Claims officers working for insurer claim departments come across lots of different collision scenarios. From straightforward ‘hit in rear’ or red/green traffic light disputes, to complicated scenarios such as drivers crashing when swerving to avoid livestock, claims officers are required to assess how a Court might determine liability in a wide-range of scenarios.
Over the years, it’s fair to say that a lot of ‘creative’ arguments have been pursued in contesting liability.
Below are five of the most common contentions that are still regularly put forward, despite their dubious legal backing.
“Your witness isn’t independent, so they don’t count”
Drivers aside, the most common witnesses to motor vehicle collisions are passengers in the vehicles involved. Typically, these people will have some sort of relationship with the driver of the vehicle: they might be a spouse, a child, a friend or a co-worker.
It is common for one party to discount the evidence of a passenger witness. And it is true that the witness’s relationship with the party is something the Court may take into account when determining the weight to give their evidence. However, the Court will not disregard a person’s evidence simply because they are ‘non-independent’. The Court will listen to all evidence presented, and judicial officers are typically reluctant to make findings that a witness is flatly lying unless there is a strong indication to that effect.
An independent witness can seriously tip the scales in favour of one party over another because of their perceived impartiality. However, it is important that non-independent witnesses are not discounted. The Court is required to determine, on the balance of probabilities, how the accident transpired. The evidence of a non-independent witness will often be enough to tip the scales in one party’s favour.
“Both parties reversing – EBO?”
Courts do not make findings of “EBO” (short for “Each Bear Own”), yet it is a common settlement reached between insurers. It is typically suggested by one insurer in circumstances where both parties appear to be equally responsible; two vehicles reversing into each other in a carpark is a common scenario. However, a Court will not make a finding in these terms.
Where a Court is of the view that parties share equal responsibility for the collision, liability will be apportioned between them on a 50/50 basis. In those circumstances, it is highly unlikely that an ‘EBO’ will be the final result. The Court will instead award each party 50% of their reasonable damages. Consequently, when two insurers agree upon an EBO because they share a view that both drivers are equally at fault, it is almost inevitable that one of those insurers will be short-changed; that is, the insurer bearing the higher loss (quantum) will lose out.
Before entering into an ‘EBO’ settlement, it’s vital claims officers consider the quantum of both claims, and the outcome if the matter were apportioned on a 50/50 basis.
“Let’s take the lights out of the equation”
When two cars travelling in perpendicular directions collide in an intersection, and both allege the other ran a red light, it can be difficult working out which version to believe. Seemingly as a result, at some point many years ago an idea emerged that parties should ‘take the lights out of the equation’, with the party ‘on the right’ having right of way and being found not at fault. (Presumably, this was first suggested by someone whose client was, coincidentally, travelling on the right).
This approach is incorrect. The Courts will not simply ‘take the lights out of the equation’. If a dispute of this nature is litigated, the Courts will consider all of the evidence and attempt to determine which party’s version should be accepted. The evidence of witnesses, dash cam footage, the credibility of the drivers and traffic light sequence reports can all be relevant. After considering these things, the Court will decide which party, on the balance of probabilities, ran the red light.
Of course, in some scenarios the Court might not be able to make a conclusive finding based on the evidence presented. However, the Court will not revert to a ‘give way to the right’ rule in those circumstances. There have been cases where the Courts, in those circumstances, have considered which party was in a better position to see the other on approaching the intersection (and is therefore perhaps more responsible), but the Court will not simply pretend the lights weren’t there.
Claims officers should be wary of ‘taking the lights out of the equation’ when determining liability. (Unless, of course, their insured was to the right of the third party).
“The police held your client at fault – we win”
In recent years, the number of motor vehicle collisions involving police attendance has declined. In most collisions, the police are not involved, and there is no formal report.
However, occasionally a police report will still be prepared following a collision. These reports are often relied upon by insurers and other parties in the course of negotiations to establish liability. However, their evidentiary weight in many cases will be negligible.
A police officer’s opinion as to who is ‘at fault’ for a collision is inadmissible as evidence in Court, and insurers should be wary to rely upon such a determination in deciding whether to accept liability. Instead, it is important to investigate why the officer made that finding. In some cases, there may be witnesses the officer spoke with, or other information (such as video footage) which resulted in the finding. Clearly, those things in themselves could be highly relevant for a Court. But in other cases, the determination may simply be an opinion of an officer based on their discussions with the two drivers, which in itself will not bear weight at a Trial. Moreover, in some situations the police have only spoken with one party when determining who is responsible.
Police reports can provide useful avenues of enquiry for insurers, but caution should be exercised in relying upon them when determining liability.
“Your client broke the road rules – pay up”
When motor vehicle property claims are litigated, the Court is generally asked to consider whether either or both of the parties were negligent. In coming to a decision, the Court will of course consider whether a person was driving in accordance with the applicable Road Rules; if a driver travels through a red light, for instance, it will be difficult for them to argue they were not negligent. However, the Court does not engage in a simplistic process of applying the ‘rules of the road’ in determining fault. When considering negligence, the Court is focused on whether a party has acted reasonably, and if they have not, whether their actions could foreseeably have caused harm.
In some cases, a party may have breached the Road Rules, but this might not have been the cause, or the major cause, of the collision. For example, a person may breach the Road Rules through unlawfully travelling in a bus lane, but if they are run into from behind by another vehicle doing the same thing, the Road Rules breach is unlikely to stop the Court finding that the rear vehicle is fully responsible.
The Road Rules are obviously relevant in determining liability, but the key is whether a party’s unreasonable driving resulted in a foreseeable loss.
If you have any questions in regards to this article, please contact James Mulcahy on 03 9947 4530 or the Ligeti Partners team on 03 9947 4500.