The Community Law Reform Committee of the Australian Capital Territory was established in June 1990. The purpose of the Committee is to assist the Government to identify areas in need of reform, anticipate emerging social and legal issues and assess the practical impact of various proposals and laws on the people of the ACT. The Committee's Office and Secretariat are at 3rd floor GIO Building, City Walk, Canberra City ACT 2601 (Tel (06)2070546, fax (06)2070538).
(i) the defence of contributory negligence should be abolished in fatal accident cases and breach of statutory duty cases; and
(ii) the Government should enact legislation to provide for increased compensation for funeral expenses in fatal accident cases.
The Report is a review of recommendations made by the Australian Law Reform Commission in its report number 28 (1985).
The Committee agrees with the recommendations of the Commission that the defence of contributory negligence should be abolished in both breach of statutory duty cases and fatal accident cases.
The Committee also agrees with the Commission that the Government should enact legislation to provide for increased compensation for funeral expenses.
Draft legislation which would give effect to the recommendations appears at the Appendix.
2. More recently the Commonwealth Government referred issues of law reform in the ACT to the Australian Law Reform Commission, under an initiative called the Community Law Reform Program. The Australian Law Reform Commission prepared several reports under this program between 1984 and 1989.
3. Despite a number of reforms having been implemented as a result of these processes, most of the recommendations of both the Law Reform Commission of the ACT and the Australian Law Reform Commission received little attention prior to self-government. The ACT Government has recognised the need to determine whether these recommendations should be implemented.
4. Therefore, in September 1990, the ACT Attorney-General, Mr Bernard Collaery, having established the Community Law Reform Committee, requested the Committee to review recommendations made by the Australian Law Reform Commission as a matter of urgency.
5. Three references to the Committee, signed by the Attorney-General in September 1990, required the Committee to consider law reform proposals which were the subject of recommendations made by the Australian Law Reform Commission pursuant to the Community Law Reform Program. Consequently, the Committee has prepared the following reports.
Report No 2 Occupiers Liability This is a review of ALRC Report No 42 (1988).
Report No 3 Contributory Negligence in Fatal Accident Cases and Breach of Statutory Duty Cases; Funeral Costs in Fatal Accident Cases. This is a review of ALRC Report No 28 (1985).
Report No 4 Action for Loss of Consortium and Compensation for Loss of Capacity to do housework. This is a review of ALRC Report No 32 (1986).
(i) the defence of contributory negligence in fatal accident cases and in breach of statutory duty cases be abolished; and
(ii) the Government enact legislation to provide for more generous and clearer entitlements to families of fatal accident victims for funeral and related costs.
(i) National Roads and Motorists Association, January 1991;
(ii) Insurance Council of Australia Limited, January 1991;
(iii) Mr J Marks, October 1990; and
(iv) Ms Uyen Loewald, February 1991.
8. The Committee also received written information from Mrs Christine Walters J.P., Manager of the firm 'M. H. O'Rourke Funerals' and received written information and oral evidence from Mr David Treloar, Managing Director of the firm 'Tobin Brothers Funeral Directors'.
9. The Committee also carefully considered the Commission's report number 28 on this area and discussed these issues extensively with Mr Nick Seddon who as Commissioner in Charge of the Community Law Reform Program, was a primary contributor to the Commission's report. Mr Seddon is a Commissioner of the Australian Law Reform Commission as well as a member of this Committee.
11. Governments have responded to the increasing complexity and hazards of modern society by legislating to oblige people to take safety measures. In particular, many laws govern safety at the workplace. In most cases legislation provides for a fine or other penalty when someone fails to perform a statutory duty.
12. The Courts allow a person injured by a breach of a statutory duty to seek compensation for their injury. Breach of statutory duty cases are generally cases involving lapses in industrial safety standards in which an employee claims compensation from his or her employer for the breach. The defence of contributory negligence applies to breach of statutory duty cases in the ACT and all other Territories and States. If successful the defence can reduce but not defeat a claim for compensation.
13. In New South Wales, the Government disallowed the defence in 1945 but restored it in 1989 for work accident cases. Section 151N of the Workers Compensation Act 1987 (NSW) allows the defence in all work accident cases including fatal accident cases and breach of statutory duty cases[2]. Subsection 151N(2) of the Act, prevents the defence from reducing compensation for loss of earning capacity below the level the worker could have claimed, if eligible, as a lump sum under the statutory compensation scheme[3]. This limitation applies to breach of statutory duty cases as well as to other work accident cases so the law in New South Wales differs from other States.
