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it. It is an accepted principle in Australia that the damages for past and future gratuitous services constitute a sum designed to provide for the injured plaintiff’s established needs. That sum may be calculated by reference to what the provider does and even what the commercial costs of doing it would entail. But the focus is upon the plaintiff’s needs. The plaintiff might, or might not, reimburse the provider. According to the repeated authority of this Court, contractual or other legal liability apart, whether the plaintiff actually reimburses the provider is entirely a matter between the injured plaintiff

and the provider. Subsequently, in Grincelis v House (2000) 201 CLR 321,22

Kirby J changed his mind on the

jurisprudential merits of the Griffiths v Kerkemeyer doctrine, stating (in dissent at [25]):

Having, in Griffiths v Kerkemeyer, embraced the principle that an injured plaintiff is entitled to recover damages for his or her needs met by the provision of gratuitous services by family or friends, this Court was set upon a path that has repeatedly demonstrated the “anomalies”, “artificiality” and even “absurdities” of the “novel legal doctrine” which it adopted in substitution for its own earlier stated opinion. 23

The Grincelis v House majority (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ), however, while noting “judicial dissatisfaction with the principle adopted in Griffiths v Kerkemeyer”, quoted Kirby J’s own words in Kars v Kars back and reiterated (at [19]):

What was decided in Griffiths v Kerkemeyer is “too deeply entrenched in this part of the law in Australia for this Court to reopen it”.

Indemnity insurance

One of the major reasons for the generous approach to the Griffiths v Kerkemeyer awards is the inconsistency between the articulated legal fiction that damages are paid out of the defendant’s pocket, and an unarticulated cognisance of the fact that in great majority of cases damages are paid by the insurer.24 In Kars v Kars (1996) 187 CLR 354, the High Court suggested (at 381-382) that “a review of the relevance of insurance to the development of the common law liability in tort may indeed be timely”,25 but never seriously followed it up. When in Dimond v Lovell (decided in May 2000 and reported at [2002] 1 AC 384) the House of Lords again criticised Megaw LJ’s judgment in Donnelly v Joyce, Lord Hoffmann pointed out (at 399) that the assumption

that damages will be paid by “the wrongdoer” out of his own pocket is not in accordance with reality. The truth is that virtually all compensation is paid directly out of public or insurance funds and that through these channels the burden of compensation is spread across the whole community through an intricate series of economic links. Often, therefore, the sources of “third party benefits” will not in reality be third parties at all. Their cost will also be borne by the community through taxation or increased prices for goods and services.

T h e r e a l i s a t i o n t h a t t h e c o s t o f d a m a g e s a w a r d e d i n t o r t c a s e s i s b o r n e b y t h e w h o l e c o m m u n i t y w a s t h e c o r e e l e m e n t o f t h e A u s t r a l i a n t o r t s r e f o r m i n i t i a t i v e . 2 6 Tort reform I n e n a c t i n g r e f o r m s t o d a m a g e s f o r g r a t u i t o u s s e r v i c e s , t h e C o m m o n w e a l t h 2 7 New South Wales,28 V i c t o r i a , 2 9 t h e N o r t h e r n T e r r i t o r y 3 0 a n d , p a r t l y , Q u e e n s l a n d 3 1 followed the Ipp Report’s

22 23 24 See also Callinan J (in dissent) in the same case at [45]-[58]. His Honour was referring to Blundell v Musgrave (1956) 96 CLR 73. For example, in Hunt v Severs [1994] 2 AC 350, Lord Bridge declared (at 462): “At common law, the circumstance that a defendant is contractually indemnified by a third party against a particular legal liability can have no relevance whatsoever to the measure of that liability.” Toohey, McHugh, Gummow and Kirby JJ. For a discussion of this issue see Mendelson D, “Plaintiffs’ Needs, Insured Defendants and Assessment of Damages” (1997) 4 JLM 307. Ipp Report, n 4, at [3.4] and [3.5]; see also New South Wales Legislative Assembly, Hansard, 23 October 2002, p 22. See also Luntz H, “The Collateral Source Rule Thirty Years On” in P Cane and J Stapleton (eds), The Law of Obligations: Essays in Celebration of John Fleming (Oxford: Clarendon Press, 1998) p 377. Trade Practices Amendment (Personal Injuries and Death) Act (No 2) 2004 (Cth), s 87W. Civil Liability Act 2002 (NSW), s 15. Wrongs Act 1958 (Vic), s 28IA. Victoria also has special statutory heads of damages for loss of gratuitous care (s 19A) and loss of capacity to provide care for others (s 28ID). 25 26 27 28 29


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