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Mchugh, Michael --- "Introduction" [2005] SydLawRw 19; (2005) 27(3) Sydney Law Review 385



One of the purposes of the splendid collection of essays that appear in this special issue of the Sydney Law Review is to honour the outstanding and continuing contribution of Professor Harold Luntz to the law of torts. Indeed, Professor Luntz himself contributes a fascinating essay of his own — ‘Personal journey through the law of torts’, an essay that he describes as ‘intensely personal and very anecdotal.’ In various ways, the other essays in this collection respond to the enactment of the Civil Liability Act 2002 (NSW) and its counterparts in other States, all of which quickly followed the publication of the Ipp Report.[1]

The themes of the essays are directed to the policy and future direction of tort law including the law of damages. The changes that the Civil Liability Acts make to substantive tortious doctrines, particularly the law of negligence, are wideranging. The essays note key areas of change and contribute to the lively debate as to whether the reforms unwisely trespass onto, or prudently provide necessary structural support for, the tortious doctrines that the common law has developed.

As Luntz points out in his essay, torts law has become essentially a system of accident compensation. With the exception of the law of defamation in New South Wales, negligence actions constitute all but a small percentage of the tort cases with which Australian lawyers deal. That is not to say that practitioners are never called on to advise concerning such torts as trespass to the person, trespass to land, malicious prosecution, false imprisonment, conspiracy to injure, intimidation and inducing breach of contract. But years may pass before a practitioner is called on to advise in respect of any of these ‘so called’ intentional torts. In contrast, seldom does a month pass without a solicitor in general practice being asked to advise in respect of a claim for damages for negligence.

After the enactment of the Civil Liability Act 2002 (NSW), the New South Wales Premier, Mr Bob Carr, remarked that the Act represents ‘the biggest body of tort law reform in 70 years’.[2] Just over 70 years ago, Lord Atkin’s speech in Donoghue v Stevenson[3] articulated the nature of the legal duty of care on which the common law negligence action has ever since been based. His conception of the duty of care was grounded in notions of corrective justice as between neighbours. The Civil Liability Acts of the State legislatures, on the other hand, aim to reallocate, as between members of society, the distribution of losses that flow from accidents. The recent passing of these Acts makes the present an appropriate time to consider how the common law of tort, which aims to correct the injustice that was done as between the parties, is shaped by the introduction of legislation whose purpose is to achieve distributive justice.

Many readers of these essays will conclude that, in one way or another, the Civil Liability Act 2002 (NSW) and its counterparts are defective. Given the unbelievably short period that elapsed between the publication of the Ipp Report and the enactment of the New South Wales Act — about three weeks — it is hardly surprising that that legislation in particular is open to the criticism contained in Professor Barbara McDonald’s essay. Insurance crisis or not, it is difficult to understand why such a major piece of ‘reform’ was rushed through the legislatures without the public consultation and debate that usually accompanies substantial pieces of law reform. Indeed, the Ipp Report itself contains some internal evidence that, because of the time constraints imposed on the Panel,[4] the Report was hastily compiled. What other explanation, is there for, for example, the totally inaccurate account in the Final Report of the facts and issues[5] in the important High Court decision of Sullivan v Moody?[6]

The essays divide into two broad categories: those that are expressly or inferentially critical of the Civil Liability Acts and those that at least sympathise with its aims and methods. Luntz’s essay makes it plain that he sees legislation such as the Civil Liability Acts as a fundamentally flawed solution to a major social problem. He repeats the view that he has urged for many years: the torts system of compensation for accidents should be replaced by a national compensation scheme that does not depend on proof of negligence. Luntz advocates the enactment of no-fault accident compensation schemes, which are ‘much more efficient, non-discriminatory and less harmful accident scheme[s]’ than the common law system underwritten by private insurance. Indeed, he thinks that a no-fault scheme should not be confined to compensation for physical or mental injury but should include provisions dealing with compensation for sickness and disease.