(i) A statutory duty is a standard of safety imposed by parliament to ensure, as far as possible, that accidents do not happen even if people are careless. It is therefore illogical and contrary to the purpose of statutory duties for compensation for breach of such a duty to be reduced for contributory negligence when the very purpose of the imposition of a statutory duty is to protect workers against their own inadvertence.
(ii) An action for breach of statutory duty is not a negligence action. The legislation which creates the duty will determine the nature of the obligation and negligence may have nothing to do with the duty or its breach. It is therefore illogical for the courts to apply standards of negligence to the injured person when those same standards may not apply in determining whether an employer has breached a statutory duty.
(iii) In many cases a statutory duty is imposed on the employer as the person in the best position, in terms of resources and knowledge of the enterprise, to make sure that the enterprise is safe. Further, employers must take out insurance against compensation claims and so are usually in a better position to pay than an uninsured worker.
(iv) The Insurance Council of Australia Limited, in its submission to the Committee, stated that abolition of the defence of contributory negligence in breach of statutory duty cases will cause an increase in the number and cost of compensation claims and so cause a rise in insurance premiums.
The Committee considers that abolition of the defence will have a minimal impact, if any, on the costs of accident compensation in the workplace. The defence itself is rarely successful and a breach of a statutory duty will often entitle an employee to full compensation regardless of his or her carelessness. Also breach of statutory duty actions represent only a small minority of compensation claims in the workplace. A recent review of workers compensation in the ACT concludes that abolition of common law claims outside the scheme will have a marginal effect on insurance costs[4]. This conclusion suggests that reform of this limited area will not have a significant effect on overall insurance costs. Abolition will however, facilitate the settlement of claims by removing a bargaining device.
(v) The High Court considered this issue for the first time in Bourke v Butterfield and Lewis[5] when it decided that, as a matter of principle, the defence did not apply to breach of statutory duty cases. Several years later the House of Lords in England in Caswell v Powell Duffryn Associated Collieries Ltd[6] came to the contrary conclusion that the defence did apply. In Piro v W Foster & Co Ltd[7], the High Court considered that it should follow the House of Lords decision. It overruled Bourke v Butterfield and Lewis to decide that the defence should apply to breach of statutory duty cases.
As decisions of the House of Lords are no longer binding on the High Court, the High Court may return to its original position. It may be noted that the defence is seldom upheld in the State and Territory Courts.
16. In general, dependents may claim for the loss of benefits or services the deceased would have provided if the deceased had survived. The family of a negligently killed full time houseworker may make a claim for the loss of the housekeeping and child caring services of the deceased. The law does not allow compensation for the emotional effect of the loss or bereavement.
17. The defence of contributory negligence applies to fatal accident cases.
18. In the ACT people may claim compensation for the loss of a family member pursuant to the Compensation (Fatal Injuries) Act 1968 which sets out in detail who may claim compensation[8]. This Act and similar Acts in other States are commonly referred to as 'Lord Campbell's Act[s]'.
19. The law in most other States is similar to that in the ACT. Victoria is now the only State where the Courts may not apply the defence of contributory negligence in fatal accident cases[9].
(i) It is inequitable for dependents to receive less compensation because of the negligence, not of themselves, but of the deceased. The loss and need of the family is just as great whether the deceased contributed to his or her death or not.
(ii) In a motor accident the surviving person who caused the accident does not pay for his or her part in the death of the deceased, an insurance company does. In contrast, the deceased's family may suffer a loss in the form of reduced compensation because of the deceased's part in his or her death. Third party motor vehicle insurance will not cover this particular loss. In short, contributory negligence has a very real financial impact on the family whereas negligence by the defendant has no financial effect on him or her.
Similarly, in work accident cases an insurance company will pay for the cost to the employer of the accident whereas the family of the deceased could suffer a direct loss in the form of reduced compensation because of the deceased's part in his or her death.
(iii) Abolition of the defence in fatal accident cases could have a particular consequence for people or organisations who negligently injure another and do not have insurance to cover liability for the injury. For example, an accident at home could lead to an injured person making a negligence claim against an uninsured person, the injurer, who becomes the defendant in the claim. The defendant may have to pay more out of his or her pocket if the defence of contributory negligence is abolished.
