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When justice is significantly injured

Feature Articles

Cite as: Cite as: March 2012 86 (03) LIJ, p.26

Do the "significant injury" provisions of the Wrongs Act conflict with the Victorian Charter of  Human Rights and Responsibilities?

By Jeremy King

Since the amendments to the Wrongs Act 1958 (Vic)1 in 2003, Victorians are now significantly restricted in respect to bringing claims for non-economic loss suffered as the result of the negligence of another party. Under s28LE of the Wrongs Act, a plaintiff can make a claim for non-economic loss (pain and suffering damages) only if they have sustained a permanent “significant injury”. A “significant” physical injury is defined under s28LF as an injury that results in a degree of impairment that is greater than 5 per cent, as assessed according to the American Medical Association’s Guides to the Evaluation of Permanent Impairment (AMA Guides), and a “significant” psychological injury is defined under s28LF(2) as being a psychological impairment that is greater than 10 per cent, according to the AMA Guides. The Wrongs Act then outlines a particularly cumbersome process of how plaintiffs can prove they have a significant injury, including the need to obtain an impairment assessment by a qualified medical assessor.2

Ultimately, the amendments potentially restrict those who have suffered genuine injuries at the hands of a negligent party from access to justice. There are several reasons for this. First, only those with permanent injuries are able to make a claim for pain and suffering damages. Consequently, an individual who has suffered significant injuries, but has made an effective recovery, is not entitled to claim damages for the pain and suffering they have endured. Second, the assessment of impairment does not allow for the medical assessor to take into account any of the subjective consequences of the injury on a person’s life. Third, the structure of the AMA Guides means that some individuals with serious injuries may not reach the required threshold. For example, the presumably significant injury of the permanent loss of one’s ability to smell equates to only 3 per cent impairment.3 Such an injury could surely be argued to be a significant one and yet under the Wrongs Act an injured party would be unable to claim for the pain and suffering damages that would arise as a result, even if they could prove negligence against another party.

Further, although the Wrongs Act would still allow a plaintiff to bring a claim for economic loss or medical and like expenses, in such a case as the loss of one’s sense of smell, it is unlikely that there will be any economic loss, unless the plaintiff was a winemaker, or that the plaintiff has incurred enough medical and like expenses so as to justify litigation. As such, in situations such as these, a plaintiff with a serious injury is effectively denied access to justice.

The potential denial of access to justice for many plaintiffs is obviously not only of great concern from a policy perspective, but may also conflict with the human right to a fair trial as contained in s24 of the Victorian Charter of Human Rights and Responsibilities Act 2006 (the Charter). As a piece of ordinary Victorian legislation, the Wrongs Act must comply with the Charter, unless Parliament has expressly stated that it does not wish it to. As the Wrongs Act was introduced before the Charter was enacted, effectively the only way it can truly be tested for compliance with the Charter is by way of individual litigation. Fortunately, under s32 and s36, the Charter potentially grants significant power to the judiciary in regard to ensuring that legislation complies with human rights. In particular, s32 grants the judiciary power to interpret, in a way that is consistent, ordinary Victorian laws into compatibility with the Charter.

As such, if an individual commenced litigation which raised the issue of the conflict between the Wrongs Act and the Charter, a Victorian court may be able to either interpret the Wrongs Act in such a way as to make it compliant with the human right in question or the Victorian Supreme Court could use its powers under s36 of the Charter to make a declaration that the Wrongs Act is inconsistent with the Charter. Of course, because s38 of the Charter does not allow a person to bring a claim solely for a breach of a right contained in the Charter, any such litigation would first have to be commenced against a decision of a public authority.

Consequently, an individual could not bring an action of itself claiming that the Wrongs Act conflicted with the Charter. A possible avenue around such a limitation would be for an individual who did not have a “significant injury”, and was therefore largely restricted in their access to justice, but who had sustained economic loss or medical expenses, even if these were only extremely limited in scope, to bring proceedings in the Victorian County Court and/or Magistrates’ Court and then request that the matter be referred to the Supreme Court to make a ruling on the Charter issue.

