‘National trends in Personal Injury Litigation: Before and after Ipp’, by Professor Ted Wright and commissioned by the Law Council of Australia, analyses trends in personal injury litigation in Australian states and territories over the past decade, and finds no evidence that reforms to personal injury were needed.

This comprehensive national report shows, once and for all, that litigation rates were, generally, not rising exponentially in the lead up to the 2002 Ipp Report,” said Tim Bugg, Law Council president-elect.

The report analysed data on trends in personal injury litigation in state and territory courts in the past ten years.

“This finding provides no empirical foundation for the premises underlying tort law reform as a strategy for addressing the insurance crisis in 2002,” states the report, released last week.

“It is evident that the reformers could have had no empirical foundation, either for predicting the impact of the reforms on personal injury litigation in their jurisdictions, or for determining by how much it was desirable to reduce it.

“The reforms introduced by the state and territory legislatures have caused a substantial decline in personal injury litigation rates in most jurisdictions. The ‘corrections’ in the three largest states, New South Wales, Queensland and Victoria, have been particularly dramatic.

“The data also show that litigation rates both before and after the reforms varied appreciably among the states and territories, and that the degree of change wrought by their reforms also vary appreciably,” the Report states.

The Law Council said it has long had concerns about the loss of compensation rights. “This report confirms what we have been saying for many years — tort law reforms were hastily-introduced and ill-thought out. They were a knee-jerk reaction to a problem that, according to this hard data, had little or nothing to do with litigation rates,” said Bugg.

The Executive Summary of the report offers some background into what took place. “In 2002 the Commonwealth, state and territory governments reacted to a ‘crisis’ over the availability and affordability of personal injury liability insurance cover by appointing a ‘Panel of Eminent Persons’ to review the law of negligence (the Ipp Review). Between 2002 and 2004 the legislatures in every Australian jurisdiction enacted significant tort law reforms, many of them recommended or inspired by the Ipp Review.”

Investigating whether Australia was experiencing a “litigation explosion” and whether this was a cause of the “insurance crisis” that the Ipp Review was meant to address, the Report notes that “there is only one state in which there appears to have been a clear rising trend in claim numbers from the beginning of the study period (1995); this was South Australia”.

“Claim numbers in Tasmania and Western Australia rose rapidly in the late 1990s. However, they were also unambiguously in decline before the Ipp reforms were in contemplation. Some questions about the quality of the Western Australian data make it tempting to ignore the very high claiming rates in 1998 and 1999, and on that basis it can be ventured that the claiming rate was perhaps rising very slightly, if it was not stable. If one is prepared to indulge this degree of speculation, it places Western Australian into the ‘rising’ group, along with South Australia,” the Report states.

“In the ACT (the nation’s highest litigation jurisdiction) the trend prior to the reforms was, if not stable, possibly declining. The data more clearly suggests that litigation rates were stable in New South Wales, Queensland, Victoria and the Northern Territory.”

There is no evidence of a general increase in personal injury litigation between 1995 and 2002, the Law Council Report states. “Of course, as we noted at the outset, the direct premise on which the Ipp Review proceeded was not that claim numbers were increasing but rather something a little different, namely that personal injury claims were becoming increasingly successful and were resulting in increasingly larger awards.

“However, neither the Ipp Review nor the coterie of government policy makers responsible for implementing its recommendations had empirical confirmation of these supposed facts either. The data required to confirm the ‘widely held view’ that these were the facts was (and is) simply not available,” the Report states.

In its conclusion, the Report states that if it has become too easy for plaintiffs to succeed in personal injury cases, an “evident rise” in claims over time could be expected. But, it states, “we did not find this trend”.