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CPI02

Personal Injury Litigation - a practical approach

NZ $60.00
incl GST
Wendy Brandon
Minter Ellison Rudd Watts
Wellington
Andrew Cadenhead
Barrister
Christchurch
Dr David Collins
QC
Wellington
Bruce Corkill
Barrister
Wellington
Antonia Fisher
Brookfields
Auckland
Stephen Harrop
Billings Lawyers
New Plymouth
Dr Toni Marks
Psychiatrist
Boulcott Clinic
Lower Hutt
Joanna Manning
Senior Lecturer
Faculty of Law
University of Auckland
John Miller
Barrister and Senior Lecturer in Law
Victoria University of Wellington
     
Author(s): Wendy Brandon, Andrew Cadenhead, Dr David Collins QC, Bruce Corkill, Antonia Fisher, Stephen Harrop, Dr Toni Marks, Jo Manning, Geoff McLay
Published: 22 April, 2002
Pages: 192

   

Introduction


Personal injury litigation in New Zealand is a complex matrix. Competing policies have produced a series of ad hoc and inconsistent outcomes. The result is that New Zealand’s fledging law of personal injury litigation is complicated and unpredictable.

At the epicentre of New Zealand’s personal injury law is our accident compensation regime which, in the space of 30 years, has undergone five major statutory transformations:
  • Accident Compensation Act 1972;
  • Accident Compensation Act 1982;
  • Accident Rehabilitation and Compensation Insurance Act 1992;
  • Accident Insurance Act 1998; and
  • Injury Prevention, Rehabilitation and Compensation Act 2001.

When first introduced, New Zealand’s Accident Compensation Scheme was widely applauded as a commendable social response to the vagaries of common law personal injury litigation.

Undoubtedly, the common law provided a very clumsy and inappropriate mechanism for dealing with personal injury claims. The common law was:
  • haphazard in that it failed to compensate significant numbers of accident victims;
  • expensive for participants;
  • prone to long delays; and
  • not conducive to rehabilitation.

The model proposed by Sir Owen Woodhouse enunciated five general principles which provided the template for the 1972, and the 1982 statutes.

At the forefront of Sir Owen’s recommendations was the need to ensure those who suffered physical incapacity received “a real measure of monetary compensation for their losses”.

There was always room to debate whether or not the 1972 and 1982 statues provided “real” compensation in respect of lump sum payments. The 1972 regime provided a maximum lump sum payment of $7,000 for permanent loss or impairment of bodily function. That Act provided a maximum lump sum payment of $10,000 for pain and suffering, loss of enjoyment of life and disfigurement (maximum total $17,000).
The 1982 regime increased the maximum lump sum payment for permanent loss or impairment of bodily function to $17,000 (combined maximum $27,000).

There could be no debate about the inadequacy of lump sum payments under the 1992 statutory regime which was based upon a report published in the name of the Honourable WF Birch, “Accident Compensation: A Fair Scheme”.

The 1992 Act was born from concerns about:
  • the increasing costs of lump sum compensation for permanent disability; and
  • the “expanding boundaries” emerging from judicial interpretation of what constituted “personal injury by accident”.

Amongst the many key changes in the 1992 statute was the abolition of lump sum compensation – a move which was justifiably criticised as a fundamental breach of the social contract which underlay the original scheme.

Uppermost in the minds of those who criticised the 1992 Act was the fact Parliament maintained the prohibition against civil plans for compensatory damages, but at the same time failed to provide victims of accidents with any lump sum compensation. The regime that emerged after 1992 was often described by commentators at the time as New Zealand’s “no fault, no compensation scheme”.

It is no coincidence that most developments and challenges to the boundaries of the common law relating to personal injury occurred after the commencement of the Accident Rehabilitation and Compensation Insurance Act 1992. Since 1992 the boundaries of the common law have been tested by:
  • attempts to extend the role of exemplary damages;
  • reintroduction of litigation arising from “nervous shock”;
  • attempts to redress inequities in the Limitation Act 1950; and
  • extensions of the scope of common law claims based on negligence, breaches of fiduciary duty, and breaches of Bill of Rights duties.

Parliament also responded to the inequities exposed by the 1992 Accident Compensation regime and restrictions imposed by the common law. Examples of Parliament’s ad hoc responses included:
  • Section 397 of the Accident Insurance Act 1998, which overturned the Court of Appeal’s judgment in Daniels v Thompson and negated the effect of the Privy Counsel’s judgment in W v W .
  • As a result, victims of criminal offending who have ACC cover can sue for exemplary damages. Persons who do not have ACC cover are still precluded from suing for exemplary damages in relation to criminal offences.
  • Sections 52 to 57 of the Health and Disability Commissioner Act 1994, which enables claims for breaches of the Code of Health and Disability Consumer’s Rights to be heard by the Human Rights Review Tribunal. As a result, those whose rights are breached under the Code can claim up to $200,000 damages before the Human Rights Review Tribunal. Included in the claims which can be made are those for exemplary damages.

Personal injury litigation presents many challenges for lawyers in New Zealand. Those who practice in this field must endeavour to steer a chart through tortuous legislation such as the Injury Prevention, Rehabilitation and Compensation Act 2001. Practitioners must also keep abreast of rapidly emerging changes to the common law. Above all else, lawyers must make difficult assessments about the merits of a client’s potential claim and the economic benefits of pursuing a claim. The absence of any significant body of case law makes the last task particularly difficult. For example, in the sphere of nervous shock, whilst there have been a number of proceedings commenced and successfully concluded on behalf of plaintiffs, all have settled on a confidential basis thereby depriving those unfamiliar with the cases with any meaningful guide on the “value” they should place on a claim and whether or not it should settle.

Today we hope we will be able to shed some light on some of the mystery that surrounds personal injury litigation in New Zealand. To assist, the New Zealand Law Society has been fortunate to assemble many of the practitioners who have been at the forefront of personal injury litigation over the past ten years. Your speakers today include lawyers who have argued the leading cases before the High Court, Court of Appeal and Privy Council as well as the Chairperson of the Medical Practitioners Disciplinary Tribunal. In addition to practitioners, we have two leading academics who have won wide acclaim for their analysis of various features of New Zealand’s personal injury law. We are also fortunate to have Dr Toni Marks who will address a number of medical issues associated with nervous shock claims. Dr Marks is one of New Zealand’s leading psychiatrists and has worked very closely with the legal profession for a number of years.

We hope you will find the papers and presentations informative.


 
Dr David Collins QC
Wellington



 

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