Such a request is specifically permitted under s34 of the Charter, which allows a party to make an application that their matter be referred to the Supreme Court where there is an issue concerning the conflict between the Charter and an ordinary law. Further, it remains open for an individual to argue that they can still bring litigation even if they only have a theoretical claim for future medical expenses or economic loss and no demonstrable claim for past loss.

THE IMPLIED RIGHT TO AN EFFECTIVE REMEDY

In terms of conflict with human rights generally, the Wrongs Act significant injury thresholds and their restrictions on an individual’s access to justice would most obviously seem to conflict with the well established human right to an effective remedy. The word “remedy” has a dual meaning, so the right to an effective remedy comprises both procedural and substantive components in international human rights law.4 In respect to the procedural aspect of the word, a remedy refers to the means by which an individual can obtain access to forums, such as courts, when there has been a potential breach of a legal right.5 The substantive aspect of a remedy, sometimes labelled “reparations”, is the actual relief granted to the individual who has been able to prove their claim in the respective forum.6

The right of an individual to at least a procedural remedy is well established in international human rights law by the plethora of case law, treaties and other documents. For example, Article 8 of the Universal Declaration of Human Rights holds that: “Everyone has the right to an effective remedy by the competent national tribunals for acts violating the fundamental rights granted to him by the constitution or by law”.

There is no direct right to an effective remedy in the Charter. Instead, the remedial rights of individuals for breaches of their rights are contained in s39 of the Charter. However, despite not being directly codified in Part 2 of the Charter, the right to an effective remedy may still be implicitly or indirectly contained in other rights in the Charter, most notably the right to a fair trial. This is because international human rights institutions have recognised that the right to a fair trial also contains an implied right to an effective remedy. For example, the European Court of Human Rights (ECtHR) has acknowledged that the right of access to courts is an implied right under Article 6 of the European Convention of the Protection of Human Rights and Fundamental Freedoms (ECHR).7 For example, in the landmark case of Golder v the UK,8 the ECtHR held that “it would be inconceivable . . . that Article 6(1) should describe in detail the procedural guarantees afforded to parties in a pending lawsuit and should not first protect that which alone makes it in fact possible to benefit from such guarantees, that is, access to a court”.9

However, it should also be noted that this implied right to procedural remedy is not absolute. Indeed, the ECtHR has held that states are permitted to place reasonable limitations on access to courts, such as statutes of limitations. However, the ECtHR has also held that these limitations should not “restrict or reduce the access left to the individual in such a way or to such an extent that the very essence of the right is impaired”.10

As there is also a right to a fair trial in the Charter, the Victorian judiciary has the option of recognising this implied right to a procedural remedy. Victorian courts have previously recognised other implied rights contained in the Charter, such as the implied right or principle of “equality of arms”, which holds that parties in a criminal proceeding should be on equal footing in all respects.11 Equality of arms is well established in international human rights law and has been particularly well developed in the ECtHR.12

Consequently, it could be strongly argued that the Victorian judiciary should also expressly recognise this implied right of access to a remedy to be contained in the right to a fair trial. Additionally, it should also be noted that the Charter does not exist in a legal vacuum, and that the right to a fair trial, and by implication a right of access to courts, is a long held tenet of Australian common law, specifically protected by the High Court.13 As such, the Victorian judiciary should feel quite comfortable in reading an implied right of access to a court into s24.

IS THERE A BREACH?

In the event that litigation was brought in regard to the conflict between the Charter and the significant injury thresholds of the Wrongs Act, the Supreme Court would have to follow the procedure set out in the landmark case of R v Momcilovic14 in their assessment of whether there is a conflict between the laws. Despite this case having been appealed to the High Court, it still stands as current law and a Victorian court would have to follow its rationale. In this case, the Victorian Court of Appeal held that s32(1) did not “permit a departure from the intention of the enacting Parliament”15 and was not a “special rule of interpretation” but one of many interpretative tools available to a judge such as common law principles and the Interpretation of Legislation Act 1984.16 Instead, the Court of Appeal characterised s32(1) as only a “statutory directive” to those undertaking the role of statutory interpretation to “explore all possible interpretations of the provision in question, and adopt that interpretation which least infringes Charter rights”.17 Once the meaning of the law has been ascertained, a court or tribunal must then consider whether the law breaches a human right protected by the Charter and then look at whether such a breach is justified under s7 of the Charter.18 The Court of Appeal went on to state that if a breach of a human right cannot be justified under s7, then the Court should not be reticent about issuing a declaration under s36.19

