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LAW REFORM (IPP RECOMMENDATIONS) BILL

The Hon. K.O. FOLEY (Deputy Premier) obtained leave and introduced a bill for an act to amend the Wrongs Act 1936, the Limitation of Actions Act 1936 and the Motor Vehicles Act 1959. Read a first time.

The Hon. K.O. FOLEY: I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

This Bill represents the second stage of the Government's legislative response to the crisis in the cost and availability of insurance. As Members recall, the first stage was completed in August last year, with legislation to apply to all personal-injury damages claims the same caps, thresholds and other limits as applied in motor accident claims, as well as legislation to permit structured settlements and legislation to provide for codes governing liability for injuries sustained in the course of risky recreations.

Those reforms included measures to restrict the size of awards of damages for personal injury, including a points scale for damages for non-economic loss, a cap on economic loss claims and like measures. This second stage implements the key liability recommen­dations of the Ipp committee.

Members will be aware that, in July 2002, the Commonwealth Minister for Revenue and Assistant Treasurer, with the agreement of Treasurers nationally, appointed the Ipp committee to report on comprehensive reforms to the law of negligence designed to reduce the cost of injury claims and, hence, the cost of insurance.

The committee comprised the Honourable Justice Ipp (now of the Court of Appeal in the Supreme Court of New South Wales and formerly of the Supreme Court of Western Australia), Professor Peter Cane (a professor of law at the Research School of Social Sciences, Australian National University), Associate Professor Dr Don Sheldon (Chairman of the Council of Procedural Specialists) and Mr Ian Macintosh (the Mayor of Bathurst City Council and Chairman of the New South Wales Country Mayors Association).

The committee reported initially in August 2002, and finally on 30 September 2002. Its report made wide-ranging recommendations dealing with liability and damages for negligently caused personal injury. The report covered medical negligence, amendments to the Commonwealth's Trade Practices Act, limitation of time to bring injury claims and liability in negligence, including standard of care, causation and foreseeability, contributory negligence, mental harm, liability of public authorities, proportionate liability and restrictions on damages.

The interim and final reports of the Ipp committee have been considered by the Commonwealth Government and by Treasurers nationally. At a meeting on 15 November 2002, Treasurers agreed in principle on nationally consistent legislation to be enacted separately by each jurisdiction to implement the key recommenda­tions of the Ipp committee on liability for personal injury. Treasurers noted that most jurisdictions had already legislated measures relating to awards of damages as thresholds and caps.

Since then, all jurisdictions have been working towards legislation. New South Wales has already legislated to implement most of the Ipp recommendations on liability. The Civil Liability Amendment (Personal Responsibility) Act 2002 passed the New South Wales Parliament in November 2002. It deals with the duty of care, causation, obvious risks, contributory negligence, mental harm, proportionate liability, the liability of public authorities and matters some of which South Australia has already legislated; for example, intoxication, claims by criminals, good samaritans, volunteers' protection and apologies.

Queensland has recently introduced legislation implementing most of the Ipp recommendations on liability. The Civil Liability Bill 2003 deals with, in particular, obvious risks, medical negligence, risky recreational activities, proportionate liability and the liability of public authorities. The Queensland Bill also covers some measures already legislated in South Australia, such as a cap on general damages in injury cases, limits on liability for injuries to criminals, mandatory reductions in damages where the plaintiff was intoxicated and exclusion of interest on pre-judgment non-economic loss.

Western Australia has also introduced the Civil Liability Amendment Bill 2003, which deals with the principles of negligence, obvious risks of recreational activity, mental harm, public authorities and proportionate liability. It also covers some measures already legislated here, such as a presumption of contributory negligence in case of intoxication, protection for good samaritans and apologies.

The Government has undertaken extensive consultation in preparing this Bill. A discussion paper was published in February and attracted submissions from a wide range of groups representing the professions and business, the sporting and recreation sector, volunteer groups and others. Ministerial meetings were held with several interested parties. In general, the Government has been encouraged by the response. There is broad support for the proposed measures. Some particular measures were criticised, and the Government has taken these criticisms into account, departing from its original intentions in some respects.

The chief purpose of the Bill is to amend the Wrongs Act to reform some aspects of the law of negligence with the expectation of moderating the cost of damages claims and, thus, the cost of insurance. The Bill does not attempt a complete codification of the law of negligence (a task that Members may acknowledge would be immense) but simply focuses on some specific aspects identified by the Ipp Committee as being in need of either restatement or reform.

The Bill proposes that these new laws are to apply to any claim for damages resulting from a breach of a duty of reasonable care or skill, regardless of whether the claim is brought in tort or contract, or under a statute. It does this by defining `negligence' to include any failure to exercise reasonable care or skill. This accords with Ipp's Recommendation 2, and is necessary because the same event might give rise to several different causes of action. For example, a patient might sue a doctor both in negligence and for a breach of a contrac­tual duty of care. If the new laws were to apply to negligence alone, then it would be possible to evade them by choice of the cause of action. If that happens, the desired benefit of reduced insurance premiums would be lost. Rather, the Bill is intended to apply to all claims for damages for failure to exercise reasonable care or skill, whether the action is brought in tort, say, as a negligence claim, in contract as a breach of a contractual duty of care, or as an action for breach of a statutory duty or warranty of reasonable care.

