NSW Premier Bob Carr’s actions to stem the rising cost of public liability premiums takes top spot in a range of reports on the issue.

Mr Carr is proposing caps on court awards, restricting a person’s ability to sue and discouraging lawyers from running trivial claims. The moves have received a generally positive reception from the Insurance Council and the Federal Government.

Mr Carr said his government wants to address the increasing size and number of public liability claims through changes to personal injury tort law. “I have called for the insurance industry to price rationally and to recognise its responsibility to the community,” he said.

While it’s a bit difficult to lay the blame for increasing court cases on the industry, Premier Carr hasn’t been slow in taking a stick to lawyers, either. He has already introduced restrictions to lawyer advertising, and suggests other measures such as making the plaintiff’s lawyer pay the defendant’s legal costs if the plaintiff loses and the court decides the claim lacked sound evidence.

The NSW package also includes proposals to:

• Cap legal costs for small claims to a proportion of the claim and introduce thresholds to preclude trivial claims;
• Change the law to exclude claims that should never have been made and provide defences to ensure people who have done the right thing are not made to pay just because they have access to insurance;
•  Change the professional negligence test to one of peer acceptance, so conduct that is consistent with a respectable view within the profession cannot be held to be negligent;
• Investigate capping general damages (such as damages for pain and suffering), possibly at a level that applies to health care claims, which is $350,000;
• Cap damages for loss of earnings and earning capacity;
• Remove the power of the courts to award exemplary or punitive damages.

ICA Deputy CEO Philip Maguire said several of Mr Carr’s proposals have been effectively implemented in CTP and workers’ compensation.

“Insurers set premiums according to the risk and the expected cost of claims,” he said. “However, it is the community which has to strike a balance between the level of benefits it wants, and how much it wants to pay for them.”