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 action for loss of consortium should be abolished; and
(ii) in association with the abolition of the action for loss of consortium, the Government should enact legislation to provide adequate compensation for loss of capacity to do housework.
The report is a review of recommendations made by the Australian Law Reform Commission in its report number 32 (1986).
The action for loss of consortium allows a husband but not a wife to claim compensation for the loss of the companionship and services of his negligently injured wife.
The Committee agrees with the recommendation of the Commission that the action for loss of consortium should be abolished and not extended. The action is clearly considered by the community to be discriminatory and anachronistic.
The Committee agrees with the Commission that it is necessary for the Government to enact legislation to enable people to claim proper compensation for loss of capacity to do housework.
Draft legislation which would give effect to the recommendations appears at the Appendix.
(i) the action for loss of consortium be abolished; and
(ii) in association with the abolition of the loss of consortium action, legislation should be enacted enabling negligently injured people to claim compensation for the loss of capacity to perform unpaid housework.
(i) National Roads and Motorists Association, January 1991; and
(ii) Insurance Council of Australia Limited, January 1991.
4. The Committee also carefully considered the Commission's report number 32 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.
6. Only husbands may claim for loss of consortium. Wives are not entitled to do so. A husband may not claim compensation for loss of consortium due to the death, caused by wrongdoing, of his wife but may claim for any loss due to her injury for the period leading up to her death so caused.
7. The right of husbands to claim for the loss of consortium originates from pre-18th century perceptions of a wife as the servant or property of the husband.
8. The right is clearly discriminatory and stems from outdated and abhorrent perceptions of the position of women in society.
9. New South Wales, Tasmania and Western Australia have all abolished the right.
10. South Australia and Queensland chose to modify the right by reducing its discriminatory features. Both South Australia and Queensland passed legislation to extend the right to wives as well as husbands[4].
11. The original action still exists in Victoria and the Northern Territory but statutory compensation schemes existing in these jurisdictions prevent the action from applying in many cases. In addition to the original action, the Northern Territory has created a new right to claim for loss of consortium due to the death of a negligently injured person. This new right is available to husbands, wives, de facto spouses of either sex and to spouses of either sex recognised as such by aboriginal tribal law[5].
12. The ACT is the only jurisdiction where the action still applies without any restriction or modification at all.
13. There are several possibilities for reform. As mentioned, different States have chosen different options, some of which are:
(i) abolition of the right to claim compensation for loss of consortium altogether;
(ii) extension of the right so that wives as well as husbands can claim; and
(iii) extension of the right to relationships other than marriage.
(i) Any extension of the action would discriminate against those who still cannot claim under the new law, unless it were made available to all. For example, if the legislature were to extend the right of action to wives only, defacto spouses and others would not be able to claim. Some consider that the extension of the action for loss of consortium to all, without exception, would involve an unacceptable increase in insurance costs.
(ii) The action for loss of consortium is a secondary claim, that is, a claim by one person for losses resulting from injury to another. Secondary claims are inappropriate for various reasons. They involve an assessment of the value of one person to another, they are complex and costly and may result in over compensation if the relationship on which the secondary claim is based ceases soon after the making of the claim. Secondary claims are also arbitrary because they allow compensation on the basis of some relationships but not of others.
(iii) Finally the action for loss of consortium is an historical anachronism which has, as its basis, the concept of giving service to another reminiscent of a master-servant relationship[6]. This premise is no longer acceptable.
16. In 1977 the High Court, in Griffiths v Kerkemeyer[8], effected far reaching changes to the law in this area. In this decision the High Court established the principle that people in need of nursing or domestic assistance as a result of injury could claim compensation for this need whether they have or will pay for the help they need. This principle put an end to the time honoured rule that people had to pay for outside help in order to claim compensation for a loss of ability to look after themselves.
17. In that case, Mr Kerkemeyer became a quadriplegic as a result of a road accident occasioned by Mr Griffiths' negligence. He thus lost the capacity to perform the tasks usually involved in looking after oneself. These tasks, many necessarily of an intimate personal nature, were performed for him by his fiancee and his family. As well, they carried out nursing tasks and helped him to read.
18. In Griffiths v Kerkemeyer, Gibbs J, as he then was, said at p.169;
'Where necessary services have been provided gratuitously by a relative or friend, it should now, as a general rule, be held that the value of the services so provided should not reduce the damages payable to the plaintiff.'
Stephen J, referring to the principle established in Donnelly v Joyce[9], said, at p.175;
'[That] principle ... readily enables an injured plaintiff to recover damages for his accident-caused needs met ... by friends or relatives who, to benefit the plaintiff, and with no thought of relieving the wrongdoer, gratuitously provide him with funds, services or goods. In such cases the courts will clearly not treat the gratuitous subventions as properly to be debited against the plaintiff.'
