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Precedent (Australian Lawyers Alliance) |
COMPLACENCY AND LACK OF ACCOUNTABILITY
THE WHITE ISLAND DISASTER
By Rita Yousef
This article discusses legal liability and rights to compensation in New Zealand in the context of the White Island disaster. It also outlines the compensation available to those covered by Australian law.
On 9 December 2019, New Zealand’s White Island (also known as Whakaari) erupted. The volcanic eruption resulted in deaths and catastrophic injuries, and news broadcasts around the world shared scenes of the terrifying experiences of the victims on the Island.
Many victims were Australians who were touring the Island as part of their Royal Caribbean cruise. This tour was operated by Royal Caribbean and White Island Tours. Royal Caribbean advertised the tour to its passengers through the company’s own promotional materials, with Royal Caribbean branding. Passengers were able to book the tour directly through Royal Caribbean, with Royal Caribbean-branded tickets issued to tour participants. Royal Caribbean staff coordinated and attended the tour along with staff from White Island Tours.
Since the eruption, questions have been raised over the conduct of the many persons, entities and businesses responsible for monitoring the volcano’s activity, managing Island operations, and managing and monitoring the safety of its visitors. The legal rights of the victims and their families have also been in the spotlight, given the extremely restrictive no-fault compensation system in New Zealand.
BACKGROUND
White Island, located 49kms off the coast of New Zealand’s North Island and north east of Whakatāne, is an active volcano. Before the disaster, the Island was a popular tourist attraction, visited by thousands of people every year. Many visitors accessed the Island through tour operators who sold helicopter tours as well as boat tours, such as the boat tour organised by Royal Caribbean on 9 December 2019.
Twenty-two people lost their lives in the White Island disaster. Loved ones were forced to identify the charred and disfigured bodies of many of the victims. Twenty-five others suffered serious catastrophic injuries, with lengthy treatment and rehabilitation programs ahead of them, and doctors were tasked with treating extensive, never before seen burns and internal injuries. Most of the surviving victims are unlikely ever to fully recover.
Monitoring and alert system
New Zealand is no stranger to volcanic eruptions. There are 12 volcanoes in New Zealand,[1] some of which have erupted relatively recently. The White Island Eruption Response Plan (revised in August 2018) says that eruptions occurring while people are on or near White Island pose significant risks to visitors.[2] It is clear that the risk of an eruption was contemplated and fully known before this deadly disaster.[3]
Indeed, there is extensive information available about White Island’s eruption history. GeoNet, whose purpose is ‘to build and operate a modern geological hazard monitoring system in New Zealand’, provides data on the previous eruptions.[4] GeoNet reports that White Island was in eruption from 1975 to 2000, the volcano’s ‘longest and largest historic eruption episode’.[5] Further, there were eruptions in 2012, 2013 and 2016.[6] GeoNet staff even authored a scientific paper[7] about the 2016 eruption which assessed the hazards posed by eruptions of White Island, ‘with specific reference to tourists on White Island’.[8]
Volcanic alert levels are used to indicate the level of unrest and risk of eruption. In the weeks leading up to the disaster, White Island’s alert levels fluctuated and the alert system provided intermittent warnings of the fluctuations but these did not result in preventative action. In addition, there are reports that White Island is known among experts as being New Zealand’s most unpredictable volcano, meaning that even where the alert level is fairly low it has a history of erupting unexpectedly. GeoNet reports in the ‘Alert Level’ section of its webpage dedicated to White Island that: ‘An eruption may occur at any level, and levels may not move in sequence as activity can change rapidly.’[9]Despite all of this, no steps were taken to prevent the December 2019 disaster. Tours went ahead. Though the alert system served as a warning, this was not acted upon. Further, visitors were allowed onto the island with minimal safety gear and protection, no practical options for evacuation, and no adequate shelter.
PROCEEDINGS AND REVIEW IN NEW ZEALAND
WorkSafe is New Zealand’s primary workplace health and safety regulator, with a focus on regulatory compliance, harm prevention and education in New Zealand workplaces. It has commenced court proceedings against 13 New Zealand defendants in relation to the eruption: Andrew, James and Peter Buttle, the owners of White Island; Whakaari Management Limited; I D Tours New Zealand Limited; the Institute of Geological Nuclear Sciences Limited; the National Emergency Management Agency; White Island Tours Limited; Volcanic Air Safaris Ltd; Aerius Limited; Kahu NZ Limited; Inflite Charters Limited; and Tauranga Tourism Services Limited.[10] At time of writing, the proceedings are on foot in the District Court of Auckland and are in relation to charges laid under the Health and Safety at Work Act 2015 (NZ) against the relevant persons and entities who are bound by this legislation.
