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Legislative Assembly for the ACT: 2004 Week 10 Hansard (26 August) . . Page.. 4393..


MS DUNDAS (continuing):

issues, which appear to have been stitched together into a single piece of legislation. While there appears to be some justification for the new laws on proportionate liability, I am particularly concerned by the proposals for professional standards.

I will start by pointing out that this bill is another in a long line of bills that purport to deal with the insurance crisis. I honestly think that the government needs to go back and reconsider the real reasons that insurance premiums have risen over the past few years. There is a great deal of evidence that it is not related to the state of legislation in the territory or any other jurisdiction.

The real reason that insurance premiums have risen is to do with continued world instability and, in particular, large amounts of insurance that needed to be paid after September 11 2001, which meant that global capital reserves in the insurance industry were depleted. Global reinsurers have moved to increase their premiums in order to recoup these lost assets.

I would add that there has been a contributing factor in this country: the poor oversight by the APRA which, along with gross mismanagement, led to the collapse of HIH. The primary cause of the so-called "insurance crisis" was not overlitigation in Australia or any other country. It was not a lack of professional standards or any problem with our domestic law. By continually trying to erode the rights under domestic law, we are treating the symptoms of the problem rather than the causes.

That being said, it does appear that the worst of this insurance crisis is over. Premiums appear to have stabilised and, certainly, the profits of insurance companies in Australia have been at record highs in the last reporting season. It is also clear that the changes in insurance made in multiple jurisdictions over the past couple of years appear to have done little to lower premiums. I think the next government should take a pause in its pursuit of further tort law reform and reassess whether there will be any real impact of these reforms on insurance prices.

The first part of this bill is devoted to proportionate liability. The basic premise here is that an organisation should not be held responsible for all of the damages associated with liability if the fault was shared among multiple parties. Instead, the amount of damages would be divided among the different contributors to the problem, regardless of their ability to pay for those damages. This contrasts with the current statutory position where liability is joint and several, meaning that anyone who is found contributing to the damage would potentially be liable for the entire payout for damages.

This situation presents us with two conflicting sets of rights. On the one hand, it is understandable that defendants believe that they should not be liable for that part of the damage that they have not caused and should not have to pay for the harm caused by others simply because those people are harder to find or unable to pay. On the other hand, the plaintiffs would argue that, regardless of how many contributors there were to the damages, the fact remains that they have been left out of pocket and somebody who is at fault should pay for that. This bill tries to balance these two competing positions.

The important element of the section on proportionate liability is that it contains two important caveats. The first is that proportionate liability will not apply to personal injury claims, meaning that in cases where people have suffered physical and mental harm, they


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