The year started out with the beginning of what rapidly became known to the media as the “insurance crisis”. The lack of public liability cover available, huge increases in premiums and frequent discussions of a “litigious society” became such a worry that by the end of January Federal Assistant Treasurer Helen Coonan had to respond to the clamour. She announced a national forum to discuss the issue.

A national summit was held at the end of March, with substantial tort reforms promised. Setting maximum payouts for personal injuries, capping legal fees, removing the right to sue for personal damages and providing volunteer and community groups with immunity from liability claims were the most popular reforms discussed. Banning lawyers from aggressive advertising and preventing them from offering “no-win no-fee” arrangements were also proposed as other methods of reducing personal injury claims.

In May, the NSW Government became the first state to introduce tort law reforms to limit damage payouts. The NSW reforms were expected to be the basis for national reforms, but this hope was killed at the second national liability summit held in Melbourne at the end of May. The agenda had moved away from reforming tort law. Instead, ministers agreed to give the ACCC the task of maintaining a watch on insurers’ market pricing every six months for the next two years. The ongoing monitoring role is intended to ensure any cost savings made by the industry are passed on in the form of lower premiums. As Senator Coonan put it, the insurance industry would have “no place to run and no place to hide.”

Two weeks later the Federal Government introduced structured settlements legislation. The Taxation Laws Amendment (Structured Settlements) Bill 2002 encourages the payment of compensation to severely injured victims in regular periodic payments rather than lump sums. This is expected to bring an end to cases of severely injured people spending their payouts too quickly. The Government also unveiled a plan to appoint a panel of legal experts to examine the law of negligence. It wasn’t until July that the expert panel’s members were announced. The four-member panel included members of both the medical and legal professions, with NSW Supreme Court Justice David Ipp chairing it.

The Ipp panel delivered its first report in September, recommending a revamp of negligence laws to impose a three-year limit on bringing claims and advocating greater personal responsibility for engaging in risky activities. One of the most controversial reforms recommended was that doctors be exempt from negligence claims if their conduct is supported by the “widely held opinion” of their colleagues. The final report from the Ipp panel was released in October, with the nation’s attorneys-general confirming they would consider the recommendations. The final report provided a number of key recommendations, including capping general damages payouts and imposing thresholds for legal costs.

Despite the consistent push by the Federal Government and the ICA for consistent national reforms, by mid-November it became clear this wouldn’t happen. A ministerial meeting of Treasury heads in Brisbane found statewide reforms won’t be fully consistent with federal reforms, but will mirror those already put forward by NSW, which has implemented most of the Ipp proposals.

Senator Coonan said the Federal Government will continue with plans to amend the Trade Practices Act. She said all states and territories have agreed to have legislation in place early next year. The ministers will meet again in Perth in early April.