The Bill applies to all kinds of harm, not just personal injury. This is the approach taken in New South Wales, Queensland and Western Australia. The terms of reference of the Ipp committee confined its report to personal injury claims but it is desirable that the same basic principles of negligence, such as the rules about causation or standard of care, apply regardless of the type of damage claimed.

To some extent, the Ipp recommendations propose to codify the common law rather than to change it. Some of the provisions of the Bill, such as those dealing with causation, foreseeability and standard of care, are restatements of the law designed to bring clarity and to make more explicit the reasoning processes that courts should apply in reaching conclusions about liability.

The Bill also makes some important changes to the present law. By clause 27 (proposed new section 41) it adopts Ipp Recommenda­tion 3 dealing with the liability of medical practitioners for profes­sional negligence resulting in injury. Because the terms of reference of the Ipp committee were limited to personal injury, its recommen­dation is focused on the medical profession. However, consistently with comment received from many sources, the Bill covers all professionals. There is no good reason for applying a different standard of care to doctors than to other professionals.

Under our current law, it is up to the court to decide whether a professional person has been negligent. The court hears evidence from other professionals and forms its own view as to whether the defendant has departed from the standard required of the reasonably competent practitioner of that profession. The Ipp committee noted that the court is never required to defer to expert opinion although, in the normal course, it will. It found that `a serious problem with this approach is that it gives no guidance as to circumstances in which a court would be justified in not deferring to medical opinion'. As a solution, the Ipp committee concluded that the test for determining the standard of care in treating patients should be that `a medical practitioner is not negligent if the treatment provided was in accordance with an opinion widely held by a significant number of respected practitioners in the field, unless the court considers that the opinion was irrational'.

Accordingly, proposed new section 41 would entitle a profession­al person to defend a negligence action by proving that there is a widely-accepted professional opinion to the effect that the action taken in the particular case was competent professional practice. The opinion must be widely accepted. A professional will not be able to avoid liability for a negligent choice of action or a negligently performed procedure by mustering a handful of friends to say that the action was acceptable. Rather, it will be necessary for the defendant to prove, on the balance of probabilities, that there is in Australia a substantial body of professional opinion that supports the action.

This is as it should be. If a practitioner in a profession has, in fact, acted in accordance with widely held professional opinion, then he or she has acted reasonably and so has not been negligent, even if the action taken has produced adverse results and even if someone else might have acted differently. No-one can guarantee a perfect result from any professional procedure. Things can, and do, go wrong through no-one's fault. The law should not place on professionals a greater burden than ensuring that they act in accordance with what is widely held in their profession to be competent practice. If they have acted accordingly, they are not negligent, even if perhaps some expert can be found from somewhere to say otherwise.

However, on Ipp's recommendation, the Bill recognises that, from time to time, an opinion might be widely held by respected practitioners and yet be irrational. If the court thinks that is the case, it may find negligence.

Of course, this proposed defence is not the only defence available, and one can imagine many cases in which it will not be available. To use medical examples, there may be cases of mistake, for instance, where the wrong dose of a drug is given, where blood of the wrong type is transfused, or where the operation is performed on the wrong limb. The defence will be relevant chiefly in cases where it is alleged that the action chosen was unsuitable to the case, or was carried out in the wrong way. Note, in particular, that the defence will not be available in medical cases based on alleged failure to warn of risks. In those cases, the rule in Rogers v Whitaker will continue to apply.

The New South Wales Act and the Queensland Bill each incorporate similar provisions. The Western Australian Bill, however, does not incorporate the Ipp recommendations concerning liability of professionals.

The Ipp committee proposed by Recommendation 4 that, in a negligence action against a person professing a particular skill, the standard of care should be stated to be what could reasonably be expected of a person professing that skill in all the circumstances at the time. This, in effect, restates the common law. It is intended, particularly, to draw attention to the fact that courts must resist the temptation to be wise in hindsight. They are to determine what could reasonably have been expected of the professional person, given the circumstances prevailing at the time. Proposed new section 40 gives effect to this recommendation.

Based on submissions received, the Government has decided not to adopt Ipp's Recommendations 5 to 7 dealing with doctors' duties to warn patients of the risks of treatment. It appears that the present law is well understood by doctors and that a practice of warning patients using standard form information, signed consents and other methods is in wide use.

Neither New South Wales nor Western Australia has adopted these recommendations, although Queensland plans to do so.