The longest of the essays and the one most critical of the Civil Liability Act 2002 (NSW) (‘the Act’) is that of Associate Professor McDonald. She surveys and describes the provisions of the Act that attempt to regulate the common law tests for breach of duty of care, negligence liability for obvious risks and causation. Of concern to McDonald is the ‘rush to legislate’ that the insurance ‘crisis’ of 2002 precipitated. In New South Wales, this rush diminished the opportunities for consultation and reflection on the recommendations of the Ipp Report before the enactment of the Act. Of particular concern to her is the Act's encroachment upon principles that are fundamental to negligence liability. As she points out, the Acts are not legislative Codes, and it is often not clear whether they intend to cover the field on particular issues or simply provide a framework in which common law principles continue to operate. It is, I think, fair to say that she disapproves of the Civil Liability Act 2002 and sees it as distorting the law of negligence and creating injustices. I suspect that she would say of that Act what a joint judgment of the High Court said of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), viz, that ‘[i]t represents a piece of law reform which seems itself to call somewhat urgently for reform.’[7]

The themes of other essays, however, support the objects and the approach of the Civil Liability Acts or, at all events, are sympathetic to their aims. Associate Professor Vines’ essay focuses on the Acts’ concern for the role that an apology plays in preventing litigation from proceeding to trial and those provisions of the Acts that make evidence of a defendant’s apology inadmissible as ‘evidence of the fault or liability’ of the defendant. While recognising the importance of tort law not discouraging wrongdoers from apologising, Vines queries whether the reforms are truly radical. She notes the High Court’s decision in Dovuro Pty Ltd v Wilkins,[8] which applied a long-standing common law distinction between apologies, admissions of liability and admissions of fact. She thinks that the enactment of the provisions that prevent apologies being used as an admission of, or evidence of, liability are likely to succeed ‘in reducing litigation’. Accordingly, she thinks ‘[t]his legislation should be cautiously welcomed.’

If experience with the tender of apologies in defamation cases applies to other tort actions, however, Vines’ optimism concerning the reduction of litigation may be misplaced. At the Bar, I advised plaintiffs and defendants in scores of defamation cases where the defendant was willing to retract a defamatory imputation and make a public apology. Only in a small percentage of cases were plaintiffs willing to accept such offers as a complete answer to their claims even when the retraction and apology were accompanied, as they usually were, by an offer to pay the plaintiff's costs. The very great majority of plaintiffs wanted money. And even in the cases where plaintiffs settled for an apology, the apology was seldom the factor that induced the settlement. More often, the inducement was the fear of an adverse costs order resulting from the weakness of the plaintiff's case or the fear of the effect that damaging publicity might have on the plaintiff's career or interests.

Professor Stephen Todd’s essay describes the ‘political reaction’ of State legislatures to the High Court’s decision in Cattanach v Melchior[9] that resulted in the Civil Liability Acts precluding courts from awarding damages for economic loss in cases of failed sterilisation. He thinks that the Act strikes a much-needed balance between the competing concerns of corrective justice, as between doctor and parent or doctor and child, and distributive justice, as between all users of a national health service whose funds require allocation. This balance, he concludes, may be best struck by courts awarding damages to parents for loss of the autonomy that the birth and rearing of a child causes.

Professor Waddams surveys a number of difficult areas of law where in his view conventional awards should replace heads of damages that are assessed as ‘all or nothing’. He argues that the advantages of these damages awards are that they give ‘a real measure of compensation’ for the plaintiff's loss, but also recognise ‘the high price to the public (especially, but not exclusively, where the defendant performs a public service) of excessive, unpredictable, and open-ended awards.’

Professor Sugarman’s essay is critical of the present position in many United States jurisdictions. He argues that the resultant ‘crazy quilt’ of available statutory compensation schemes in the United States need to be reconciled with each other and with any common law damages awards. He proposes a ‘collateral source rule’, whereby common law awards are reduced by the sum that the plaintiff may receive under statutory compensation schemes. In this way, common law awards may be ‘reserved’ ‘to deal with compensation needs that are not already met by the society's core social insurance arrangements.’ He thinks ‘that Australia in general, and News South Wales in particular, have already moved in the direction I suggest.’

The need to avoid the duplication of statutory and common law awards has long been recognised by Australian legislatures.[10] But in Australia, statutory schemes of compensation are the complement to the common law awards of damages. The amount a plaintiff receives under statutory schemes is reduced by the amount that the plaintiff has received under a common law remedy. Moreover, Workers Compensation legislation and its equivalents have long contained provisions that require a worker who recovers common law damages to repay any payments made under the statutory scheme. These methods of calculation ensure that common law duties of care continue to be recognised even when statutory schemes of compensation are enacted and at the same time avoid double dipping by injured persons. In general, statutory schemes of compensation in Australia do not represent an alternative to common law liability. In effect, they are a safety net, which ensure that in the areas where they apply an injured person will obtain compensation even if the defendant has acted in accord with the standards of care that the law of tort demands. The Australian schemes work differently from that which appears to be contemplated by Sugarman’s collateral source rule.