A statement by WorkSafe on 30 November 2020 reads:
‘22 people have lost their lives in this tragic event. WorkSafe is tasked with investigating workplace incidents to determine whether those with health and safety responsibilities met them. This was an unexpected event, but that does not mean it was unforeseeable and there is a duty on operators to protect those in their care.’[11]
If the defendants are successfully prosecuted, they face fines. However, the WorkSafe system is entirely separate from the New Zealand compensation system and does not provide victims with remedies. Also, the jurisdiction does not extend to entities or persons not bound by the New Zealand legislation and not within WorkSafe’s jurisdiction, including Royal Caribbean.
In addition, the New Zealand Government has ordered an independent review of WorkSafe in relation to the White Island disaster.[12] This review is intended to:
‘... assess the adequacy and appropriateness of WorkSafe’s actions and whether further steps should have been taken. It will also identify whether any changes to WorkSafe’s systems, processes and practices are necessary or desirable.’[13]
NEW ZEALAND’S NO-FAULT COMPENSATION SYSTEM
Despite the current WorkSafe proceedings in which clear failures, breaches and negligent acts can be identified, as well as the WorkSafe review, under New Zealand law it is not possible for the victims to sue for lump sum compensation in negligence. This has been the case since 1974 when the no-fault scheme became operational, following the 1967 Royal Commission into Compensation for Personal Injury in New Zealand and subsequent Woodhouse Report.[14]
Generally, the scheme allows for the payment of rehabilitation fees, care expenses and lost wages with certain restrictions and caps. It also allows for limited lump sum payments for permanent impairment. It is not dependent on fault in terms of who caused the loss and damage.
The scheme is administered by New Zealand’s Accident Compensation Corporation (ACC), which has a stated vision ‘to create a unique partnership with every New Zealander, improving their quality of life by minimising the incidence and impact of injury’.[15] The ACC is governed by the Accident Compensation Act 2001 (NZ), which has a stated purpose to:
‘... enhance the public good and reinforce the social contract represented by the first accident compensation scheme by providing for a fair and sustainable scheme for managing personal injury that has, as its overriding goals, minimising both the overall incidence of injury in the community, and the impact of injury on the community (including economic, social, and personal costs) ...’.[16]
A lack of accountability and deterrence
Accountability and deterrence are noticeably absent from the overarching vision of the scheme and the governing legislation. The scheme has arguably encouraged complacency on the part of entities and persons who were in a position of responsibility and could have prevented the White Island disaster. It is argued that those responsible took unreasonable risks and failed to implement practical and available safety measures. Possible reasons for this include that there was no requirement to have comprehensive insurance cover; no possibility of being sued in negligence; and no possibility of being properly held to account for failures.
A system that is based on duties and standards of care would have enforced such requirements and, arguably, have prevented such a disaster. Even if it could not have prevented the full effects of a disaster of this kind, it would have provided for more comprehensive coverage of victims’ losses and other remedies. It could also have provided them with acknowledgement and closure – outcomes that are not encompassed by the no-fault system.
Undeniably, this is not the first time that New Zealand’s no-fault scheme has been under the spotlight – countless commentators have highlighted its inadequacies.[17] The scheme has been the subject of several rounds of reviews, amendments and overhauls since 1974, yet the problem remains that it encourages a lack of accountability and perhaps a more flippant approach when it comes to safety.[18]
THE TORT SYSTEM
A tort system that allows victims to sue in negligence not only allows for more comprehensive coverage of their losses, but is also dependent on the cause of the losses, involving scrutiny of the wrongdoers’ actions. Victims are arguably better and more holistically served by a tort system, as opposed to a no-fault system.
Madden summarises the overarching objectives of a tort law system as follows:
‘(1) returning the party who has suffered a loss to the position he enjoyed before the wrongful activity; (2) requiring the wrongdoer to disgorge the monetary or imputed benefit derived from his actions; and (3) by the remedy meted out, and by its example, deterring the wrongdoer and others in a similar situation from engaging in the same wrongful and injurious pursuit. ... [T]ort goals [can serve] either goals of (4) “corrective justice” and “morality”; or (5) “economic efficiency and deterrence”.’[19]
Litigation involves a process of fact-finding and evidence gathering, allowing for the making of specific allegations in negligence, with the process ultimately holding the negligent wrongdoer or wrongdoers to account. The law of negligence acts as a deterrent in that it provides an avenue for victims to sue, and to seek a publicly available court judgment, confirming not only the defendant’s failures, but also how those failures have led the victim to suffer loss and damage. It also involves the detailed quantification of those losses and damage, both to date and into the future, based on victims’ most likely future circumstances, and compensates them for their pain and suffering. It requires the defendant to pay lump sum compensation, often in significant amounts. The scrutiny involved, the fear of a publicly available adverse judgment and court orders to pay significant sums in compensation act as deterrents.[20]
A no-fault system is in effect short sighted, in that it focuses only on minimal benefits to attempt to help the victim to ‘get by’. It lacks the overarching objectives of a system based in negligence. There are minimal incentives for wrongdoers to prioritise safety and to make decisions based on risk minimisation. The result of this on White Island was a disaster that has had devastating consequences.
