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Tuesday, 24 June 2003
Page: 17361


Mr CIOBO (7:59 PM) —At the outset I would like to commend the opposition for supporting the government on the Trade Practices Amendment (Personal Injuries and Death) Bill 2003. This is an important bill and forms part of a raft of legislative changes that we, as a government, hope will go to the core of altering an attitude that seems to prevail in modern day Australia. It is an important bill because it is, as I said, another step along that path towards reform of the marketplace, particularly liability and insurance pertaining to public liability.

This amendment to the Trade Practices Act is at the periphery of the debate but highlights what has been, in essence, one of the ongoing problems the public liability insurance marketplace has faced in recent years. I am referring to the attitude that has descended among the Australian population—an attitude that, in my view, has unfortunately been promoted by unscrupulous and unethical lawyers. They tend to adopt an attitude that you sue wherever and whenever you can. By promoting and building a perception among the general public that, irrespective of what has happened and of any way in which you may have contributed to injuries that you have suffered, you should adopt a deep pockets philosophy and sue. Australians all around the nation are now suffering the consequences of allowing that kind of environment to continue unabated and unfettered by commonsense.

This bill will now go towards reducing what has been an unfettered attitude towards suing for damages, irrespective of the cause, in cases of personal injury and, at the extreme end and one which is abused far less, in death. The bill amends the Trade Practices Act 1974 to prevent individuals using part V, division 1 of that act to seek damages for personal injury and death. There has been some discussion about this in many circles. The member for Fraser, who spoke immediately before me, highlighted the ways in which it has been envisaged that the Trade Practices Act, in particular part V, division 1, may be used or misused to obtain damages for personal injury and death where it is felt that there has been no ability to seek recompense under other forms of legislation or under tort law. This amendment is driven by the increasingly litigious society in which we now live. Australians sue regularly and, consequently, have created an upward spiral of insurance premiums and insurance claims. This new environment has required the Commonwealth and the state governments to work together to end this upward spiral and to make significant changes not only to tort law but also to particular acts such as the Trade Practices Act.

As background to this bill we are debating in the Commonwealth parliament tonight, I highlight that Trowbridge Consulting reported in their Public liability insurance: analysis of a meeting of ministers on 27 March 2002 that there have been rapid increases, as I have outlined, in the numbers of people suing and attempting to sue on a regular basis for what they claim to be breaches of public liability. It found that, as a consequence, the insurance crisis was impacting most severely on community and sporting events, tourism and leisure operations, the retail industry and local non-government community groups that operate under the umbrella of local government.

I have two principal concerns with this issue. The first is with regard to Trowbridge Consulting's findings that, as a result of the crisis that arose in public liability insurance, we were suffering in terms of tourism and leisure operations. There is a good example that directly highlights the ways in which the people of the Gold Coast, whom I represent in the seat of Moncrieff, could suffer as a consequence of this apparently out of control spiral of claims on public liability insurance. It is the very high profile decision made recently in the case of a gentleman who suffered injury when he dived into the surf at Bondi Beach. It was held in the first judgment in this case that the local council was responsible, at least in part, for the injuries suffered by this young gentleman. If I recall media clippings correctly, this man admitted to being under the influence when he dived into the beach at Bondi and suffered injury. This sent immediate shock waves throughout the local community on the Gold Coast. Locals engaged in any type of activity that involved the surf—for example, the Gold Coast City Council, the Surf Life Saving Association or any like operator—had to suddenly consider ways in which they might be liable as a consequence of this ruling.

Another poignant reminder of ways in which unexpected decisions were having an impact on the public liability crisis was a court case that took place on the Gold Coast. Again, it concerned an inebriated party-goer who dived off a fence into one of the canals. In this case, the individual suffered significant injury to his neck and spinal cord. It was held in that case that there would be significant damages payable by the owners of the property at which the party this young gentleman attended was held. I must say I was astounded.

I do not profess to be an expert in tort law. It has been many years since I studied tort law, but I do recall some basic principles from tort law with regard to tort actions. One of them was the legal notion of volenti non fit injuria; in other words, the voluntary assumption of risk. When I heard about this case involving a young gentleman diving off a fence into a canal and injuring his spine, I thought it would be a very remote possibility that there could be a causal connection between this young gentleman being at the party and the owners of the premises at which this party was held being liable—at least in part; certainly not in full—for the injuries sustained by him. I was very surprised when I discovered the court held the owners were in part liable.

Another area of particular concern is community groups. As a consequence of the spiralling costs associated with public liability insurance, there are many examples of local community groups on the Gold Coast going about their business in a meaningful way to try to better the community in which they reside—trying to make a difference in the community—increasingly being hampered as premiums skyrocketed. Logically, many people were requiring community groups to demonstrate they held comprehensive public liability insurance. It is only to be expected that there would be a requirement for community groups to have significant comprehensive public liability insurance policies in place in order to help ease the concern in the minds of so many people with regard to what potential liabilities might exist should something happen.

I highlight as an example two local community groups in the electorate of Moncrieff which recently received significant funding from the Commonwealth government: the Silver Bridle Action community group and the Connect the Coast community group. The Commonwealth government required, as part of its funding package and funding contract, that these community groups have in place comprehensive public liability policies—policies that had increased significantly in price when these groups sought them. Premiums had increased significantly as a consequence of the latest tremors flowing through the public liability marketplace. In this case both groups were able to obtain the necessary cover, but at great expense. Whilst I am delighted they received the funding, this just underscores and highlights the very great need not only for the Commonwealth government but also for state governments to act on this crisis. This is another demonstrable way in which the Commonwealth government is heeding the call to respond in a proactive and efficient way with regard to public liability.

