Contributory Negligence in Fatal Accident Cases and Breach of Statutory Duty Cases and Funeral Costs in Fatal Accident Cases

Report No 3 of the Community Law Reform Committee of the Australian Capital Territory. This Report reflects the law as at March 1991. Committee Reference: CLRC No 3.

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).

Summary

This report examines whether:

(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.

Introduction

Background

1. Before the ACT gained self-government in 1989, ACT law reform lacked a consistent and overall focus. The Commonwealth had attempted to establish an ACT law reform process. In the early 1970s a short lived Law Reform Commission of the ACT, under the guidance of Chairperson Mr Justice Blackburn, prepared several reports for the Commonwealth on issues including conveyancing, mental health and guardianship.

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).

The Reference

6. This report, the second of the three reports on recommendations of the Commission, was requested by the Attorney-General in a reference to the Committee signed on the 21 September 1990. The reference required the Committee to review the recommendations of the Commission, presented in its report number 28 (1985). The Commission recommended that:

(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.

Submissions

7. In preparing this report the Committee made use of the collective experience of its members, including those with expertise in business, legal practice and community welfare, to assess the impact of proposals on the ACT community. An Issues Paper[1] on this area, prepared by the Committee's Secretariat, was widely circulated and the Committee called for submissions. Members of the Committee have examined the following submissions:

(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.

Breach of Statutory Duty Cases

Background

10. The law allows people who suffer injury due to the negligence of another to claim compensation from the 'injurer'. However if the victim contributed to his or her injury then the law may reduce the amount of compensation the victim might otherwise have received because of the 'contributory negligence' of the victim. For example: if Anne negligently injures Bill and Bill contributed to his injury, then the law may reduce the amount of money he may receive from Anne or her insurer because of what the law calls Bill's 'contributory negligence'. Lawyers refer to this rule as the 'defence of contributory negligence'.

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.

Recommendation

14. The Committee agrees with the recommendation of the Commission that the defence of contributory negligence should be abolished in breach of statutory duty cases. The Committee had regard to the following points in making its decision.

(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.

Fatal Accident Cases

Background

15. Legislation in the ACT and other States allows family members to claim compensation for the economic effects of the loss of a breadwinner or houseworker. To claim compensation, family members must establish that the deceased victim died because of the negligence of another.

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].

Recommendation

20. The Committee agrees with the recommendation of the Commission that the defence of contributory negligence should be abolished in fatal accident cases. The Committee had regard to the following points in making its decision.

(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.

Funeral Expenses

Background

21. Legislation in the ACT allows the family of negligently killed victims to claim compensation for the 'reasonable expenses of burial and cremation'[15]. The ACT Courts have interpreted this phrase very narrowly to find that it includes only the bare cost of burial or cremation and not other costs such as for a memorial or headstone to a grave[16]. This legislation prevents relatives of people killed in the ACT from claiming reasonable compensation for items such as headstones, wreaths, funeral notices and church services which they would generally be able to do if the death occurred in other States[17].

Recommendation

22. The legislation in the ACT does not allow for proper and adequate compensation for funeral expenses. The Committee therefore agrees with the Commission that changes to the legislation are necessary. The Committee recommends that the Government enact legislation as annexed, to allow claims for compensation for reasonable funeral expenses beyond the bare cost of burial or cremation. In coming to this decision, the Committee considered the following matters.

(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.

Financial Considerations for the ACT Government

Cost Implications

23. The implementation of these recommendations will not involve the ACT Government in any immediate financial cost.

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.

Bibliography

Table of Cases

Bourke v Butterfield and Lewis (1926) 38 CLR 354

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

Table of Legislation

Australian Capital Territory

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

Terms of Reference

I, BERNARD COLLAERY, Attorney-General of the Australian Capital Territory, HAVING REGARD TO -

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

ATTORNEY-GENERAL

Participants

The Committee

Chairperson

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

Mr Peter Hohnen

Law Reform Unit - Secretariat to Committee

Director: Mr Peter Quinton

Senior Legal Officer: Ms Tracy Reid

Project Officer: Mr David Snowden

Word processing/Secretarial: Margaret Ryan