Written by Kristin van Meeuwen
In July 2020, on a semi-rural road in Dural, New South Wales a vehicle driven by Wendy Richards crossed over the centre line into oncoming traffic, and collided, head-on, with a vehicle travelling in the opposite direction. Ms Richards was injured and subsequently made a claim for statutory entitlements under the Motor Accident Injuries Act 2017 (NSW) (‘the MAIA’). What ensued in the case of Insurance Australia Limited v Richards [2023] NSWSC 909 was a matter involving the interpretation of the statutory entitlement provisions of the MAIA, the operation of the doctrine of res ipsa loquitor, and the changing burden of proof between a claimant and an insurer.
NSW CTP Insurance Explained
Generally, Compulsory Third Party (‘CTP’) Insurance covers the cost of compensation claims for injury to others (‘third parties’), with the cover varying across each Australian Jurisdiction.
In NSW, the MAIA, offers a no-fault scheme which provides statutory benefits for persons who suffer injuries in a multi-party accident, regardless of fault (unless the injured person is charged with a serious driving offence).
Relevant to Ms Richards’ claim, the no-fault benefit period at the time was up to 26 weeks, with the MAIA allowing injured parties to claim for benefits beyond that period (up to 52 weeks) if the accident was not wholly or mostly caused by the injured person (or for certain injuries).
What Caused the Accident?
Ms Richards could offer no direct evidence as to the cause of the accident. However, she informed the investigating police that she had taken medication, which may have caused drowsiness, possibly triggering a micro sleep. Witnesses reported that Ms Richards’ driving behaviour before the collision showed no signs of erratic driving, and that there were no road hazards present.
The issue as to the cause of the accident, or more precisely, whether and to what extent Ms Richards was at fault for the accident, became relevant in relation to whether Ms Richards had any entitlement to the additional statutory benefits (beyond the initial 26 weeks available at the time).
In relation to this, NRMA, the CTP insurer, denied it was liable for damages beyond 26 weeks, and asserted Ms Richards was mostly at fault for the accident. NRMA based its denial on the doctrine of res ipsa loquitur. This Latin phrase literally translates to “the thing speaks for itself”, and the doctrine, when applied, leads to a finding that the mere occurrence of the incident or loss is sufficient to imply negligence.
The Findings of the New South Wales Personal Injury Commission
At first instance, the Personal Injury Commission (‘PIC’) noted that NRMA had the burden of establishing that Ms Richards was not entitled to statutory benefits beyond the initial 26 weeks, and flowing from that, had the onus of proving Ms Richards was at fault or mostly at fault for the accident, and that the doctrine of res ipsa loquitur applied.
In relation to the application of the doctrine of res ipsa loquitur, the PIC found that, despite the cause of the accident having been identified as Ms Richards’ vehicle swerving onto the wrong side of the road, ‘the reason for this manoeuvre has not been positively identified. In the circumstances, it was not appropriate to apply the doctrine of res ipsa loquitur’.
The PIC concluded that there was insufficient evidence to infer negligence on the part of Ms Richards (by way of the res ipsa loquitur or otherwise).
The PIC’s finding was curious. The res ipsa loquitor approach is often applied in circumstances where the cause of the incident cannot be confidently determined, but where experience would suggest it was due to one party’s negligence based on the nature of the event itself (e.g. a car inexplicably veering onto the wrong side of the road). Ironically, in this case the PIC found the very uncertainty of the incident’s cause meant the doctrine had no application.
The PIC also found it was most likely that Ms Richards swerved into the path of the oncoming traffic in order to take evasive action when she ‘unexpectedly found herself in a situation, which was not of her making to which she was forced to react suddenly, and unexpectedly, and move into the path of the [other] driver’. It is noted there was no evidence of there being any hazard Ms Richards needed to avoid. It is also noted that making a determination in relation to a likely cause of the incident is of itself sufficient to displace the doctrine of res ipsa loquitur.
The Judicial Review to the Supreme Court of New South Wales
NRMA disagreed with the decision of the PIC and sought a judicial review in the Supreme Court of New South Wales. The Court there confirmed the burden of proof falls on an insurer when seeking to establish an accident was wholly or mostly caused by the claimant.
In relation specifically to the doctrine of res ipsa loquitur, the Court commented that, whilst NRMA bears the onus of proof, it is entitled to rely on res ipsa loquitur when faced with an unexplained accident, especially when negligence can be inferred from unexplained facts.
The Court stated:
- ‘‘Res ipsa loquitor is not a distinct, substantive rule of law, but an inferential reasoning process, applied where [the party asserting it] bears the onus of proof in relation to alleged negligence”;
- “While the burden of proof does not alter, the doctrine may permit negligence to be inferred from a fact which is unexplained …’.
- “A car crossing the road and hitting an oncoming vehicle, if unexplained, provides some evidence of negligence”.
In relation to Ms Richards’ claim, the Court held that “What caused Ms Richards to drive … into the oncoming traffic was … an occurrence which logically … does not typically occur without negligence’. The Court found that the doctrine of res ipsa loquitur was established.
In relation to what the PIC found was the ‘likely’ cause (namely Ms Richards taking some sort of evasive action), the Court found that this finding was ‘not reasonably available on all the evidence’.
The Court set aside the PIC’s decision and remitted the matter back to the PIC to be heard by a different member for reconsideration.
What it Means for Insurers
While it will not apply in the case of all unexplained accidents, and the party wishing to rely on the doctrine of res ipsa loquitur has the burden of establishing that it ought to apply, insurers should take comfort in the Court’s decision to confirm the availability to rely on the doctrine to reject prolonged claims for statutory benefits.
In cases where the circumstances of an accident are unclear, unknown, or ambiguous, and where the circumstances can give rise to an inference that, absent any other explanation, there was negligence on the part of the injured person, insurers ought to consider declining liability, and relying on the doctrine in the absence of any other basis.
Should you wish to discuss the decision and its implications, please contact Doran Yacobi on 03 9947 4504 or any member of the Ligeti Partners team on 03 9947 4500.
