Ballantyne, Tom; Murphy, Katie --- "Claims by third parties" [2016] PrecedentAULA 17; (2016) 133 Precedent 14

CLAIMS BY THIRD PARTIES

By Tom Ballantyne and Katie Murphy

The right of some third parties to bring a claim for compensation has long been recognised by the common law and, more recently, in legislation. Such claims can be brought for damages arising from mental harm and, in the case of a fatal accident, for loss of financial dependency.

There is not scope in this article to consider claims for financial dependency or the various state-based road accident and workplace schemes. In line with the theme of this edition of Precedent, the focus will instead be on claims brought by third parties for compensation for pure mental harm when someone else has been catastrophically injured by another’s negligence. While the primary injury being a catastrophic one does not greatly change the nature of the claim, it does raise some unique issues that practitioners need to be aware of.

WHO CAN BRING A CLAIM?

While the right of third parties to bring a claim for mental harm in some circumstances is well accepted, the class of third parties able to bring a claim for compensation has fluctuated over time. Even today, a third party who may be able to bring a successful claim for pure mental harm in Victoria could be denied similar compensation in South Australia.

Historically, third-party claims were restricted to circumstances where it was ‘reasonably foreseeable’ that a person of ‘normal fortitude’ would have suffered a psychiatric injury if the defendant did not take reasonable care. Further, the plaintiff must also have witnessed the event in question, and have suffered the injury as a result of sudden shock or insult.^[1]

However, this position changed after Tame v New South Wales; Annetts v Australian Stations Pty Ltd [2002] HCA 35 (‘Tame/Annetts’), which became the leading Australian authority on this issue. The decision found that the key issue when establishing whether a duty was owed to third parties was simply whether the risk of mental harm to the third party was reasonably foreseeable at the time of the original tortfeasor’s actions.

Such a duty was found to potentially include situations where the injury was caused by an experience other than a sudden shock or insult. The requirement that the plaintiff witness the event or aftermath was also rejected, with the court extending the existence of a duty of care to include third-party plaintiffs who may not have witnessed the event, but who had a close relationship with the victim. The High Court noted that although the means by which the plaintiff acquires knowledge of that phenomenon are relevant to determining the existence of proximity and the duty of care, they are not decisive of liability.^[2]

The High Court also rejected the requirement of ‘normal fortitude’, although it noted that the plaintiff’s susceptibility to injury remains relevant when considering the idea of ‘reasonable foreseeability’ generally.

The right of a plaintiff to bring a claim for pure mental harm is now protected by legislation in nearly every jurisdiction.^[3] The plaintiff must have suffered a recognisable psychiatric illness, not just emotional distress, and most Australian jurisdictions have also introduced injury thresholds that must be satisfied before general damages can be awarded.^[4]

Under the various Acts, a defendant does not owe a duty of care to a plaintiff unless the defendant foresaw (or ought to have foreseen) that a person of normal fortitude might, in the ‘circumstances of the case’, have suffered a recognised psychiatric illness if reasonable care were not taken.^[5]

When considering the ‘circumstances of the case’, the legislation directs the court to consider various matters, which differ slightly between jurisdictions. These include:^[6]

• whether or not the mental harm was suffered as the result of a sudden shock;

• whether the plaintiff witnessed, at the scene, a person being killed, injured or put in danger (or, in NSW, ‘put in peril’);

• the nature of the relationship between the plaintiff and the killed, injured or endangered person; and

• whether there was a pre-existing relationship between the plaintiff and the defendant.

Although these are matters for the court’s consideration, rather than stand-alone requirements, we can see that elements of the position pre-Tame/Annetts have been re-introduced. This includes the requirement of ‘normal fortitude’ and the concept of ‘sudden shock’.

In effect, third parties must now demonstrate either that they witnessed the event (physical proximity) or prove that they have a close relationship to the victim.