Mason J, as he then was, made it clear that what was to be compensated was a plaintiff's incapacity to look after himself or herself when he said, at p.192;
'The respondent's relevant loss is his incapacity to look after himself ... and this loss is to be quantified by reference to the value or cost of providing those services. The fact that a relative or stranger to the proceedings is or may be prepared to provide the services gratuitously is not a circumstance which accrues to the advantage of the appellant.'
See also his comment at p.193 that;
'It is now recognised that the true loss is the loss of capacity which occasions the need for the service.'
He added guidance as to the measure of damages when he said, also at page 193;
'In general the value or cost of providing voluntary services will be the standard or market cost of the services ...'
19. The Griffiths v Kerkemeyer principle allows claims for compensation for loss of capacity to do housework or other domestic work (any later reference to housework is to be taken to include domestic work generally). The Federal Court confirmed this when it applied the new principle to circumstances involving a need for domestic assistance only[10]. The Supreme Court of the ACT has similarly applied the principle. See Hodges v Frost at first instance[11] and Lander v The Commonwealth and Bagozzi[12]. In Lander v Bagozzi, the Supreme Court awarded compensation for the partial loss of capacity of a mother to perform housework for herself and her youngest son. In that case the housework was voluntarily taken over by the daughter.
20. The Griffiths v Kerkemeyer principle, as applied by State and Territory Courts, falls short of offering compensation for loss of capacity to do housework in all circumstances. The Courts have asserted in various ways and in varying degrees that an injured person should be compensated for his or her needs and not those of others and then only if it would have been reasonably necessary to pay for help if it had not been provided voluntarily. It may be noted however, that the ACT Supreme Court in Lander v Bagozzi[13] decided that, people could claim compensation for loss of capacity to look after others as well as oneself.
21. The Courts have expressed a willingness to award compensation for loss of capacity to do housework which did not fall within the Griffiths v Kerkemeyer principle, as part of the injured person's general compensation for loss of enjoyment in life[14]. However in the past compensation on these lines has often been less than that which would have been awarded under the Griffiths v Kerkemeyer principle.
22. New South Wales and other States have recognised the significance of the Griffiths v Kerkemeyer principle with legislation which limits the compensation people may claim for voluntary assistance. New South Wales legislation in relation to motor and work accidents disallows compensation in excess of the average hourly wage rate and the average weekly wage. Claims made in respect of the first six months of assistance after the accident are disallowed while claims thereafter are restricted to periods in excess of the first 6 hours of each week. South Australia also has legislation which restricts the maximum amount of compensation to the average wage in that State. Tasmania has abolished the right of people to claim compensation for voluntary services entirely and Victoria has abolished it in respect of motor accidents[15].
23. There are various ways in which loss of capacity to do housework can be measured. The Committee considered the several methods by which a monetary figure could be put on unpaid housework as set out in the Commission's report[16] and various statistical approaches in this area[17].
24. In determining compensation, the Courts have not adopted a specific formula to quantify the value of the loss of capacity to do housework, but determine the level of compensation according to what is perceived to be reasonable in the circumstances. The Courts often consider, as an initial guide, the commercial cost of obtaining replacement help if voluntary services had not been available. While the Courts have taken into account the circumstances of the provider of voluntary help, various decisions have emphasised that it is the extent of the loss of the injured person, not the circumstances of the provider of services which should ultimately determine the level of compensation[18].
25. The Committee considered the following possible options available to the Government. These reflect, in part, the different ways in which loss of capacity to do housework can be measured:
(i) make no changes to the law, leaving the Courts to determine the relevant loss of capacity and its appropriate compensation;
(ii) enact legislation enabling claims for proper compensation for loss of capacity to do housework, leaving the Courts to determine the appropriate amount of compensation;
(iii) enact legislation which determines the value of housework according to a formula or a fixed, unchanging 'hourly rate'; or
(iv) enact legislation which determines the value of housework by tying it either to the average wage, the median wage, the average housekeeping wage, the average wages for each particular type of housework such as cooking or child care, or the cost of obtaining a replacement housekeeper, cook or child carer.
(i) The Committee agrees with the conclusion of the Commission that the law should recognise a loss of capacity to do housework as an economic loss. The injured houseworker should be entitled to claim compensation for the full extent of the loss, including the loss of capacity to perform housework for others 'at the standard or market cost of the services'[19].
(ii) The Committee recognises that the law already allows claims for compensation for loss of capacity to do housework but considers the law is developing. It may be that in some circumstances negligently injured persons will be unable to claim for the full value of his or her loss of capacity.
(iii) The Committee considers it preferable that legislation be enacted to enable the Courts to continue to determine the appropriate level of compensation in each case, rather than to impose a rigid formula for the calculation of compensation. This approach will allow appropriate flexibility to meet the individual and peculiar requirements of different situations.
(iv) The Committee recognises the undesirability of increases in insurance premiums but considers that the draft legislation annexed will have only a limited effect on compensation costs because people may already claim significant compensation for loss of capacity to do housework under the present law. The draft legislation also enables the Courts to continue to keep compensation to a level reasonable and appropriate in the circumstances.
