Evidence submitted by Mark Lunney, Associate
Professor, School of Law, University of New England, Australia
1. INTRODUCTION
1.1 I am an Associate Professor at the School
of Law, University of New England, Australia. Before taking up
this post I was a lecturer, senior lecturer and reader at the
School of Law, King's College London. My primary research interest
is the law of torts, and, among other publications, I am the co-author
(with Ken Oliphant) of one of the leading tort coursebooks in
the United Kingdom.
1.2 Since returning to Australia I have
became familiar with the major statutory changes made to the law
of tort in Australian jurisdictions. I believe my comparative
experience—between the unreformed UK law of tort, and the
modified law of tort in Australia—may be of value in assisting
the Committee in its deliberations.
2. THE "CHILLING
EFFECT" OF
THE LAW
OF NEGLIGENCE
2.1 It is important at the outset to recognise
that the primary concerns about a "compensation culture"
relate to actions in the tort of negligence. My submissions will
be addressed to this issue.
2.2 Absent a major empirical study (and
even such a study would not be conclusive) it is difficult to
assess claims that behavioural change can be attributed to the
law of negligence. However, there is certainly some evidence that
public bodies modify their behaviour because of a fear of litigation.
A very good example is a case that reached the House of Lords
in 2003, Tomlinson v Congleton Borough Council [2004] 1 AC 46.
Here the claimant sued when he hit his head on the bottom of a
man-made lake (or something protruding from the bottom of the
lake) after diving into the water and suffered catastrophic injuries.
Although the claimant ultimately lost in the House of Lords, it
is instructive to see what steps the Council thought it had to
take to avoid being sued. Because warning signs had not prevented
unauthorised access to the lake, and it was impractical to employ
sufficient rangers to prevent such action, the Council had decided
that the only way to avoid the risk of injury from people diving
into the lake was to prevent access to it by planting a reed-bed
on the foreshore of the lake. As I have argued previously ("Occupiers
and Obvious Risks" (2003) 11 Tort Law Review 140), this is
a classic case of the "chilling effect" of the law of
negligence—the Council felt it was forced to deny access
to the lake to the detriment of the vast majority of the users
of the facility over concerns that it might be found liable.
2.3 Although the claimant ultimately lost
in the House of Lords, the decision does not exclude the possibility
of such claims in the future. This is because the legal basis
of the Council's victory was that it had not breached its duty
of care (ie it had not been careless). This is a question of fact
to be decided on each case. However, the House of Lords did stress
that the voluntary nature of the claimant's actions, and what
the Council could assume the claimant knew as regards the risks
associated with that conduct, were important factors in deciding
the "breach of duty" issue. In other words, it was not
careless to allow the claimant to voluntarily run a risk of injury
(by diving into the lake) of which he was or ought to have been
aware.
2.4 It was this line of reasoning—put
in terms of reintroducing "personal responsibility"
into the law of negligence—that supported the reforms to
the law of negligence in Australia. I will return to that legislation
shortly, but in terms of the result in the Tomlinson decision,
similar notions of personal responsibility clearly underpin the
decision of the House of Lords.
2.5 Whether decisions such as Tomlinson
are sufficient to reduce risk averseness of public bodies (to
the extent such a trend is evidenced by this case) to an acceptable
level will depend on the level of protection from the law of negligence
that it is thought such bodies deserve. It is worth flagging here
the diverse views that are held by tort scholars as to the appropriate
role of the law of negligence. If the aim is to embody notions
of "corrective justice"—that is, to remedy a "wrong"
committed by one party against another—the approach of Tomlinson
can hardly be faulted. The Council failed to take steps to ensure
that the claimant did not voluntarily act in such a way as to
harm himself. Only on a broad view of the social responsibility
of the Council would such a failure be seen as culpable (see also
Clough v First Choice Holidays and Flights Ltd [2005] All ER (D)
205—no liability where intoxicated claimant fell into shallow
pool; claimant had to accept the risks associated with his conduct).
However, if the goals of the law of negligence are seen as compensation
and loss distribution, finding the Council liable in circumstances
such as Tomlinson may be seen as desirable. Accidents are an inevitable
by-product of allowing people access to man-made lakes, and as
the community benefits from such facilities, the community should
pay for accidents. This is achieved if Councils are held liable
because Councils can spread the loss amongst its ratepayers. Taken
to its logical conclusion, such an approach justifies payment
of compensation on a no-fault basis, but, failing this, at least
more accident victims are compensated if public bodies are held
liable in negligence in a wide variety of circumstances.
2.6 My point here is that to ask whether
there is a "compensation culture" or whether public
bodies are unnecessarily "risk" averse is to ask questions
that cannot be answered solely by recourse to empirical arguments.
