Confused about what happened last week when state and federal ministers met to thrash out a solution to the public liability insurance crisis? You’re not alone. So here is our understanding of what happened:

The meeting in Melbourne moved away from reforming tort law and turned the blowtorch back on the insurance industry. The reforms being planned by NSW – and which were expected to form the basis for national reforms – didn’t get up. Instead, the ministers chose a hotch-potch of actions that says a lot about the level of suspicion surrounding the insurance industry and the level of support plaintiff lawyers can muster when they’re in a tight spot.

The summit agreed:

To give the ACCC the task of maintaining a watch on insurers’ market pricing every six months for the next two years. If the industry does not pass on cost savings, the Federal Government will consider more “formal action”. The industry will also be made to facilitate group buying and pooling arrangements.

The Productivity Commission will also benchmark Australian insurers’ claims management against world standards – a move hailed by some regulatory and consumer insiders as likely to precipitate vast improvements in some quarters.

An inquiry will be mounted to examine the law of negligence. It will report back in two months.

The benefits and cost of exempting non-profit organisations from common law damages will be examined. So will the alignment of common law payouts with existing schemes; capping damages for gratuitous attendant care; tightening up contributory negligence; forcing the parties to negotiate and exchange information pre-trial; and reintroducing a scale of costs. The vexed subject of lawyers’ “no-win no-fee” advertising was also shuffled off to an inquiry.

The Commonwealth will also legislate this week to allow people wanting to undertake risky activities to waive the right to sue. It will also protect volunteers from negligence claims and allow structured settlements.

The reaction

Not surprisingly, there were plenty of who found the result of the summit an enormous letdown. ICA Executive Director Alan Mason said it left everything up in the air, with no evidence of united action and very little to attract additional capacity into the liability market.

The Plaintiff Lawyers Association’s response hammered away about injured people subsidising the greedy insurers, and attacked the provision to allow waivers of common law rights. “Why would insurance companies deliver the savings to the community rather than pocket the loot?” asked Plaintiff Lawyers Association spokesman Peter Burt, who had obviously missed the bit about the ACCC.

What they’re doing anyway

This is a breakdown of what is already being done by the states and territories. Obviously, some of the planned actions will be overtaken by Federal initiatives.

NSW: The Carr Government’s Civil Liability Bill 2002 is the first stage of its law reform program. In September further reforms will be introduced including waivers and voluntary assumption of risk; establishing a realistic duty of care; protecting volunteers under “good samaritan” legislation; defences against negligence claims for public authorities; structured settlements; and drug and alcohol use to be taken into account in assessing negligence.

Victoria: The Bracks Government has created a group insurance scheme for community organisations. It has given $330,000 to the Municipal Association to develop risk mitigation activities that are linked to the community group insurance scheme; and $100,000 to adventure tourism operators to assist them in preparing risk management plans and audits.

Victoria has also committed to a legislative package that includes: providing waivers to allow people to accept responsibility for their own participation in risky activities; protecting volunteers and good samaritans; implementing proper risk management and accreditation frameworks for businesses and organisations; and enabling structured settlements.

It will also legislate to improve legal procedures surrounding claims, ensure saying “sorry” doesn’t represent an admission of liability, and remove the right to claim damages where the injury was suffered through criminal activity or while under the influence of drugs.

Queensland: Group buying schemes for community based organisations will commence in September. The Beattie Government has also approved the drafting of a Personal Injuries Proceedings Bill for introduction in mid-June. This is aimed at replicating the early reporting regime and early claim resolution processes adopted under the state’s CTP scheme.

It’s also aimed at limiting economic loss to three times average weekly earnings, limiting legal costs for small claims, and excluding jury trials.

Further measures to be introduced include provisions also favoured by NSW and Victoria, as well as capping general damages, changing the statue of limitations, reviewing the law of negligence, and dispensing with the concept of joint and several liability.

Western Australia: Apart from drafting legislation to protect volunteers from personal liability, the Government is also in favour of limiting the cost of the general damages by bringing them into line with other personal injury compensation schemes in WA, legislating to allow self-assumption of risk, applying a cap for the loss of earnings component.

It also favours restricting lawyers’ personal injury advertising and requiring insurers to contribute data and revise their strategic approach to claims management.

South Australia: The Government has introduced legislation to protect volunteers, government and incorporated bodies from liability. It has a provision under its workers’ compensation legislation to provide cover to volunteers, and already has in place pre-litigation procedures that provide opportunities for early settlement of claims.

The long-standing local government public liability cover will be broadened to cover more community groups, and a “wide range” of other reforms such as capping payouts and incorporating self-assumption of risk are also being considered.

Tasmania: The Government of Premier Jim Bacon has already implemented a number of measures. Its recent budget removed stamp duty on public liability policies from July 1.

Community organisations in the state will also benefit from the joint Tasmanian-Victorian “Our Community” group buying scheme.

Tasmania already has in place some of the measures under consideration in other jurisdictions, such as a discount rate of 7%, no provision for pre-judgment interest, no damages in respect of gratuitous attendant care, and a three-year statute of limitations for personal injury claims.

Northern Territory: The Government is sorting out whether to join Queensland’s group scheme for, and is amending the standard insurance requirements in government contracts. It already has in place some of the measures under consideration – for example, a three-year statute of limitation period and procedures to encourage the resolution of claims without resort to trial.

Australian Capital Territory: A survey has found overwhelming support for group insurance schemes. The ACT Government will now seek to participate in the group insurance schemes of state and local government groups in NSW and Victoria.

It is also contemplating the introduction of legislation protecting volunteers and “good samaritans”.