ACC 2

The effect of s 317 in relation to torts 2

Statutory bar on proceedings for personal injury 2

Personal injury 2

Bringing proceedings for exemplary damages 3

The philosophy behind s 317 4

The Woodhouse Report 4

The Accident Compensation Scheme as a “Social Contract” 4

McGougan 5

ACC

Lecture 34: (04/08/20)

The effect of s 317 in relation to torts

Statutory bar on proceedings for personal injury

Section 317 Proceedings for personal injury

(1) No person may bring proceedings independently of this Act, whether under any rule of law or any enactment, in any court in New Zealand, for damages arising directly or indirectly out of— (a) personal injury covered by this Act; or (b) personal injury covered by the former Acts.

• Bars any right to sue for damages arising directly or indirectly out of personal injury covered by the Act.

• Thus, a claimant may not rely on the law of torts – and most relevantly, the tort of negligence – to seek damages for personal injury that is covered by the Act.

• Whether nor not the law of torts continues to be available comes down to whether the claimant has cover for the personal injury, and whether the proceedings are for damages arising out of the personal injury.

In return for barring the claimant’s right to sue, the Act offers an entitlement to claim compensation under the Accident Compensation Scheme (ACS).

• A claimant’s right to compensation depends on whether personal injury is covered by the Act.

• If it is covered, the claimant may be entitled to a range of entitlements, including rehabilitation, compensation for loss of earnings, and lump sum compensation for permanent impairment.

Personal injury

The personal injury must be of a kind covered by the Act, and it must have been sustained in the prescribed circumstances.

• Under s 20, the personal injury must be of a kind described in s 26(1)(a), (b), (c) or (e), and it must have been sustained in the circumstances described in s 20(2).

• For the purposes of s 20, s 26(1) includes death, physical injuries (including, eg, a strain or a sprain), mental injury suffered by a person because of physical injuries, damage (other than wear and tear) to dentures or prostheses that replace a part of the human body.

There is cover provided the personal injury was (s 20(2)):

• Caused by an accident to the person (see s 25 on the meaning of “accident”),

• Treatment injury suffered by the person,

• Consequence of treatment for personal injury, or

• Caused by a work-related gradual process, disease, or infection suffered by the person.

Bringing proceedings for exemplary damages

Section 317 applies only to proceedings for damages arising out of personal injury. This may raise the question whether a particular claim relating to personal injury falls within the scope of s 317.

Compensatory damages for personal injury is barred:

• A claim seeking compensatory damages for personal injury is necessarily barred by s 317

• A claim in negligence that the defendant compensate the plaintiff for loss of income arising out of personal injury cannot be brought.

Exemplary damages are not barred, even where claim is founded on personal injury:

• The purpose of exemplary damages is to punish and deter, rather than to compensate. Exemplary damages are only available in cases of intentional or reckless wrongdoing.

(b) Donselaar, affirmed in Couch

• Actions for exemplary damages are not barred by s 317, which was aimed at actions for compensation. Exemplary damages “did not arise out of the plaintiff’s injury”. It was immaterial that personal injury was a necessary ingredient of the action (Couch).

Cf reparation: not barred

• In Davies, the Supreme Court held that s 317 barred the making of a reparation order in criminal proceedings. This decision was reversed by the Sentencing Amendment Act 2014.

Section 319 Exemplary damages

(1) Nothing in this Act, and no rule of law, prevents any person from bringing proceedings in any court in New Zealand for exemplary damages for conduct by the defendant that has resulted in—(a) personal injury covered by this Act; or (b) personal injury covered by the former Acts.

The philosophy behind s 317

Lecture 35: (06/08/20)

The Woodhouse Report

In earlier times, compensation looked to the interest harmed – little regard for quality of conduct which caused the harm

• The event determined liability – strict liability.

• Right to indemnity – law tries to put plaintiff back into the position they would have been in if the harm had not occurred....

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