ALRC reference: Class actions + litigation funders

On 11 December 2017 the Attorney General (Cth) made a reference to the Australian Law Reform Commission (ALRC) asking it to “inquire into class action proceedings and third party litigation funders, to maximise access to justice for ordinary Australians”.

The ALRC will report by 21 December 2018.

The media release reads:

With class actions becoming more common in courts across Australia, the Turnbull Government wants to ensure the costs of such proceedings are appropriate and proportionate and that the interests of plaintiffs and class members are protected.

There is a significant risk, in such proceedings, that members of plaintiff groups may be required to pay lawyers’ fees which are exorbitant and unjustifiable.

Unlike lawyers, third party funding entities are not bound by professional ethical obligations, despite playing a significant role in enabling and maintaining class action proceedings.

Third party litigation funders are not subject to any comprehensive Commonwealth or state and territory regulation to address the structure, operation and terms on which they participate in the Australian legal system.

I have asked the ALRC to consider whether and to what extent class action proceedings and third party litigation funders should be subject to Commonwealth regulation, with reference to specific matters that have arisen including the proportionality of lawyers’ costs and the lack of ethical constraints on their operation such as those binding legal practitioners.

The ALRC will consult widely with institutions and individuals with experience in litigation, class action proceedings and access to justice issues including the legal profession, courts and tribunals, litigation funding entities and the academic community.

Expert evidence: Expertise & late service

Sandra Battersby v Allan; Darrel Battersby v Allan [2017] NSWSC 1724 was an interlocutory decision in the course of claim arising from a neurosurgical  procedure following which the claimant suffered hemiplegia. The defendant applied for orders in relation to the claimant’s expert, who was a neurologist not a neurosurgeon.

The court held at [48] – [49]:

The unchallenged evidence before me is that a Neurologist is required to have a detailed understanding of (inter alia) the anatomy of the brain, and the deficits resulting from damage to the brain. The evidence also establishes that a Fellow in Neuropathology (Dr Milder having held such a Fellowship since 1981) is required to have expertise in the macroscopic and microscopic examination of the brain. The opinion expressed by Dr Milder in the present case is clearly based upon his knowledge of, and his training, study and experience in, those matters. It is also evident that Dr Milder’s opinions are based, at least in part, upon matters of physiology, an area in which he has considerable training, study and experience.

I am mindful of the observations of the Court in Farquharson (at [79]) regarding the importance of considering the precise character of the question upon which the expert evidence is sought to be given. In the present case, the precise character of the question is centred upon a surgical procedure to an area of the anatomy in which he has considerable training, study and experience. It may be the case that ultimately, the weight to be attached to Dr his opinion is less than that to be attributed to the opinion of a Neurosurgeon. However, questions of admissibility must not be confused with questions of weight: Farquharson at [81].

The court also addressed the late service of an expert’s report, which was allowed at [77] –  [79] on the basis of exceptional circumstances:

That said, it remains the case that the hearing of the proceedings will not be delayed as a consequence of the service of Dr Webster’s report. Moreover, and although the report was served outside of orders made by the Court, counsel for the defendant candidly, and properly, conceded that there would be no demonstrable prejudice to the defendant if the report were admitted. Perhaps even more importantly, if the report were excluded it would leave the plaintiffs in a position where they would be precluded from relying upon important expert evidence in support of their respective cases. That, in addition to the matters to which I have already referred, is sufficient in my view, to constitute exceptional circumstances.

In the course of submissions it was suggested by counsel for the defendant, albeit feintly, that it was relevant to take into account that in the event that the report of Dr Webster were excluded, the plaintiffs may have some cause of action against their solicitor. If that be a possibility, it is one which is of little weight in the discretionary exercise: Repco Corp Limited v Scardamaglia [1996] 1 VR 7 at 15 per Smith J; Simms v Western Sydney Area Health Service [2003] NSWSC 445 at [11]-[12] per Burchett AJ.

It follows that in my view, exceptional circumstances are established for the purposes of r. 31.28(4)(a) and leave should be granted to admit the report of Dr Webster.


Recommendations by a psychiatrist: Child said to be at risk of harm.

Although the decision relates only to approval of a settlement and the claim was not a medical claim, the matter of Hopkins ( by her tutor the New South Wales Trustee and Guardian) v State of New South Wales [2017] NSWSC 1733 is of interest for its background facts, which concerned in part a recommendation by a psychiatrist about a child who was thought to be at risk of harm in a foster care setting.