Initially, the Government had proposed to adopt all the Ipp recommendations dealing with liability for risks that are obvious. There is much to be said for the view that if a person chooses to engage in a dangerous recreation and is hurt when one of the obvious dangers comes to pass, he or she should not be able to blame others. However, the Government has been persuaded by submissions to abandon the proposal to enact Recommendation 11. The Recreation­al Services (Limitation of Liability) Act 2002 already provides an avenue by which providers of dangerous recreations will be able to limit their liability. Also, more recent common law developments suggest that the pendulum has swung away from the extreme reached in the case of Nagle v Rottnest Island Tourist Authority. Further, the proposal could have had unintended effects in relieving providers of the duty to provide safe equipment and conditions. The Bill does not, therefore, make any provision about liability for the materialisa­tion of obvious risks of recreational activities.

The Government still believes, however, that the Ipp committee is right in recommending that the law specifically state that there is no liability for failure to warn of obvious risks in any context. The Bill so provides by clause 27 (proposed new section 38). It is important to understand that this is not limited to recreational services. It can apply to occupation of land, for example. If a risk is obvious, then it is reasonable to expect the plaintiff to detect it and to take reasonable care against it. In large part, this probably reflects the common law. In considering whether a person was negligent in failing to give a warning, the court will consider, among other things, whether in the circumstances the danger was so obvious that there was no duty to warn. For example, in Romeo v Conservation Commissioner, (1998) 192 CLR 431, Justice Kirby observed that `where a risk is obvious to a person exercising reasonable care for his or her own safety, the notion that the occupier must warn the entrant about that risk is neither reasonable nor just.' This seems to the Government to be plain common sense. The more recent case of Woods v Multi-Sport Holdings Pty Ltd also illustrates this point. A statutory statement is, however, useful in sending a message.

There are some important exceptions to this general principle. One is where there is an Act or regulation requiring a warning. Another is the duty of a heath care practitioner to warn about the risk of injury from the provision of a health care service. The effect of this exception is that no medical risk can be an obvious risk. This is reasonable because, in general, medical knowledge is needed to appreciate such risks.

These recommendations have also been considered in the context of the sporting use of registered motor vehicles. At present, the CTP insurance scheme covers bodily injury sustained in the course of a race or rally on a road if the defaulting driver is driving a South Australian registered vehicle. This is so, even though the road has been closed off officially for the race and the road rules, including the speed limit, suspended. Consistently with the spirit of Ipp's recommendations, the Government believes that those who choose to participate in road races and rallies, knowing that the road rules will not apply, should not be able to claim on the CTP fund if they are injured as a result. Accordingly, the Bill proposes to amend the Motor Vehicles Act 1959 to exclude coverage for this situation, and also for the situation where a registered vehicle is raced on a racetrack. Further, although CTP cover will still apply if a spectator is injured by a driver's negligence, the Bill would give the Motor Accident Commission a right of recovery against the race organisers.

The Bill also deals with some of the principles to be applied by the court in negligence cases. Here it closely follows the recommen­dations of the Ipp committee about foreseeability, causation and remoteness of damage.

Clause 27 (proposed new section 32) sets out how the court is to decide whether the defendant ought to have taken precautions to reduce or avoid a risk. The present law uses the concept of `foresee­ability'. If a risk is `far-fetched or fanciful', there is no duty to take action to reduce or avoid it (Wyong Shire Council v Shirt). If it is otherwise, it may be that precautions should have been taken. The Bill proposes to codify the law by providing that the threshold for liability in respect of a risk is that the risk is `not insignificant'. This is intended to set a standard higher than the present `far-fetched or fanciful' rule and yet not as high as `significant'. That is, the risk does not have to be a major or important risk before the defendant will be required to take it into account. However, this does not mean that a person must always take precautions against any risk that is `not insignificant'. Instead, once the risk is so identified, the `negligence calculus' applies. This involves an assessment of whether a reasonable person would have taken precautions against that risk, having regard to—

×the probability that the harm would occur if care were not taken; and

×the likely seriousness of that harm; and

×the burden of taking precautions to avoid the harm; and

×the social utility of the risk-creating activity,

amongst other things.

The court is to weigh up all these factors in each case to decide whether the defendant should have taken action to reduce or avoid the risk.

Proposed new sections 34 and 35 deal with causation. Again, what is proposed is, to some extent, a codification. It is provided that the plaintiff always bears the burden of proving any fact relevant to causation and that the standard of proof is the balance of probabili­ties. The Bill goes further, however, and makes express the fact that, to some extent, when deciding questions of causation, courts make judgments about whether a defendant should be held liable. It does this by distinguishing `factual causation' from `scope of liability'.

'Factual causation' normally involves answering the question whether the negligence was a necessary condition of the occurrence of the harm. However, Ipp proposes an exception for certain cases where factual causation cannot be established because it is not possible to prove which of several negligent acts was in fact causative. In that case, factual causation can nonetheless be found in accordance with established principles but it will be necessary for the court to make a judgment as to whether and why a defendant is to be held liable.

