Australian Government Asbestos Litigation Unit

Transcription

1 Australian Government Asbestos Litigation Unit Review of the Dust Diseases Claims Resolution Process Legal Branch New South Wales Cabinet Office GPO Box 5341 SYDNEY NSW Comcare makes this submission in its capacity as the successor to and statutory manager of the common law asbestos-related claim liabilities of the Commonwealth and of Commonwealth authorities other than the Australian Postal Corporation, Telstra Corporation Ltd and their respective subsidiaries. This arises from the Asbestos-related Claims (Management of Commonwealth Liabilities) Act 2005 (Cth) (ARC Act). Comcare has established the Australian Government Asbestos Litigation Unit (AGALU) staffed by legal practitioners and support personnel to assist in carrying out this role. 2. This submission has been developed in consultation with: the Commonwealth Department of Employment and Workplace Relations, which has policy responsibility for Commonwealth asbestos liabilities; the Asbestos Litigation Cell of the Commonwealth Department of Defence, which manages Defence portfolio asbestos-related claims under a delegation from Comcare; the Office of Legal Services Coordination of the Commonwealth Attorney-General s Department, which has oversight of Commonwealth legal work and the Legal Services Directions 2005 (Cth) (LSD) issued under the Judiciary Act 1903 (Cth); and Comcare s external legal services providers in the Dust Diseases Tribunal (DDT) jurisdiction. 3. Comcare s is involved in asbestos-related claims primarily as a defendant to claims by asbestos-related disease sufferers or their dependants or estates, but it is also defendant to a significant number of crossclaims and occasionally a crossclaimant. Approximately two-thirds of the claims currently managed by Comcare are within the DDT jurisdiction, but with a continuing growth of claims in other jurisdictions and reduction of claims in the DDT.

2 4. Comcare has established and published its Asbestos Litigation Policy Statement (ALPS) to inform other parties and guide and instruct external legal services providers on the conduct and management of asbestos-related claims. A copy of ALPS is attached as Appendix A. Comcare practice and ALPS recognise and reflect that any Comcare asbestos-related claims expenditure must be a. within the purpose of the relevant appropriation of taxpayer funds to Comcare; b. consistent with the model litigant and financial claim obligations under the LSD; and c. satisfy the business judgment rule set out in the Commonwealth Authorities and Companies Act 1997 (Cth). Comcare endeavours to comply with the DDT claims resolution process (CRP) except where doing so would put it in breach of the above obligations. 5. The relatively small number of matters that have progressed through the CRP to date make an assessment of its effectiveness difficult at this stage. Comcare has yet to observe any evidence of a reduction in legal, administrative and other costs; fully supports the disclosure required by the Statement of Particulars (Form 1), as this enables investigation of the allegations asserted in the Statement of Claim and particulars, but notes delays in providing details of losses claimed defers commencement of meaningful settlement negotiations; notes that the review is directed to considering the effectiveness of the CRP in reducing legal, administrative and other costs and possible amendments to reduce such costs, but observes that costefficiency needs to be considered within the more fundamental issue of whether the CRP is effective in delivering justice or advances cost efficiency and interests of particular participants at the expense of the legitimate entitlements and expectations of others; considers there is a need for a further review, to consider the effectiveness of the CRP in delivering justice and, to the extent compatible with delivering justice, reducing legal, administrative and other costs, to be conducted in the 2007/2008 financial year. 6. Comcare s responses to the specific issues raised by the Issues Paper are attached in Appendix B.