The claimant, who was a ward of the State, was sent to a psychiatrist as a result of ‘risk of harm’ reports. At [8] – [9] the approvals judge explained:

By 2005, the matters contained in a risk of harm report were such as to lead the defendant to arrange for the plaintiff to be assessed by a psychiatrist. Notwithstanding these matters, the defendant returned the plaintiff to the custody of Ruth and Roger Hope. As a result of the defendant’s referral, the plaintiff was assessed by a psychiatrist, Associate Professor Quadrio, in 2005. It was the plaintiff’s case that, had the opinion of Associate Professor Quadrio and her recommendations been taken into account, as it is alleged they should have been, the plaintiff would have been removed from the custody of Ruth and Roger Hope in about September 2005.

In late 2005, subsequent to Associate Professor Quadrio’s assessment, the evidence adduced by the plaintiff establishes that Mr Hope began sexually abusing the plaintiff. This sexual abuse continued for the next four years and had, on the plaintiff’s case, a very significant detrimental effect on her and caused her to suffer chronic post-traumatic stress disorder. It was her case that the substance abuse from which she later suffered was a result of that sexual abuse. The plaintiff relied on expert evidence to the effect that the offences she committed which led to her incarceration were a direct and natural result of the sexual abuse which she sustained as a young girl, in circumstances where she was entitled to the protection of the State.

The settlement, without admission of liability,  was approved.


Reproductive negligence: A proposal

Writing in the Columbia Law Review, Associate Professor Dov Fox proposes a novel framework of reproductive wrongs. It distinguishes misconduct that (1) imposes unwanted pregnancy or parent­hood, (2) deprives wanted pregnancy or parenthood, and (3) confounds efforts to have or avoid a child born with particular traits. It also introduces a right to recover when reproductive professionals perpe­trate these wrongs.

The essay by Fox has been followed by a series of thoughtful replies, such as by Professor Gregory Keating and more recently by Professor Carol Sanger in her note entitled ‘The Lopsided Harms of Reproductive Negligence’.



Limitation Act (Western Australia)

Waldron v Joondalup Hospital Pty Ltd [2017] NSWSC 1728 is of interest for its consideration of an application for extension of the limitation period in circumstances where the Limitation Act 2005 (WA) applied.

The proposed claim arose from the amputation of her right leg below the knee, pain and suffering and psychiatric injury. It was said that the hospital failed to properly heed the plaintiff’s history as given (in 2011), in particular the recent commencement of a third generation oral contraceptive pill, the long flight from Sydney and that there had been no trauma to the foot.

The court dismissed the extension application at [120].

While the plaintiff has established that she is aware of the threshold issues set out in s 39(4)(a) and (c) she has not, at this stage, established that she was aware or ought to have reasonably become aware that the injury was attributable to the conduct of Joondalup hospital. She has not satisfied the s 39(4)(b) threshold. Thus, the plaintiff has not satisfied all three requirements of s 39(4). She is required to do so. That being so, the plaintiff’s claim to extend the limitation period in relation to Joondalup hospital fails.


Statutory will: Compensation proceeds

Re K’s Statutory Will [2017] NSWSC 1711 concerned an application for an order authorising a will to be made on behalf of an incapacitated minor (a 7 year old boy), K. As a result of an award of personal injury compensation against a local health district, K was possessed of a substantial estate.

Detailed reasons were published in this matter arising from (at [27]):

… (a) a contention of K’s mother that the will to be authorised for K should include provision for establishment of testamentary trusts for the benefit of a range of people, and institutions, beyond those presently engaged in K’s everyday life; and (b) a concern that, should a practice develop of using a statutory will application as a vehicle for establishment of unnecessarily complex estate management structures, the estates of incapacitated persons might be burdened by costs and schemes foreign to the protective purpose of the Succession Act.

In relation to the testamentary trusts the court said at [33] – [36]:

A will providing for the establishment of one or more testamentary trusts for the benefit of an object beyond the immediate comprehension, or orbit, of an incapacitated person by its nature might be thought to look primarily to the conferral of future benefits upon, and the future enjoyment of property by, persons other than the incapacitated person.

If such a will is to be approved (particularly on behalf of an incapacitated person in a “nil capacity case”) there needs to be some basis upon which it can reasonably be said that the terms of the will are for the benefit, and in the interests, of the incapacitated person during his or her lifetime.

The more remote a proposed will is from the personal circumstances of an incapacitated person, the less likely it is to be able to be justified as an exercise of jurisdiction protective of that person.

