Academic journal article Defense Counsel Journal

2002: Australia's Year Zero of Tort Reform: But Federal Government's Response Is Crucial

Academic journal article Defense Counsel Journal

2002: Australia's Year Zero of Tort Reform: But Federal Government's Response Is Crucial

Article excerpt

In the wake of the recommendations of the Ipp Report, legislation at the state and territory level will shape litigation for years to come

IT MAY have taken the collapse of a major insurer and a medical indemnity organisation, spiralling premiums and some highly publicised cases, but 2002 was a year of unprecedented law reform in Australia.

The immediate trigger for the flurry of reform was the widespread perception that insurance for many socially useful activities-medicine, volunteer activities and community organisations and events-was either no longer available or so expensive as to be unaffordable. It was assumed that this had come about as the consequence of a legal system "out of control" and the emergence of a "culture of blame." Both assumptions have some validity.

Throughout 2002 there was intense debate amongst lawyers about what gave rise to the culture of blame and what contributed to a legal system being perceived as out of control. While there were many contributing factors, the genesis of the problem can be traced to the frenzy of law reform seen in Australia in 1992. Fuelled by plaintiffs' lawyers, those reforms included the removal of a ban on advertising by lawyers and the introduction of a form of contingency fees and culminated in the introduction of a class action system more plaintiff friendly than that of the United States. It is perhaps no surprise then that Australia is now the most likely place outside North America for a plaintiff to bring a class action.

Australia has one of the highest lawyer per capita ratios in the world (38,000 lawyers in a population of 18.8 million people, for a ratio of 537 persons per lawyer), and in some key practice areas, levels of litigation in Australia now exceed those in most parts of the United States. For example, only California tops Australia for medical negligence litigation.1

Whatever the causes of the problem, there is no doubt that 2002 was Australia's year zero of tort reform, the effects of which will guide the development of law for many years to come. The initial response of the various state governments included capping damages and introducing procedural changes. The real engine for reform, however, was the federal government's Review of the Law of Negligence. This review, chaired by Justice David Andrew Ipp of the Supreme Court of Western Australia, was established to inquire into the law of negligence and recommend a series of proposals to provide a principled approach to reforming that area of the law.

The panel released its report, colloquially known as the Ipp Report, in two stages. The first report was made public in September 2002 and the final report, which incorporated the first, was released in October 2002.2 It is the final report to which chapter, recommendation and paragraph references are made in this article.


Australia is a federation composed of six states and two self-governing territories. The Australian Constitution specifies a range of matters that are the responsibility of the federal government. The balance of legal issues remain the responsibility of the various state and territory governments.

Australia's laws and legal system have their foundation in the common law of England. However, while the judgments of the House of Lords and English Court of Appeal are of persuasive authority, they are not binding on Australian courts. Australia has both a federal court system and a hierarchy of courts in each of the states and territories. In all cases, the ultimate appellate court is the High Court of Australia.

Actions heard by Australian courts proceed on an adversarial basis. The practice and procedure, including rules of evidence, are similar to those in English courts. Civil proceedings in Australia are generally heard by a judge sitting without a jury, but it is possible to have a matter heard by a judge and jury in most of the state and territory supreme courts. …

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