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Wednesday, 25 June 2003
Page: 17434

Mr SLIPPER (Parliamentary Secretary to the Minister for Finance and Administration) (10:19 PM) —in reply—I am particularly pleased that the debate on the Trade Practices Amendment (Personal Injuries and Death) Bill 2003 has obtained the support of members of both sides of the House, although I note the caveat given by the member for Fraser in his speech when he said he supports the amendments but questions if the amendments provide the appropriate consumer protections. He also said that the opposition would be examining two issues relating to the bill in the Senate committee. They are whether it might be more appropriate to introduce caps and thresholds on quantum damages under section 52 in line with other amendments to be made to the Trade Practices Act and also the interaction of the amendments contained in this bill with the legislation passed last year to enable waivers for recreational services. He also claimed that the Commonwealth should impose formal ACCC price surveillance on insurance companies. I will comment shortly on the matters raised by the member for Fraser.

With regard to the debate on the Trade Practices Amendment (Personal Injuries and Death) Bill 2003, I want to thank the member for Fraser, the member for Moncrieff, the member for Calare, the member for Cowper and the member for Flinders for participating in this debate. It is a very important topic which has exercised the minds of state and federal governments and the wider community in relation to the issue of public liability insurance. The review of the law of negligence was established to assist the Commonwealth, state and territory governments to formulate a consistent approach to the problems of rising premiums and reduced availability of public liability insurance. Political representatives often get accused of playing politics—and at times they do—but, with regard to a national solution to the problem of public liability insurance, there has been a high level of cooperation on the part of the Commonwealth and all of the states and territories with a view to working through what is a very major problem.

The review's terms of reference were broad and required it to consider, amongst other things, the application, effectiveness and operation of common law principles applied in negligence to limit liability arising from personal injuries or death. In addition, the review was asked to consider the interaction of the Trade Practices Act with the common law principles applied in negligence. The review presented two reports to government—an initial report in September 2002 and a final report in October of that year. The review recommended a number of changes to the Trade Practices Act to ensure that the act cannot be used to undermine state and territory civil liability reforms.

In this bill, the government is responding in part to the review recommendations related to the Trade Practices Act by proposing a first tranche of amendments. In particular, this bill will implement review recommendations 19 and 20. Recommendation 19 proposed that the Trade Practices Act be amended to prevent individuals bringing actions for damages for personal injuries and death relating to unfair practices prohibited in division 1 of part V. Recommendation 20 proposed that the act be amended to remove the power of the Australian Competition and Consumer Commission to bring representative actions for damages for personal injuries and death relating to unfair practices prohibited in division 1 of part IV. Division 1 of part V of the Trade Practices Act prohibits under civil law unfair practices in trade and commerce, including misleading and deceptive conduct. Division 2 of part VC of the act applies criminal sanctions to similar conduct.

The measures contained in the bill will, therefore, amend the Trade Practices Act to prevent individuals and the ACCC in a representative capacity from bringing civil actions for damages for personal injuries or death resulting from contraventions of division 1 of part V of the Trade Practices Act. As a consequence, these measures will ensure that plaintiffs continue to seek damages for personal injuries or death by pursuing a right of action under the common law rather than by relying on division 1 of part V of the Trade Practices Act. These reforms are aimed at limiting public liability claims costs in order to reduce pressure on insurance premiums and assist in delivering affordable public liability insurance. To date, division 1 of part V of the Trade Practices Act has rarely been used to seek damages for personal injuries or death; however, the potential for division 1 of part V to be used as a basis for such claims is significant. I can see the member for Barton nodding with respect to this particular matter. Claims of this nature are considered to be more likely in response to state and territory civil liability reforms.

The state of New South Wales has already introduced amendments to its Fair Trading Act 1987 to address review recommendations 19 and 20. I understand that other states and territories are progressing similar reforms. The bill does not amend a range of other civil orders and remedies that are available under the Trade Practices Act for unfair practices in trade and commerce that are in contravention of division 1 of part V.

Mr SLIPPER —It is an important matter. I thank the member for Melbourne for his supportive interjection. The bill will have no impact on the availability of criminal sanctions under division 2 of part VC. The review made further recommendations in relation to the Trade Practices Act. These recommendations relate to rules on quantum of damages, limitations on actions and other limitations on liabilities to claims of personal injuries and death relating to other parts of the Trade Practices Act. The government is still formulating its response to these recommendations. It is anticipated that the government's response to these recommendations will be included in a further bill to be introduced during the spring sittings.

