Key legislation: Wrongs Act

 

Important changes in personal injury law affect the way negligence is judged by a court and restrict the damages that can be awarded. Also, good Samaritans are protected, apologies are not admissions of liability, and being drunk or acting illegally can affect the right to claim. Transport accidents, work injuries and dust/tobacco related injuries are covered under other legislation.

The Wrongs Act and major amendments

The Wrongs Act 1958 (Vic) (“Wrongs Act”) is the main legislation governing claims for damages for personal injury (or resulting death) in Victoria, particularly in cases not involving transport accidents or work injuries. There have been three major amendments to the Wrongs Act:

1 the Wrongs and Other Acts (Public Liability Insurance Reform) Act 2002 (Vic);

2 the Wrongs and Limitation of Actions Acts (Insurance Reform) Act 2003 (Vic);

3 the Wrongs and Other Acts (Law of Negligence) Act 2003 (Vic) (“Law of Negligence Act”); and

4 the Wrongs Amendment Act 2015 (Vic).

These Acts have greatly affected claims for damages in personal injury cases not involving transport accidents, work injuries or other injuries as specified.

It is important to note that many of the changes made by these Acts will apply to injuries that occurred before their commencement. These changes are set out in some detail below. The changes enacted in the Law of Negligence Act will not apply to transport injuries, work injuries, dust/tobacco related injuries and other specified cases (seeLaw of Negligence Act amendments”). It is important to seek advice from a lawyer or a community legal centre in all cases involving a possible claim for damages for personal injury.

Note that all the following references to legislation are references to the Wrongs Act (as amended).

Protected events

The Wrongs Act gives protection from claims for damages for personal injury to “good Samaritans” helping at emergencies or accidents, volunteers providing services for community work and donors of food (pts VIA, IX, VIB). However, some exceptions will apply to those cases.

Also, the making of an apology or a waiver or reduction of fees cannot be an admission of liability or poor performance in civil proceedings (pt IIC). This provision will be particularly relevant in cases involving professionals such as doctors or lawyers. In considering a claim for damages, a court can also take into account whether a plaintiff was intoxicated by drugs or alcohol voluntarily consumed, as well as whether the plaintiff was engaged in illegal activity (pt IIB).

Law of Negligence Act amendments

The Law of Negligence Act has substantially altered the law relating to negligence. The Law of Negligence Act amendments apply to all claims for damages resulting from negligence whether brought in tort, in contract, under statute or otherwise (s 44) except for transport injuries, work injuries, dust and tobacco-related injuries and other claims as specified (s 45). A dust-related injury will include an asbestos dust injury.

The amendments radically affect the previous common law principles relating to negligence and other aspects as set out in the Law of Negligence Act. The following is a brief summary of relevant provisions of the Law of Negligence Act. Further commentary will have to await consideration by the courts, and probable further legislation.

Duty of care

A person is not negligent in failing to take precautions against a risk of harm unless the risk was foreseeable and “not insignificant” (s 48).

The fact that a risk of harm could have been avoided by doing something in a different way (or something that was in fact done later) does not affect liability (or constitute an admission of liability) in connection with the risk (s 49).

Causation

The negligence must be a necessary condition of the harm (factual causation). Also, it must be shown that it is appropriate for the scope of the negligent person’s liability to extend to the caused harm (scope of liability) (s 51). The plaintiff will always have to prove any fact relevant to the issue of causation (s 52).

Awareness of risk

In most cases, if there is an “obvious risk”, the plaintiff must prove that they were unaware of the risk (s 54). A person is not liable in negligence for harm suffered by another person as a result of an “inherent risk”. However, there still may be a duty to warn of the risk (s 55).

Contributory negligence

Contrary to previous common law principles, if a court determines that there should be a reduction of 100 per cent for contributory negligence, then a claim for damages is defeated (s 63).

Negligence of professionals

The standard of care for professionals is the standard of “peer professional opinion” (s 59(1)). The term “professional” is not defined, but it will at least cover such people as doctors and lawyers.

“Peer professional opinion” is the manner of practice at the time “widely accepted in Australia by a significant number of respected practitioners in the field as competent professional practice in the circumstances” (s 59(1)). A court can still override “peer professional opinion” if it determines that that opinion is unreasonable (s 59(2)).

Mental harm

The Law of Negligence Act distinguishes between “consequential mental harm” (psychological or psychiatric injury that is a consequence of an injury, for example, depression as a result of back injury) and “pure mental harm” (psychological or psychiatric injury other than consequential mental harm) (s 67).

Recovery of damages for all types of mental harm requires that it was foreseeable that a person of “normal fortitude” might suffer a recognised psychiatric illness if reasonable care were not taken (ss 72, 73). At common law a defendant was liable for all the medical consequences of an injury even if a plaintiff was more susceptible to injury because of a pre-existing medical state (such as an abnormally thin skull). That principle, known as the “egg shell skull” rule, will no longer be applicable in cases of mental harm.

In cases of damages for pure mental harm for “secondary” nervous shock, it will be necessary for the plaintiff to have witnessed an incident involving another person (“the victim”) or to be in a “close relationship” with that victim (s 73(3)). Also, the victim must be able to recover damages as a result of that incident, if the person suffering secondary nervous shock is to recover damages as well (s 73(3)).

Damages can only be recovered for economic loss for mental harm resulting from negligence where the harm consists of a recognised mental illness (s 75).