As previously noted, the significant injury thresholds of the Wrongs Act seek to limit the rights of individuals to make claims for non-economic loss. As such, the meanings of the laws in question, although technical, are not particularly difficult to ascertain. The Supreme Court or the Court of Appeal would then have to determine whether there was a conflict between the Wrongs Act and the Charter. If the Court of Appeal would be willing to recognise an implied right to an effective procedural remedy in the right to fair trial, it could be reasonably inferred that they would most likely subsequently find that the “significant injury” thresholds of the Wrongs Act conflict with such an implied right. This is because of the previously mentioned potentially severe denial of access to justice that can occur for those who do not meet the thresholds of s28LE.

A JUSTIFIED CONFLICT?

However, before either invoking its s32 or s36 powers the Supreme Court or the Court of Appeal would also have to evaluate whether the “significant injury” thresholds were a demonstrably justified restriction of the right to a fair trial under s7 of the Charter. There are several factors listed in s7(2)(a)-(e) of the Charter that must be taken into account when limiting a right, including the relationship between the limitation and its purpose, the importance of the purpose of the limitation and whether there is “any less restrictive means reasonably available to achieve the purpose that the limitation seeks to achieve”.

There has been a vast amount of commentary about the impact of the amendments to the Wrongs Act, which was part of a nationwide campaign for tort reform.20 There were several arguments advanced by proponents of tort reform, including the need for consistency among all Australian states on the law of negligence.21 However, the primary argument put forward by critics for tort reform was that the ability to “easily” bring an action for damages and the increase in the amount of damages awarded by courts were causing a significant rise in insurance premiums (the so-called “insurance crisis”), which had been rising consistently since about 2001.22 Clearly this alleged risk of insurance premium rises could be used by the Victorian government to justify limiting the right to a fair trial.

However, any court assessing whether the significant injury limitation is justified would first have to assess the wealth of criticism about the link between the rise in insurance premiums and an increase in litigation/assessment of damages. For example, it has been argued by several critics that at the time of the tort reform there simply wasn’t the data to support the argument that increased litigation and payouts had caused an increase in premiums.23 Second, a court assessing the issue should also evaluate the data available on whether the tort reforms enacted have actually resulted in a reduction in insurance premiums.

In light of the fact that the right to a fair trial is one of the fundamental rights in the Charter, it could be argued that there would have to be a substantial reduction in premiums to justify the denial of access to justice. If the figures did not support such a substantial reduction, a court could reasonably find that the relationship between the limitation and its purpose cannot be properly justified. Further, arguably there must be other less restrictive ways to reduce insurance premiums, such as placing government control over the premiums that insurers are allowed to charge, rather than simply prohibiting injured plaintiffs from bringing proceedings.

There has also been a substantial drop in public liability cases. For example, only 5734 public liability actions were commenced in the County Court in 2008 compared with 8902 actions brought in 2001 and 7419 actions in 2002 (the two years preceding the tort reform).24 So,there has been a drop of about 30-40 per cent in public liability cases brought in the County Court. As such, it could be argued that the nature and extent of the restrictive amendments to the Wrongs Act are too wide-ranging because they are affecting the rights of a large number of people.