The overlap of statutory reforms embodied in the Civil Liability Acts with preexisting common law principles raises, however, a more fundamental issue. An underlying question that some of the essays raise is whether these Acts change not only the substance of tortious causes of action and evidentiary procedures but also the common law techniques and principles by which judges have incrementally developed the law of tort. In particular, two questions resonate through this collection.

First, in practice, do the Civil Liability Acts effectively prescribe amendments to judicial processes of reasoning as well as principles of law? An example of a statutory provision that raises this issue is s5D of the Civil Liability Act 2002 (NSW). That section follows recommendation 29 of the Ipp Report, which suggested that a statutory codification of the issue of causation entail two elements, namely ‘factual causation’ and ‘scope of liability’. The Ipp Report made this recommendation so that the statutory provision ‘will suggest to courts a suitable framework in which to resolve individual cases.’[11]

A question that McDonald’s essay raises for consideration is whether ‘legislative guidance’ on issues like causation (s5D of the Act) and tests for the breach of a duty of care (s5B of the Act) may be of any use to a court. The reason is that the sections specify tests that are satisfied, not upon the happening of a specified event or the doing of a specified act, but upon the court being satisfied that the general and indeterminate tests of the section have been met. It therefore remains to be seen whether the established common law tests as to causation and breach of duties of care will be shaped by, or merely fitted into, the language of these provisions.

The second and more important question that the essays raise is: what relevance does the purpose of the Civil Liability Acts have for the ways that judges discern and prioritise the ‘contemporary values’ by which issues of duty of care and standard of care are inevitably resolved and damages awarded?

In Dorset Yacht Co Ltd v Home Office,[12] Lord Diplock warned against the mechanical application of Lord Atkin's ‘general conception of relations giving rise to a duty of care’. Lord Diplock said that, while it may be used by the common law judge ‘as a guide to characteristics which will be found to exist in conduct and relationships which give rise to a legal duty of care’, it is ‘misused as a universal’ proposition. In the absence of a universal and unifying proposition, from which all duties of care may be deduced, Australian courts have generally adopted a technique of incremental development, whereby courts reason by analogy from established categories of duties of care and established legal principles.[13]However, as Hayne J noted in Brodie v Singleton Shire Council,[14] ‘[e]ven incremental steps require implicit reference to some general principles.’

When the well of established legal principles and rules in negligence runs dry, judges must reason from more basic and general principles. Lest the law's development be capricious, the judicial conscience must discern these principles, not from the judge’s own philosophy, but from the values that existing legal principles recognise as being espoused by the society.

As Todd’s essay highlights, this technique is clearly demonstrated in the area of medical negligence, where the application of established legal principles to actions involving life and death are likely to produce results that conflict with fundamental values recognised by other common law principles. In Cattanach v Melchior,[15] the majority of the High Court held that the damages claimed for the costs of raising a child who was born as a result of a doctor's negligent sterilisation procedure were allowable under established principles of compensatory damage. In contrast, the minority held that the value that society places in the integrity of the family unit required the common law to deny that its negligence principles reached such cases.[16] The minority Justices reasoned that, because the law recognises the family as the essential unit of society, at least so far as the rearing of children is concerned, tort rules should not be applied or modified so as to blur or obscure that recognition. Todd accepts that there ‘are good arguments on both sides’ of this debate. But he thinks that the minority’s arguments in Cattanach ‘ultimately are persuasive and should prevail.’ In his view, ‘the majority approach in Cattanach is not a policy-free application of ordinary legal principle’, as the majority judgments maintained.

As McDonald’s essay also illustrates, it is unclear whether, in conducting the type of analysis engaged in by the minority judgments in Cattanach, statutory articulations of fundamental values should be taken to override the values embedded in the common law generally and in negligence doctrine in particular. This issue has not arisen until recently because, as McDonald notes, ‘[l]egislative intervention in tort law has historically tended to be piecemeal and context-driven, through specific extensions or restrictions of liability rather than through broadranging reforms.’ However, Australian courts are now called upon to apply the broad-ranging provisions of the Civil Liability Acts to difficult negligence cases including those involving conception, birth and death and other important social issues. As a result, a live issue for the courts will be whether the ‘waves of legislative tort reform’ should be taken to ‘reflect significant changes in social policy or conditions or community values and sentiment’? Do they require the courts not only to give direct effect to the language of the Civil Liability Acts but to regard those Acts as signaling a fundamental change in the direction of tort law?

