Policy Agenda

Tort Law Reform

Bringing balance to personal injury laws

In 2002, the Federal, State and Territory Governments commissioned the Negligence Review Panel, Chaired by the Hon Justice David Ipp, to recommend changes to personal injury laws for the primary purpose of reducing the numbers of litigated claims and size of court awarded compensation payments to injured claimants. The review was commissioned in response to the so-called "insurance crisis" of 1999-2002, during which the cost of public liability and professional indemnity insurance rose to unsustainable levels.

There is significant conjecture about the source of the insurance crisis. Whilst the insurance industry blamed the crisis on an "explosion" in litigation and "overly generous" courts, most commentators believed the insurance crisis was precipitated by the collapse of HIH Insurance in 1999, combined with several other factors including a hardening global insurance market, increase in the cost of reinsurance and unrealistically low public liability insurance premiums in a highly competitive domestic insurance market.

The changes to personal injury laws implemented in several jurisdictions in response to the insurance crisis has lead to a patchwork of laws which have invariably weakened the common law rights of people injured due to the carelessness of others. The reforms have also enabled insurers to reap a massive windfall of profits in public liability, motor accidents and workers compensation insurance, due to the dramatic reduction in the number of compensable claims caused by changes to personal injury laws.

The changes have been subject to extensive criticism from the judiciary, legal profession, consumer groups, unions and disability rights groups. Even the supposed "author" of the reforms, Justice Ipp, has declared that the changes went too far. In a speech in 2007 Justice Ipp stated: "Certain of the statutory barriers that plaintiffs now face are inordinately high."

The Law Council is committed to improving the lives of injured people, including better access to common law for those injured due to negligence of others, and creating a fairer, more uniform set of personal injury laws across Australia.

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