A Guide to the Civil Liability ACT as Amended NSW 2002 for Personal Injury Actions Covering Public Liability & Medical Negligence

PUBLISHED 19 Jan 2015

Often new clients approach Gerard Malouf and Partners expert personal injury lawyers, and ask what chance they have in a medical negligence case involving an action against a hospital, nurse, doctor, chiropractor or a member of the medical profession as a result of negligent, unsafe medical treatment/diagnosis.

The same questions are asked when clients approach requesting advice as to the prospects of success in public liability type actions involving falls, trips, slips or accidents due to the negligence of a third party on building sites, public and private residences, shopping malls, supermarkets and similar properties including rental properties.

There are a few points to keep in mind under the law:–

  • A Statement of Claim or a Defence in all civil actions covering matters mentioned above cannot be filed by a solicitor unless the lawyer states in writing there are reasonable grounds for believing on the basis of provable facts and a reasonably arguable view of law, that the claim or the Defence has reasonable prospects of success.  In the event of a lawyer/Solicitor acting where there aren’t reasonable prospects of success in accordance with this statement they are liable for paying legal costs if the case is lost and are subject to severe professional disciplinary proceedings.
  • Reasonable prospects of success are defined under the Civil Liability Act but as a general summary there have to be sufficient facts and evidence that could establish upon the balance of probability that the claimant or injured person sustained injuries as stated and this in effect means that they have to prove their case occurred using a 50% probability as the minimum benchmark.
  • Duty of Care – Sections 5B and 5C Civil Liability Act NSW

The meaning of reasonable foreseeability has been adapted from law handed down through the court system known as the common law.

A risk is foreseeable if the person knew of it or ought to have known of it.  It also has to be not an insignificant risk and a reasonable person would have taken precautions to prevent that risk.  The Act then provides a further list of criteria to ascertain whether a reasonable person would have taken precautions.  These factors include:

  • the probability that the harm would occur if care were not taken;
  • the likely seriousness of the harm;
  • the burden of taking precautions; and
  • the social utility of the activity which creates the risk of harm.

These last provisions cause considerable problems with their interpretation by the court.

The issue of the “burden” of taking precautions is further clarified in the Act where it is confirmed that such precautions also would include the burden of taking precautions to avoid similar risks of harm to the one under consideration. Liability is not affected by:

  • the fact that a risk could have been avoided by doing something in a different way;
  • the subsequent taking of action that would have avoided a risk (had the action been taken earlier). This is obviously intended to avoid the “wisdom of hindsight”.
Assumption of Risk – Sections 5F – 5I

No duty of care to warn another person of a risk that is “obvious” unless:

  • the plaintiff requested information about the risk;
  • there is a requirement in the written law to warn; or
  • there is a risk of death or injury from professional services.
‘Obvious risk’ means:
  • a risk that is obvious to a reasonable person in the injured person’s position;
  • matters of common knowledge.

Risks can be obvious even though there is a low probability of occurrence.  They can also be obvious even though they are not prominent, conspicuous or physically observable.

A person is presumed to be aware of an obvious risk unless they can prove that they were not aware of it.  For these purposes, the person does not need to be aware of the precise risk but merely the type or kind of risk – the onus is on the injured person.

‘Inherent risk’ is a risk of something occurring that cannot be avoided by reasonable care and skill.

There is no liability in respect of an inherent risk but it does not excuse defendants who still have a duty to warn people of them.

Recreational Activities – Sections 5J – 5N – Defences to actions for breach of duty

Recreational activity includes any sport (whether or not organised) and any pursuit or activity engaged in for enjoyment, relaxation or leisure.  Accordingly, the definition is very broad.  A dangerous recreational activity involves a significant risk of physical harm.

A defendant is not negligent as a result of the materialisation of an obvious risk of a dangerous recreational activity engaged in by the plaintiff, whether or not the plaintiff was aware of the risk.

There is no duty of care owed to a person engaging in a recreational activity if that person has been warned of the risk.  The warning can be oral or in writing.  There are a number of qualifications:

  • for incapable persons, the risk warning has to given either to an accompanying person or a parent of the incapable person.
  • the warning must be given prior to engagement in recreational activity. No requirement to establish receipt or understanding of the warning.
  • the risk warning does not need to be specific – it can be a general warning.
  • defendants have no entitlement to rely on a risk warning where there is a breach of safety standards.
  • warnings can be negated by contradictory representations by or on behalf of the defendant. For example, a staff member states there is no real risk of injury.
  • the fact of a risk warning does not, of itself, mean that the risk is not an inherent or obvious risk or that a duty of care is owed in relation to the risk.

Professional Negligence – Sections 5O – 5P – Covering for example Doctors and engineers

The standard of care for professionals has been changed to the “Bolam” principle – no liability where professional acted in a manner that was widely accepted in Australia by peers’ professional opinion as competent professional practice unless the court determines that this opinion is irrational.  This provision will give the courts considerable scope for interpretation. However it is ultimately up to the Court to make this decision.

However there is no definition of “profession”.
  • there can be one or more widely accepted peer professional opinions.
  • peer professional opinion does not have to be universally accepted to be considered widely accepted.
  • any duty to warn of risks is not affected.
Economic loss – Sections 12 – 14

The maximum weekly rate is capped at 3 times average gross weekly earnings (currently $3,354.90), and applied to:

  • past and future loss of earnings;
  • loss of earning capacity; and

A GUIDE TO THE CIVIL LIABILITY ACT 2002 (NSW) PAGE 5

  • Compensation to Relatives Act financial support.

Courts must award future loss based on what a Plaintiff establishes would have been his/her “most likely circumstances but for the injury”, and give reasons.  A percentage adjustment applies to the possibility of the circumstances proving true.

A 5% discount rate applies for future economic loss damages.  Formerly the discount was lower

(3%).  The difference can be seen in the example where a 30 year old Plaintiff is awarded $250 per week until retirement at age 65 – on the 3% tables he would be given $284,500, while the 5% tables now allow only $218,900.

Section 14 was amended by the Civil Liability Amendment (Personal Responsibility) Act to apply the 5% rule to ‘future economic loss of any kind’.  Despite that change, it may still leave open the question of whether other future damages (treatment expenses, attendant care etc) may be assessed on the 3% tables.

Gratuitous Care – Section 15

This applies to domestic, nursing and other services that aim to alleviate the consequences of injury. Section 15 regulates the damages awarded under the Griffiths -v- Kerkemeyer approach.

The restrictions are:
  • the care must arise from reasonable needs caused solely by the injury;
  • threshold – no damages if the care is provided for less than 6 hours per week and for less than 6 months; and
  • capped at a maximum of 40 hours per week using average weekly earnings for the period when care was provided – currently $18.20 per hour.

Call us now on 1800 004 878 to book a free appointment with one of my compensation experts, or email your enquiry.