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Date: Mon, 7 Aug 2006 17:54:09 +1000

From: Neil Foster

Subject: New Compensation Act for UK


Dear Colleagues;

In case it becomes relevant it may be worth noting that ss 1 and 2 have reasonably close equivalents in the Civil Liability Act 2002 (NSW). CA 2006 (UK) section 1 is similar to CLA 2002 (NSW) s 5B(2)(d), which provides that

In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things) ... (d) the social utility of the activity that creates the risk of harm.

It seems that "social utility" is similar to the notion of "desirability" (ie presumably something is "desirable" not just because someone desires to do it, even if that someone is a judge, but because there is some objective ie "social" desirability?) Not much jurisprudence yet on the question of the "social utility" of activities, though we do have some obiter comment on it by Ipp JA in Waverley Council v Ferreira [2005] NSWCA 418 at [50] (example of need to speed by an ambulance taking a patient to hospital). In Haris v Bulldogs Rugby League Club [2006] NSWCA 53 at [60] it is suggested that football is a "socially useful" activity (a proposition that might also find some support in the UK?).

CA 2006 (UK) section 2 is similar to CLA 2002 (NSW) s 69 - not much reported on that yet either, but it does seem like a sensible provision which may encourage people to take the sting out of harm they have caused before it gets too far.


Neil Foster

Neil Foster
Lecturer & LLB Program Convenor
School of Law
Faculty of Business & Law
University of Newcastle
Callaghan NSW 2308
ph 02 4921 7430
fax 02 4921 6931


>>> Richard Lewis 5/08/06 12:10:03 >>>

Members may be interested in the new UK Compensation Act. The politics of tort continues apace?

(The new regulator of the claims companies is to be the former director of the Association of British Insurers).

OPSI website: 26 July 2006
Compensation Act receives Royal assent
The new Compensation Act 2006 has received Royal assent and is available to download from the OPSI (formerly HMSO) website.
The amended Part 1, section 3 incorporates wording to overturn the recent House of Lords decision of Barker v Corus.


According to the DCA

The Compensation Act is an important step in tackling false perceptions of a compensation culture. It will ensure that there is proper regulation of those who manage compensation claims.

For too long people have been pressured into making claims by "hard sell" tactics and misled by inappropriate and aggressive advertising. This legislation will make those who sell such services conform to strict rules of conduct and deal with their clients honestly.

Victims of mesothelioma, a form of lung cancer, will also benefit from the new Act. It will ensure that those suffering from mesothelioma due to another's negligence will be able to receive full compensation from any responsible person as quickly and easily as possible. The responsible person will then be able to claim back contributions from other responsible persons.

The Act also confirms that courts considering what standard of care is reasonable in a claim for negligence or breach of statutory duty can take into account whether requiring particular steps to be taken to meet the standard of care would prevent or impede a desirable activity from taking place. This will improve awareness of this aspect of the law and will help to ensure that normal activities are not prevented because of the fear of litigation and excessively risk averse behaviour.


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