Saturday, March 28, 2009
New Zealand famously abolished tort actions for personal injuries and set up a comprehensive no-fault compensation plan. Australia seriously considered a similar plan, but never adopted it. Harold Luntz (University of Melbourne) has written an article comparing how personal injuries are handled in the two jurisdictions. His article, A View from Abroad, has just been posted to SSRN. Here is the abstract:
The Woodhouse Commission examined the common criticisms of the common law action for negligence in relation to personal injury. The criticisms included the risk of litigation (the uncertainty of outcome); the reduction of damages if there was any contributory negligence; the long delays before the receipt of compensation, if any; the high costs of determining who was and who was not entitled; the need to find a solvent defendant; the adverse effects on rehabilitation; and the inappropriateness of lump sum awards of damages to provide for long-term incapacity. The Woodhouse Commission concluded that "the time [had] clearly come for the common law action to yield to a more coherent and consistent remedy in the whole area of personal injury", and it recommended "that the Court action based on fault should now be abolished in respect of all cases of personal injury, no matter how occurring". This article examines the continued application of the common law of negligence in relation to personal injury in Australia, with particular reference to decisions of the High Court of Australia. It demonstrates that the criticisms made by the Woodhouse Commission remain valid 40 years later, and contrasts the decisions of the High Court with how similar injuries would be dealt with in New Zealand. For pragmatic reasons, the Woodhouse Commission confined its recommendations to accidental injuries, and hoped that other forms of incapacity could be accommodated later. The later "Australian Woodhouse Report" recommended the extension of the compensation scheme to incapacity caused by congenital conditions and sickness, but that scheme was never implemented. The failure to extend the New Zealand compensation scheme in this way means that some of the High Court decisions on the common law deal with situations on the borderline of the New Zealand compensation scheme and are likely to give rise to similar problems.