The degree of complexity of a proposed will is not, of itself, a determinative factor in whether or not it should be approved by the Court. However, complexity unrelated to the present or prospective, personal circumstances of an incapacitated person (or complexity designed, primarily, to benefit others after the death of the incapacitated person) renders more difficult the task of the Court in approving a statutory will.

As for later review of the Will, the court said at [42] – [43]:

Allowance needs to be made for potential changes in the personal circumstances of the incapacitated person for whom a will is made if a court-approved will is to serve a protective purpose and to accommodate such, if any, expression of the particular person’s state of mind as may reasonably be discernible.

It is just as important for the will of an incapacitated person to be reviewed as it is for the will of a fully capable person to be reviewed in light of changing circumstances. Lest such a necessity is overlooked, it is appropriate in a case such as the present for the Court to build into its orders a mechanism for a timely review of any will authorised to be made.


Wrongful life issues? Claim by child fathered by an undercover police officer.

TBS v Metropolitan Police Commissioner [2017] EWHC 3094 (QB) is an interlocutory decision dealing with an application by the defendant to have the claim struck out. The facts of the matter are (to say the least) unusual, but to some extent touch on wrongful life topics. As stated at [1] -[2]:

The Claimant was born in September 1985. His mother was a political activist who is referred to as ‘Jacqui’. His father was Bob Lambert. Lambert was an undercover police officer who, using the pseudonym Bob Robinson, pretended to share Jacqui’s political views and formed a liaison with her which resulted in the Claimant’s birth. It is pleaded that Lambert continued to fulfil (or purported to fulfil) a father’s role until late 1988 when he pretended that he had to leave to avoid prosecution. Thereafter the Claimant had no contact with Lambert until after 2012 when Lambert’s role as a police officer was revealed.

By these proceedings the Claimant seeks compensation for, among other things, the Adjustment Disorder with Depressed Mood which he says he has suffered as a result of finding out that his father was not a political activist but a police officer, from Lambert purporting to assume a father’s role under a false identity and from Lambert abandoning his parental role towards him relying upon a false explanation.

The Claimant’s mother, Jacqui, brought her own claim in 2013 which was settled in 2014 for £425,000. The present claim by the child alleged misfeasance in public office and negligence. In relation to the negligence claim, at [37] – [38]:

The Defendant argues that the claim regarding the Claimant’s conception cannot succeed because, if he had not been conceived he would not be alive. In effect, Mr Skelton argues, this is a ‘wrongful life’ claim, but such claims are contrary to public policy. That was the decision in McKay v Essex Area Health Authority [1982] 1 QB 1166 CA. The Court gave two reasons for its decision. The first was that such a claim would be contrary to the principle of the sanctity of human life – see for instance Ackner LJ at p.1188C. The second reason was a practical one. The plaintiff was a child whose mother had contracted rubella while she was pregnant. The plaintiff alleged that the doctors had been negligent in not identifying his mother’s condition and said, that, if it had been, he would have been aborted. The plaintiff could give evidence of his condition with the congenital deformities from which he suffered as a result of his mother’s illness. But the logic of his claim was that this had to be compared with the position if the doctors had not been negligent. In those circumstances, he would not have been born. Yet there was no way the court could assess non-existence or put a value on it.

Ms Williams argues that the comparison with McKay is inapt. The Claimant does not say he should never have been born. Rather he seeks compensation for the psychiatric injury which he has suffered as a result of the deception practised on his mother and on him about his father’s circumstances. Such a claim does not offend the principle of the sanctity of life. Nor does it engage the same practical difficulties as existed for the plaintiff in McKay. She observes that the child plaintiff in McKay had an alternative claim for failure to treat the mother’s rubella. Such treatment, it was said, could not have reversed or ameliorated damage already done to the unborn child, but it could have reduced the likelihood of further damage. At 1185B-C Ackner LJ said,

‘It has not been contested that if the facts set out above are established, Mary has an arguable cause of action against the doctor. In fact, without it being in terms conceded, it was assumed on those facts she would indeed recover damages.’

The court did not accept the argument by the defendant, saying at [40] that the claimant is not aggrieved at having been born, but he does complain that the circumstances of his father mean that he has suffered the Adjustment Disorder.

The existence of an arguable duty of care in negligence was also discussed at [36]. The court held at [47] that the pleaded duty of care need not inevitably fail, so refused to strike out the claim.

No doubt the matter will require further attention from the courts in due course.