Proposed new Part 7 deals with contributory negligence. It provides that the same rules should apply to determine whether the plaintiff was contributorily negligent as would apply to determining whether the defendant was negligent. Again, this restates the common law. This general provision, of course, does not derogate from specific statutory provisions about contributory negligence, such as the rule that a person who is intoxicated automatically loses at least 25 per cent of his or her damages.

Proposed new section 37 deals with the defence of voluntary assumption of risk. It is a defence to a negligence action that the plaintiff willingly chose to take a risk. He or she therefore cannot complain when the risk eventuates. The defence rarely succeeds. The court is more likely to deal with such a case by holding the plaintiff contributorily negligent. One reason why success is so rare, Ipp argues, is that courts are unwilling to find that the plaintiff actually knew about the risk so as to assume it. Another is that courts require the defendant to prove that the plaintiff knew of the particular risk that in fact eventuated, not just the general possibility of harm.

Accordingly, following Ipp's recommendation, this new section would make it easier to establish a defence of voluntary assumption of risk by two means. First, where a risk is obvious, the plaintiff will be presumed to have known of it. That is, the defendant does not need to prove that the plaintiff actually knew but only that the risk was obvious. It is, however, to be open to the plaintiff to show that even though the risk was obvious, he or she did not in fact know of it. Second, it provides that it is not necessary to show that the plaintiff knew of the exact nature or manner of occurrence of the risk. It is enough to show that he or she knew of the type or kind of risk (or that a risk of this type or kind was obvious).

Proposed new sections 33 and 55 deal with liability for mental harm. For the most part, they restate the existing law but there is a departure. At present, if a person suffers bodily injury and, in consequence, also suffers mental harm, damages are payable for the effects of both regardless of whether the mental harm amounts to a psychiatric illness or is merely mental distress. On the other hand, if the person suffers no bodily injury, but only mental shock (for instance, as a bystander at an accident), there is no claim unless the shock can be diagnosed as a psychiatric illness. Ipp proposed that, in the case of consequential mental harm, damages for economic loss should be recoverable only if the mental harm amounted to a recognised psychiatric illness. Proposed new section 55 embodies this rule.

Proposed new section 42 deals with the liability of highway authorities. It is intended to restore the `highway immunity' rule. As is well known, the High Court in Brodie v Singleton Shire Council held that the former rule that protected highway authorities from liability for harm resulting from mere inaction was no longer good law. This decision overturns the legal basis on which highway authorities had, until 2001, made their risk management plans and arranged their road maintenance activity. The Government had proposed, in its discussion paper, to restore the highway immunity rule temporarily, but also to adopt the Ipp recommendations for a policy decision defence for all public authorities. As a result of comment, and also of the High Court's decision in the case of Ryan v Great Lakes Shire Council, the Government has decided not to proceed with a policy decision defence for public authorities. Accordingly, the highway immunity rule is to be restored indefinite­ly. In the longer term, however, it may come to be replaced by a defence based on adherence to objective road maintenance standards.

Some other jurisdictions have restored the rule. Under section 45 of the New South Wales Act, a road authority is not liable for failing to carry out or to consider carrying out road work, unless the authority actually knows of the danger. Victoria has also restored the immunity but on a temporary basis until 1 January 2005. It intends that, in the meantime, road maintenance standards be devised. It has mooted legislation to provide that compliance with standards will be a defence to a negligence action. Queensland also proposes temporary restoration of the rule until 31 December 2005. In Tasmania the rule is statutory and so the effect of the Brodie decision there has been minimal. The Western Australian Bill would not, however, restore the rule. It deals with the liability of public authorities in accordance with the Ipp recommendations.

Proposed new section 44 provides that if a person is subject to a non-delegable duty to see that another person takes reasonable care, then the provisions of this Act as to liability for breach of that duty apply as if the person were vicariously liable for the negligence of their contractor. Again, this is intended to prevent actions for breach of a non-delegable duty being taken as a way around the limitations imposed by the new law.

The Bill also amends the Limitation of Actions Act 1936. It does not adopt the recommendations of the Ipp report in this respect. The Government was concerned that these were complex and difficult to apply. They also had the potential to prejudice the rights of children whose parents neglected to take action in time and thus to lead to litigation between parents and children. Several submissions urged the Government not to adopt Ipp's recommendation that time should run against a minor. Further, there has not been national support for the Ipp recommendations dealing with limitation of actions. So far, they have been adopted only by New South Wales. Neither Queensland nor Western Australia proposes to adopt them.

Instead, taking up suggestions presented in some submissions, the Bill makes 3 main reforms to the law relating to limitation of liability. First, it amends section 48 of the Limitation of Actions Act to restrict extensions of time. Evidence presented in submissions suggested that extensions are, at present, readily available and that the necessary new material fact can readily be found, often in the form of a new medical report. The Government thinks it desirable to refocus the law so that extensions are not granted just because a new relevant fact has been discovered, but are only available if the plaintiff can show that the fact forms an essential element of the plaintiff's claim, or would have major significance on an assessment of the plaintiff's loss.