Returning to the remarks made by the member for Fraser, I referred to what he said where he pointed out that the opposition supported the amendments but questioned certain matters. He also referred to the two matters which the opposition wants examined in the context of a Senate committee, and I have outlined what those are. I want to say to the member for Fraser that I have noted what he has articulated in the chamber and that this bill has been referred by the opposition to a committee in the Senate. With respect to the issues raised by the member for Fraser, I note that the reason the review of the law of negligence, or the Ipp review, recommended preventing actions of personal injury or death under section 52 of the Trade Practices Act rather than simply capping damages et cetera is the strict liability characteristics of section 52. Perhaps that is a matter the member for Fraser was not aware of when he looked into consideration of the points before making his speech.

Other provisions of the Trade Practices Act identified by the Ipp review do not contain this element of strict liability, and the Commonwealth will be introducing legislation to amend these areas to support state and territory limitations on quantum damages. I note that the amendments contained in this bill parallel amendments which have already been enacted in New South Wales. If this bill is not passed, the New South Wales reforms will be made redundant. The Carr Labor government has brought in certain reforms. As a government, we are bringing in legislation which parallels the New South Wales amendments. If the parliament does not pass this bill, Mr Carr would obviously have to go back to the drawing board to look at new legislation, which would not be a desirable outcome at all. I would urge the Senate to support this bill in its entirety, and I would urge any Senate committee consideration of this bill to in effect recommend that the bill as submitted by the government be passed by the parliament.

With respect to comments made by the honourable member for Fraser about the interaction between this bill and legislation passed by the parliament last year, I note that the waivers envisaged under that act relate to damages caused by taking part in recreational activities. It is unlikely that a court would uphold a waiver which included a material misstatement. As noted by the Ipp review, in order for a waiver to be effective the words of the exclusion clause must be clear and unambiguous. Any doubts about the precise meaning of the clause will be resolved in favour of the consumer. In relation to the formal ACCC price monitoring, I draw to the attention of the honourable member for Fraser the comments of the ACCC in its second industry pricing review issued last September where the ACCC noted that regulating the price of insurance is unlikely to be effective and may, indeed, be damaging.

Finally, with respect to the honourable member's comments on the effectiveness of law reform, I suggest that he talk to his colleagues in the Australian Capital Territory Labor government, who are sadly lagging behind every other Australian jurisdiction in moving to amend their laws of negligence. The member for Fraser is an ACT member, and he would be doing the whole nation a service if he were able to move along the government in the Australian Capital Territory to conform to what other governments are doing throughout the nation.

The member for Moncrieff made a thought-provoking contribution, as always, and he drew to our attention the rapidly rising public liability costs and the effect that these are having on community groups and others within his electorate. I suspect that most members around the House would have had approaches from community organisations worried about their inability to obtain affordable public liability insurance. We have all seen circumstances where community events which have occurred year after year have had to be cancelled because of the failure to obtain public liability insurance. This is why this whole national process, led by the Minister for Revenue and Assistant Treasurer, Senator Coonan, has been so important. This is why it is important that this particular legislation is carried by the parliament.

The member for Moncrieff pointed out that it is necessary to find a better balance between the willingness of people to take responsibility for their own actions and the rights of people to seek compensation in circumstances where injuries result from another person's negligence. I want to thank the member for Moncrieff, who makes a tremendous contribution to the parliament, for his ongoing interest in this matter. I acknowledge the impact that public liability premiums are having on community activities across the nation. The thrust of law reform taking place in all Australian jurisdictions—including the Australian Capital Territory, if they can pull their socks up—is to rebalance the rights of both plaintiffs and defendants to ensure that individuals in their own society accept responsibility for the consequences of their own decisions and their own actions. The amendments contained in this bill underpin state and territory law reforms aimed at this purpose.

Quite often I do not agree with the member for Calare, but I would be the first to admit that his speeches are well prepared and well thought out. He certainly speaks sincerely and from the heart. He made the point in his contribution that, while the reforms contained in this bill are necessary to support state and territory law reforms, the government should consider adopting a New Zealand style no-fault scheme to provide compensation to the long-term catastrophically injured.

