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| Bill presented and read a first time. Dr TOYNE (Justice and Attorney-General): Madam Speaker, I move that the bill now be read a second time. The purpose of this bill is to reform the law which determines the respective liabilities of individuals who have separately caused economic loss or property damage, with the exception of cases involving personal injury. This bill deals with issues arising where a court finds that more than one respondent has contributed to a claimant's loss. In such case, at common law, the law of negligence operates so that the principle of joint and several liability determines what damages are paid for the loss and damage caused. The effect of this general principle is that the claimant only needs to identify one respondent against whom a case can be proved. That respondent is then potentially liable for all the damages payable to the claimant. Where all contributing respondents have sufficient assets or are insured and can be found, damages are apportioned according to each respondent's contribution to the loss. However, this usually only occurs when these respondents bring actions against each other. Problems arise where only one respondent can be located or where only one respondent is financially viable or insured. That one respondent can be held liable for all the claimant's loss regardless of how much he or she contributed to that loss. This common law principle protects claimants by allowing them to recover the total damage suffered from at least one of the respondents. However, this approach has led to problems for respondents, particularly in terms of the availability and cost of professional indemnity insurance. The application of joint and several liability has resulted in members of some occupations being particularly vulnerable for legal action in proceedings for property damage and economic loss. For example, if economic loss has been caused primarily by the negligence of a property advisor, with no assets or insurance, but was also partially caused by advice from a lawyer or accountant with assets or insurance cover, the successful claimant could obtain full damages from the lawyer or accountant. This targeting of professionals with professional indemnity insurance is considered to be a factor in the significant increases in professional indemnity premiums over the past few years. Madam Speaker, this bill seeks to reverse the current common law position in the Northern Territory. It does this by introducing the principle of proportionate liability. This principle, put simply, is that a respondent should only be liable for his or her own share of the damage suffered by a claimant. Before proceeding to set out how this principle will work under the bill, I mention two important points. Firstly, the bill will not apply to claims for personal injury. The 2002 Review of the Law of Negligence conducted by the Hon Justice Ipp recommended against reversing the common law principle of joint and several liability in relation to personal injury claims. This recommendation has been accepted in all Australian jurisdictions and adopted on the basis that the interest of claimants, in such cases, are paramount; and their ability to access damages to cover medical expenses or to compensate for loss of income or loss of capacity should not be constrained. Secondly, since 1994, the principle of proportionate liability has operated in the Northern Territory in respect of most building disputes under the Building Act 1993. This bill will repeal the relevant Building Act provisions so that the provisions under this bill apply uniformly to all disputes that occur after the commencement of this legislation. I will now outline the main provisions of the bill. Clause 13 provides that a person who is a concurrent wrong-doer is only liable for the amount of the claimant's loss. That reflects his or her share of the responsibility for the overall loss. A concurrent wrong-doer is defined in clause 6 as being 'one or two or more persons whose acts or omissions have caused the loss to the claimant.' Critically, the principle of proportionate liability will only apply to apportionable claims, a term which is defined in clause 4 of the bill. The main features of an apportionable claim are that subject to stated exceptions, it includes claims arising from a failure to take reasonable care. Such claims can arise in contract, tort, under a statute, or otherwise. It includes claims for breaches of section 42 of the Consumer Affairs and Fair Trading Act relating to misleading and deceptive conduct, and it includes such other claims as may be prescribed in regulations made under the proposed legislation although no such regulations are currently contemplated. As I mentioned earlier, the major exception to this general principle is set out in clause 4(3) of the bill, is that personal injury claims are not apportionable claims. Other types of claims which are not wholly apportionable include claims for breaches of Part 4 of the Consumer Affairs and Fair Trading Act relating to breaches of dangerous product provisions; and claims where one of the wrong-doers intended to cause or fraudulently causes the loss or damage. In such cases, the fraudulent wrong-doer may be liable as if the principles of proportionate liability did not apply. However, other concurrent wrong-doers would continue to be protected by the principle of proportionate liability. Madam Speaker, one of the main advantages of the law as it currently stands is that a claimant only needs to take action against respondents who may be in a position to pay damages. The bill, in clause 10, continues this general principle by providing that not all respondents need to be party to proceedings for the court to make decisions apportioning responsibility. It should be noted, however, that a potential respondent will not be liable unless they become a party to the proceedings. It could be argued that under the scheme of proportionate liability proposed by the bill, some respondents may be tempted to avoid responsibility by shifting the blame onto third parties, especially third parties who either cannot be found or have no assets. The bill addresses this issue by requiring respondents to give written notice to claimants about any other potential concurrent wrongdoers, and making respondents who fail to give notice liable for any costs unnecessarily incurred because of their failure to give notice. The new law will not affect existing law governing established concepts such contributory negligence, vicarious liability, the liability of partners in a partnership, and the liability of a principal for acts of an agent within the scope of the agent's commission. In summary, the introduction of proportionate liability for economic loss and property damage ensures that respondents are generally not liable for damages that are greater that the losses that their actions have caused. Under proportionate liability, claimants in cases where more than one party has been negligent will lose the protection of only having to pursue one respondent, however the new law will result in greater fairness for respondents in the distribution of damages awarded. Madam Speaker, this bill is part of a national agreement reached by insurance ministers and others for the introduction of proportionate liability for claims of economic loss and property damage throughout Australia. It is one of a range of measures aimed at alleviating the 2002 crisis in the professional indemnity insurance industry. In broad terms, the legislation contains reforms that are supported by all governments and most of the professions and occupations potentially affected by the legislation. This bill is based on a national model prepared by an officers committee of the Standing Committee of Attorneys-General. Similar proposals are contained in the Commonwealth Corporate Law Economic Reform Program, Audit Reform Disclosure Act (2004), the New South Wales Civil Liability Amendment (Personal Responsibility) Act (2003), the Victorian Wrongs and Limitations of Actions Insurance Reform Act (2003), the Queensland Professional Standards Act (2004), the Western Australian Civil Liability Amendment Bill (2004), and the Civil Liability Amendment (Proportionate Liability) Act (2004) of the Australian Capital Territory. I understand that the South Australians will also be introducing similar legislation early this year. Madam Speaker, I have tabled the Explanatory Memorandum that accompanies this bill, and I commend the bill to honourable members. Debate adjourned. |