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Thursday, 12 December 2002
Page: 7981

Senator LUDWIG (8:34 PM) —In relation to the Trade Practices Amendment (Liability for Recreational Services) Bill 2002, I seek leave to incorporate a speech on the second reading.

Leave granted.

The speech read as follows—

I rise to speak on the Trade Practices Amendment (Liability for Recreational Services) Bill 2002.

This Bill seeks to amend the Trade Practices Act to allow a contractual exclusion for liability for death or personal injury by the providers of recreational services.

This is achieved by amending the Trade Practices Act to allow waivers or exclusion clauses not to be subject to the implied conditions in section 74 of the Trade Practices Act.

Section 74 implies into every contract for a service that the services will be rendered with due care and skill, and that any material supplied in connection with those services will be reasonably fit for its intended purpose.

This Bill was introduced into Parliament on 27 June 2002 amidst spiralling public liability insurance premiums.

The Senate referred the Bill for inquiry by the Economics Legislation Committee.

The Committee reported this week and a Government majority report and two minority reports representing the views of Labor and the Democrats were tabled.

Over the last 12 months there has been a crisis in public liability insurance.

What was once a routine procedure for most groups in the community has literally become a nightmare.

But the Howard Government refused to accept its constitutional responsibility and act to curb the crisis.

After failing to act for 12 months, the Howard Government rushed out a premature press release before the end of the financial year.

This press release was issued to meet demands for action arising from a lack of action over the previous 12 months

The Government has an unflattering history of issuing press releases to convey the impression that it is addressing issues and then fails to implement proposals.

One just has to look at the area of airport security. The Government has taken an extraordinary 15 months to release its policy on airport security post September 11.

Yet another example of the Government saying it is concerned and then failing to act.

The solution proposed in the Minister's press release enabled businesses that provided inherently risky types of recreational activities to rely on exclusion clauses or waivers.

The inability to rely on these waivers is believed to have been a significant factor behind the sharp rise in insurance premiums for these types of businesses.

The Expert Panel on the Review of the Law of Negligence (the Ipp Report) was released after the legislation had been introduced.

The Ipp report recommended some amendments to the Bill.

Treasury evidence to the Committee confirmed that there was no proposal for Government amendments to the Bill in the Senate.

While we are disappointed the Government has chosen to ignore the advice of the Expert Panel, Labor is committed to implementing the recommendations of the Ipp report.

The Government has chosen to ignore the report despite the fact that the Bill appears to allow people to agree unlimited waivers releasing service providers from all liability for death and personal injury, including in those cases involving gross negligence.

The objective of this Bill is now, according to evidence from Treasury to the Committee, to meet the commitment made by the Commonwealth at the Ministerial Meeting on Public Liability Insurance in May 2002.

The communique from that summit states that:

“The Commonwealth will legislate to allow self assumption of risk for people who choose to participate in inherently risky activities such as adventure tourism and sports, subject to preserving adequate protection for consumers in the Trade Practices Act. The States committed to introducing mirror legislation where required.

The appeal of this Bill, as represented by the Minister's press release, when the Bill was introduced, was to allow people to voluntarily assume the risks involved in risky recreational activities.

This was seen as addressing the need by tourism operators and sports providers for enforceable waivers so that they were not liable for “accidents” which arise from the inherent risks of participating in such activities.

At the time of the Bill's introduction, the Bill was strongly supported by pony clubs and operators of adventure tourism and other high-risk activities.

However, now that the true scope of this Bill has been revealed, this support is qualified.

The Australian Consumers Association have also indicated that, without amendments, they would be forced to issue a consumer warning to participants in recreational activities.

This Bill goes much further than the position originally advanced in the Minister's press release.

Instead of potentially removing liability for “accidents” or obvious or inherent risks in participating in recreational activities a waiver could also waive liability for negligence, however arising.

Labor are concerned that this Bill does not impact unfairly on the rights of consumers.