Acceptable levels of litigation are conditioned by the view one
holds of the role of negligence in the relationship between public
bodies and the individual (see, for example, the competing reviews
expressed in Kneebone, Tort Liability of Public Authorities (1998)
and my review of this book in (2000) 22 Adelaide Law Review pp
109-115). Although judges are not free to decide cases according
to an individual sense of justice, there is undoubtedly scope
in cases at the margins for such views to be influential. This
is not a criticism; rather, it reflects the view that at some
level judicial decision-making involves choices. In a parliamentary
environment, the "political" questions should be made
explicit and any decision justified, at least partly, by recourse
to views about the appropriate relationship between fault, compensation
and loss-distribution.
3. STATUTORY
REFORM OF
THE LAW
OF NEGLIGENCE
3.1 Clause 1 of the Compensation Bill is
a limited attempt to legislatively reduce the "chilling"
effect of the law of negligence. In my view, the clause will have
little effect. First, it is directed to the question of breach
of duty (the reference to standard of care) rather than to the
"duty of care". It might not be possible in every case
(because of the decisions of the European Court of Human Rights)
to deny a duty of care for the reasons set out the clause, but
it should be possible to do so in appropriate cases. However,
the legislation is not directed to this point. Secondly, the "public
benefit" of the defendant's activity is already taken into
account in the breach of duty enquiry. For example, liability
in relation to ambulances in WWII (Daborn v Bath Tramways [1946]
2 All ER 333) and fire engines (Watt v Hertfordshire County Council
[1954] 1 WLR 835) has been denied because of the public benefit
of the defendant's activity. Clause 1 is likely to bring this
factor into greater prominence but it remains a relatively minor
change. It might also be noted that the extent to which the individual
must suffer in the public interest is a matter which has attracted
the interest of human rights lawyers (see Marcic v Thames Water
Authority [2002] QB 929 (CA), [2004] 2 AC 42, Dennis v Ministry
of Defence [2003] EWHC 793). It is at least arguable that denial
of a breach of duty on the grounds of the public interest of the
defendant's activity, so as to avoid the payment of any compensation
to a person injured by that activity, may infringe Articles 2
and 8 of the Convention.
3.2 Far more radical statutory change has
been undertaken in all Australian jurisdictions in response to
concerns similar to those that have motivated this inquiry. The
reforms affect questions of both liability and quantum of damages.
Liability is affected by legislative reform requiring claimants
to take greater responsibility for their actions (hence the idea
that the reforms are based on ideas of "personal responsibility").
Broadly, these reforms provide defences to actions in negligence
where the claimant has run an obvious risk, and then seeks to
hold a defendant liable for either failing to eradicate the risk
or failing to warn of it. In most jurisdictions there is no liability
for failing to warn of an obvious risk. Persons are presumed to
be aware of obvious risks, and there is no liability where inherent
risks materialize to cause injury. In New South Wales, where the
most radical changes have been made, defences also apply in respect
of dangerous recreational activities, and providers of recreational
services are allowed to exclude liability for negligence (subject
to certain restrictions). Apart from these generic defences, public
bodies are also given specific, additional defences. Thus, in
New South Wales, limited resources are taken into account in determining
questions of duty of care and breach of duty, and there are limits
on the liability of a public body acting as a regulator.
3.3 The detailed provisions of the Australian
legislation reforming the law of negligence represent a different
model for legislative reform than that proposed by the Compensation
Bill. Whether it is preferable depends upon the amount of flexibility
it is thought desirable to give judges. For the reasons set out
above, it is possible that the enactment of Clause 1 would make
little change to the common law. However, the changes made by
legislation in Australia have had a dramatic effect in reducing
the amount of litigation. It is true that the High Court of Australia
had already begun to limit liability in negligence through a series
of what were seen as pro-defendant decisions, but the legislative
reforms have limited the scope for the judiciary to take decisions
seen as either pro-or-anti claimants or defendants.
3.4 It is my submission that, if there is
seen to be a "compensation culture" and that this is
undesirable, legislative reform of the law of negligence should
go further than that contained in Clause 1 of the Compensation
Bill. Whatever the success of the remainder of the clauses of
the Compensation Bill, and the NHS Redress Bill, the law of negligence
will remain open-ended and will not provide the certainty that
greater legislative intervention would provide. In particular,
the liability of those who supply recreational services, or allow
their land to be used for such purposes, could be limited in the
manner of the Australian legislation. I should add that I am not
an advocate for the wholesale importation of this legislation
into the England and Wales legal system (see "Personal Responsibility
and the `New' Volenti" (2005) 13 Tort Law Review 76). However,
the Australian experience suggests that greater legislative reform
than that proposed might be more successful in reducing the number
of actions for negligence.