The Trowbridge Consulting report confirmed in particular were community groups experiencing problems in obtaining affordable public liability insurance. The report also found in a statistical and factual way that premium increases of 20 per cent were routine, 100 per cent not uncommon and 500 to 1,000 per cent had occurred. You can see how, in that kind of environment, it quickly all becomes unsustainable.

The question is: what is driving these insurance market problems? What is driving these significant increases in premiums for public liability insurance? What has driven the significant changes which have taken place in the public liability marketplace? It is very clear that we can point the finger at a number of different events: the collapse of HIH insurance, the terrorist bombings on 11 September, unwise business practices by insurance companies and a poor investment environment. These are just some of the many identified causes which have led to this crisis. As I have also been indicating, an escalation in the number and size of personal injury claims has also been identified as a key contributor to the problem. I cannot help but wonder why, on so many occasions when I sit and watch television, I still see to this very day law firms advertising questionable practices. They say, `If you have been injured, call us and learn your legal rights. Irrespective of the circumstances, we will look at taking an action. There may be redress you can seek as a consequence of taking legal action.'

I am certainly not someone who seeks to deny a legitimate right to compensation for those who have been injured or the parties of those who have died as a consequence of negligence. Not for one moment would I value a circumstance in which we denied those who have been injured or the parties of those who have died as a result of their injuries the right to seek lawful, legitimate, adequate recompense for their injuries. Having said that, though, it is important it is done in a sustainable and measured way. It is very clear to this point it has not been sustainable or measured. That is the reason why we are in this chamber this evening discussing this bill.

With regard to some of the drivers behind what has been taking place we can see and find evidence that demonstrates the insurance market is not dissimilar to any other marketplace. It has peaks and troughs and it is possible, although unfortunate, that the current market conditions might be part of this business cycle. The Trowbridge Consulting report noted:

The nature of the crisis is that there are fewer insurers than ever before accepting the business and these insurers are generally charging much higher prices than previously and are also being very selective in their acceptance of risks.

While this phenomenon can be regarded as the peak (or trough) of an insurance market cycle, it is nevertheless to persist for another year or two at least unless there is some external stimulus to or intervention in the market.

This, in large part, is what drove the decision of the ministers to bring about a review of negligence. In a recent article in the Australian Bar Review, the Chair of the Negligence Review Committee, Justice David Ipp, set out the key practical arguments as to why negligence laws needed to be reviewed. He stated:

There is no conclusive evidence that the state of the law of negligence bears any responsibility for this situation [the insurance crisis]. But the fact is that insurance companies are not prepared to provide the necessary insurance (or are only prepared to provide it at unaffordable rates), because of the unpredictability of the law, the ease with which plaintiffs succeed and the generosity of courts in awarding damages. There is evidence to suggest that the insurance crisis is at least partly attributable to the conduct of certain insurance companies but that is not to say that the state of the law of negligence has not contributed to the current state of affairs.

It is interesting to note that Justice Ipp acknowledged that insurance companies were at least in part to blame for the insurance crisis.

The Minister for Revenue and Assistant Treasurer, Senator Helen Coonan, has drawn clear links between problems with the legal system, the insurance crisis and the need for the government to intervene. All of these elements have been drawn together by this government and by the state governments to bring about changes to the laws of negligence. This bill gives effect to recommendation 19 of the Review of the law of negligence report, the Ipp report, which stated:

The TPA should be amended to prevent individuals bringing action for damages for personal injury and death under Part V Div I.

This essentially has been predicated on developing a strategy to respond to the highly publicised crisis which has been occurring.

In terms of this review, there was once a very clear legal precedent in tort law: the notion of volenti non fit injuria. This notion—that is, the voluntary assumption of risk—is a legal notion that I would like to see take greater standing. It is very true that this bill acts to deny people the opportunity to misuse section 52 or section 53, for example, of the Trade Practices Act to obtain damages as a consequence of pursuing actions under the Trade Practices Act. Although we do that in this bill, there still needs to be fundamental reform to the marketplace. There needs to be reform to the mind-set that occupies too many lawyers—the mind-set that immediately springs to mind when people are injured. That mind-set seems to be, in two words, `easy money'. Let us use this bill to deny people the opportunity to use the Trade Practices Act in a way for which it was not originally intended, but let us also be mindful of the continual need to reform and change the way people think about injuries. If someone is injured and it is appropriate to sue for negligence, let that person sue. But let it not be a money-hunting exercise, let it not be an exercise in pursuing deep pockets, and let it not be an exercise that contributes to the significant increases in costs that we have seen associated with public liability insurance.

Let people recognise—let the House reassert this fact—that they must take responsibility for their actions. If someone is inebriated and they dive off a fence and injure themselves, or if someone is inebriated and they dive into the water at Bondi beach and injure their neck, they must recognise that, in doing so, they must take some assumption of risk. There is a requirement for people to understand that the government, or those with deep pockets, or, indeed, those with insurance, are not easy targets for people to pursue.

This is also the way we have got to make people think when it comes to recreational services, particularly in the tourism industry, which, as I said, is predominant on the Gold Coast. People ought not take the view that they can go and bungee jump, for example, and, should they be injured, look at suing the operator of a bungee jumping service. Let them understand and let the principle be reinforced. (Time expired)

Debate (on motion by Mr Andren) adjourned.