Second, the Bill provides that the parent or guardian of a child under 15 years of age is to give notice of the claim to the prospective defendant within 6 years after the accident. If a parent fails to give a notice, the child does not lose the right to sue—this still endures until the `child' turns 21. However, in that case, the cost of medical treatment and legal work incurred by the parents and the gratuitous services rendered by them before the date of commencement of the proceedings are not claimable from the defendant, unless the court finds that there was a good reason excusing the non-compliance with the notice requirement. This bears some analogy with the Queens­land Personal Injuries Proceedings Act, as proposed to be amended by the Civil Liability Bill 2003.

Once the prospective defendant is served with this notice, he or she is entitled to have access to the child's medical and other relevant records (such as school records) and to have the child medically examined at reasonable intervals at the defendant's expense.

Further, a defendant who has been served with a notice can require the child's parent or guardian to apply for a declaratory judgment on liability. After 6 years, it should be possible to deal with the issue of liability, even though final assessment of damages may need to await the child's maturity. The Government thinks this is fair, because of the risk that evidence relevant to liability may deteriorate with time. For example, if the case is one of birth injury, the hospital staff who were involved in the incident may leave, retire or die if the case is left too long. Records of what happened may be lost or destroyed. All of this reduces the chance of the court establishing whether there has been negligence, and by whom. It is fair that in this case the prospective defendant be able to ask the court to decide whether it is legally liable or not.

The Ipp committee also made recommendations about damages awards, legal costs and other matters. For the most part, the Government considers that concerns about the quantum of damages claims have been adequately addressed by the amendments to the Wrongs Act that passed this Parliament last August. There are, however, 2 measures that have been considered necessary to ensure that the law achieves its intended results. Proposed new section 47 makes it clear that in a loss of dependency claim, the damages recoverable by the dependants are to be reduced for any contributory negligence of the deceased. Further, the cap imposed on damages for economic loss also applies to those claims. There is no reason why they should be treated differently from other claims.

Finally, I mention that, in its discussion paper, the Government asked for comment on 2 other measures—proportionate liability and professional standards legislation. Both are still under consideration and further legislation may well be brought before this House in due course. In particular, the proposal to move to proportionate liability for claims for economic loss and property damage attracted a good deal of support from commentators on the Government's discussion paper. Proportionate liability has already been legislated in New South Wales and is included in both the Queensland and Western Australian Bills, although Queensland has adopted a divergent model that sets a $500 000 threshold. Both proportionate liability and professional standards legislation will be further discussed at forthcoming national Ministerial meetings.

The Government believes this Bill strikes a fair balance between the interests, on the one hand, of defendants and their insurers and, on the other, of plaintiffs who have legitimate and proper claims. It is important to protect the rights of persons injured through the wrongdoing of others. Equally, it must be recognised that those rights may be worth very little, in many cases, if the wrongdoer is not insured. I hope that all Members will recognise this practical reality and will understand the need to balance these competing interests. Overall, our consultation process shows that there is broad public support for the measure. I commend it to the house.

Explanation of Clauses

General explanation

The main purpose of this Bill is to bring the law in South Australia relating to civil liability into line with the national Ipp Review of the Law of Negligence. As a result of adopting certain recommendations, the Wrongs Act 1936 is to be renamed as the Civil Liability Act 1936 and the Act is to be-ordered. Over the years, the Wrongs Act has been amended numerous times and this opportunity has been taken to simplify the numbering and to put the Act and all of its amendments into a logical sequence.

Part 1—Preliminary

Clause 1: Short title

Clause 2: Commencement

Clause 3: Amendment provisions

These clauses are formal.

Part 2—Amendment of Wrongs Act 1936

Clause 4: Insertion of heading

This clause inserts the heading `Part 1—Preliminary' before section 1 of the Wrongs Act 1936 (in Part 2 of the explanation of clauses referred to as the principal Act).

Clause 5: Substitution of section 1

1.Short title

The name of the principal Act is to be changed to the Civil Liability Act 1936.

Clause 6: Substitution of section 2

2.Act to bind the Crown

The principal Act binds the Crown.

Clause 7: Repeal of section 3

This section has been enacted in section 2 (see clause 6).

Clause 8: Amendment and redesignation of section 3A—Interpretation

Definitions formerly enacted just for the purposes of that Part of the principal Act dealing with personal injuries have been re-enacted here so that they apply for the purposes of the whole of the principal Act. A number of new definitions have also been inserted and the section is to be redesignated as section 3.

Clause 9: Insertion of section 4

4.Application of this Act

This Act applies to the exclusion of inconsistent laws of any other place to the determination of liability and the assessment of damages for harm arising from an accident occurring in this State but does not derogate from the Recreational Services (Limitation of Liability) Act 2002 or affect a right to compensa­tion under the Workers Rehabilitation and Compensation Act 1986.

