New uncertainties in personal injury limitation periods
Since the recent decision of the New South Wales Court of Appeal in Baker-Morrison v New South Wales [2009] NSWCA 35, it is considerably more difficult for defendants and their insurers to determine whether the limitation period for a plaintiff to sue for injury arising out of alleged negligence in more recent years has expired. Although the case resolved uncertainty in New South Wales as to the approach to be taken, particularly where different Courts had adopted different approaches, prospective plaintiffs will now essentially have more time in which to sue alleged wrongdoers for their injuries.
The old regime – a limitation period based upon occurrence of damage
For many years, working out whether a limitation period for a personal injury claim had expired was a relatively simple process, by being either six years (before 1990) or three years (after 1990) from when the damage crystallised, which is usually when a prospective plaintiff suffers injury. Discretionary extensions of the limitation period were available for explicable delays, where it was “just and reasonable” to do so, taking into factors such as difficulty in discovering any cause of action and prejudice to any defendant.
The new regime – a limitation period based on discovering a cause of action
For claims arising out of alleged negligence committed on or after 6December2002, a different regime applies. There are now three limitation periods for these claims, namely:
- injury has occurred;
- injury was caused by the fault of a prospective defendant; and
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the injury was sufficiently serious to justify commencing Court proceedings.
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the twelve year “long-stop” period, for claims where the discoverability period has not yet expired; and
-
the thirty year ultimate bar within which to bring a claim from when any limitation period begins to run.
Unlike the regime for pre-December 2002 claims, the discoverability period cannot be extended. There is discretionary extension available for the ‘long-stop’ period (based upon similar considerations for an extension of limitation period for pre-December 2002 claims). Importantly, where the limitation period in older claims is suspended for children until they turned 18 years of age, for newer claims, if they have a competent parent or guardian the limitation period is no longer suspended. It is becoming more common to see claims on behalf of children being brought soon after an injury.
The difficulty of discoverability
It took several years for claims to be brought where the discoverability period was in issue.
There was considerable uncertainty both about what constituted knowledge of ‘fault’ of a prospective defendant and where an injury was sufficiently serious to justify Court proceedings. Did ‘fault’ mean a potential defendant’s acts or omissions causing injury, that the defendant could have done something (or not done something) preventing injury, or that the defendant should have done (or not done) something? As to seriousness of injury, did a prospective plaintiff need to know they had an injury with either lasting effects or one which would cause them loss, or did they need to know any claim would exceed certain legislative thresholds for recovery of damages, such as for damages for pain and suffering or for gratuitous assistance?
What constituted ‘fault’ has previously been interpreted differently. In Victoria, ‘fault’ has been interpreted as knowledge that a prospective defendant should have acted differently (Vellar v Spandideas [2008] VSCA 139). Whilst some New South Wales District Court judges adopted a similar approach, or even went further to suggest a need for expert evidence to identify ‘fault’ in certain cases, others adopted an approach that knowledge of a prospective defendant’s acts or omissions causing injury, short of that they should have done something differently, was sufficient to constitute ‘fault’. Limited consideration had been given to what injuries would be sufficiently serious to justify commencing Court proceedings. One judge had suggested that a prospective plaintiff would need to know their injury and loss would exceed certain statutory thresholds.
Baker-Morrison – Clarifying discoverability and seriousness
On 26 May 2004, Shakyra Baker-Morrison’s right fingers were caught in automatic sliding doors at Gosford Police Station. On 21 June 2007, District Court proceedings were commenced against the State of New South Wales as having responsibility for the police station, being three years and 26 days following injury. Shortly after the injury, she had undergone partial finger amputation and tendon reconstruction. Her mother had first consulted a solicitor on 1 June 2004, who wrote to Gosford police that same day raising the possibility of a damages claim. Three days later, both inspected and photographed the door in question. The State subsequently applied to dismiss the proceedings upon the basis that the claim was outside the limitation period.
The District Court granted the State’s application. The judge observed that the intention of tort law reform had been to introduce more stringent criteria for limitation periods. He found that the mother’s knowledge of the police as occupier of the premises and her daughter suffering injury requiring hospital treatment was sufficient to suggest a prospective claim shortly after the injury. Accordingly, the claim was outside the limitation period. Miss Baker-Morrison then appealed the District Court’s dismissal of her claim.