The vast majority of fatal accidents occur on the road or at work where the defendant is insured. It is not appropriate to make an exception for the small minority of situations where the defendant is not insured and allow the defence of contributory negligence to continue to apply in those cases. To do so would result in an injured person receiving less compensation simply because the defendant on a particular occasion did not have insurance. People are able to obtain insurance at modest rates against the possibility of a negligence claim but victims can not choose their injurer.
(iv) In addition, abolition could have an exceptional consequence for owner drivers and employers without compulsory insurance. A person injured by an uninsured vehicle must sue the nominal defendant for compensation instead of the owner of the uninsured vehicle[10]. The nominal defendant can then recover the compensation it pays to that person from the owner of the uninsured vehicle[11]. In this situation, the uninsured owner and not an insurance company, becomes liable to pay the full costs of compensation. If the defence of contributory negligence is abolished in fatal motor accident cases, the nominal defendant and therefore uninsured drivers could on occasion have to pay more compensation than if the defence had applied. Employers without compulsory insurance against common law liability to the level required under the Workmens Compensation Act 1951 may find themselves in a similar situation[12].
The Committee decided against retention of the defence in these instances because to do so would advantage those who commit a serious offence in not having compulsory insurance.
(v) Some consider that these issues apply equally to dependents of accident victims who survive but suffer serious injuries and that, if the defence is abolished to the benefit of families in fatal accident cases, it should also disappear in cases where the victim survives.
Dependents of a negligently injured person are in a different situation from dependents of a negligently killed person. The dependents of an injured person can not claim compensation for the injury, only the actual victim can do so. In contrast, dependents of a person who is killed have an independent right to claim compensation for the loss of support and other benefits they might have expected to receive from the deceased. It is therefore appropriate to pursue reform in the discrete area of fatal accidents. To do otherwise and postpone reform, pending abolition of the defence in all accident cases, will most likely result in no reform at all.
(vi) The High Court has significantly narrowed the scope of the defence of contributory negligence in work accidents[13]. Mistakes due to conditions of work including preoccupation with the job at hand, inattention caused by repetitive tasks or fatigue will, in general, not amount to contributory negligence.
The approach of the High Court recognises that a worker should not suffer because of mistakes made due to the pressure of work. Abolition of the defence in fatal accidents at work is an appropriate extension of this same philosophy.
(vii) Abolition of the defence will not change other features of the law of negligence which limit and define people's liability for injury to others. The injured person must still prove that the alleged injurer was negligent and that the negligence caused the injury. Also, the defence of 'voluntary assumption of risk' still applies in appropriate situations[14]. This defence allows an injurer to establish that he or she is not liable because the injured person voluntarily consented to involvement in the dangerous situation causing the injury when fully aware of the risks involved.
(viii) The National Roads and Motorists Association and the Insurance Council of Australia Limited in their submissions to the Committee stated that abolition of the defence in fatal accident cases will cause insurance premiums to rise. They were, however, unable to provide the Committee with statistical evidence to support this view.
(ix) There is no evidence before the Committee to enable it to say with certainty whether abolition will cause an increase in the amount insurance companies must pay for compensation or that it will cause a rise in insurance premiums.
(i) The legislation should allow compensation for the reasonable cost of funeral services, press notices, headstones or memorials, flowers and other expenses.
(ii) The Committee agrees with the recommendation of the Commission that the legislation should clearly state the type of funeral expenses for which people may claim.
(iii) The Committee considers, on balance, that the legislation should enable the Courts to determine what level of compensation is reasonable rather than set a fixed monetary sum or ceiling to apply in all or most cases. The diversity of funeral requirements of different ethnic and religious groups makes it difficult to determine in advance a level of compensation which would meet the majority of reasonable and just claims.
(iv) Regard should be had to the need to discount the full amount paid or payable for funeral expenses in circumstances where the age or health of the deceased immediately prior to the relevant accident renders such discounting appropriate.
24. In the long term the Government could incur additional costs in the form of increased compensation payments. These extra costs would be payable directly by the Government as it and its instrumentalities are, in the main, self insured. The Committee considers such extra costs would be of marginal significance because the recommendations will affect only a minority of future compensation claims against the Government.
