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Allens Arthur Robinson

April 2006

Legislative amendments to prevent claims for personal injury

In brief: The escalating cost of public liability insurance has led to changes to the Trade Practices Act 1974. The amendments prevent individuals from recovering compensation for personal injuries and death under the TPA provisions that prohibit unfair practices in trade or commerce, including misleading and deceptive conduct. Partner Belinda Thompson(view CV) and Law Clerk Alice Cope report.

Background

In 2002, the Federal Government announced a review of the law of negligence to identify possible reforms to address the cost and availability of public liability insurance (the Ipp Review). Chaired by Justice David Ipp, the review's terms of reference included a review of the interaction between the Trade Practices Act 1974 (the TPA) and the law of negligence.

A key recommendation of the Ipp Review was that the TPA be amended to prevent individuals from bringing actions for damages for personal injury and death based on contraventions of Division 1 of Part V of the TPA (the Unfair Practices, Consumer Protection provisions).

The Federal Government initially responded to the Ipp Review by introducing the Trade Practices Amendment (Personal Injuries and Death) Bill 2003 (Cth) (the 2003 Bill). The 2003 Bill was not passed by the Senate, which amended the Bill such that claims for damages for personal injury or death could still be made, but the quantum of damages available was limited.

In 2004, however, the Federal Government reintroduced the previously rejected amendments to Parliament, with the Trade Practices Amendment (Personal Injuries and Death) Act 2006 (Cth) (the 2006 Act) being enacted earlier this year. The amendments contained in the 2006 Act will commence on 20 April 2006.

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Objectives

The Ipp Review's recommendations aimed to address the rising cost and availability of public liability insurance by limiting public liability claims costs. The amendments contained in the 2006 Act prevent claims for personal injury or death based on contraventions of provisions contained in Division 1 of Part V of the TPA, which prohibit unfair practices in trade or commerce, including misleading and deceptive conduct.

The Ipp Review stated that section 52 of the TPA 'has gained such popularity with plaintiffs because it has been held by the courts to impose liability on defendants without the need to establish any fault'1 . On this basis, the amendments to the TPA aim to remove what is potentially otherwise an extremely broad basis for claiming damages for personal injury or death. The amendments will also prevent plaintiffs from taking certain actions for personal injury or death under the TPA that may otherwise undermine state and territory laws, in particular those laws that set caps on recoverable damages in such claims.

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The amendments

The 2006 Act makes the following amendments to the TPA:

  • A person, and the Australian Competition and Consumer Commission (ACCC) in a representative capacity, is not permitted to recover damages for personal injury or death to the extent that such an action is based on a contravention of the Unfair Practices, Consumer Protection provisions of the TPA, contained in Division 1 of Part V.
  • Similarly, a person, and the ACCC in a representative capacity, is not permitted to seek other orders from a court (including orders to pay damages) to compensate for loss or damage resulting from personal injury or death where the order would be based on a contravention of the Unfair Practices, Consumer Protection provisions of the TPA, contained in Division 1 of Part V.
  • However, claims for loss or damage asserted to have been caused by smoking or the use of tobacco products based on an alleged contravention of the Unfair Practices, Consumer Protection provisions of the TPA, contained in Division 1 of Part V, may be pursued. Such claims will be subject to a limitation period of three years after the 'date of discoverability' of the personal injury or death.

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Implications

For contraventions of Division 1 of Part V of the TPA occurring after 20 April 2006 that result in personal injury or death, a plaintiff will not have a cause of action under the TPA, and will instead need to rely on another cause of action such as negligence at common law2 .
However, contraventions that have occurred (or occur prior to 20 April 2006) will continue to be actionable until the end of the relevant limitation period under the TPA, which is generally three years after the 'date of discoverability' for the personal injury or death, or 12 years after the conduct that caused the injury or death.

While the amendments do remove a potentially broad cause of action available to plaintiffs, it remains to be seen whether the ultimate aim of addressing the rising cost and availability of public liability insurance will be achieved.

Footnotes
  1.  Final Report of the Review of the Law of Negligence (2002), 5.24.
  2.  2006 Act, Schedule 1, Item 8 .

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