3 APPENDIX A ASBESTOS LITIGATION POLICY STATEMENT 1. Introduction 1.1 The Asbestos-related Claims (Management of Commonwealth Liabilities) Act 2005 (Cth) provides for Comcare to (a) assume the liability for any common law asbestos-related condition claim made against the Commonwealth or, with certain exceptions, a Commonwealth authority; and (b) respond to the claim and manage the conduct of any proceedings (including any contribution claim or cross claim against any other liable party). 1.2 The claims referred to in paragraph 1.1(a) include claims against current and former Australian Government agencies and controlled companies but do not include claims made against the Australian Postal Corporation, Telstra Corporation Ltd and their respective subsidiaries. 1.3 Comcare has made delegations to officers of the Australian Government Asbestos Litigation Unit within Comcare and to officers of the Defence Legal Asbestos Litigation Cell for these purposes. 2. Application This statement sets out the policy to be followed in managing common law claims for asbestos-related conditions made against Comcare, the Commonwealth or a Commonwealth authority (other than the Australian Postal Corporation, Telstra Corporation Ltd and their respective subsidiaries). 3. Commencement This policy statement was developed in consultation with the Office of Legal Services Coordination of the Attorney-General s Department, the Asbestos Policy Unit of the Department of Employment and Workplace Relations and the Defence Legal Asbestos Litigation Cell and takes effect on and from 1 April Definitions For the purposes of this policy statement:- claim means a common law asbestos-related claim made against Comcare, the Commonwealth or a Commonwealth authority; claimant means a person who brings a claim and includes the person who suffers the asbestos-related condition or a dependant or personal representative of that person but does not include a cross claimant; compensation means damages in respect of the losses suffered by the claimant and the legal costs reasonably incurred by the plaintiff in pursuing the claim; cross claimant means a defendant who makes a claim for contribution from Comcare, the Commonwealth or a Commonwealth authority;

4 defendant means any person who is, or may be, liable to contribute to any compensation payable in respect of the claim; final settlement means a settlement under which the claimant is compensated for all ascertained and yet to be ascertained losses and operates as a full and final discharge of Comcare s liability to the claimant; provisional settlement means a settlement under which the claimant is compensated for losses already ascertained and operates as a discharge of Comcare s liability to the claimant save for any losses yet to be ascertained, and includes, but is not limited to, a settlement under section 11A(2)(a) of the Dust Diseases Tribunal Act 1989 (NSW) or section 9(1) of the Dust Diseases Act 2005 (SA); settlement means an agreed resolution of a claim, whether final or provisional. 5. Management Objectives 5.1 Claims shall be managed pursuant to this policy statement as follows: (a) in accordance with legal principles and practice; and (b) with the objectives of (i) expediting the payment of compensation where liability is admitted or established and (ii) minimising the cost to taxpayers by recovering contributions from other defendants where practicable. 5.2 To facilitate the objective in paragraph 5.1(b)(ii) a claimant may be required to provide affidavit evidence that, to the best of his or her recollection, identifies: (a) any other defendant; and (b) the events or things tending to establish the liability of such defendant; before any settlement will be entered into or the claim is otherwise resolved on a provisional or final basis. 5.3 Priority in the management and resolution of claims in accordance with this policy statement will be given to: (a) claims by plaintiffs near death over claims by other plaintiffs; (b) claims by plaintiffs who suffer malignant conditions (such as cancer or mesothelioma) over claims by plaintiffs who suffer asbestosis and nonmalignant asbestos related conditions (such as asbestos-related pleural diseases and pleural plaques); (c) claims by plaintiffs who suffer moderate or severe asbestosis over claims by plaintiffs who suffer mild asbestosis or asbestos-related pleural disease or pleural plaques; (d) claims by plaintiffs who suffer mild asbestosis, asbestos-related pleural disease or pleural plaques over claims by dependants or personal representatives of persons who have died as a result of an asbestosrelated condition; and (e) claims by claimants over claims by cross claimants. 6. Settlement Protocols 6.1 When to Settle Reasonable endeavours to settle a claim should be made whenever the available evidence provides a meaningful prospect of liability being established. In considering whether to agree to a settlement, regard is to be had to: (a) legal principles and practice;

