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Tuesday, 24 June 2003
Page: 17371

Mr ANDREN (8:48 PM) —After listening to that last debate, I must say that this bill may be subject to amendment in the Senate. That is the Senate's prerogative and it is absolutely essential in our democracy that that be the case. The government should not get too excited about any constitutional reform in that area. The public will never deliver a winner take all mandate to any party winning just 37 per cent to 39 per cent of the vote. Minority government, or what I call `consensus government', is here to stay. I hope it is represented in this place one day.

The Trade Practices Amendment (Personal Injuries and Death) Bill 2003 amends the Trade Practices Act to ensure that individuals cannot resort to provisions under the act to seek damages for personal injury and death. The aim of the bill is that such damages be pursued only within the parameters of state tort law and it certainly makes clear that the Trade Practices Act is to be an area of law quite separate from ordinary laws of negligence. The TPA essentially sets up standards of conduct that a corporation must adhere to. Provisions in part V, division 1 of the act deal with misleading and deceptive conduct, including bait advertising, harassment and coercion, and pyramid selling. Where these provisions are breached, a person may seek to recover from the corporation damages for any loss they have suffered as a result of a contravention of the provision. This may also include injunctive relief, non-punitive orders, punitive orders and remedial orders. Criminal proceedings may also be brought to bear under section 52, which deals with misleading and deceptive conduct.

The ACCC may also take legal proceedings—so-called `representative actions'—on behalf of a person who has suffered loss where any of the provisions in part V, division 1 are breached. The bill amends the Trade Practices Act 1974 to prevent individuals recovering damages for personal injury and death where there has been a contravention of part V, division 1 of the act. It also prevents the ACCC bringing representative actions on behalf of individuals to recover damages for personal injury and death. According to the report of last year's inquiry into the insurance crisis facing this country, the Ipp report, such measures will ensure that changes to negligence law—that is, the tightening of the circumstances under which a person may seek damages for personal injury—are not undermined.

I might add that the Mayor of Bathurst, Ian Macintosh, was a distinguished member of the Ipp committee. He strongly represented the concerns of local government and those many community groups that the Deputy Speaker knows have been so hurt by the insurance crisis. The suggestion from that report is that people who are unsuccessful in claiming damages for negligence may resort to claiming damages under the misleading and deceptive conduct provisions of the Trade Practices Act. It is noteworthy that if this bill becomes law it will be possible to pursue damages for economic loss under part V, division 1, but not for loss of life, or quality of life, due to injury. However, I accept that claims for personal injury or death under part V, division 1 have been very rare and that the existing provisions could well invite plaintiffs and their lawyers to circumvent negligence laws by applying the TPA.

It is also clear that these amendments are necessary to complement tort law reform in relation to public liability claims. It seems reasonable to maintain that the Trade Practices Act does not exist to deal with personal injury compensation when the recovery of damages for injury and death is provided for under tort law. The member for Moncrieff, who contributed earlier to this debate, talked of the voluntary assumption of risk and brought into his delivery the Bondi surf incident and diving into a canal on the Gold Coast as examples of gross negligence. But the fact remains that, whoever is liable, the victim—reckless or not—is still a huge cost to society.

It seems to me incredible that we do not seriously study the New Zealand no-fault process as the most economical way of dealing with this. For instance, Evans Shire—one of my constituent councils—is faced with a $16 million payout, or part thereof, to a victim of a road accident, where it has been established that the gravel left on the road by the contractors contributed substantially to the horrific injuries sustained by that young lady. There is no question about the need to compensate her, but the money goes to the individual, then to the family and then to the estate. A staged payment scheme and a better rehabilitation and respite care process, spreading the risk over the whole community by way of a levy, might offer a more sensible and sane solution to what is an enormously expensive area of litigation—lifelong damages have been provided in recent court settlements.

I understand that, despite the proposed amendments, consumers will still be able to recover damages for economic loss as a result of breaches of part V, division 1. The ACCC may still represent individuals to recover damages for economic loss. Criminal proceedings may still be brought if a person suffers personal injury or dies as a result of conduct in breach of part V, division 1, with the exception of section 52. A court may still issue an injunction or make punitive or non-punitive orders where the provisions have been breached and this leads to personal injury or death. For these reasons I do support the bill, but I have strong reservations about an adversarial fault system, the bounty it provides for lawyers and the wastage that is inherent in a lump sum payout—as I have demonstrated. I am not convinced that that is the way to go.

I do have a problem with the underlying assertions made—not only by the Ipp report but also by the government—that the obscene rises in insurance premiums will be fixed through changes in federal and state laws. I have a problem with the insurance industry, in that it is not committed to making insurance more available or affordable in response to changes in legislation. There was a warning from the industry only three months ago that premiums for professional indemnity were `set to soar'. I still receive calls from community groups, sporting bodies and small businesses either not able to afford insurance—especially public liability premiums—or simply not able to access any cover whatsoever.

Where is the data to support all these industry assertions that this crisis in insurance is mainly caused by greedy lawyers and too many excessive payouts? There is, as I said, a large argument about the wastage of such payouts, but I am certainly not convinced by the industry's argument that they are not to blame for any of this. I do not deny that spurious and simply vexatious claims for compensation should not even make it to court. As for exorbitant payouts for pain and suffering caused umpteen years ago by the cane at school, or to someone's mother who claims psychological suffering because her son was hit by a home owner while breaking into a house, I simply do not believe they are allowable. They should not be on. Those legal professionals who encourage this sort of behaviour should be strongly discouraged.

My concerns are about addressing the problem of unaffordable or unavailable insurance and the effects this has on communities, without limiting a person's right to fair and proper recompense for their future care when seriously injured. Because of our parlous rehabilitation and disabled care in this country, payouts have been large lump sums targeted at individuals rather than shared community care. There have been many factors contributing to this insurance crisis. The big ones have been the so-called normal hardening of the worldwide insurance cycle—exacerbated by a number of factors in Australia, including the crash of HIH—and the events of 11 September overseas, and the consequent lack of underwriting and reinsurance.

I do not doubt that the huge payouts for medical negligence and increased activity in this area from the legal profession have contributed to premium increases. But my point is this: insurance cover is now a prerequisite to any sort of activity a person may be involved in, whether it be a community jam stall to raise money for the local CareFlight helicopter or the planting of trees in our damaged environment. Despite changes to state laws, including the capping of compensation for personal injury and limits on lawyers' costs, there is no guarantee the premiums will be made more affordable—unless of course the vagaries of the market determine that conditions are right. These conditions are cyclical, and the market will harden again and again. No person must ever go without comprehensive care for their injuries, no matter who is at fault.

It is starkly obvious that we need more publicly funded rehabilitation, primary and respite care places for our injured and handicapped. We must focus not on the cost of this but on the cost of not providing such services. There is absolutely nothing in the Constitution to prevent the Commonwealth from becoming involved with insurance in a more proactive way. This is a national problem and needs a national approach. As I said, we need a national fund similar to New Zealand's accident compensation scheme, which provides cover for injuries no matter who is at fault and which pays weekly compensation equivalent to 80 per cent of normal earnings to a maximum of $1,300. The scheme pays for medical bills, rehabilitation, home and vehicle modification, retraining, counselling—any costs that arise from the injury itself.

Debate interrupted.