Clause 10: Substitution of heading to Part 1

What was formerly designated as Part 1 of the principal Act will be designated as Part 2 (but this Part will still deal with defamation). No substantive changes are proposed to this Part.

Clause 11: Substitution of heading to Part 1A

What was formerly designated as Part 1A of the principal Act will be designated as Part 3 (but this Part will still deal with liability for animals). No substantive changes are proposed to this Part.

Clause 12: Redesignation of section 17A—Liability for animals

This section is to redesignated as section 18.

Clause 13: Substitution of heading to Part 1B

What was formerly designated as Part 1B of the principal Act will be designated as Part 4 (but this Part will still deal with occupiers liability). No substantive changes are proposed to this Part.

Clause 14: Redesignation of section 17B—Interpretation

Clause 15: Redesignation of section 17C—Occupier's duty of care

Clause 16: Redesignation of section 17D—Landlord's liability limited to breach of duty to repair

Clause 17: Redesignation of section 17E—Exclusion of conflicting common law principles

These sections (all contained in the Part dealing with occupiers liability) are to be redesignated as sections 19 to 22 respectively.

Clause 18: Substitution of heading to Part 2

What was formerly designated as Part 2 of the principal Act will be designated as Part 5 (but this Part will still deal with wrongful acts or neglect).

Clause 19: Redesignation of section 19—Liability for death caused wrongfully

Clause 20: Amendment and redesignation of section 20—Effect and mode of bringing action, awarding of damages for funeral expenses etc

Clause 21: Redesignation of section 21—Restriction of actions and time of commencement

Clause 22: Redesignation of section 22—Particulars of person for whom damages claimed

Clause 23: Amendment and redesignation of section 23—Provision where no executor or administrator or action not commenced within 6 months

Clause 24: Redesignation of section 23A—Liability to parents of person wrongfully killed

Clause 25: Redesignation of section 23B—Liability to surviving spouse of person wrongfully killed

Clause 26: Amendment and redesignation of section 23C—Further provision as to solatium etc

These sections are to be redesignated as sections 23 to 30 respective­ly. The amendments are consequential changes to cross-references.

Clause 27: Insertion of Part 6

Part 6—Negligence

Division 1—Duty of care

31.Standard of care

For determining whether a person (the defendant) was negligent, the standard of care required is that of a reasonable person in the defendant's position who was in possession of all information that the defendant either had, or ought reasonably to have had, at the time of the incident out of which the harm arose.

32.Precautions against risk

A person is not negligent in failing to take precautions against a risk of harm unless—

×the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known); and

×the risk was not insignificant; and

×in the circumstances, a reasonable person in the person's position would have taken those precautions.

33.Mental harm—duty of care

A person (the defendant) does not owe a duty to another person (the plaintiff) to take care not to cause the plaintiff mental harm unless a reasonable person in the defendant's position would have foreseen that a person of normal fortitude in the plaintiff's position might, in the circumstances of the case, suffer a psychiatric illness. This proposed section does not affect the duty of care of a person (the defendant) to another (the plaintiff) if the defendant knows, or ought reasonably to know, that the plaintiff is a person of less than normal fortitude.

Division 2—Causation

34.General principles

A determination that negligence caused particular harm compris­es the following elements:

×that the negligence was a necessary condition of the occur­rence of the harm (factual causation); and

×that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused (scope of liability).

35.Burden of proof

In determining liability for negligence, the plaintiff always bears the burden of proving, on the balance of probabilities, any fact relevant to the issue of causation.

Division 3—Assumption of risk

36.Meaning of `obvious risk'

An obvious risk to a person who suffers harm is a risk that, in the circumstances, would have been obvious to a reasonable person in the position of that person. A risk can be an obvious risk even if the risk (or a condition or circumstance that gives rise to the risk) is not prominent, conspicuous or physically observable.

37.Injured persons presumed to be aware of obvious risks

If, in an action for damages for negligence, a defence of voluntary assumption of risk (volenti non fit injuria) is raised by the defendant and the risk is an obvious risk, the plaintiff is taken to have been aware of the risk unless the plaintiff proves, on the balance of probabilities, that he or she was not aware of the risk.

38.No duty to warn of obvious risk

A person (the defendant) does not owe a duty of care to another person (the plaintiff) to warn of an obvious risk to the plaintiff. This does not apply if—

×the plaintiff has requested advice or information about the risk from the defendant; or

×the defendant is required to warn the plaintiff of the risk—

—by a written law; or

—by an applicable code of practice in force under the Recreational Services (Limitation of Liability) Act 2002; or

×the risk is a risk of death or of personal injury to the plaintiff from the provision of a health care service by the defendant.

39.No liability for materialisation of inherent risk

A person is not liable in negligence for harm suffered by another person as a result of the materialisation of an inherent risk (that is, a risk of something occurring that cannot be avoided by the exercise of reasonable care and skill). This does not operate to exclude liability in connection with a duty to warn of a risk.