5 (b) (c) whether agreement can be reached on a fair and just amount by way of damages and costs, the amount by way of costs being an agreed or assessed amount in respect of legal costs actually and reasonably incurred by the plaintiff; and whether the settlement would prejudice the recovery of a contribution from any other defendant. 6.2 Death, Malignant Conditions and Moderate-Severe Asbestosis Any settlement of a claim (a) in respect of a death resulting from an asbestos-related condition; or (b) by a plaintiff near death; or (c) by a plaintiff who suffers cancer, mesothelioma or moderate to severe asbestosis; shall be a full and final settlement in respect of all ascertained and unascertained injuries or losses caused or contributed by the exposure of the deceased or claimant to asbestos. 6.3 Mild Asbestosis, Asbestos-related Pleural Diseases (excluding Pleural Plaques) Except as provided by paragraph 6.3.4, any settlement of a claim by a plaintiff who suffers mild asbestosis or asbestos related pleural disease (not being merely pleural plaques) is to be by way o provisional settlement A settlement under paragraph shall be without prejudice to the recovery of compensation if, but only if, the claimant undergoes screening as provided for by paragraph and such screening establishes that the claimant has developed cancer, mesothelioma or severe asbestosis The terms of any settlement under paragraph shall include provision for the claimant to undergo regular medical screening, with such screening to be arranged and paid for by Comcare A final settlement of a claim by a claimant referred to in paragraph will only be considered if Comcare is provided with a certificate in writing by a legal practitioner acting for the claimant that such practitioner has advised the claimant of the consequences of settling on a final basis The terms of any settlement under paragraph shall include an acknowledgement by the claimant that he or she has elected a final rather than provisional settlement having received legal advice on the consequences of doing so. 6.4 Pleural Plaques Where a plaintiff suffers pleural plaques only: (a) no settlement will be considered unless and until a further asbestosrelated condition is evidenced; (b) if the claimant has commenced proceedings against Comcare, the Commonwealth or a Commonwealth autrhority, consideration will be given to the providing an undertaking not to take any steps to have the proceedings struck out for want of prosecution within three years of the date of the undertaking; (c) an undertaking referred to in paragraph 6.4(b) will only be given if the claimant agrees in writing to undergo medical screening, with such screening to be arranged and paid for by Comcare, during the period of the undertaking; and

6 (d) the provision of an undertaking referred to in paragraph 6.4(b) above will not constitute an admission of liability by Comcare, the Commonwealth or a Commonwealth authority. 6.5 Certification of settlement Before any settlement is entered into under this policy statement a legal practitioner who acts for Comcare must have certified in writing that the settlement amount is fair and reasonable. 6.6 Settlement Requirements A settlement in accordance with this policy statement shall be evidenced by: (a) signed Terms of Settlement, a Deed of Release and a signed Authority to Receive, each in a form acceptable to Comcare; or (b) signed Terms of Settlement, sealed Court order(s) and a signed Authority to Receive, each in a form acceptable to Comcare The Terms of Settlement shall include a provision acknowledging Comcare s obligation to, and authorising Comcare to, deduct or pay from the settlement amount any monies payable to: (a) Medicare Australia under the Health and Other Services (Compensation) Act 1995 (Cth) or Health and Other Services (Compensation) Care Charges Act 1999 (CTh); (b) Centrelink under the Social Security Act 1991 (Cth) or Disability Services Act 1986 (Cth); (c) Comcare under the Safety, Rehabilitation and Compensation Act 1988 (Cth); (d) Military Rehabilitation and Compensation Commission under the Military Rehabilitation and Compensation Act 2004 (Cth) or Safety, Rehabilitation and Compensation Act 1988 (Cth); (e) Department of Veterans Affairs under the Veterans Entitlements Act 1986 (Cth); and any other social welfare, sick leave, workers compensation, private health insurance or the like benefits that may become repayable by reason of the settlement amount becoming payable to the claimant. Approved: 13 March 2006 Barbara Bennett Chief Executive Officer

