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Medical Indemnity

State and Territory Tort and Legal Process Reform

This page describes the State and Territory Tort law reform and how it relates to Medical Indemnity.

Insurance is now more affordable as a result of the Australian Government's leadership in law reform. In 2002, a high level panel, headed by Justice Ipp, reviewed the law of negligence and made 61 recommendations,. Click here for the report.

At a ministerial meeting on public liability insurance on 15 November 2002, chaired by the former Minister for Revenue and Assistant Treasurer, Senator Helen Coonan, state and territory ministers agreed on a package of law reforms to make insurance more affordable.

This included agreement on:

• implementation of key recommendations of the Ipp Report on a nationally consistent basis
• introduction of the necessary legislation by each State and Territory as a matter of priority.

A directly relevant recommendation was to modify the standard of care to be applied to medical practitioners in assessing negligence.

The new test reinstated a modified version of the Bolam rule and re-balance the interests of plaintiffs and defendants. For more information on the modified Bolam rule click here and refer to the Chapter entitled 'Professional Negligence'.

This meant that medical practitioners would be protected against a claim for negligence if they have acted in accordance with an opinion widely held by a significant number of respected medical practitioners working in that field, unless the court considers that the opinion is irrational. The panel considered that this recommendation could be applied broadly to any profession or trade and it would provide significant protection for professionals acting in accordance with accepted practice. Several states and territories have adopted, or announced their intention to adopt, the modified standard of care that was recommended by the Ipp panel.

To complement state and territory reforms on caps on damages and limitation periods the Australian Government has amended the Trade Practices Act 1974. The Trade Practices Amendment (Personal Injuries and Death) Act (no. 2) 2004 now:

• sets a general limitation period of 3 years since the date of discoverability for personal injury claims; and
• caps the maximum amount of damages for non-economic loss at $250,000 (indexed to CPI).

In addition, the Australian Government will make further changes to the Trade Practices Act 1974 through the Trade Practices Amendment (Personal Injuries and Death) Bill 2004. This Bill is currently before Parliament. It proposes to amend the Trade Practices Act 1974 to prevent individuals from bringing actions for damages for personal injury or death resulting from contraventions of the misleading and deceptive conduct and other unfair practices provisions in Part V Division 1 of that Act.

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