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Thursday, 25 March 2004
Page: 27235

Mr FITZGIBBON (10:51 AM) —As earlier contributors have indicated, the Trade Practices Amendment (Personal Injuries and Death) Bill (No. 2) 2004 is part of the government's response to the huge increase in public liability insurance premiums and, in many cases, the inability of small businesses and community groups even to secure any insurance coverage at all. There has been no shortage of examples of this in my own electorate. For example, this year we almost did not have a touch football competition in my home town because of the organising committee's inability to secure any insurance whatsoever.

Mr King —How did you keep fit, then?

Mr FITZGIBBON —The Upper Hunter Eisteddfod—an important cultural event of long standing based in Muswellbrook—has almost been forced from existence. The member for Wentworth asked me how I kept fit in the absence of a touch football competition. He knows only too well that I am pretty good at being injured. On that basis, I no longer participate in the touch football competition.

The Richmond Vale Preservation Society, which rehabilitates steam engines in my electorate and runs tourism type train rides in the area surrounding Kurri Kurri, has had to fold its tent on those activities because of insurance concerns. The Singleton Cancer Support Group would have had to cancel its 2002 fundraising activities if Hunter Health had not intervened and extended its own coverage to indemnify them. Like most members of this House, I have had numerous representations from various small business people who are struggling with either spiralling premium costs or indeed an inability to secure insurance at all. In response to all of this, all states and territories have moved to reform their tort laws and as part of that they have imposed caps on general damages, amongst other things.

As the member for Wentworth was saying, many forces have been cited to explain why the insurance crisis in Australia has reached such dizzy heights. The most obvious is the collapse of HIH. There was not only the removal of one of our biggest insurers from the market but also the fact that HIH was making most of its money on reinvestment rather than from premiums per se, and on that basis a heavy discounter was taken out of the market when HIH collapsed. The various terrorist events around the world, which have had a devastating effect on so many cities and countries, have had an effect on the assessment of risk and, therefore, insurance premiums.

The interpretation of the courts of various questions of law—such as the standard of care, the concepts of causation and the remoteness of damage—have also had an impact, as has the general move towards a more litigious society. There is an Americanisation of our society, you might say—a willingness and preparedness of people to take action for seemingly any event. Even my own children, who are aged only 12, 13 and 14, have a propensity to look to the law when they are aggrieved by some matter. I recall that one afternoon there was a foreign dog in my backyard—

Mr King —What was it doing?

Mr FITZGIBBON —It was spying for the Liberal Party, I suspect. It was drinking from our own dog's dish. My then 11-year-old suggested that we should sue the owners of that dog for its having the audacity to enter our property and drink our dog's water. There is a changing culture in Australian society. As I have said, there is an Americanisation of Australian society, and it is of concern and something that we all should strive to keep in check.

Mr King —Did you sue?

Mr FITZGIBBON —No, we did not sue. I can assure the member for Wentworth that no legal action was taken—mainly because I cannot afford the legal costs. As people involved in such events and the member for Wentworth will know only too well, the cost of legal representation is also spiralling, which is another reason we have these matters coming before the House. I am pleased that the member will find a comfortable income when, sadly, he departs this place.

The principal aim of the law of torts is to provide compensation for a civil wrong. That compensation can take many forms. For example, it could be payment for pain and suffering or, alternatively, repayment of money that was inappropriately gained. But, while tort law is about transferring loss from one party to another, the advent of insurance has rendered our tort law more about spreading loss across the community. That fact inevitably leads us to the interplay between legal concepts and economic theory. On that front, the question arises as to whether tort law should not only be fashioned to ensure that losses are spread but also be designed in a way that maximises economic efficiency.

That brings us to the role of deterrence as a function in our tort law. No doubt the ACCC partly had deterrence in mind when it raised its concerns before the Senate committee about the provisions of the first tranche of these reforms—in other words, the provisions in bill No. 1—which sought to totally remove the ability of the consumer to seek the recovery of damages for death or accident under the provisions of the Trade Practices Act.

Labor accept that forum shopping is a risk. It is of concern that, in the wake of state tort reform, people seek to shop around and gain access to more generous damages under the Trade Practices Act, so we certainly support the concept of closing those loopholes to prevent forum shopping, but in doing so we believe that the amendments in the bill should be in general uniformity with what is taking place in the states and, therefore, that damages should be limited on the basis of general standards amongst the states. That is why we raised objections to the first bill, and we maintain those objections.

Now, with respect to the second bill, which takes a much different approach, we ask why the government should see fit to limit damages under one part of the Trade Practices Act but to remove them in their entirety under a second part of the act. For some explanation of this, I went to the second reading contribution of the member for Parramatta, who introduced the bill. I cannot say that I took any great comfort in his words, because the key point he made was this:

In contradistinction it is open to serious question whether parliament intended the provisions that relate to unconscionable and misleading or deceptive conduct—that is, the relevant provisions in part IVA and part V division 1—to provide causes of action to individuals who suffer personal injury and death in the absence of any element of fault required to establish misleading and deceptive conduct.

The thing that concerns me is the words `it is open to serious question'. They are hardly reassuring for a member trying to determine what the correct legal position on these matters is. In any case, whether or not the issue of fault is required, I still cannot understand why the government would not take a safer and consistent approach to the whole of the act and limit the damages in line with what one would secure under various state acts. I know that in the past the government has argued for consistency across the act. When we were dealing with the insertion of representative actions in the Trade Practices Act—that is the ability and capacity of the ACCC to take action for an injured party in the context of big businesses abusing market power over small businesses—the government argued in the face of our resistance to extending those provisions to 45D and E that there should be consistency across the act. I think the same principle should apply here. I invite the government to fold its tent on its resistance to our amendments to bill No. 1 so that we can get on with these important reforms.