7 APPENDIX B COMCARE RESPONSE TO SPECIFIC ISSUES IN ISSUES PAPER Issue 1: Delays in serving the Statement of Claim and Statement of Particulars Does the period between the filing and serving of the Statement of Claim cause any difficulty for defendants? What are they? Yes. The Statement of Claim and Statement of Particulars are increasingly being delivered well after filing of the Statement of Claim. Where this does not occur, there is often a significant delay between delivery of the Statement of Claim and provision of the Statement of Particulars and, not infrequently, a further significant delay in remedying critical omissions from the Statement of Particulars. Both these circumstances cause significant difficulties to Comcare. As successor to the common law asbestos-related claim liabilities of the Commonwealth and Commonwealth authorities (other than the Australian Postal Corporation, Telstra Corporation Ltd and their subsidiaries) Comcare may be unable to identify the Commonwealth agency or authority ( or its operational successor) the alleged asbestos exposure relates to until receipt of the Statement of Particulars. Identification of that agency or authority, and of the location, nature and period of alleged asbestos exposure, is essential to investigation of the alleged exposure. This problem most commonly arises where the plaintiff alleges exposure as a contractor, subcontractor or contractor s employee or by transfer from such a person. Further, by delaying delivery of the Statement of Particulars plaintiff lawyers gain additional time to build a case, conferring an advantage compared to the more tightly regulated response time allowed Defendants. This is a particular problem, and has an unfair effect, where the claimant has multiple conditions, given the evidentiary onus on defendants to disentangle the impairments arising from compensable and noncompensable conditions. Could the period be reduced or made subject to specified limits, without creating unfairness to plaintiffs? How? Yes. Subsection 20(1) of the Regulations should be amended to require the Statement of Particulars to be completed and served as soon as practicable and, consistent with the time limit in the Uniform Civil Procedure Rules, in any case by not later than 6 months after the filing of the Statement of Claim. The named defendant(s) should be entitled served with and heard on any application for extension of this limit. Do parties, in some circumstances, not follow the requirements of the CRP as to Statements of Particulars? If so, in what circumstances? Does this help or hinder resolution of claims? Yes, in claims in respect of malignant conditions where a link between the alleged exposure and defendant is clear and no real issue of loss of earnings arises. These claims will usually resolve by negotiated settlement outside the CRP framework except where another defendant insists on the CRP.

8 Issue 2: Removal of urgent claims Are the provisions of the Regulations relating to the removal of urgent claims operating as intended? If not, how should they be changed? Yes. Issue 3: Removal of claims prior to information exchange Are there circumstances other than those currently prescribed by the Regulations where claims should be removed from the CRP? If so, for what reason? How have such cases caused difficulty in claims under the Regulations to date? Yes, where the claim is in the nature of a test case and this is obvious to and agreed by all parties prior to service of the Statement of Particulars and Reply or Replies. Issue 4: Dormant claims Do dormant claims impose costs on any parties? If so, what costs, and how do they arise? Yes, primarily in relation to claims in respect of pleural plaques where any significant loss is yet to be suffered and the claim has been lodged in case the claimant develops asbestosis or a malignant condition. Comcare seeks to reduce costs by agreeing to defer legal activity for up to 3 years pending diagnosis of such a further condition, but the CRP does not accommodate this. Is there a need to amend the Regulations to require that steps be taken in relation to transitional claims where no action is taken by the plaintiff within a reasonable period of time? If so, how? Yes, the defendants should be entitled to apply to have the claim transferred out of the CRP or the CRP postponed. This should either be by agreement of all parties, see answer to previous question, or automatic where 12 months have elapsed without serving a claim proposal or, unless previously filed, a Statement of Particulars. Issue 5: Flexibility of the timetable Are there particular stages of CRP where the timetable is creating difficulties for parties? What alternatives are there, if any, which would enable the timetable to be varied (either generally or in specific cases) while ensuring that claims continue to be resolved promptly? Yes, Comcare has particular difficulties in respect of those liabilities it inherited from the Commonwealth which were liabilities the Commonwealth inherited from various non-metropolitan State railways transferred to the Commonwealth in the 1970s. The relevant records are generally still held by an agency or authority of the relevant State, not the Commonwealth. As many of these claims are for malignant conditions the CRP timetable is usually impossible to meet. Further, on occasions mediations have been postponed due to the non-provision of medical reports or other necessary information. Issue 6: Filing fees for the commencement of cross-claims Is there a need to clarify the provisions of the Regulations to make it clear that the first directions hearing fee applies to cross-claims? Alternatively, should the separate fees for commencing crossclaims and the first directions hearing fee be combined into a single fee? Clarification is required and a combined fee may be simpler.