3.5 Apart from notions of personal responsibility,
the other method adopted by Australian legislatures to avoid a
"compensation culture" has been to legislatively intervene
in the rules relating to the assessment of damages in personal
injury claims. The most significant has been to eliminate claims
for non-pecuniary loss where the injury resulted in less than
15% of total body impairment, the latter state being one of catastrophic
injury. Even beyond 15%, damages are scaled down to a proportion
of total body impairment for the purposes of calculating the award
of damages for this head (so, for example, injury assessed at
25% of total body impairment is scaled down to 6.5% for assessing
damages). The legislation also sets a maximum amount that may
be awarded for non-pecuniary loss, and the percentage recoverable
is a percentage of that maximum amount. The maximum amount is
currently $416,000.
3.6 Limits have also been set on awards
of damages for pecuniary loss. Damages for loss of earnings are
capped, and damages for the cost of care gratuitously provided
to a claimant are also limited (to where the care is for a period
of at least six months and for at least six hours/week). As in
the United Kingdom, the discount rate for future loss is set by
statute (currently 5%).
3.7 Whilst these changes have also been
successful in limiting the number of successful claims, the changes
have been controversial. Whilst eliminating the claim for non-pecuniary
loss in respect of minor injuries has reduced the number of claims,
the creation of a cap for such damages raises concerns about insufficient
compensation. Indeed, one of the main findings of the Law Commission
of England and Wales Report, Damages for Personal Injury: Non-Pecuniary
Loss, No 257 (1999) was that awards of damages for non-pecuniary
loss were too low in cases of serious injury. I note also that
awards under the Guidelines for the Assessment of General Damages
in Personal Injury Cases (6th ed, 2002) suggest that awards considerably
higher than $416,000 (about £175,000) can be made in England
and Wales. Some of the advocates of reform in Australia have also
recognised that the reforms may have gone too far (see for example,
the speech of the Chief Justice Spigelman to the Commonwealth
Law Conference in London in September 2005).
3.8 In my submission, there is no justification
for the statutory caps introduced by legislation in Australia.
In particular, the caps on damages for non-pecuniary loss operate
to increase the chances that the seriously injured will be under-compensated.
Such a reform should not be introduced in England and Wales.
3.9 Once a claimant has established a cause
of action against a defendant, the principle of full compensation
should be applied. The aim of any legislative reform of the law
of negligence (if thought necessary) should be to reduce the circumstances
where defendants are found liable. It should not penalise claimants
who have established a good claim by reducing the damages awarded
to them.
4. THE WIDER
QUESTION
4.1 Although it is outside the terms of
reference of the inquiry, it is necessary to point out that the
question of compensation for accident victims arises in circumstances
outside the law of negligence. As has frequently been pointed
out, persons injured through actionable negligence are the elite
in terms of accident compensation (see Cane, Atiyah's Accidents,
Compensation and the Law (6th ed, 1999). Any legislative reform
of the law of negligence will not address the wider issue of the
difference in treatment between victims of negligence and other
accident victims. To that extent, any such reform will be piecemeal.
5. CONCLUSION
5.1 Questions of the existence of a "compensation
culture" or "risk averseness" of defendants are
not questions that can be answered solely by reference to statistics.
The levels of litigation thought acceptable are value judgements
based on wider views as to the appropriate scope of the law of
negligence. Different views can be discerned from the existing
caselaw, but there is some evidence that notions of personal responsibility
are influencing judicial decisions, with the result that defendants
will not be found liable where the claimant voluntarily runs a
risk of which she knew or ought to have known.
5.2 The legislative reform proposed in Clause
1 of the Compensation Bill is minor and is unlikely of itself
to produce a major change in the course of negligence litigation.
If real change is desired, consideration should be given to adopting
some of the legislative reform adopted in the Australian jurisdictions.
In particular, legislation limiting claims against occupiers of
land and organizers of recreational activities in respect of injuries
to participants voluntarily engaged in risky activities should
be introduced. This would legislatively entrench the approach
of the House of Lords in the Tomlinson decision. Such legislation
might be more nuanced than that in Australia, so that the manner
in which the claimant ran the risk (reckless indifference, mere
inadvertence) could be taken into account in deciding whether
the defences would apply. However, it is submitted that legislative
reform should not extend to changing the rules relating to the
assessment of damages. Once a claimant has established her case,
she should be entitled to a full award of damages assessed under
existing rules to ensure, as far as is possible under this system,
full compensation.
5.3 The question of compensation through
the law of negligence is only one aspect of the wider question
of accident compensation. It is to be hoped that this wider question
will be addressed in due course.
Mark Lunney
Associate Professor of the School of Law
University of New England
Australia
November 2005
|
