Insurance: A Community Issue...

Specific indemnities are in place in some jurisdictions under what are called "Good Samaritan" legislation where specific activities, such as emergency medical assistance, is permitted to perform its tasks free from the threat of professional or public indemnity claims.  There is always an overriding understanding, of course, that such legislation does  not protect operators from claims of gross negligence.

Formal risk management: This involves looking at the establishment of formal training in risk management through a university or TAFE college or specialist educator.  The educator would be accredited for this task.  Operators, after they have successfully completed training, would be licensed as being competent in risk management.  Formal codes of conduct, or minimum activity standards, would be established to set the yardstick for operator performance and for assessment of negligence.

Obviously not all activities will be appropriate to participate in such a risk management scheme.  Whether each area or endeavour needs its own practices or whether activities can be grouped is a question to be considered.  What I am putting forward is an option available to us to eliminate negligence, reduce claims cost and improve the community's approach to risk management.

Direct claims cost reduction: Mechanisms here include claims capping, establishment of minimum hurdle values and structured settlements.  Each of these mechanisms is in force in other jurisdictions specifically to reduce burgeoning claims costs.  The Victorian WorkCover Authority, for example, is actively pursing these and other mechanisms to reduce its very large unfunded liabilities.

Page  2

Each of these direct claims cost reduction mechanisms is likely to require enabling legislation.  Other than for tax considerations this legislation is likely to be effected at state level.  So consideration of this option will require the active involvement of not only the Government but also the opposition parties, because the last thing we want is to have politicians playing games with this serious community issue.

Deliberately contesting selected public liability claims: This is a strategy which can be undertaken by insurers and by industry.  The objective is to develop a case history of claims being successfully defended.  With such a case history, plaintiff lawyers can be induced to recommended to clients that they not proceed with weak cases.  The public, legal fraternity and the bench can come to look on negligence in a much more disciplined light.  And the attitude prevalent in our society of: "someone is injured, the insurer can pay" will be weakened.

This strategy of contesting claims has been successfully applied in the white water rafting situation in British Columbia, in protecting claims against snow fields operators in Victoria and NSW and in the Victorian WorkCover environment.  It is an expensive option to undertake but one which we intend to explore.

Key elements of a solution:
I have outlined some options open to us to address the public liability issue at a structural level.  Coming at the issue from a different direction, there are several key elements which will be part of the solution. 

Continued ....