This issue is complicated by one of the stated purposes of the legislation, which is ‘to reduce insurance premiums by reducing liability’. In considering common law cases, to what degree, if at all, should a court give effect to the legislature's purpose of according distributive justice? To what extent is a court required to take into account the interests of insurers and policy holders? The adversarial nature of the common law system has traditionally required its courts to do justice according to law having regard to the interests of the parties appearing before them and, in some cases, to the interests of those in like situations. Most judges spend most of their working lives applying established principles to factual issues joined between the parties. Appellate judges — particularly ultimate appellate judges — however spend considerably more of their time formulating and reformulating general principles of law. Even so, the role of the appellate judge is not that of the legislator. Appellate judges formulate and reformulate principles with the facts of the case before them and the facts of similar cases in mind. The strength of the common law system of justice has largely resulted from its capacity to adapt and apply its principles to ensure that justice is done in individual cases. Only in rare cases — usually those involving illegality — have the common law courts considered interests beyond those of the parties before it and those who are or will be in similar situations. Have the Civil Liability Acts inferentially changed this paradigm? Is a court now required to ask itself whether the order sought by a party has such consequences for insurers and policy holders that the court cannot do corrective, or, what Sugarman describes as ‘precise’, justice? Will it, for example, affect the evaluation of whether the defendant owed a duty of care or has acted reasonably or whether an award of a particular sum of damages is reasonable? The answer to these questions will depend on the extent to which, if at all, the Australian judiciary sees the Civil Liability Acts as bringing about fundamental change in the underlying philosophy and direction of Australian tort law. Many would say that recent decisions of appellate courts[17] — including the High Court of Australia[18] — signal that negligence doctrine has already shifted ground to bring it into line with the purposes and the underlying philosophy of the Civil Liability Acts.

These essays then are highly topical. They constitute an important contribution to a question of fundamental importance to the future application and development of the law of negligence. That question is whether, despite the Civil Liability Acts, the insurance ‘crises’ and beneficial changes to the welfare state, the values of neighbourhood and the structure of incremental reasoning articulated by Lord Atkin in Donoghue v Stevenson just over 70 years ago continue to set the framework for resolving negligence disputes?

[*] A Justice of the High Court of Australia.

[1] The Terms of Reference announced by the Commonwealth Government on 2 July 2002 required the Panel ‘to report to Ministers on terms 3 (d), 3(f) 4 and 5 by 30 August 2002 and on the remainder of terms by 30 September 2002. Panel for the Review of the Law of Negligence Review of the Law of Negligence: Final Report (2002) (hereafter Ipp Report)

[2] New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 13 November 2003 at 4980. See also (Hansard), 2 November 2003 at 2947.

[3] [1932] AC 562.

[4] Above n1.

[5] Id at 160 [10.36].

[6] (2001) 207 CLR 562. Sullivan decided that doctors and social workers employed by the Department of Community Welfare and South Australia did not owe a duty of care to the father of a child being examined for evidence of sexual abuse. However, the Final Report states that Sullivan ‘held that imposing a common law duty on a school authority to take care in conducting a disciplinary investigation about the conduct of a head teacher would be incompatible with the authority’s statutory obligations in conducting the inquiry.’

[7] Bitumen and Oil Refineries (Australia) Ltd v Commissioner for Government Transport [1955] HCA 1; (1955) 92 CLR 200 at 211.

[8] [2003] HCA 51; (2003) 215 CLR 317.

[9] [2003] HCA 38; (2003) 215 CLR 1.

[10] See, for example, Victims of Crime Assistance Act 1996 (Vic) s16. Compare Criminal Offence Victims Act 1995 (Qld) s22.

[11] Ipp Report, above n1 at 117 [7.48].

[12] [1970] UKHL 2; [1970] AC 1004 at 1060.

[13] Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180 at 216 [93].

[14] [2001] HCA 29; (2001) 206 CLR 512 at 631 [317].

[15] [2003] HCA 38; (2003) 215 CLR 1.

[16] Id at 22 [35] (Gleeson CJ), at 133 [363] (Heydon J).

[17] Wyong Shire Council v Vairy; Mulligan v Coffs Harbour City Council (2004) Aust Torts Rep 81–754; Boroondara City Council v Cattanach [2004] VSCA 139; (2004) 136 LGERA 374; Warrener v Australian Capital Territory [2004] ACTCA 9; Percy v Noosa Shire Council [2002] QCA 245.

[18] Jones v Bartlett (2000) 205 CLR 166; Modbury Triangle Shopping Centre Pty Ltd v Anzil [2000] HCA 61; (2000) 205 CLR 254; Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; (2004) 216 CLR 515; D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 214 ALR 92; Trustees of the Roman Catholic Church for the Diocese of Canberra and Goulburn (as St Anthony's Primary School) v Hadba [2005] HCA 31.

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