In the intervening period, the New South Wales Supreme Court in Foster v QBE Insurance (Australia) Limited [2008] NSWSC 1004 approved the Baker-Morrison approach. As this was the first Supreme Court consideration of the issue, it was thought that this was indicative of the approach which would subsequently be followed in New South Wales.
The Court of Appeal set aside the District Court judgment and dismissed the State’s application for the claim to be struck out, ordering the State to pay Ms Baker-Morrison’s costs. Notably, the Court contained Ipp JA, the author of the report upon which tort law reforms were based.
Basten JA (with whom Ipp and Macfarlan JJA agreed) thought the District Court’s observation that the tort law reforms intended to introduce more stringent criteria for limitation periods was only partially true, as the new regime abandoned the rigidity of a commencement date for the limitation period based upon when damage crystallises. Accordingly, the limitation period may potentially not commence until a significant period of time has elapsed.
There was no dispute that Ms Baker-Morrison’s mother was aware of her injury. Ms Baker-Morrison’s solicitor had given evidence that, following his inspection of the premises, he had not decided she had reasonable prospects of success or that the police were at fault. Neither had he informed her mother that there were reasonable prospects of success, nor had her mother conveyed to him any belief in such prospects, before March 2005.
His Honour observed that the discoverability provisions used the term ‘fault’, as compared with the phrase ‘act or omission’ which was used elsewhere in the Limitation Act 1969 (NSW). Although he rejected that a prospective plaintiff would need to have an opinion on a prospective defendant’s legal liability, he observed that the report leading to tort law reform proposed a provision for discoverability which included injury attributable to a defendant’s negligent conduct. Whilst it was unnecessary to identify the precise nature of any claim, the ‘key factors’ necessary to establish liability need to be known. For Miss Baker-Morrison, until her mother either knew, or should have known, of the availability and reasonable practicality of action which could have prevented injury (in this case, a protective guard for the door), her mother could not have been aware that the State had caused her daughter injury by failing to take reasonable care for her safety. In terms of seriousness of injury, a prospective plaintiff needed both medical and legal advice in light of thresholds to recover damages. In justifying his approach, he cited the requirement for a solicitor to certify that the claim has reasonable prospects of success.
It is uncertain if the decision has been appealed to the High Court.
Implications
Baker-Morrison arguably completes an emerging trend, at least for the time being, of expecting both greater knowledge on the part of prospective plaintiffs of potential claims and for them to act more promptly in making a claim. It marks a shift away from looking more towards objective factors, towards more subjective factors in individual cases. It is now considerably more difficult for defendants and their insurers to both prove a claim is outside the limitation period, and to know before the plaintiff’s own evidence is available, whether there is any merit in raising a limitation period defence and / or seeking to have the claim struck out. It is likely fewer applications will be brought to dismiss claims for limitation period elapse, with such applications more likely to be made where there is clearly apparent delay for a number of years with no obvious reason.
If Baker-Morrison is not appealed, it is likely that a suitable case will be in the not too distant future. The likely outcome is somewhat difficult to predict. Whilst there is at least a credible argument that ‘fault’ merely constitutes a defendant’s actions (or inactions) causing injury, a significant difficulty with this argument is that ‘fault’ usually imports an element of culpability or wrongdoing. As to seriousness of injury, whilst it can be difficult to determine the size of a potential damages award, or whether certain thresholds will be exceeded, without medical or legal advice, it is also clearly open to argue that where a prospective plaintiff has suffered an injury which causes them loss, they should suspect an injury sufficiently serious to justify commencing Court proceedings and institute appropriate investigations, particularly where thresholds only exist for certain heads of damage, such as pain and suffering and gratuitous assistance.
Both defendants and their insurers need to be cautious in asserting limitation period expiry where the proper defendant’s identity is uncertain. Although this can be relatively clear in cases such as Baker-Morrison, it can be significantly more complex in institutional settings, such as workplaces or public spaces where different entities work together to provide services. Before Baker-Morrison, there were cases where a plaintiff could not have discovered a claim where identity of the proper defendant to sue was uncertain.
The issue is one to watch in the future, particularly the outcome of any High Court appeals and if the New South Wales Parliament legislates to clarify discoverability.