Mr Tanner —Hear, hear!

Mr SLIPPER —It is interesting that the member for Melbourne adopts that particular point. I suppose what you need is a balance in being able to compensate people who are injured as a result of negligence not of their own cause. In many cases, we know of people whose lives have been completely destroyed. They have lost the ability to earn an income and they have lost the ability to have any reasonable enjoyment of life, and it does seem a bit rough if those people have to obtain a lower level of benefit when in fact what happened to them was through no fault of their own.

No-fault compensation schemes certainly would reduce the level of insurance, but the downside is that they do create some significant problems—and I can see that the member for Barton agrees with me here. A scheme which provides universal compensation—

Mr Tanner —It's bad for lawyers.

Mr SLIPPER —Well, it is not a question of whether it is bad for lawyers. We are not really interested in protecting lawyers; we are interested in striking a balance so that people who do suffer as a result of the negligence of others are able to receive a reasonable level of compensation. Let us face it: we have got to look at it in the interests of the community at large and not in the interests of any particular profession. As I said, there has been a cooperative approach amongst the states and the Commonwealth—regardless of political point of view, regardless of political affiliation—and the states and territories have worked together with the Commonwealth in a very commendable way. We are solving what has previously appeared to be an intractable difficulty.

No-fault compensation schemes impose no level of accountability on individuals for their own actions. However, it is worth mentioning in this context that work is ongoing between the Commonwealth and the states to establish the feasibility of putting in place a scheme for the treatment of catastrophically injured people requiring long-term care. I suspect that even the member for Melbourne would support that particular initiative. Without pre-empting the outcome of the study, I would say that no-one should underestimate the complexity or likely costs of putting such a scheme in place. I would, however, like to agree with the remarks made by the member for Calare in relation to structured settlements. Structured settlements may provide for a better alignment with the needs of a claimant and ensure that sufficient funds are available over the entire course of a person's life. A shortfall in compensation for a catastrophically injured person is as unjust as a windfall is to a defendant. The member for Calare may well be interested to know that last year the Howard government amended the tax laws to remove taxation disincentives to plaintiffs accepting structured settlements over lump sum awards for damages.

The member for Flinders, as did other members, noted the impact of the increasing cost of insurance and pointed out that there are numerous causes of the conditions in the insurance market, one of which is the significant increase in the number and costs of personal injury claims. He pointed out also that this bill seeks to address this issue by cutting off an alternative course of action under the Trade Practices Act. I want to thank the member for Flinders for his thoughtful comments concerning this bill. What we need is an appropriate balance, and the member for Flinders supports that—the balance between the rights of plaintiffs and defendants. As the member has indicated, these reforms, as recommended by the Ipp review, aim to strike that balance. These reforms, importantly, go towards addressing the structural conditions in the insurance market driving insurance premiums.

The member for Cowper noted the impact of escalating premiums, particularly in respect of tourism operators in his electorate. He would not have the same level of tourism that we enjoy on the Sunshine Coast, but certainly most members throughout the country realise the very great importance of the tourism industry as a wealth generator and a job generator. Tourism operators in my own electorate have also contacted me with respect to this particular matter. The member for Cowper noted the high level of cooperation amongst all jurisdictions in Australia, and he also noted the strong leadership and reforms undertaken by the Commonwealth. I suppose in a sense he was praising the Minister for Revenue and Assistant Treasurer, who has actually led this whole national debate. I want to thank the member for Cowper for his comments, and I note the importance of these reforms for tourism operators throughout the nation.

I am advised that in a recent visit to the electorate of the member for Cowper the Minister for Revenue and Assistant Treasurer visited the Pet Porpoise Pool at Coffs Harbour. I am sure she would be very pleased to hear that the Pet Porpoise Pool has been able to secure insurance. That must have been a matter that was raised with her at that time. I also support the comments made by the member for Cowper in relation to the degree of cooperation amongst all levels of government in Australia.

This is a particularly important piece of legislation. It is part of a national response. It is regrettable that the matter has been sent off to a Senate committee, but I am optimistic that the Senate committee will recommend that the bill be implemented as suggested by the government. I am very pleased to commend this item of legislation to the House.

Question agreed to.

Bill read a second time.