9 Issue 7: Adequacy of Statement of Particulars and Reply Is all necessary and relevant information being provided as part of the Statement of Particulars and Reply? Yes, but usually the particulars are only complete well after the timetable. Are parties clearly identifying information which is not available and indicating when it will be available? Yes to the first and occasionally to the second, with ambiguous and indefinite time indications (eg as soon as possible/as soon as investigations are completed) being common. Are parties updating the information as and when required? Generally, but it is sometimes apparent delayed information was known and could have been provided earlier. Is information required by the forms which is not really necessary? No, although plaintiff lawyers sometimes pressure defendants who are not manufacturers/suppliers to supply information only applicable in the case of a manufacturer/supplier Issue 8: Part 6 of the Statement of Particulars Should Part 6 remain as part of the Statement of Particulars Except in those cases where there is no claim for economic loss (apart from medical costs), the Part 6 particulars or a claim proposal containing the same information is necessary to informed settlement negotiations. Where the claim is limited to general damages and medical costs only Part 6 could be waived. Issue 9: Medical authority Are additional measures necessary to encourage plaintiffs to provide a medical authority to enable defendants to access medical records without the need to issue a subpoena? Yes, Comcare will have recourse to subpoenas in the absence of an authority as the proper diagnosis and the extent to which other medical conditions contribute to impairment and loss always require investigation. Issue 10: Defendant s Reply - Timetable Is the current timetable for defendants to file their Reply appropriate? No, see answer to issue 5 above. The necessity of leaving matters unanswered in the Reply until investigations can be completed can introduce further contention and costs that would be avoided by having a more generous and fairer timetable. Issue 11: Standard Defence Replies and Joint Replies What would be the advantage and disadvantages, if any, of a system which enables a Standard Reply to be filed with the Tribunal? Would it assist in reducing costs? Standard and joint replies are not supported.

10 Should defendants be able to file joint Replies? No. Issue 12: Sanctions for failing to comply with the timetable Are additional measures necessary to ensure that parties comply with the timetable? If so, what measures should be introduced and how could they be made most effective? Not at this stage. This should be considered in a further review in 12 months. Issue 13: Medical and Expert Reports - Plaintiffs Has the overall number of medical and other expert reports obtained by plaintiffs declined as part of the CRP? Are reports still being obtained unnecessarily by plaintiffs? If so, what options should be considered to further encourage parties to minimise the number of unnecessary reports? Apart from a slight reduction in service of occupational therapist reports no consistent change has been observed. Additional reports to clarify and comment on issues raised by other reports are necessary and discouraging the addressing of these issues will prolong resolution unnecessarily. Issue 14: Medical and Expert Reports - Defendants Has the overall number of medical and other expert reports obtained by defendants declined as part of CRP? No consistent change observed. Are plaintiffs being required to undergo medical examination and are reports being obtained by defendants unnecessarily, particularly in regard to disputing diagnosis? If so, what options should be considered to further encourage parties to minimise the number of unnecessary reports? Not in Comcare s experience. Issue 15: Resolution prior to mediation Could the Regulations better encourage parties to enter into settlement discussions prior to mediation? If so, how? Subject to the concerns and qualifications already expressed about the timetable for exchange of information, Comcare observes that there have been a significant number of settlements prior to or during but outside mediation. A significant factor appears to be plaintiff lawyers being better prepared to make detailed claims, rather than ambit style claims, enabled by the greater plaintiff preparation required by CRP. Issue 16: Additions or alternatives to mediation Should additions or alternatives to compulsory mediation be considered? More experience and evidence on compulsory mediation is required before introducing alternatives. It is noticed CRP does not preclude the negotiation of settlements outside the CRP process. Issue 17: Mediator s Fees Should fees charged by mediators be regulated? If so, how? Insufficient experience and evidence to justify intervention at this stage.

11 Issue 18: Objections to mediators Should a process be introduced which requires mediators to disclose to the Registrar for whom they have acted in dust diseases litigation? Comcare has not experienced any problems but agrees such a process may be useful. Issue 19: Participation in mediation Is there a need for additional measures to encourage parties to engage in mediation in good faith? If so, what form should these measures take? No sanction, beyond a report by the mediator that a party did not engage in good faith which can be taken into account on party/party costs, should be necessary. Issue 20: Delays in finalising contributions assessments Is there any evidence to suggest that the inclusion of cross-claims within the system is contributing to delay for plaintiffs? If so, how? Too early to say. Are contributions assessors being appointed, failing agreement of the parties, as and when required by the Regulations? If not, why not? Should amendments be made to address any identified problems? Too early to say. Issue 21: Operation of the contributions assessment provisions Are defendants behaving more commercially in relation to contributions disputes? If not, why not? No evidence apparent at this stage. Does the system disadvantage any particular class of defendants? Not to Comcare s knowledge. Issue 22: Standard presumptions relating to apportionment Is there a need to vary specific aspects of the standard presumptions set out in the Dust Diseases Tribunal (Standard Presumptions Apportionment) Order 2005 as a result of recent decisions, or for other reasons? If so, provide details of the basis for your view. Not at this stage. Issue 23: Application of the apportionment provisions once the claim with the plaintiff has settled Should contributions assessments be undertaken in accordance with the current timetable in multiple defendant claims in circumstances where progress of the plaintiffs claim through the CRP has been suspended due to the death of the plaintiff? Only if the majority of defendants agree. Should the contributions assessment provisions be applied in cases where cross-claims remain after the plaintiff s claim has settled or where cross-claims are brought separately from the plaintiff s claim? No.