Physical proximity

In terms of physical proximity, the NSW and Victorian legislation requires that the plaintiff must have witnessed the victim being killed, injured or put in peril ‘at the scene’.^[7] In contrast, plaintiffs in South Australia must have been ‘present at the scene’.^[8] Only Tasmania has specifically allowed for those who experience the immediate aftermath of the event to bring a claim.^[9] The Western Australian legislation does not include a specific restriction on the class of third parties to whom a duty may be owed, so the common law principles still apply.^[10]

The meaning of ‘put in peril’, as it is used in the NSW legislation, was considered by the High Court in Wicks and Sheehan v State Rail Authority of NSW [2010] HCA 22 (‘Wicks’). In that case, the Court read the term broadly and found that rescue workers arriving at the scene of a large-scale rail accident satisfied the requirement of having seen the victims ‘put in peril’, in that the injured victims remained at risk of further harm until rescued. The rescue workers could therefore establish physical proximity, despite having arrived after the accident itself had occurred.

However, a recent High Court decision, King v Philcox [2015] HCA 19, muddies the waters for witnesses to the aftermath of an accident. In that case, a South Australian man brought a claim against the negligent driver responsible for the death of his brother. The plaintiff had not witnessed the accident itself, but had driven past the scene of the accident on five separate occasions, before being told by his parents that his brother had been killed in the accident later that evening.

The High Court was asked to consider whether the driver owed a duty of care to the brother under s33 of the Civil Liability Act 1936 (SA) (‘the CLA’), which states that a duty is owed only when ‘a reasonable person in the defendant's position would have foreseen that a person of normal fortitude in the plaintiff's position might, in the circumstances of the case, suffer a recognised psychiatric injury.’

The Court was also asked to consider s53, which limits the duty of care owed to third parties to those ‘present at the scene’ when the accident occurred, or to the parent, spouse, domestic partner or child of the victim. This meant that the brother had to argue that being ‘present at the scene’ of the accident included witnessing the aftermath. The Full Federal Court agreed, finding that a duty of care was owed to the brother and that witnessing the aftermath of the accident was sufficient to satisfy the requirement that the plaintiff had been present at the scene of the accident.

The High Court upheld the finding of the trial judge and the Full Federal Court in finding that the driver did owe a duty of care to the brother. In obiter, the Court noted that it was reasonably foreseeable that experiencing the scene of a collision, including its aftermath, may cause the sibling of the victim to suffer mental harm.^[11] However, the High Court unanimously overturned the finding of the Full Federal Court on the issue of whether the brother had been ‘present at the scene’, concluding that witnessing the aftermath was not enough to satisfy this requirement.

This decision may undermine the ability of witnesses to the aftermath of an accident to bring a claim. However, it seems likely that this decision only affects the position in South Australia, which is the only jurisdiction that limits third-party claims to those ‘present at the scene when the accident occurred’. It is instructive to compare this decision with that in Wicks, discussed above, where the High Court found that those attending the aftermath of an accident could bring a claim. This was due to the NSW legislation allowing third parties to make a claim if they witnessed the injured person being ‘put in peril’. The Victorian legislation also allows for those who witness the injured person being ‘put in danger’, which may be interpreted in a similar way.

In the context of catastrophic injury, establishing physical proximity will sometimes be straightforward, as with motor vehicle accidents. However, for other claims, like medical negligence, this may be more complicated. Many of these cases involve a series of events before the catastrophic injury crystallises, the nature of which may not be properly understood at the time they were witnessed. Or, the third party may have witnessed the traumatic nature of the treatment but have no understanding of the outcome. Neither of these scenarios fits neatly into the legislation around ‘physical proximity’.

Close relationships

If the third party has not witnessed the event, claims are restricted to those who have a close relationship to the injured person. The nature of the relationship that must exist also differs between jurisdictions. In NSW, ‘close member of the family’ is defined as including a parent, spouse or partner, child or step child, brother or sister of the primary victim.^[12] The South Australian and ACT legislation excludes siblings on the basis of the ‘close relationship’ alone.^[13] Neither the Victorian nor Western Australian legislation defines ‘close relationship’.