RECOURSE IN AUSTRALIA
For those victims who entered into tour contracts governed by Australian law, there is fortunately recourse in Australia. The recourse is in negligence,[21] contract[22] and under the Australian Consumer Law (ACL).[23]
In the case of the White Island disaster, duties of care and contractual obligations were breached when the victims were allowed onto the Island. The applicable guarantees under the ACL were not met as the tour service was not fit for purpose because it was delivered without reasonable care and skill.
Claims brought in negligence, for breaches of contract and under the ACL allow victims to pursue compensation not only for their past losses but also for their pain and suffering,[24] loss of income and earning capacity[25] and their care and assistance needs,[26] as well as for their treatment and equipment needs arising from their injuries.[27]
CONCLUSION
This disaster has highlighted the inadequacies of the New Zealand no-fault scheme. It lacks comprehensive coverage of the true extent of the damage and loss suffered by the victims, and also lacks a focus on accountability and deterrence.
The consequences of being sued in negligence are wide-ranging and impactful. The knowledge of such consequences would force persons and entities in a position of responsibility to heed warnings, take out proper insurance cover and implement adequate safety mechanisms. The no-fault system, on the contrary, has led to a preventable disaster with many lives destroyed, as well as damage and loss that will never be fully accounted for under the New Zealand system.
Rita Yousef is a solicitor at Stacks Goudkamp and an Accredited Specialist in Personal Injury Law. PHONE (02) 9237 2222 EMAIL rita@stacksgoudkamp.com.au.
[1] See the ‘Volcanoes’ drop-down menu on the GeoNet website. Further explanation of GeoNet is provided later in this article. See: GeoNet, Volcano: Whakaari/White Island, <https://www.geonet.org.nz/volcano/whiteisland>.
[2] White Island Eruption Response Plan (revised in August 2018), para 2.1.2.
[3] M Burdon, C Hayer, C Miller and B Christenson, ‘Insights into the 9 December 2019 eruption of Whakaari/White Island from analysis of TROPOMI SO2 imagery’, Science Advances, Vol. 7, No. 25, June 2021, <https://advances.sciencemag.org/content/advances/7/25/eabg1218.full.pdf>.
[4] GeoNet, About GeoNet, <https://www.geonet.org.nz/about>.
[5] GeoNet, above note 1, ‘About’.
[6] Ibid.
[7] G Kilgour et al, ‘Phreatic eruption dynamics derived from deposit analysis: A case study from a small, phreatic eruption from Whakāri/White Island, New Zealand’, Earth Planets Space, Vol. 71, No. 36, 2019, 1–21, <https://earth-planets-space.springeropen.com/articles/10.1186/s40623-019-1008-8>.
[8] Ibid, 19.
[9] GeoNet, above note 1, ‘Alert level’.
[10] WorkSafe New Zealand, ‘13 parties charged by WorkSafe New Zealand over Whakaari/White Island tragedy’, 30 November 2020, <https://www.worksafe.govt.nz/about-us/news-and-media/13-parties-charged-by-worksafe-new-zealand-over-whakaariwhite-island-tragedy/>.
[12] Ministry of Business, Innovation & Employment, ‘Independent review of WorkSafe in relation to Whakaari/White Island’ (2021) <https://www.mbie.govt.nz/business-and-employment/employment-and-skills/health-and-safety/independent-review-of-worksafe-in-relation-to-whakaariwhite-island/>.
[13] Ibid.
[14] SL Anderson, ‘The Woodhouse report on compensation for personal injury in New Zealand’, Auckland University Law Review, Vol. 1, No. 2, 1969, 1–15; EJ Lemons, ‘The Woodhouse Report: Relegated to the archives’, McGill Law Journal, Vol. 19, No. 2, 1973.
[15] ACC, What we do (12 June 2020) <https://www.acc.co.nz/about-us/who-we-are/what-we-do/>.
[16] Accident Compensation Act 2001 (NZ), s3.
[17] Some examples, provided for illustration only and not as an exhaustive list: S Morrison, ‘The New Zealand no-fault accident compensation scheme’, Precedent, No. 114, January/February 2013, 39–42; M Doepel and S Canton, ‘A reflection on no-fault compensation’, Vol. 13, No. 3, Australian Civil Liability Newsletter, 2016, 36; EK Solender, ‘New Zealand’s no-fault accident compensation scheme has some unintended consequences: A caution for US reformers’, The International Lawyer, Vol. 27, No. 1, 1993, 91–111.
[18] Morrison, above note 17.
[19] M Stuart Madden, ‘Efficiency themes in tort law from antiquity’, Adelaide Law Review, Vol. 34, No. 2, 2013, 232.
[20] Ibid, 264–5.
[21] Civil Liability Act 2002 (NSW).
[22] The contract with the cruise company stipulates that NSW and Commonwealth law apply.
[23] Competition and Consumer Act 2010 (Cth), sch 2 (Australian Consumer Law), ss60 and 61.
[24] Civil Liability Act 2002 (NSW), s16.
[26] Ibid.
[27] Ibid.
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