12 Issue 24: Submissions to contributions assessors Are significant costs being incurred in preparing detailed submissions for contributions assessors? Is this causing any delay? Are measures necessary to discourage this practice? Not in Comcare s experience. Whilst the contributions assessor is directed to make an assessment based on the Statement of Particulars and Replies there is capacity for the parties to supply additional particulars/replies and may be circumstances where the assessor may seek further information to resolve ambiguities in material provided. Comcare would support the regulations being amended to allow submissions with the leave or at the request of the assessor. Issue 25: Variation of contribution assessments Should a power be introduced to enable a contributions assessor to correct his or her determination? If so, what limits should apply to such a power in order to ensure that the existence of such a power is not abused by defendants seeking to challenge the apportionment determination? Yes, equivalent to the slip rule. Issue 26: Objections to contribution assessors Is there a need for a more formal process to require contributions assessors to address conflicts of interest where they have acted for, or against, one or more of the parties who may be affected by their determination? Yes, unlike mediators, contributions assessors have a quasi-judicial role that requires perceived independence. Issue 27: Joining other defendants Are additional measures necessary to ensure that all defendants who should be a party to a claim are joined? Yes, especially in the case of claims for non-malignant conditions where a defendant has, and CRP should fully recognise the defendant as only having, proportionate, not joint and several, liability. The claimant, who bears the evidentiary onus of establishing the fact and circumstances of exposure should always bear primary responsibility, to both identify and join defendants. It is unfair and inefficient to expect defendants to do so where the relevant facts are matters within the claimant s knowledge (such as in respect of defendants who employed or otherwise engaged the claimant s services). It is only appropriate for defendants to be responsible for joining other defendants in respect of their own contractors or suppliers, these being matters within their rather than the claimant s knowledge. Issue 28: Single claims manager Has using a SCM been effective in reducing costs? Too soon to answer, Comcare considers use of a SCM to be incompatible with its statutory functions and responsibilities under Commonwealth law and will not authorise another Defendant to represent it except by prior agreement as to conduct of the matter. Has using the SCM had benefits for plaintiffs? Has using a SCM had benefits for defendants? Not with Comcare s knowledge.

13 What has been the experience of those defendants which have acted as SCM? Not applicable What improvements (if any) could be made to the system? No comment. Issue 29: Form 3 returns Should any additional information be collected as part of the Form 3 Return? How can the layout of the form be improved? Is any information required by the Form 3 Return not useful? No comment. Issue 30: Costs inclusive settlements Has anything changed in the last 12 months to such an extent that it would be appropriate to reconsider the issue of cost-inclusive settlements? No, in our experience plaintiff lawyers continue to pursue cost inclusive settlements: with the proportion of the settlement amount received by the claimant being obscured. Anecdotal evidence suggests net claimant receipts may be significantly lower than legal costs disclosures in the Form 3 would suggest. Issue 31: Additional data Is the data presented in Chapter 2 of the Issues Paper useful, in whole or part? Is there any other breakdown or analysis of the data which stakeholders would consider useful? Yes, but the quality and quantity of data is inadequate to enable this review to draw sustainable conclusions. Issue 32: Further Review Should a further review of the CRP s operation be conducted in 12 months time? Yes, but unlike this review, it should also address whether CRP has been effective in delivering justice with actual and potential cost savings being considered within that over riding principle.

14