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The Australian
March 23, 2002
Insurance crisis our fault: judge
by Bernard Lane
The national insurance crisis has been caused
partly by judges "playing Santa Claus" with compensation payouts,
says one of the nation's senior jurists.
"The judiciary has a lot to
answer for this," Justice James Thomas, an authority on judicial ethics,
said yesterday in his retirement speech from the Queensland Court of Appeal.
"Some (judges) have enjoyed playing Santa Claus, forgetting that someone
has to pay for our generosity.
"We have allowed the tests for negligence to degenerate to such a
trivial level that people can be successfully sued for ordinary human
activity.
"When I say 'we', I mean all levels of adjudication right up to the High
Court."
State and federal ministers meet next week in Canberra to discuss possible solutions to
the crisis in public liability insurance, which covers business and community
groups against litigation.
Sharply increased premiums are putting in question events such as school
fetes, Anzac Day marches and festivals.
In his speech, Justice Thomas said: "We now have a compensation-oriented
society in which people know that a minor injury is a means of getting more
money than they could possibly save in a lifetime.
He said "the popular lust for compensation in an over-litigious
society" had been "accelerating for the past 20 years".
"Churches, schools, sporting clubs and all manner of voluntary
organisations that help weave the fabric of our society are finding it too
financially risky to perform traditional services," Justice Thomas
said.
"There is a retreat on the part of professional people from some
essential services. Suddenly an insurance crisis is upon us with unimaginable
rises in insurance premiums.
"These are direct results of the explosion of litigation and our
aggressive legal industry.
"It is no use blaming the plaintiffs' lawyers. We (the judges) are the ones
who have laid down the rules and given the judgments. The buck stops with us,
not them.
"We are the ones who have let the quantum of damages get out of hand,
and who have lowered the barriers of negligence and causation.
"Common sense has long gone from the legal system in the area of tort
(such as negligence) and damages for personal injuries.
"I have, of course, faithfully followed precedent, but there is not a
lot that a judge, even at intermediate appeal level, can do unless the High
Court approves, except to bemoan the general trend."
In an appeal decision last year, Lisle v Brice, Justice Thomas had no choice
but to follow precedent and uphold an order that a motorist pay damages to
support the wife and children of a man who committed suicide three years
after suffering "relatively minor" physical injuries in a motor
accident.
But the judge warned that such unrealistically generous rules, applied and
extended by the courts, would push up the costs of compulsory third party,
employer's liability, public risk and professional indemnity insurance
premiums.
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