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LAW REFORM (DELAY IN RESOLUTION OF PERSONAL INJURY CLAIMS) BILL\TOC\2\LAW REFORM (DELAY IN RESOLUTION OF PERSONAL INJURY CLAIMS) BILL

\IND\Speech:nn:The Hon. M.J. ATKINSON The Hon. M.J. ATKINSON (Attorney-General) obtained leave and introduced a bill for an act to provide for the award of damages for the benefit of the dependants or the estate of a deceased person where a person against whom a claim for personal injury lies unreasonably delays resolution of the claim; to amend the Wrongs Act 1936 and the Survival of Causes of Action Act 1940; and for other purposes. Read a first time.

One White

The Hon. M.J. ATKINSON: I move:

That this bill be now read a second time.

The bill was introduced into the last parliament and was passed in another place, but lapsed when parliament was prorogued before the last election. The bill—a government bill—was an adaptation of a private member's bill moved by the Hon. Nick Xenophon to try to help victims of meso­thelioma and asbestosis. The bill would add a new divi­sion 10A to Part 3 of the Wrongs Act 1936. The new division is entitled `Unreasonable delay in resolution of claim'. The bill would also amend the Survival of Causes of Action Act 1940 and update it by removing references to obsolete causes of action.

New division 10A would create a new entitlement to damages in the nature of exemplary damages in certain circumstances. Courts and tribunals would be able to award damages under section 35C on the application of the personal representatives of a person who has suffered a personal injury (including disease or any impairment of physical or mental condition) and who has a made a claim for damages or compensation, but died before damages or workers' compen­sation for non-economic loss have been determined. The section 35C damages could be awarded if the defendant is found liable to pay damages or compensation to the person who suffered the injury and certain other factors exist.

The damages would be awarded against the defendant or other person who controlled or had an interest in the defence of the claim such as the insurer, a liquidator, or the personal representatives of a deceased defendant. They are called in the bill `the person in default'. The section 35C damages would be payable if the court or tribunal finds that the person in default knew, or ought to have known, that the claimant was, because of advanced age, illness or injury, at risk of dying before resolution of the claim and that the person in default unreasonably delayed the resolution of the claim. I seek leave to insert the remainder of the second reading explanation in Hansard without my reading it.

Leave granted.

TAKE IN H:\2READEXP\LRDIROPI.DOC

law reform (delay in resolution of personal injury claims) bill 2002 The ques­tion of whether the person in default unreason­ably delayed is to be determined in the context of the proceedings as a whole, including negotiations prior to the issue of proceed­ings in a court or tribunal, and including the conduct of the deceased person and any other parties.

Damages may not be awarded under this bill if damag­es for non-economic loss have been recovered already or are recoverable by the estate under section 3(2) of the Survival of Causes of Action Act 1940 as amended by the Survival of Causes of Acton (Dust-Related Conditions) Amendment Act 2001 (Act No 49 of 2001).

The amount of the damages would be at the discretion of the court or tribunal. In determin­ing the amount of these damages the court or tribunal would be required to have regard to the need to ensure that the defendant or other person in default does not benefit from the unreason­able delay in the resolution of the de­ceased person's claim, the need to punish the person in default for the unreason­able delay and any other relevant factor. The first element is based on concepts of unjust enrichment and is restitutionary in nature. An amount by which the person in default would benefit or be unjustly enriched by unrea­sonable delay is the amount of the liability for non-eco­nomic loss. The second element is punitive in nature. The third element ensures that any other factors that are rel­evant are taken into account.

However, the amount that may be awarded when the claim that has been delayed unreasonably is a claim for workers' compensa­tion may not exceed the total amount that would have been pay­able by way of compensation for non-eco­nomic loss under the relevant workers' compensa­tion Act if the worker had not died.

In Australia liability for exemplary damages is several. This means that when there are several tortfeasors, exem­plary damages may be awarded against only one or some of them or different amounts may be awarded against different tortfeasors.

The bill would direct that normally the damages be paid to the dependants of the deceased claimant, but the court or tribunal has a discretion about this. If they are not paid to dependants, then they are paid to the estate. In appor­tion­ing the damages between dependants, the court or tribunal would be required to have regard to any statu­tory entitle­ments, such as those that are conferred on depend­ants by the workers' compensation legislation.

A claim for section 35C damages could be added to pro­ceed­ings commenced by the deceased person and con­tinued by the personal representative or the personal repre­sentative could issue separate proceedings within 3 years of the date of death of the deceased person.

The object of these new provisions is to deter delay by persons who stand to gain by a reduction in their liability if the claimant dies before the claim is resolved. The bill should remove the incentive for them to delay claims and also provide an incentive to deal with them quickly.

The need for this reform arises because of the current state of the law, which gives an incentive to those who are liable to pay damages or compensation to delay a claim if it is thought that the claimant is likely to die in the near future. The manner in which this comes about is now summarised.

A person who suffers personal injury because of the civil wrong (tort) of another person may sue for common law damages, including for non-economic loss, i.e. for the claimant's personal pain and suffering, loss of mental or bodily function and loss of expectation of life. However, the liability for damages for non-economic loss ceases upon the death of the claimant. (Damages for economic loss have survived the death of the claimant since enact­ment of the Survival of Causes of Action Act 1940).