If a defendant knows, or ought to have known, that the plaintiff is a person of “less than normal fortitude” then the Law of Negligence Act amendments do not apply (s 72(3)).

Liability of public authorities

The Law of Negligence Act introduces major amendments to the liability of public authorities to claims for damages for negligence except for dust (e.g. asbestos) or tobacco-related injuries (s 81). “Public authority” is defined in the Act (s 79) and will include such organisations as local councils.

A public authority is not liable for breach of a statutory duty unless its act or omission is so unreasonable that no public authority could consider the act or omission to be a reasonable exercise (s 84(2)). This provision means that it will be very difficult to claim damages for breach of a statutory duty by a public authority.

Otherwise, in considering an alleged breach of common law duty of care by a public authority, the court must look at a number of factors such as the broad range of activities performed by the authority, its available resources and its compliance with general procedures and applicable standards.

Personal injury damages

The following provisions are now included in the Wrongs Act (pt VB). They apply to any person claiming damages for personal injury (“the claimant”) except for cases set out in section 28C of the Wrongs Act. Exceptions specified in the Act include transport accident and work injuries and intentional sexual assault or misconduct cases.

In calculating damages for claims for past or future economic loss (e.g. loss of earnings and earning capacity), the maximum amount of damages that can be awarded for each week of lost earnings is three times the average weekly earnings at the date of the award (s 28F).

Damages for non-economic loss (e.g. pain and suffering) are limited to a maximum amount, which is usually indexed on 1 July each year (s 28G). As at 1 July 2016, the maximum amount was $589,650.

There are also qualifications and limits on the awarding of damages for gratuitous attendant care services and for loss of capacity to provide gratuitous care to dependants (ss 28IA–IE).

Restrictions on damages for non-economic loss

The Wrongs Act places restrictions on the recovery of damages for non-economic loss (e.g. pain and suffering) (pt VBA). Such restrictions apply in all cases of damages for personal injury except for transport accident injuries, work injuries, asbestos-related conditions, and intentional sexual assault or misconduct cases (s 28LC).

A claimant must have a “significant injury” before being entitled to recover damages for non-economic loss pursuant to the Wrongs Act. Similarly to work injuries cases, non-psychiatric impairment is assessed pursuant to the American Medical Association Guides to the Evaluation of Permanent Impairment (4th edition); in cases of psychiatric impairment, the Clinical Guidelines to the Rating of Psychiatric Impairment, prepared by the medical panel (psychiatry), Melbourne (October 1997) are used (both are referred to as “the Guides”).

The threshold (or minimum) level for the recovery of damages in these cases is an impairment of 5 per cent or more for a non-psychiatric injury, or 10 per cent or more for a psychiatric injury. Such impairment must be assessed by an approved medical practitioner or a medical panel as defined by the Wrongs Act (seeAssessment”).

Injuries such as the loss of a breast or the loss of a foetus are specifically defined as being a “significant” injury (s 28LF). There are also specific provisions for impairment being a loss of hearing (s 28LK).

In assessing psychiatric impairment it is necessary to disregard any psychiatric impairment or injury consequential on a physical injury (s 28LJ).

Assessment

Generally, the degree of impairment assessment must be made by an approved medical practitioner as defined by the Wrongs Act (ss 28LB, 28LG). All injuries arising out of the same incident must be included in the one assessment (s 28LL).

In most cases a claimant should obtain a certificate of assessment from an approved medical practitioner. The certificate should state whether the degree of impairment satisfies the threshold level but not state the specific degree of impairment (s 28LN). A certificate may be issued even if not all the injuries have stabilised (s 28LN).

The Wrongs Act sets out a procedure whereby a claimant will generally serve a certificate of assessment on a person (including a company or other organisation or body) against whom a claim for damages is made (“the respondent”). A court can stay the proceeding until the claimant serves the certificate of assessment and the required accompanying information (s 28LZMA).

A respondent can waive the requirement for an assessment of degree of impairment (s 28LP) or dispute responsibility (s 28LQ). A court can also determine whether a claimant has suffered a significant injury in an urgent case where the death of the claimant is imminent, or in certain cases where the claimant has previously died (s 28LZN).

If a certificate of assessment is served on a respondent, the assessment can be accepted or referred to a medical panel for an opinion on the assessment. Such response by a respondent must be in writing and occur within 60 days of service of the certificate (s 28LW).

The Wrongs Act sets out procedures for a medical panel to assess whether the impairment of the claimant satisfies the threshold level prescribed by the Act (pt VBA div 5). Those procedures before a medical panel are similar to the medical panel procedures in the Accident Compensation Act 1985 (Vic) (s 28LZL) (see Work injuries).

A medical panel considering an application pursuant to the Wrongs Act gives its opinion on whether the degree of impairment satisfies (or will satisfy when the injury has stabilised) the threshold level, but must not state the specific degree of impairment (s 28LZG). Such an opinion is binding on any court as a determination whether or not the claimant has a significant injury (s 28LZH).

Legal advice should be sought from a lawyer or community legal centre on procedures, including time limits, in cases involving a medical panel assessment of impairment under the Wrongs Act.

There are very limited rights of appeal from an opinion of a medical panel (s 28LZI).

A claimant must file in the court a copy of the certificate of assessment or the certificate of opinion of the medical panel sought to be relied upon. If a respondent is deemed to have accepted an assessment, then a statement to that effect should be filed (s 28LZM). The appropriate forms and certificates are set out in the Wrongs (Part VBA Claims) Regulations 2005 (Vic).