blogs writes about the Swain High Court decision in today’s SMH. You know, the bloke who got $3.75 million for diving into a sandbank between the flags at Bondi Beach and making himself a quadriplegic.
Ackland apparently shares my bemusement about the basis for the High Court majority’s decision, but still labels the legally-correct McHugh and Heydon JJ as “flinty“. But Ackland fails to note that the majority’s decision blatantly ignores existing authority and shifts the burden of disproof of negligence to the defendant local council even though the plaintiff Swain hadn’t made out a prima facie case for negligence (because he hadn’t established both that there was a foreseeable risk of injury from the placement of the swimming flags and that there was some practical and safer alternative). I suspect that this is one of those cases that will eventually be “distinguished and confined to its own facts” as lawyers euphemistically refer to wrong decisions by our highest court.
More interestingly, Ackland also muses in passing about whether a no-fault injury compensation scheme (like New Zealand) might be a better alternative to the existing expensive tort law lottery. He contrasts the Swain case with that of Glenn Ollier:
At least Swain has something to go on with, unlike Glenn Ollier, who was struck on the head by a golf ball hit by Mark Shanahan at the Magnetic Island Country Club near Townsville. Ollier is severely brain damaged as a result, and the Queensland Supreme Court awarded him $2.6 million. The club is not liable but Mr Shanahan is, although he has no money. It is unlikely that the victim will see much by way of damages or compensation.
There is something profoundly out of whack with a system that produces such divergent outcomes. Yet we see the president of the Law Council of Australia, John North, who is terrific in most respects, arguing against a no-fault compensation scheme for the catastrophically injured: “The common law system provides proper compensation to people injured as a result of negligence by someone else.”
Not if you’re Mr Ollier it doesn’t.
Precisely. Why is there little or no public debate about the desirability or otherwise of a universal no-fault injury compensation system? Especially with Labor governments in all States, because this is quintessentially an area of State responsibility. Such a system seems to be working quite well in New Zealand after some initial teething problems, as this article discusses:
The compensation of crime victims in New Zealand differs from other countries in that crime victims are treated in the same way as other accident victims. All are compensated as part of the no fault 24-hour cover accident compensation scheme.
The scheme provides compensation for those who suffer personal injury and it does not matter whether the injury was caused by a careless motorist or doctor, by the victim’s own fault in skiing too fast or by a criminal in a deliberate assault. All that has to be shown is that the victim suffered a personal injury that has cover under the Act. Personal injury is defined as physical injury and includes any mental injury which is an outcome of the physical injuries.
Benefits available to injured persons include: weekly compensation; an independence allowance; cover for medical costs; and, rehabilitation assistance. Whilst the benefits available in fatal claims include: surviving spouse weekly compensation; and, compensation for each child under 18 (or 21 if studying). Other payments include a survivor’s grant and a funeral grant.
The scheme is funded from premiums paid by motorists, employers and earners. The Government also makes a contribution for injuries which cannot be attributed to the above categories (for example non earners).
As the scheme has replaced workers compensation and the common law action for damages, employers, motorists and others no longer have to take out insurance against being sued in court for damages for personal injury. Thus in effect the scheme is mainly funded by transferring the insurance premiums that were previously being paid to various insurance companies into one central organisation: the Accident Compensation Corporation (ACC).
The scheme is fully funded, although it wasn’t until 1999 and there’s still a significant accumulated shortfall liability from those earlier days. It also seems to compare favourably in cost with the Australian tort-based system. Administration costs are much lower, and the huge litigation legal costs of Australian are non-existent (which means the legal profession opposes it). And the cost to employers and others funders of the scheme seems to be about the same as a tort-based system.
That is because the scheme is a trade-off. Everyone gets covered, but there are no big lump sums for pain and suffering, permanent impairment, loss of amenity and the like. Weekly benefits are fixed at 80% of the individual’s ordinary weekly earnings, but only to a capped amount (I think it’s presently around $70,000 pa or thereabouts, but I can’t find any reference to the cap on the ACC website). Thus higher income earners (and not all that high) are clearly under-compensated compared with a successful plaintiff in a tort-based system like Australia’s.
Personally I think such a system is worthy of serious consideration, which is why I’m blogging about it. This article by Hassan El Menyawi in Murdoch University’s E-Law journal summarises the arguments for and against a no fault injury compensation system.
The main argument against is that a no-fault system removes any deterrent/punishment/incentives for employers etc to take steps to minimise risks of injury in workplaces and the like. But it isn’t as powerful an argument as it might seem at first blush. Even under our existing tort-based system, the incentives for risk minimisation are fairly marginal. Insurance premiums in most sectors are set on an industry-wide basis, so individual operators can do little or nothing to reduce their insurance premium costs. Moreover, New Zealand’s scheme duplicates this aspect anyway, with differing annual compensation levy levels to the ACC depending on the risk profile of the industry concerned.
As far as I can see, the option of no-fault injury compensation wasn’t canvassed at all (and certainly not seriously) when tort law reform was all the rage a couple of years ago in the wake of September 11 and the HIH crash. I’ll be stuffed if I know why; it seems such an eminently sensible measure. Come to think of it, I reckon I do know the reason. It’s drastically contrary to the interests of the legal profession and the insurance industry, and most other businesses would benefit only marginally. And the rest of us aren’t interested in these sorts of issues because we don’t think we’ll ever get injured and incapacitated. And we’re just isolated individuals anyway without the power of an industry lobby behind us.