A worker who suffers a permanent compensable dis­ability in the course of his or her employment has a statu­tory right to com­pensation for his or her non-economic loss without proof of any fault on the part of the employer. The lump sum for non-economic loss is not payable under the Workers' Rehabilitation and Com­pensation Act 1986 unless the worker survives for 28 days after suffering the disability, although the surviving spouse and any depend­ants become entitled by operation of that Act to death benefits on the death of the worker from the compensable injury.

Thus, if the claimant dies before the claim is settled or deter­mined by the court or tribunal, the defendant is re­lieved of liability for damages or compensation for non-economic loss.

The new remedy would be available in any case in which the claimant dies after the Act comes into operation. This would have the effect of discouraging delay by de­fendants of claims that have been made already. It would ensure also that people who have been exposed to injuri­ous sub­stances in the past, but who have not yet made a claim, perhaps because they have not yet developed mani­fest symptoms, will have the benefit of the effect of this reform. It is thought that it is a fair approach because a defendant against whom a good claim is made is liable to pay damages or compensation for non-economic loss if the claimant lives. If the claimant dies, thereby relieving the defendant of that liability, a risk of a different liability would arise in its place, i.e. the risk of liability to pay the section 35C damages if the defendant is found to have unreasonably delayed the proceedings knowing that by reason of advanced age, injury or illness the claimant was at risk of dying before the claim was resolved. Unreason­able delay in the circumstances in which this new remedy would apply is uncon­scionable and the defendant should not be permitted to benefit from it regardless of whether it occurred before or after the Act came into operation.

Obsolete Provisions of the Survival of Causes of Action Act 1940

Section 2 of the Survival of Causes of Action Act 1940 provides that the causes of action of defamation, seduc­tion, inducing one spouse to leave or remain apart from the other and claims under section 22 of the Matrimonial Causes Act 1929-1938 for adultery do not survive the death of the plaintiff or the defendant. Actions for seduc­tion, enticement and harbouring were abolished in 1972 by the Statutes Amendment (Law of Property and Wrongs) Act 1972. The time limit within which these actions must be brought is 6 years and all pending proceedings would have been finalised by now. Section 22 of the Matrimo­nial Causes Act 1929 (SA) con­cerning actions for damages for adultery ceased to have any effect when the Matrimo­nial Causes Act 1959 of the Commonwealth came into operation in 1961. Although the 1959 Commonwealth Act, which replaced it, allowed a husband or wife to sue for damages for adultery, this right was abolished on 1 January 1976 by the Family Law Act 1975. The High Court ruled that an action for damages for adultery could not be maintained after I January 1976. Thus the reference in the Survival of Causes of Action Act to damages for adultery became obsolete in 1961, or at the latest in 1976. Thus, the only one of these causes of action that can now be pursued is an action for defamation. Section 2 of the Act has been repealed and recast to modern drafting stand­ards with reference to the obsolete causes of action re­moved.

Although a cause of action for breach of promise to marry survives the death of the plaintiff or defendant, section 3(1)(c) of the Survival of Causes of Action Act limited the damages recover­able for the benefit of the estate of the jilted party. The right to sue for damages for breach of a promise of marriage was abolished in South Australia on 18 November 1971 by the Action for Breach of Promise of Marriage (Abolition) Act 1971. All pro­ceedings issued before 18 November 1971 would have been finalised by now. Section 3(1)(c ) of the Survival of Causes of Action Act is now obsolete and so is to be re­pealed.

I commend this bill to the house.

Explanation of Clauses

Clause 1: Short title

This clause is formal.

Clause 2: Commencement

The measure will be brought into operation by proclamation.

Clause 3: Amendment of Survival of Causes of Action Act 1940

This clause provides for the amendment of the Survival of Causes of Action Act 1940 to update its application in the light of Division 10A of Part 3 of the Wrongs Act 1936 (see clause 4).

Clause 4: Amendment of Wrongs Act 1936

This clause provides for the amendment of the Wrongs Act 1936. It is intended to provide that a court may award damages, on the application of the personal representative of a deceased person, in certain cases involving unreason­able delay in the resolution of a claim for compensation or damages with respect to personal injury suffered by a person before he or she died. An award may be made if (a) the person in default, knowing that the claimant in the personal injury case was, because of advanced age, illness or injury, at risk of dying before the resolution of the claim, unrea­sonably delayed the resolution of the claim; (b) the person in default is the person against whom the claim lay, or is some other person with authority to defend the claim; and (c) the deceased person died before com­pensation or damages for non-economic loss were finally determined by agreement by the parties or by a judgment or decision of a court or tribunal. A court or tribunal will, in determining the amount of any damages, have regard to (a) the extent to which unreasonable delay in the resolu­tion of the claim is fairly attributable to the person in default (and his or her agents), and the extent to which there are other reasons for the delay; and (b) the need to ensure that the person in default does not benefit for his or her unreasonable delay; and (c) the need to punish the person for the unreasonable delay. Damages will be paid, at the direction of the court or tribunal, to the dependants of the deceased person, or to his or her estate. The provi­sion will apply if the deceased person dies on or after the commencement of the measure (whether the circumstances out of which the personal injury claim arose occurred before or after that date).

One White

Ms CHAPMAN secured the adjournment of the debate.