The Minister in her press release of 27 June 2002 indicated that in allowing people to voluntarily waive their right to sue, it was important to achieve a balance between protecting consumers and allowing them to take responsibility for themselves.

Indeed the press release stated that the amendments to the Trade Practices Act would still allow customers to sue if they are victims of gross negligence on the part of the operator.

However, in evidence to the Committee the Government confirmed it does not intend making any amendments to the Bill to prohibit the waiver of gross negligence.

Even the Australian Horse Industry Councils stated that the Bill as tabled would lead to an unreasonable impact on the rights of individuals.

Evidence before the Committee highlighted further problems, including the legal enforceability of waivers.

Thus the Bill appears to address the needs of recreational service providers but in many cases will just alter what is litigated.

On the other hand, there is a legitimate concern that this Bill may remove the incentive for businesses to ensure they provide safe services.

Evidence to the Committee suggested that the Government is aware of these problems but it claims it is concerned to be consistent with State reforms in the area of self-assumption of risk in recreational activities.

However, there is some variation between jurisdictions at this stage.

According to the communique at the Ministerial Meeting on Public Liability Insurance in October, every State and Territory made a commitment in relation to the provision of waivers to allow people to accept risk.

Only New South Wales, South Australia and Victoria have announced or implemented details of their commitment.

However, none of these States have legislated to completely exclude liability for personal injury or death.

Of the other States and Territories, the details are not known or the commitment is much vaguer.

Thus, it is not clear there is any uniformity among the States and Territory in any event.

Labor, on the other hand, has proposed a remedy which will deal with the problems associated with the current legislation.

The amendment that we are proposing is consistent with the legislation enacted in Victoria as part of their commitment to the Government in relation to the provision of waivers to allow individuals to accept risk.

This amendment allows the originally stated intentions of the Bill to be met.

However, the amendment will provide the important balance between protecting consumers and allowing them to take responsibility for their actions, as referred to by the Minister in her press release.

The amendment will make provision for prescribing the form of the waiver and what particulars must be included in the waiver.

Even the Government members of the Committee said, at paragraph 1.68 of its report, that reliance on unwritten waivers could present quite substantial problems of proof.

The waiver must also be signed by the consumer and will be rendered void if it is made on a false and misleading basis.

Finally the waiver will be ineffective if an act or omission causing injury was done with reckless disregard.

This Bill as it stands allows corporations which provide recreational services to completely exclude any liability for death and personal injury even if that death and personal injury is caused by the gross and wilful lack of care of those acting for the Corporation.

This is totally unacceptable.

At the very minimum, liability should be retained in cases where an act or omission is carried out with reckless disregard.

This also has the very positive outcome of creating an incentive for businesses to provide safe services.

While Labor supports appropriate measures to reduce insurance premiums and are of the view that this initiative will assist in resolving the current insurance crisis, this Bill will only assist recreational service providers if there is a mechanism to ensure that savings result in lower insurance premiums.

Without proper supervision the benefits of the well considered law reforms will end up in the pockets of the insurance companies and the public liability insurance crisis will continue unabated.

Labor has introduced a Private Member's Bill, Trade Practices Amendment (Public Liability Insurance) Bill 2002, granting the ACCC the necessary powers to protect consumers and ensure savings are passed on.

This legislation is necessary to realise the benefits of the law reforms undertaken by the States and benefits arising out of this amendment.

If not, the Bill will merely appear to address the needs of providers of recreational services but will have little practical effect.

In all reforms it is essential that the rights of the injured are adequately protected but also that there is a balance in the system so that organisations and businesses can continue to operate.

Yet the balanced solution proposed in the Minister's press release has not been translated into legislation.

It is clear from submissions to the Committee that there is substantial opposition to the Bill as it stands, including from those organisations which are set to benefit from the Bill.

Labor call on the Government to support the amendment and improve consumer protections without unduly compromising the objectives of the Bill.