Legislation in New South Wales and South Australia recognises the Griffiths v Kerkemeyer principle and imposes specific restrictions on claims for domestic services[20]. There is also in New South Wales a draft Bill available for comment which would extend similar restrictions to all negligence claims. The draft Bill is subject to change and may not become legislation.
It is not possible to say at this early stage whether the recently enacted New South Wales provisions have had or will have any effect on compensation claims or insurance premiums in that State. The restrictions they impose are limited but would, on occasion, result in inadequate compensation for a particular individual. The draft legislation annexed allows for reasonable compensation without the injustice of arbitrary and fixed limitations. It would be worthwhile, however, to monitor the effect of the New South Wales legislation on compensation payments and insurance premiums as one method of assessing whether restrictions additional to those in the draft legislation may become necessary in due course.
28. In the long term, the Government could incur additional costs in the form of increased compensation payments in relation to loss of capacity to do housework. 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 limited significance because the recommendations only extend an already existing right to claim compensation for loss of capacity to do housework.
Federal Court (18 June 1980)
Donnelly v Joyce [1974] QB 454
GIO of NSW v. Planas (1984) 2 NSWLR 671
Griffiths v. Kerkemeyer (1977) 139 CLR 161
Hodges v Frost at first instance, (unreported) decision of
Kelly J, Supreme Court, ACT (21 October 1983) No. 799 of 1980
Hodges v Frost (1984) 53 ALR 373
Lander v. The Commonwealth and Bagozzi (unreported) decision of
Miles CJ, Supreme Court, ACT (8 May 1987) No. 443 of 1980
McIntyre v Miller (1980) 30 ACTR 8
Nguyen v Nguyen (1990) 169 CLR 245
Veselinovic v. Thorley (1988) 1 Qd R 191
Wann v. Fire and All Risks Insurance Co. Ltd. (1990) 2 Qd R 596
Waters v. Mussig (1986) 1 Qd R 224
New South Wales
Motor Accidents Act 1988
s 72
Workers Compensation Act 1987
s 151K
Northern Territory
Compensation (Fatal Injuries) Act 1974
s 10(3)(c)
s 4(3)(c)
Queensland
Law Reform (Husband and Wife) Act 1968
s 3
South Australia
Wrongs Act 1936
s 33
s 35a(1)(g)
s 35a(1)(h)
s 35a(2)
Tasmania
Common Law (Miscellaneous Actions) Act 1986
s 5
Victoria
Transport Accident Act 1986
s 93(10)
AUSTRALIAN CAPITAL TERRITORY, DEPARTMENT OF JUSTICE AND COMMUNITY SERVICES Issues Paper, Loss of Consortium, Canberra 1990
AUSTRALIAN CAPITAL TERRITORY, DEPARTMENT OF JUSTICE AND COMMUNITY SERVICES Issues Paper, Contributory Negligence, Canberra 1990
AUSTRALIAN BUREAU OF STATISTICS Measuring Unpaid Household Work: Issues and Experimental Estimates, Canberra, 1990
AUSTRALIAN LAW REFORM COMMISSION Report No 32, Community Law Reform for the Australian Capital Territory, Second Report AGPS, Canberra, 1985
COMMUNITY LAW REFORM COMMITTEE Report No 3, Australian Capital Territory, Canberra, 1991
GRAYCAR R 'Compensation for Loss of Capacity to Work in the Home' Sydney Law Review, vol. 10, 1985, 528
FLEMING J The Law of Torts 7th Ed, The Law Book Company, Sydney, 1987
LUNTZ H Assessment of Damages for Personal Injury and Death 3rd Ed, Butterworths Pty Ltd., Sydney, 1990
THORNTON M 'Loss of Consortium: Inequality Before the Law' Sydney Law Review vol. 10, 1984, 259
(a) the recommendations of the Australian Law Reform Commission, made in its second report to the Commonwealth Attorney-General pursuant to the Australian Capital Territory Community Law Reform Program that:
(i) the action for loss of consortium be abolished; and
(ii) in association with the abolition of the loss of consortium action, legislation be enacted enabling negligently injured people to claim compensation for the loss of capacity to perform unpaid housework; and
(b) the desirability that the action for loss of consortium be abolished as anachronistic and discriminatory;
REFER the following matters to the Community Law Reform Committee, as provided for in the Constitution of the Committee:
TO REVIEW AND REPORT
(a) whether, the action for loss of consortium as it exists and is used in the Australian Capital Territory should be abolished or altered;
(b) whether, in association with the abolition of the action for loss of consortium, legislation should be enacted enabling negligently injured people to claim compensation for the loss of capacity to perform unpaid housework and for other related heads of damage; and
(c) 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 Dunstan
Word processing/Secretarial: Margaret Ryan