This year marks the 20^th anniversary of tort reform in Australia. 

With two decades now having passed since the introduction of civil liability legislation in many Australian jurisdictions, a question arises as to whether the reforms have achieved the goal of restoring balance between the rights of victims of negligence and stability of the insurance market. 

Background to the Australian tort reform

Civil liability reform occurred in Australia in response to a perceived ‘insurance crisis’ around availability and affordability with respect to personal injury liability. This perceived ‘insurance crisis’ prompted the then government to undertake the Review of the Law of Negligence. The report arising from that review, authored by The Honourable David Andrew Ipp, was published in October 2002 and is referred to in Australia as the Ipp Report.

The Ipp report was a springboard for tort law reform throughout Australia. Many, though not all, of the Ipp report’s recommendations were incorporated into legislative reforms at both Commonwealth and State and Territory levels.

The desirability of uniform reform of tort legislation was emphasised by the Ipp report and confirmed as an objective of the Federal Government in April 2003 at its Joint Communiqué: Ministerial Meeting on Insurance Issues.

Unfortunately, however, despite over two decades having now passed since the introduction by many jurisdictions of civil liability legislation, a true uniform approach remains elusive.

Commentary

Since the reforms were introduced, there has been debate regarding the very existence of a liability insurance crisis and its causes, and whether the reforms have achieved the important goal of restoring balance between the rights of victims of negligence and the stability of the insurance market.

Whether or not the original objective has been achieved, it is clear the reforms have served to tighten the law of negligence throughout Australia by imposing limitations on certain types of claims and capping various heads of damages. In some States and one Territory, reforms to the substantive legal principles have also been coupled with a major procedural overhaul which has introduced legislated steps that must be taken prior to a claimant being entitled to commence court proceedings.

With most States and Territories having now had the benefit of their respective tort legislation for over 20 years, there is an abundance of case law and commentary to provide assistance and guidance in the application of the various Acts and sections.

Whilst many would argue that plaintiffs face a higher burden to succeed under the Civil Liability Act of each respective State and Territory, there is no doubt that practitioners have greater certainty of their prospects under the regime and Insurers have been able to assess risk and provide cover with greater confidence. This has been integral to the on-going affordability of insurance and therefore the viability of essential business in Australia.

The common law position on causation

One example of an area of civil liability impacted by legislative reform is the issue of causation. In Australia a key concept in negligence requires a plaintiff to prove, on the balance of probabilities, that a tortfeasor’s breach of duty was causative of the plaintiff’s harm or injury. If causation is satisfied, damages will be recoverable. If causation is too remote, or if the chain of causation is broken, damages will not be recoverable.

The common law concept of causation requires only a finding that event ‘A’ was a cause or materially contributed to, but not necessarily the sole cause, of result ‘B’. Causation is a question of fact. It is to be decided by the application of common sense to the facts of the case.  

The traditional test for causation has therefore been the ‘but for’ test; that is, would the harm not have occurred but for the defendant’s wrongdoing? If yes, then causation is satisfied.

However, the ‘but for’ test has been judicially considered not to be a comprehensive and inclusive test for causation capable of being applied to all cases.

The Australian approach to the question of causation at common law therefore continues to be refined.

Legislative reform

In Australia the civil liability legislation introduced in most states provides for proof of causation based on common principles. To establish whether negligence caused the harm alleged, the states have adopted the below test for causation, which involves two levels of inquiry, that is:

Factual causation: Was the negligent act a necessary condition of the occurrence of the harm?

Scope of liability: Does the injury or harm fall within the scope of the negligent person’s liability?

In all Australian jurisdictions, the plaintiff bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation.

To determine factual causation, Australian courts undertake enquiries as to whether the defendant’s conduct played a part in bringing about the harm or loss complained of.

The statutory test for factual causation essentially reflects the ‘but for’ test. That is, the plaintiff’s harm would not have occurred ‘but for’ the breach of duty of the defendant.

Where factual causation cannot be established because it cannot be proved that the breach was a necessary condition of the occurrence of harm, some Australian states have made provision for an ‘exceptional case’ or ‘appropriate case’. In that situation, the court must exercise a value judgment in evaluating whether or not a defendant should be held responsible for the harm.

Where factual causation is established, the court must then consider (amongst other relevant things) whether or not and why responsibility for the harm rests with the defendant. In most, but not all jurisdictions, the plaintiff’s evidence as to what they would have done if no breach of duty occurred, is inadmissible.

Future reform

The debate as to whether legislative reform has achieved its objectives for personal injury litigation continues across Australia as the legislature and the judiciary continue to try to find balance between personal responsibility and social expectation of proper compensation and care for injured persons.

To keep up to date on this, Carter Newell publishes the Australian Civil Liability Guide, now in its 12^th edition, to assist in understanding the reforms that have occurred to date and the current state of civil liability law in all jurisdictions of Australia.