16th May 2011

In 2002 the Civil Liability Act (“CLA”) and the Civil Liability Amendment (Personal Responsibility) Act (“CLAPRA”) were introduced. The CLA applies retrospectively from 20 March 2002 (subject to some exceptions) and the CLAPRA was proclaimed to commence from 6 December 2002. The purpose of these Acts was to reform civil liability, particularly negligence, personal injury damages and costs, to overcome the public liability insurance “crisis” which has recently received a great deal of public attention and debate. The following is a brief overview of some of the main provisions of the Act.

Negligence & Causation

Failure to take precautions against the risk of harm is not negligence unless the risk was foreseeable, and was not in-significant, and a reasonable person in the person’s position would have taken those precautions. “Causation” comprises factual causation (existing but-for test) and determination of whether liability should extend to harm (scope of liability).

Risk

An injured person is presumed to have been aware of the risk of harm if it was an obvious risk unless there is proof, on the balance of probabilities, that there was no knowledge of the risk.

There is no duty of care to warn of obvious risks unless information about a risk is requested, a warning is required pursuant to written law, or the defendant is a professional and his/her services involve a risk of death or personal injury.

There is no liability for the materialisation of an “inherent” risk.

There is no liability in negligence for harm suffered from an obvious risk in a “dangerous recreational activity” engaged in by the plaintiff. A duty of care is not owed to a person involved in a dangerous recreational activity if a risk warning was provided to that person.

Possible Defences

The Act allows providers of dangerous recreational activities to waive liability.

A 100% deduction for contributory negligence can be made.

Persons are not owed a duty of care merely because they are intoxicated. The presence of intoxication does not of itself increase the standard of care owed to them. No damages are payable unless harm would have occurred even if the person was not intoxicated. If the person was intoxicated, there will be a presumption of contributory negligence unless the court is satisfied that intoxication did not contribute to the accident.
Damages

An award for past or future economic loss is to be limited to 3 times the average weekly earnings.

Damages for gratuitous provision of care services will only be awarded if they are required for at least six hours per week and for six months.

No damages can be awarded for non-economic loss unless the severity of the loss is at least 15% of a most extreme case. A sliding scale applies to claims between 15% and 33%, and for more serious cases, damages increase to a maximum of $384,500.

Lawyers’ Accountability

A solicitor or barrister must not act unless there are reasonable prospects of success. An originating process or defence can only be filed if it is accompanied by a certificate as to the reasonable prospects of success. Costs can be ordered against solicitors or barristers who act in a claim (or defence of a claim) which does not have reasonable prospects of success.

In claims under $100,000 professional costs are limited to $10,000 or 20% whichever is greater. This is significant because previously claimants could recover costs in excess of this amount. This provision ensures that costs will be limited in claims less than $100,000.

Conclusion

The above are some of the main provisions of the Acts. Our experience of the operation of the Acts has been primarily at arbitration level. We have detected a tendency by arbitrators to attempt to maximise claimants’ damages to the extent the Acts permit. The interpretation of the Acts at appellate court level is keenly anticipated.

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Amendments to Civil Liability - AM Legal Compensation Lawyers                                

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