Reforming Tort Law - Torts Law

Class 8- Reforming tort law (SM Abel, Wright):

Abel (page 28)- national trends in personal injury litigation: before and after IPP: abel??

• In 2002 there was a crisis over the availability and affordability of injury insurance cover. The government appointed a ‘Panel of Eminent Persons’ to review the law of negligence.

• The IPP review inspired them to make tort law reforms.

• Does statistic data support that there was a litigation explosion?

• What effect did the tort reforms have on the incidence of personal injury litigation?

A relevant inquiry?

• The NSW government said that it was an explosion in the size of payouts and not the numbers of litigation that justified the new laws but the empirical data does not support the idea that the insurance crisis was a tort law crisis.

Consequences of tort law reform:

• The states and territories all departed from the Reviews recommendations in various respects. There was not national uniformity in tort law.

• The ACCC was asked to monitor the effect of the reforms every 6 months for two years and now three years more.

• They showed that in 1998, the number of claims was declining steadily by about 50% and levelled out in 2002.

• After 2002 claims dropped by 50% or more so people were not getting compensated at all.

Litigation rates- was there a tort law crisis?

• Everybody knows that the insurance crisis was not just a tort law crisis. HIH and FAI collapsed. This was because of the poor risk assessment practices and underpricing. A market intervention was needed but not by cutting compensation to injured people.

• Towbridge Consulting, a actuarial firm prepared two reports in 2002 saying that in real terms, personal injury claims had increased by 5% for 20 years. But this was unsupported because it did not even go beyond 1993. The five firms they sampled could only provide data for the past 5 years.

• The ACCC’s findings do not match Towbridge or even an earlier ACCC study.

Tort law before and after IPP:

• Claims arising from the workplace and road accidents were excluded. Personal injury cases are easy to differentiate from these.

• In NSW information was available from the following courts and periods: SC (1995-2005), District Court (1996-2005)

• There was an increasing trend in the claim rate between 1996 and 2002 but this was because of spate filings which are caused by the prospect of reform and are not a long term trend. It fell back to the 1997 level in 2000.

• Each jurisdiction has had differing effects in claiming rates. In NSW and Victoria there is a large change but in South Australia the amount of litigation increased slightly. Queensland and Victoria now have the lowest national average after the reforms.

• The District court was shown to have increased its litigations in 1996 to 2000. However this was because the District Court had received more jurisdiction in 1997.

• In NSW, the increases in 2001 and 2002 were spate filing.

• In 2003-2006 tort litigation reduced by 60% by the reforms.

• Victoria was also stable between 1996-2001 but spiked in 2002. Now they are the lowest claiming state in the country.

• In Queensland there was no evidence of a sustained increasing trend in personal injury litigation prior to the IPP Review.

• Western Australia was before the IPP, one of the highest litigation states in the country. Claims increased between 1996-1999 and then declined rapidly.

• South Australia and Tasmania before the IPP were the lowest claiming jurisdictions and the peak at 2002 was caused by spate filing. But there is an increase between 1995-2002, the only jurisdiction to show this. The SA reforms have had little impact. They are the least severe therefore.

• The ACT claiming rates were at their highest in 1995. Their reforms were not too severe.

Conclusion:

• The only rising trend in claim numbers was from South Australia which was one of the lowest claims states. The increase was slight. The claim rates of the WA are questionable because of the data used. Litigation rates were stable in the other states. There is no evidence that tort law contributed to the insurance crisis.

• Claims in NSW have fallen 63%, 70% in Queensland and 80% in Victoria. Large numbers of people who are injured through the fault of others no longer seek compensation. The adjustment is too large.

Wright (page 92) – A critique of Torts:

• Tort law used to be pre-occupied with intentional wrongs. Even misfortunes that we now interpret as accidental like a snake bit were seen as intentional because of witchcraft, sorcery or the wrath of gods. It all depended on how well the victim could get a support group.

• Social, economic, political and cultural changes have transformed tort law. The concentration of private capital and political power and autocratic structures of control have augmented the potential effects of carelessness.

• Mass urbanisation has produced a nation of strangers. People are more interested in compensation than revenge but the state are reluctant to get involved because it would destroy intimacy. Few criminals can pay damages.

• Tort law has begun to resemble modern warfare in the distance between tortfeasor and victim. Strangers are given the incentive to exercise care towards each other.

• Its moral tone has changed. They do not use moralistic rhetoric and they have imposed liability without fault simply because they were parties in dangerous activities.

• Lost earnings past and future have become an essential element of damages.

• Capitalism and mass production spread consumer goods and property loss has become part of torts. There is a remedy for intangible injury like fear and damage to emotional relationships because a post industrial society promises a perfect life.

• There has been social fragmentation so it is difficult to get a support group. You rely on state assistance which must be bought from lawyers. Lawyers have fees 25-50% of the victim’s recovery.

• Capitalist tort law alienates victims. There is no redress and the worker has no say how their...