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Ferguson, Judith --- "The political economy of personal injury law by Peter Cane" [2009] OtaLawRw 14; (2009) 12 Otago Law Review 221

Last Updated: 26 February 2012

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^{The Political Economy of Personal Injury Law}

(by Peter Cane, the McPherson Lecture Series Volume Two, University of Queensland Press, 2007)

The book reviewed comprises Professor Peter Cane’s contribution to the annual McPherson Lecture series hosted by the TC Beirne School of Law at the University of Queensland. Professor Cane delivered the three lectures in March 2007 and their publication reflects again his outstanding scholarship and adds to his significant contribution to learned legal debate in the area of both public and private law.

The lectures are tightly constructed, leading the reader through first a political and then an economic analysis of personal injury tort law. Regulation, Compensation, Responsibility and Law-making are the headings under which the distribution of risk and the redistribution of resources involved in resolving personal injury actions are justified by political theorists such as Calabresi, Ison and Atiyah and economic theorists such as Kaplow and Shavell. Problematic areas of personal injury tort law are acknowledged – in particular, the very high administrative costs and the ineffectiveness in providing a remedy for all who might require it. The iconic aspects of personal injury tort law

– fault, causation and full compensation – are also held to account for their role in making life difficult for litigants and in adding to current dissatisfaction.

In the third lecture, ‘The Political Economy of a Mixed System,’ Professor Cane concludes with a call to consider legislative reform of tort law which would minimize the acknowledged negative aspects of the tort system and would make constructive use of the other ‘external’ support already in place for those suffering personal injury, such as social welfare measures and strict liability regimes like workers’ compensation schemes. But he will not consider letting go of the tort system for personal injury as we have here in New Zealand.

At the beginning of the first lecture, Professor Cane classifies the opposing approaches towards tort as a way of dealing with personal injury as abolitionist or incrementalist. As their label implies, abolitionists would do away with tort as a way of dealing with personal injuries. It no longer provides an economic or effective remedy for many litigants. Incrementalists, on the other hand, while acknowledging problems, prefer to work within the existing structures to try to adjust and change the tort system to address those problems. Abolitionists, in Professor Cane’s view, are in many respects observant, insightful and persuasive, but ultimately unrealistic – ‘utopian’ – in their radical prescription for the future. The more conservative incrementalists, while lacking an appreciation of the political, economic and social environment in which we now operate in the 21^st century, have what Professor Cane refers to as a positive ‘strategic realisation’ of the need to work with the materials at hand. In other words, they do not question the need for tort law, accepting that it is here to stay. The task is to develop it internally to

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^{deal more effectively with the challenges at hand.}

Although Professor Cane acknowledges the strength of the arguments of the abolitionists, he too is unwilling to abandon the traditional, to step bravely outside the square and consider a radically new world.

While not clearly putting forward a specific template for reform to the acknowledged personal injury problem in Australia, Professor Cane’s solution is one of compromise. He writes of a ‘minimal’ tort regime combined with external remedies for those for whom the law of tort does not provide a remedy. Legislative reform is suggested as the preferred mode of reform. The law of tort for personal injury might be less costly and more effective if the proof of fault requirement were lessened in favour of an approach using strict liability. But he insists that the abolitionists’ approach, ‘in the circumstances of 21^st-century Australia, [is] totally unrealistic.’ (p 4)

We, in New Zealand, owe much to our leading abolitionist, Sir Owen Woodhouse, and those who were courageous enough to implement his vision in our Accident Compensation Scheme almost forty years ago in the 1970s. We were fortunate that the opportunity arose at a political and economic moment in time when we were able to abolish tort law as a way of dealing with personal injury. While there will always be room for improvement, the formidable problems of cost and limited effectiveness of the tort system in Australia acknowledged by Professor Cane have largely been avoided here.

One irony is that while we have removed one of the costly elements of personal injury tort law – the requirement to prove fault – the other costly element noted by Professor Cane – the need to prove causation

– is proving to be increasingly problematic and costly both in time and resources even within the Accident Compensation Scheme. Many of the problems arise at the interface between personal injury and sickness where ACC will cover only those whose conditions are caused by accident, are workplace injuries or are treatment injuries (the old medical misadventure cover). If only those early abolitionists had been brave enough to take the full plunge and cover both injury and sickness within the initial scheme!

While I respect Professor Cane’s views, the latent idealist within me is still looking for a more convincing rejection of the abolitionists’ views than that given in the lectures. It is disappointing that courage and vision, even if ‘utopian,’ must give way to pragmatism and a reluctance to let go of traditional structures. If the abolitionist arguments are as ‘strong and securely based in a reasoned appreciation of what we know about the way tort operates in practice’ (p4), then it is disappointing that they should be recognized yet rejected as being too idealistic. When it comes to considering alternative solutions, maybe there is still a role, particularly in academic debate, to challenge the political and the economic analysts again with the question ‘Why not?’ It may have been a unique moment of opportunity for us in New Zealand in the 1970s, but maybe such windows of opportunity are only recognized in retrospect. The real moving force

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for us was one man’s vision and his disciplined, convincing exposition and supporting reasoning.

Judith Ferguson, Faculty of Law, University of Otago.