Yet even without an examination of the data or criticisms of the tort reform, an argument could well be made that any reforms that directly benefit insurance corporations at the expense of a significant individual human right could never be truly justified. It is arguable that insurance companies receive large benefits from the significant injury thresholds simply because fewer claims are made by policy holders, meaning that less money is paid out by insurers for claims, which in turn must increase their profits. However, there are a plethora of decisions in international human rights law that have held that the monetary considerations of corporations is not a legitimate factor, save for exceptional circumstances, that should be taken into account when assessing whether a restriction on a human right is legitimate or justified.25

CONCLUSION

Ultimately, if the Supreme Court or Court of Appeal were willing to follow international human rights jurisprudence, then it could strongly be argued that the “significant injury” thresholds in the Wrongs Act conflict with the aspect of access to effective remedy contained in the right to a fair trial in the Charter. However, in light of the precise wording of s28LF of the Wrongs Act, which reflects a clear intention of parliament, it is unlikely that either court would be able to use its s32 powers to interpret the Wrongs Act in way which would bring it into conformity with the Charter. As such, it is more likely that the Supreme Court would have to make a declaration of inconsistent interpretation in accordance with its s36 powers. That is, a declaration from the Court that the Wrongs Act cannot be interpreted compatibly with the Charter and that parliament should reconsider amending the legislation to ensure that it is compatible. As such, the power would ultimately be left to the Victorian Parliament as to whether it wished to amend the Wrongs Act and remove the “significant injury” restrictions or allow the legislation to remain inconsistent with the Charter.




JEREMY KING is a solicitor with Robinson Gill Lawyers.

1. See Division 3 of the Wrongs Act 1958 (Vic).

2. Note 1 above.

3. Chu, John, “An analysis and evaluation of Victorian reform in general damages for personal injury under the tort of negligence” (2007) 10(2) Deakin Law Review 163 and see American Medical Association, Guides to the Evaluation of Permanent Impairment (4th edn), Chapter 9.3c “Olfaction and Taste”, p231.

4. Shelton, Dinah, Remedies in International Human Rights Law, 2005, Oxford University Press, p7.

5. Buyse, Antoine, “Lost and regained? Restitution as a remedy for human rights violations in the context of international law” (2008) 68 Heidelberg Journal of International Law 1.

6. Note 5 above, p7.

7. Article 6(1) of the ECHR states: “In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law . . . ”.

8. Golder v the UK, judgment of 21 February 1975, App No. 4451/70 - A.18 (1975) 1 EHRR 524.

9. Note 8 above, at [35].

10. Stubbings v the UK, judgment of 22 October 1996, App No. 22083/93, at [50].

11. See Ragg v Magistrates’ Court of Victoria and Corcoris (2008) VSC 1 (24 January 2008), where Bell J of the Victorian Supreme Court held the right to a fair trial includes the implied principle of “equality of arms” developed in international human rights law.

12. See the cases of Dombo Beheer B.V v. The Netherlands – Judgment of 27 February 1980 – App No.14448/88 – A 274, at [33], Ernst and Others v Belgium, judgment of 15 July 2003, App No. 33400/96, at [60]-[61] and Schuler-Zgraggen v Switzerland, judgment of 24 June 1993, App No. 14518/89 – A 263, at [50]-[52].

13. See R v Glennon (1992) 173 CLR 592.

14. R v Momcilovic (2010) 265 ALR 751.

15. Note 14 above, at [77].

16. Note 14 above, at [35].

17. Note 14 above, at [103].

18. Note 14 above, at [35].

19. Note 14 above, at [94].

20. For example, see Clark, Stuart S and McInnes, Ross, “Unprecedented reform: the new tort law” (2004) 15(2) Insurance Law Journal 1.

21. Ipp, Andrew , Cane, Peter , Sheldon, Don and Macintosh, Ian, Review of the Law of Negligence Final Report, September 2002: http://revofneg.treasury.gov.au/content/review2.asp (accessed 24 January 2012).

22. Chu, John, note 3 above, p129-132.

23. Feldthusen, Bruce, “Posturing, tinkering and reforming the law of negligence – a Canadian perspective” (2003) 25(3) UNSW Law Journal 856.

24. See County Court of Victoria, Statistics for Civil Causes of Action Brought per Calendar Year: http://tinyurl.com/84swkea (accessed 24 January 2012).

25. See also Hatton v The United Kingdom, judgment of 8 July 2003, App No. 36022/97, at [121]; Lopez Ostra v Spain, App No. 16798/90 (1994), Series A – Non. 303-C; The Indigenous Community Yakye Axa v Paraguay, Case 12.313, Report No. 2/02, IACtHR, Doc. 5 rev. 1 (2002).

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