NEW CLASSES OF PLAINTIFFS AND THE RISK OF INDETERMINATE LIABILITY?

Concerns about indeterminate liability are often raised when the scope of third-party claims is discussed. The decision in King v Philcox suggested that the High Court is sensitive to this issue, with Keane J noting that the restrictions imposed by s53(1)(a) were an ‘informed and rational response...as to where the law should best draw the line to limit indeterminate liability’.^[14] His Honour also noted that these measures are ‘taken in the public interest to preserve the general availability of the remedy by ensuring the viability and affordability of arrangements to meet the costs involved’.^[15]

The issue of indeterminate liability was highlighted by the High Court in the recent decision of Hunter and New England Local Health District v McKenna; Hunter and New England Local Health District v Simon [2014] HCA 44. In that case, the Court considered a claim for compensation for psychiatric harm brought against a hospital by the family of a man killed by a psychiatric patient discharged into his care.

While the High Court found that the hospital did not owe a duty of care, this was largely due to a statutory duty under the Mental Health Act 1990 (NSW) to detain a patient only where no other less restrictive care was available. The Court found that this was inconsistent with a duty in negligence being owed to the public.

The Court did not then need to consider the Court of Appeal’s finding that the hospital owed a general duty of care to the victim and his relatives.^[16] However, the Court did highlight the difficulties of potential indeterminate liability that might arise if a duty of care were found in such circumstances, and noted that any duty owed to the victim and his family members could arguably be extended to any person with whom the released patient came into contact.^[17]

It seems clear that the legislative changes post-Tame/Annetts are designed to clearly define who can bring a claim, and restrict the ability of some third parties to do so. However, the class of third parties who can bring claims will continue to present novel challenges for practitioners and the courts.

Increasing access to video recording through smart phones and the explosion in use of social media and the internet could also raise new issues. For example, could the defendant responsible for a catastrophic injury also owe a duty of care to third parties who view footage of that accident over the internet?^[18] The UK courts have already rejected a plaintiff’s claim for injury suffered after witnessing a negligently caused accident over the television.^[19] However, to our knowledge, Australian courts have not yet been asked to make a finding in similar circumstances.

Legislation in most jurisdictions requires that the plaintiff witness the event ‘at the scene’, but that term is not defined. Could a plaintiff argue that it is sufficient that they saw the injured person ‘at the scene’ through the footage? While it seems unlikely that the court would interpret the term so broadly given the clear sensitivity to indeterminate liability, it is an interesting issue to consider.

Medical negligence is another area that often generates complex issues. Recent case law in the UK has considered when a family member of a patient who receives negligent medical treatment can bring a claim for pure mental harm suffered as a result of witnessing that treatment.^[20] In several of these cases, UK courts found that the healthcare provider did not owe a duty of care to the family member, as the treatment in question was not sufficiently ‘shocking’, ‘horrifying’ or ‘wholly exceptional’ to cause mental harm.^[21]

While Australian law does not specifically require that the treatment in question must have been ‘outside the range of human experience’ or that the third party’s injury was suffered as a result of a ‘sudden shock to the senses’, most legislation does refer to the idea of the mental harm being caused by ‘sudden shock’. If the UK reasoning is followed, it suggests that family members (or any third party) who witness negligent medical treatment need to establish that the treatment itself was traumatic or shocking. This may limit claims, as much of the poor treatment that leads to catastrophic injury may not in itself actually be traumatic or shocking.

OTHER CONSIDERATIONS

When assessing a potential claim for a third party, practitioners also need to be aware of the impact on any claim for the primary victim.

In bringing their claim, a third party plaintiff will invariably undergo a number of psychological assessments, which will require them to repeat their recollection of the circumstances of the event multiple times. Any inconsistencies or unhelpful information could then be used by the defendant to undermine the primary case in negligence. Given the potentially large damages at stake in any catastrophic injury claim, it is crucial that practitioners are aware of this risk and properly advise their clients so that they can make an informed decision about whether the third-party claim is worth pursuing. This caution is particularly relevant to claims where the primary victim is a child and may therefore have a longer limitations period within which to investigate and bring their claim, compared with the adult third party.

