Wrongs and Limitation of Actions Acts (Insurance Reform) Bill Introduction Print EXPLANATORY MEMORANDUM

Provided by:

551075 BILL LA INTRODUCTION 21/5/2003 PART 1--PRELIMINARY

CM Password Pty Ltd Parliamentary Monitor (Vic)

Tel: 03 9639 9222

http://vic.capmon.com

Clause 1 sets out the main purposes of the Bill. The Bill amends the Wrongs Act 1958, the Limitation of Actions Act 1958, the Building Act 1993, the Accident Compensation Act 1985 and makes a minor amendment to the Fair Trading Act 1999. Clause 2 provides this Act (except the sections relating to proportionate liability) to be deemed to have come into operation on 21 May 2003. The sections relating to proportionate liability come into operation on a day to be proclaimed. There is no fixed day for commencement to allow co-ordination with the operation of proportionate liability legislation in other Australian jurisdictions. PART 2--AMENDMENTS TO WRONGS ACT 1958 Clause 3 inserts a new Part IVAA into the Wrongs Act 1958. PART IVAA--PROPORTIONATE LIABILITY Section 24AE defines the terms used in the new Part IVAA. Section 24AF provides that this Part applies to claims for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from failure to take reasonable care, and also claims for damages for contravention of section 9 of the Fair Trading Act 1999. These are "apportionable claims". It also provides for apportionable cases arising from different causes of action to be considered as if part of one claim. The section further provides that this Part does not affect any other protection from liability under any statute or other law. Section 24AG excludes claims relating to injury from the operation of this Part, and further explicitly excludes claims under certain specified statutory provisions from the operation of this Part. It also provides for other claims in a specified class of proceedings under Regulation to be excluded from the operation of this Part. Section 24AH defines a "concurrent wrongdoer" as one of 2 or more persons whose acts or omissions caused independently of each other or jointly the loss or damage that is the subject of the claim, and specifies that a person who is insolvent, is being wound up, has ceased to exist or has died is not excluded from being a concurrent wrongdoer. Section 24AI limits the liability of a defendant who is a concurrent wrongdoer in an apportionable claim to the proportion of the plaintiff's loss for which that defendant is considered responsible, and precludes judgment from being given for more than that amount. Note that section 24AP(d) provides that punitive or exemplary damages may still be awarded against such a defendant. The section also provides that in proceedings that involve both an apportionable claim and some other claim, only the apportionable claim is to be determined in accordance with the proposed Part. Existing law will continue to apply to the non-apportionable claim.

The section further provides that the court cannot apportion responsibility to any person who is not a party to the proceedings, unless the reason for the person not being a party is that the person is dead or, if a corporation, has been wound up. Section 24AJ precludes a defendant against whom judgment has been given in an apportionable claim from being required to contribute to the damages recovered or recoverable from another concurrent wrongdoer in the same proceedings, or to indemnify another concurrent wrongdoer. Section 24AK provides that a plaintiff who has recovered damages from a concurrent wrongdoer for an apportionable loss retains the right to bring an action against another concurrent wrongdoer for that loss, but cannot through these successive actions recover more than the amount actually lost. Section 24AL provides for the court to allow any other persons to be joined as a defendant in an apportionable claim, except where that person was a party to a previously concluded proceeding in respect of that claim. Section 24AM provides that a defendant against whom a finding of fraud has been made remains jointly and severally liable for the damages awarded against any other defendant in that proceeding. Section 24AN provides that the other provisions of the Wrongs Act 1958 that relate to contributory negligence of the plaintiff are not affected by this Part.

Section 24AO provides that the provisions of the Wrongs Act 1958 that relate to contributions by and between other parties are not affected by the operation of this Part, other than as specified in section 24AJ.
Section 24AP provides that nothing in this Part affects the vicarious liability of a person, or the joint and several liability of a principal for damages awarded against an agent, or the joint and several liability of a partner for the proportion of an apportionable claim awarded against another person. As noted above in respect of section 24AI, this section also provides that courts may continue to award exemplary or punitive damages. The section further provides that the operation of any Act that specifically imposes several liability is not affected by the enactment of this Part. Section 24AQ provides that sections 24AI and 24AL are intended to alter or vary section 85 of the Constitution Act 1975. Section 24AR provides for the making of regulations in relation to this Part. Section 24AS provides that this Part applies to all proceedings commenced on or after the date on which this Part commences to operate. That date is specified in Clause 2 to be a date to be proclaimed. Clause 4 inserts a new Part VBA into the Wrongs Act 1958. PART VBA--THRESHOLDS IN RELATION TO RECOVERY OF DAMAGES FOR NON-ECONOMIC LOSS Division 1--Introductory Section 28LB defines the terms used in the new Part VBA. Section 28LC provides that this Part applies to all claims for the recovery of damages for non-economic loss, even if the claim is based on breach of contract or any other cause of action. The Part does not apply to claims relating to intentional acts intended to cause death or injury, or to sexual assault or sexual misconduct, or to which certain specified statutory provisions apply. The section also provides for other claims in a specified class of proceedings under regulation to be excluded from the operation of this Part. Section 28LD provides that the whole of this new Part VBA of the Wrongs Act 1958 is substantive law.

Division 2--Restriction on recovery of damages for non-economic loss Section 28LE provides that a person is not entitled to recover damages for non-economic loss unless the person has suffered significant injury. Section 28LF defines significant injury the purposes of the Part. The Act specifies a threshold level of more than 5 per cent of impairment for injuries other than psychiatric injuries and more than 10 per cent for psychiatric injury and provides that an injury is significant injury if the degree of impairment resulting from the injury is assessed by an approved medical practitioner as satisfying the threshold level. If a Medical Panel determines under Division 5 whether the degree of impairment satisfies the threshold level, the determination of the Medical Panel will apply to determine significant injury rather than the assessment of the approved medical practitioner. Loss of a foetus and loss of a breast are also significant injuries for the purposes of the Part. The section further provides that injury is significant injury if the parties to the claim agree to waive the need for assessment, or a court determines that assessment will be forgone in view of the claimant's death or imminent death, and that the claimant would have been assessed as having significant injury (see new section 28LZN). Division 3--Assessment of impairment Section 28LG provides that assessment of degree of impairment must be made by an approved medical practitioner, as defined in section 28LB. Section 28LH provides that assessment of impairment must be made in accordance with A.M.A. Guides, as defined in section 28LB, or methods prescribed for these purposes, and in accordance with any operational guidelines issued by the Minister. Section 28LI provides that assessment of psychiatric impairment must be undertaken using the specified clinical guidelines prepared by the Medical Panel (Psychiatry) Melbourne and gazetted on 28 August 1998. Section 28LJ provides that secondary psychiatric or psychological impairment is not to be included in assessment of degree of impairment. Section 28LK provides that impairment relating to hearing loss is to be assessed using specified procedures published by the National Acoustic Laboratory, and that the degree of impairment of the whole person resulting from hearing loss is to be calculated from the degree of binaural loss of hearing in accordance with a specified scale. Section 28LL provides that impairments resulting from injuries arising from one incident must be assessed together, and impairments resulting from those injuries are to be combined using the tables in the A.M.A. Guides or the methods prescribed for the purposes of this Part. The section also provides that impairments from unrelated injuries or causes are to be disregarded in making an assessment. Section 28LM provides that if methods are prescribed for the purpose of making assessments of impairment, then assessments must be made using those prescribed