to justice; increase obligation, increase your liability for action taken against you by the state.

In general, the Democrats support the rights of aggrieved parties to take claims for damages and compensation to the courts and for those matters to be decided by the courts. While we support necessary restraints on ambulance chasers and excessive litigation, the so-called reforms in this area have gone far too far, and we have consistently opposed them. The argument was that, if there were a limit to common-law actions, then insurance premiums would be reduced, the number of claims would drop and genuine complainants would survive. Claims have dropped, insurance profits have risen significantly, premiums remain high and cover is more difficult for small organisations to get than ever. There is no indication as to why these further changes should reduce insurance premiums and it further and unnecessarily limits the ability of injured people to bring an action.

A panel of experts reviewed the law of negligence in Australia after a ministerial meeting on public liability insurance in 2002. The panel recommended the changes so that the law at state and federal levels would be consistent. However, although the Hon. Minister Brough states that this consistency will be achieved by the passage of these amendments to the Trade Practices Act, it should be pointed out they will not. These changes are styled upon the New South Wales legislation. Not all states have followed the New South Wales legislation, and consistency will therefore not be achieved as has been asserted. According to the government, these measures are being introduced so that the Trade Practices Act cannot be used to undermine state and territory civil liability tort reforms. As far as any inconsistency remains, they can be used to do just that.

I also point out that, in the government’s anxious desire to keep the insurance industry contented, they appear to have completely overlooked the impact this legislation will have on future budgets. Generally the payouts made by the courts include provision for the ongoing care of an injured person calculated at the cost of the care and the number of years they are likely to require the care. Courts will no longer have to do these long and complicated sums because the injured people are now forced to rely exclusively on Centrelink and Medicare payments for the rest of their lives. So, in aggregate, what this bill does, as do the other bills, is to transfer liability from the insurance companies to the taxpayer.

I would like to point out some other points which, instead of simplifying matters and taking them out of the hands of lawyers, appear to increase the likelihood of litigation. In particular, the calculation of the date of discoverability is rather open ended. It is three years except in those circumstances where it is up to 12 years. There is certainly an attempt at specificity. However, it appears to open up avenues for long, drawn-out litigation processes to determine whether or not a person can bring an action. This takes time, money and energy, which an injured person may not wish to expend, so there will be a reduction in litigation, as the government wants, but also a reduction in real justice. In the case of some injuries, three years is a very short period of time. The current proposed time limit will put off people who may have a legitimate claim but not sufficient funds from pursuing it. That is not justice; that is intimidation.

I concede that this aspect does not apply to smoking related diseases, but I do believe there are other conditions which may have a long gestation period. The Democrats support the notion that people can bring actions against tobacco companies. Tobacco companies were well aware by at least the 1960s of the scientific evidence which showed the link between smoking and lung, throat and mouth cancer, but they continued to promote smoking as part of a healthy, trendy lifestyle. However, the limitation period and the calculation of the limitation period proposed in this legislation appear to create opportunities for lawyers rather than certainty for plaintiffs.

I am also aware of some of the definitions contained in the proposed amendments. The definition of a most extreme case is ‘a case in which the plaintiff suffers non-economic loss of the gravest conceivable kind’. I suggest that this again does not promote certainty in the law and appears simply to create an opportunity for lawyers to offer up different determinations of exactly what the ‘gravest conceivable kind’ really means. It is a matter which is going to be subject to jurisprudence.

It again appears to lend itself to much preliminary examination of issues rather than dealing with the question of the amount of damages that a person can claim for a certain type of injury. The government has reiterated that the purpose of the bill is to reduce insurance premiums. The changes to state legislation were for the same purpose, but there has been no notable reduction in insurance premiums. I certainly have not had constituents ringing me up and saying how wonderful it is that insurance premiums have dropped or that they can get cover for whatever they need, particularly for small not-for-profit organisations. Therefore, there is no reason to suggest that these amendments will achieve any end other than a loss of consumer rights for potential legitimate claimants. They will, in fact, further disadvantage injured Australians and taxpayers, who will now carry the burden of Centrelink and Medicare payments for the injured, which would have been carried by insurance companies through court decisions. For the reasons outlined above, the Australian Democrats oppose this bill, as we have previous bills which have had this intention.