CONCLUSION

While the right of third parties to bring claims for financial dependency following the death of a family member is well established, the class of third parties that can bring a claim for pure mental harm is not as clear-cut.

The introduction of legislative framework post-Ipp has afforded plaintiffs greater clarity in some respects; however, the differences between jurisdictions and the interaction with other pre-existing legislative duties means that the circumstances in which a duty will be found are far from clear.

Practitioners considering bringing third-party claims for pure mental harm should be encouraged to consider pre-existing duties owed by the potential defendant, as well as the effect that a third-party claim may have upon the primary victim’s claim.

That being said, the courts have expressed a clear desire to approach third-party claims on a case-by-case basis, and practitioners should not be discouraged from bringing claims in novel circumstances.

Tom Ballantyne is a Senior Associate in the Medical Negligence department at Maurice Blackburn Lawyers and is a member of the A.L.A Victorian State Committee. Phone: [phone]. Email: [e-mail].

Katie Murphy is lawyer in the Medical Negligence department at Maurice Blackburn Lawyers. Phone [phone] Email: [e-mail].

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^[1] See, for example, Jaensch v Coffey [1984] HCA 52.

^[2] Per Gummow and Kirby JJ at [225], Tame v New South Wales; Annetts v Australian Stations Pty Ltd [2002] HCA 35.

^[3] With the exception of Queensland and the Northern Territory, where the legislation does not make specific provision for claims for mental harm.

^[4] Section 28LF Wrongs Act 1958 (Vic); s52 Civil Liability Act 1936 (SA); s16 Civil Liability Act 2002 (NSW); s9 Civil Liability Act 2002 (WA); s27 Civil Liability Act 2002 (Tas).

^[5] Section 72(1) Wrongs Act 1958 (Vic); s33(1) Civil Liability Act 1936 (SA); s32(1) Civil Liability Act 2002 (NSW); s34(1) Civil Law (Wrongs) Act 2002 (ACT); s5S(1) Civil Liability Act 2002 (WA); s34(1) Civil Liability Act 2002 (Tas).

^[6] Section 72(2) Wrongs Act 1958 (Vic); s33(2) Civil Liability Act 1936 (SA); s32(2) Civil Liability Act 2002 (NSW); s34(2) Civil Law (Wrongs) Act 2002 (ACT); s5S(2) Civil Liability Act 1936 (WA); s34(2) Civil Liability Act 2002 (Tas).

^[7] Section 73(2)(a) Wrongs Act 1958 (Vic); s30(2)(a) Civil Liability Act 2002 (NSW).

^[8] Section 53(1)(a) Civil Liability Act 1936 (SA).

^[9] Section 32(2)(a) Civil Liability Act 2002 (Tas).

^[10] Section 5S Civil Liability Act 1936 (WA).

^[11] King v Philcox 2015 HCA 19, [82] – [85].

^[12] Section 30(5), Civil Liability Act 2002 (NSW).

^[13] Section 53, Civil Liability Act 1936 (SA); s36(1), Civil Law (Wrongs) Act 2002 (ACT).

^[14] King v Philcox 2015 HCA 19, [49].

^[15] Ibid, at [42].

^[16] Hunter and New England Local Health District v McKenna; Hunter and New England Local Health District v Simon [2014] HCA 44, at [15].

^[17] Ibid, at [16].

^[18] As opposed to a duty owed to viewers by the broadcaster.

^[19] See, for example, Alcock v Chief Constable of South Yorkshire Police [1997] 1 All ER 540.

^[20] See, for example, Liverpool Women’s Hospital NHS Foundation Trust v Ronayne [2015] EWCA Civ 588; Shorter v Surrey and Sussex Healthcare NHS Trust [2015] EQHC 614 (QB).

^[21] See, for example, Liverpool Women’s Hospital NHS Foundation Trust v Ronayne [2015] EWCA Civ 588 at [41].

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