Division 4—Negligence on the part of persons professing to have a particular skill

40.Standard of care to be expected of persons professing to have a particular skill

In a case involving an allegation of negligence against a person (the defendant) who holds himself or herself out as possessing a particular skill, the standard to be applied by a court in determining whether the defendant acted with due care and skill is (subject to proposed Division 4) to be determined by reference to—

×what could reasonably be expected of a person professing that skill; and

×the relevant circumstances as at the date of the alleged negligence and not a later date.

41.Standard of care for professionals

A person who provides a professional service incurs no liability in negligence arising from the service if it is established that the provider acted in a manner that (at the time the service was provided) was widely accepted in Australia by members of the same profession as competent professional practice.

Division 5—Liability of road authorities

42.Liability of road authorities

A road authority is not liable in negligence for a failure—

×to maintain, repair or renew a public road; or

×to take other action to avoid or reduce the risk of harm that results from a failure to maintain, repair or renew a public road.

Division 6—Non-delegable duties and vicarious liability

43.Liability based on non-delegable duty

If a person (the defendant) is subject to a non-delegable duty to ensure that any work or task is carried out with reasonable care and the defendant entrusts the carrying out of the work or task to another (the contractor), the defendant's liability for breach of the duty is to be determined in the same way as if the duty had been validly delegated to the contractor, and the defendant were vicariously liable for the contractor's negligent or otherwise tortious failure to carry out the duty.

Division 7—Exclusion of liability for criminal conduct

44.Exclusion of liability for criminal conduct

This is the re-enactment of current section 24I with an addition as a consequence of relocating the section from the Part dealing with personal injuries to the Part dealing generally with negli­gence.

Part 7—Contributory negligence

45.Standard of contributory negligence

The principles that are applicable in determining whether a person has been negligent also apply in determining whether a person who suffered harm (the plaintiff) has been contributorily negligent. This proposed section is not to derogate from any provision for reduction of damages on account of contributory negligence.

46.Contributory negligence in cases brought on behalf of dependants of deceased person

In a claim for damages brought on behalf of the dependants of a deceased person, the court is to have regard to any contributory negligence on the part of the deceased person.

Note: See clause which proposes to redesignate sections 24J to 24N of the principal Act as sections 47 to 51 respectively and to relocate the sections so that they follow proposed section 47 in this proposed Part.

Clause 28: Substitution of heading to Part 2A

Part 8—Damages for personal injury

What was formerly designated as Part 2A of the principal Act will be designated as Part 8 (but this Part will still deal with personal injuries) but will no longer be divided into Divisions.

Clause 29: Repeal of heading to Part 2A Division 1

This heading is otiose.

Clause 30: Repeal of section 24

The definitions set out in this section have been re-enacted in the redesignated section 3 (Interpretation).

Clause 31: Redesignation of section 24A—Application of this Part

This section is to be redesignated as section 52.

Clause 32: Repeal of heading to Part 2A Division 2

This heading is otiose.

Clause 33: Redesignation of section 24B—Damages for non-economic loss

This section is to be redesignated as section 53.

Clause 34: Substitution of section 24C

54.Damages for mental harm

The substituted provision uses the previous provision as a basis but amends it in keeping with the Ipp recommendations. Damages may only be awarded for mental harm if the injured person—

×was physically injured in the accident or was present at the scene of the accident when the accident occurred; or

×is a parent, spouse or child of a person killed, injured or endangered in the accident.

Damages may only be awarded for pure mental harm if the harm consists of a recognised psychiatric illness and damages may only be awarded for economic loss resulting from consequential mental harm if the harm consists of a recog­nised psychiatric illness.

Clause 35: Amendment and redesignation of section 24D—Damages for loss of earning capacity

This section as amended is to be redesignated as section 55. The amendment provides that in an action brought for the benefit of the dependants of a deceased person, the total amount awarded to compensate economic loss resulting from the death of the deceased person (apart from expenses actually incurred as a result of the death) cannot exceed the prescribed maximum and if before the date of death the deceased person received damages to compensate loss of earning capacity, the limit is to be reduced by the amount of those damages.

Clause 36: Redesignation of section 24E—Lump sum compensa­tion for future losses

Clause 37: Redesignation of section 24F—Exclusion of interest on damages compensating non-economic loss or future loss

Clause 38: Redesignation of section 24G—Exclusion of damages for cost of management or investment

Clause 39: Redesignation of section 24H—Damages in respect of gratuitous services

These sections are to be redesignated as sections 56 to 59 respective­ly.

Clause 40: Repeal of section 24I

It is proposed that this section be redesignated and relocated with an addition (see new section 44).

Clause 41: Repeal of heading to Part 2A Division 3

This heading is otiose.

Clause 42: Relocation of sections 24J to 24N

These sections are to be redesignated as sections 47 to 51 respective­ly and relocated so that they follow section 46 in Part 7 (see clause 27).

Clause 43: Repeal of Part 2A Division 4

This section is otiose as the substance of the provision is now set out in section 4.

