CHIEF JUSTICE of New South Wales, James Spigelman, is on the right track in his comments that the tide of tort reform changes must be turned back for the benefit of injured Australians, according to the peak body representing the Australian legal profession.
In an address to the 14th Commonwealth Law Conference in London entitled ‘Negligence: Is recovery for personal injury too generous?’, Chief Justice Spigelman said “the changes in NSW go well beyond anything that was ever recommended”.
“Those changes occurred without a full appreciation of the extent to which judicial attitudes had already changed and were changing. A number of persons, including myself, have indicated that in various respects the statutory changes have gone too far,” he said.
Law Council of Australia president John North said the Chief Justice’s comments refute claims made by Andrew Robb MP about compliant courts awarding unjustified levels of damages. “Changes in NSW and other jurisdictions have done nothing more than shift the burden of treating the injured from insurance companies to the taxpayer,” North said.
The Law Council reflected that in the 2002 “insurance crisis”, state governments legislated to curb rising premiums, which it said insurance companies claimed were the result of a “litigation explosion”. The Chief Justice was correct in refuting this misconception, said the Law Council’s North, and in pointing instead to the insurance industry’s own poor management, September 11 and the unusual number of natural disasters.
Spigelman said in his speech that there is “an active debate in Australia as to whether or not the statutory changes have gone too far”. This debate has been “fuelled by the modest reduction in premiums that has occurred to date, in contrast with the considerable increase in insurance company profits and their escalating share prices”.
“There is now a flow of judgments interpreting the new legislation which include critical comment by judges about the anomalies and the injustices arising from the application of the statutes,” Chief Justice Spigelman said.
Spigelman said many legal professionals have been concerned about the impact of the changes on injured Australians. “Legal practitioners and their representative organisations have emphasised that many people with serious injuries are no longer able to receive any or adequate compensation. Insurance companies and their organisations have responded by highlighting the self-interest that some legal practitioners have in these observations. There is a distinct element of pots calling kettles black and vice versa in all of this,” he said.
“In New South Wales a parliamentary committee is conducting an inquiry into the changes to personal injury compensation law both with respect to the general tort law reform and also the earlier changes to workers compensation and third party motor accident schemes. The changes in New South Wales went well beyond what has occurred in other States. That included significant changes that have no implication for insurance premiums paid by individual organisations or companies,” Spigelman said.