Caswell v Powell Duffryn Associated Collieries Ltd (1940) A.C. 152
Cunningham v The Nominal Defendant (1970) 17 FLR 61
Commissioner for Railways v Halley (1978) 20 ALR 409
Commissioner of Railways v Ruprecht (1978) 142 CLR 563
Insurance Commissioner v Joyce (1948) 77 CLR 39
Mclean v Tedman (1984) 155 CLR 306
Piro v W Foster & Co Ltd (1943) 68 CLR 313
Podreberserk v Australian Iron and Steel Pty Ltd (1985) 59 ALR 529
Roggenkamp v Bennett (1950) 80 CLR 292
Zotovic v Dobel Boat Hire Pty Limited (1985) 62 ACTR 29
Compensation (Fatal Injuries) Act 1968
Law Reform (Miscellaneous Provisions) Act 1955
Motor Traffic Act 1936
Workmens Compensation Act 1951
New South Wales
Compensation to Relatives Act 1897
Motor Accidents Act 1988
Workers Compensation Act 1987
Northern Territory
Compensation (Fatal Injuries) Act 1974
Queensland
Succession Act 1981
South Australia
Wrongs Act 1936
Tasmania
Fatal Accidents Act 1934
Victoria
Administration and Probate Act 1958
Wrongs Act 1958
Western Australia
Fatal Accidents Act 1959
AUSTRALIAN CAPITAL TERRITORY, Review of the ACT Workers Compensation Scheme, Sydney, August, 1990
AUSTRALIAN CAPITAL TERRITORY DEPARTMENT OF JUSTICE AND COMMUNITY SERVICES, Issues Paper, Defence of Contributory Negligence, Canberra 1990
AUSTRALIAN LAW REFORM COMMISSION, Report No 28, Community Law Reform for the Australian Capital Territory, First Report AGPS, Canberra 1985
AUSTRALIAN TORTS REPORTER, CCH Australia Ltd., Sydney, 1989
COMMUNITY LAW REFORM COMMITTEE, Report No 2, Australian Capital Territory, Canberra, 1991
COMMUNITY LAW REFORM COMMITTEE, Report No 4, Australian Capital Territory, Canberra, 1991
FLEMING J The Law of Torts 7th Ed, The Law Book Company, Sydney, 1987
LUNTZ Assessment of Damages for Personal Injury and Death 3rd Ed, Butterworths Pty Ltd., Sydney, 1990
LUNTZ HAMBLY AND HAYES Torts Cases and Commentary 2nd Ed, Butterworths Pty Ltd., Sydney, 1985
the recommendations of the Australian Law Reform Commission, made in its first report to the Commonwealth Attorney-General pursuant to the Australian Capital Territory Community Law Reform Program that:
(i) the defence of contributory negligence in fatal accident and breach of statutory duty cases be abolished; and
(ii) legislation be enacted to provide more generous and clearer entitlements to families of fatal accident victims for funeral and related costs;
REFER the following matter to the Community Law Reform Committee as provided for in the Constitution of the Committee:
TO REVIEW the laws in force in the Territory with respect to the defence of contributory negligence in fatal accident and breach of statutory duty cases and compensation for funeral costs in fatal accident cases;
AND REPORT
(a) which, if any, of the recommendations of the abovementioned report of the Law Reform Commission should be adopted in whole or in part; and
(b) on any other relevant matter the Committee wishes to take into consideration.
IN MAKING ITS REVIEW AND REPORT the Committee will have regard to any views of business, community or government agencies on the subject matter of this reference and the possible effect any recommendations may have on insurance or related financial costs.
SIGNED THIS 21ST DAY OF SEPTEMBER 1990
BERNARD COLLAERY
The Honourable JJA Kelly, QC
Deputy Chairpersons
Ms Jennifer Kitchin
Chief Magistrate Mr RJ Cahill
Committee Members
Mr Nick Seddon
Mr Graeme Lunney
Mr Peter Sutherland
Mrs Bettie McNee
Mr Rod Campbell
Ms Judy Harrison
Professor Roman Tomasic
Professor Duncan Chappell
Ms Robin Burnett
Mr Rainer Frisch
Mr Ross Gengos
Senior Legal Officer: Ms Tracy Reid
Project Officer: Mr David Snowden
Word processing/Secretarial: Margaret Ryan