Clause 44: Substitution of heading to Part 3

What was formerly designated as Part 2A of the principal Act will be designated as Part 8 (but this Part will still deal with miscellaneous matters).

Clause 45: Substitution of heading to Part 3 Division 3

Clause 46: Redesignation of section 27C—Rights as between employer and employee

Clause 47: Repeal of Part 3 Division 4

Clause 48: Redesignation of heading to Part 3 Division 5—Remedies against certain shipowners

Clause 49: Redesignation of section 29—Remedy against shipowners and others for injuries

Clause 50: Redesignation of heading to Part 3 Division 6—Damage by aircraft

Clause 51: Redesignation of section 29A—Damage by aircraft

Clause 52: Redesignation of section 29B—Exclusion of liability for trespass or nuisance

Clause 53: Redesignation of heading to Part 3 Division 7—Abolition of rule of common employment

Clause 54: Redesignation of section 30—Abolition of rule of common employment

Clause 55: Redesignation of heading to Part 3 Division 8—Actions in tort relating to husband and wife

Clause 56: Redesignation of section 32—Abolition of rule as to unity of spouses

Clause 57: Redesignation of section 33—Wife may claim for loss or impairment of consortium

Clause 58: Redesignation of section 34—Damages where injured spouse participated in a business

Clause 59: Redesignation of heading to Part 3 Division 9—Abolition of actions of seduction, enticement and harbouring

Clause 60: Redesignation of section 35—Abolition of actions for enticement, seduction and harbouring

Clause 61: Redesignation of heading to Part 3 Division 10A—Unreasonable delay in resolution of claim

Clause 62: Redesignation of section 35B—Definitions

Clause 63: Redesignation of section 35C—Damages for unreasonable delay in resolution of a claim

Clause 64: Redesignation of section 35D—Regulations

Clause 65: Redesignation of heading to Part 3 Division 11—Liability for perjury in civil actions

Clause 66: Redesignation of section 36—Liability for perjury in civil actions

Clause 67: Redesignation of heading to Part 3 Division 12—Racial victimisation

Clause 68: Redesignation of section 37—Racial victimisation

Clause 69: Redesignation of heading to Part 3 Division 13—Good samaritans

Clause 70: Redesignation of section 38—Good samaritans

Clause 71: Redesignation of heading to Part 3 Division 14—Expressions of regret

Clause 72: Redesignation of section 39—Expressions of regret

Clauses 45 to 72 are `house-keeping' provisions. They redesignate the Divisions and sections so that they follow sequentially from the previous Part.

Part 3—Amendment of Limitation of Actions Act 1936

Clause 73: Amendment of section 3—Interpretation

This amendment inserts a definition of child.

Clause 74: Amendment of section 45—Persons under legal disability

This is consequential on the insertion of the definition of child.

Clause 75: Insertion of section 45A

45A.Special provision regarding children

If a child (the plaintiff) suffers personal injury and the time for bringing an action for damages is extended by this Act (the Limitation of Actions Act) to more than 6 years from the date of the incident out of which the injury arose (the relevant date) and no action is in fact brought within 6 years of the relevant date, notice of an intended action must be given within 6 years after the relevant date by, or on behalf of, the child to the person(s) alleged to be liable in damages (the defendant).

The defendant may, by written notice, require the plaintiff, within 6 months after the date of the notice, to bring an action so that the claim may be judicially determined (in relation to liability and/or assessment of damages, as the court thinks appropriate).

The effect of non-compliance with a requirement of this proposed section on the part of a plaintiff is that, unless the court is satisfied that there is good reason to excuse the non-compliance, damages will not be allowed in such an action to compensate or allow for medical, legal or gratuitous services provided before the date the action was commenced.

Clause 76: Amendment of section 48—General power to extend periods of limitation

This amendment describes what is to be regarded as a material fact.

Part 4—Amendment of Motor Vehicles Act 1959

Clause 77: Amendment of section 99—Interpretation

This clause inserts definitions of participant and road race.

Clause 78: Amendment of section 104—Requirements if policy is to comply with this Part

A new subsection is proposed that provides that a policy of insurance complies with this Part even though it contains an exclusion of liability of the nature and extent prescribed by clause 4 of Sched­ule 4.

Clause 79: Amendment of section 124A—Recovery by insurer

This provides that where an insured person incurs, as a participant in a road race, a liability against which he or she is insured under Part 4 of the Motor Vehicles Act, the insurer may, by action in a court of competent jurisdiction, recover from the organiser of the road race the amount of the liability and the reasonable costs incurred by the insurer in respect of that liability.

Clause 80: Amendment of Schedule 4—Policy of insurance

This amendment provides that the policy of insurance set out in Schedule 4 does not extend to liability arising from death of, or bodily injury to, a participant in a road race caused by the act or omission of another participant in the road race.

The Hon. DEAN BROWN secured the adjournment of the debate.