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- 19 October 2005
Civil Liability Amendment (Offender Damages Trust Fund) Bill
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Page: 18853
Second Reading
The Hon. HENRY TSANG (Parliamentary Secretary) [6.10 p.m.]: I move:
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
Leave granted.
This bill introduces a Government initiative that is the first of its kind in Australia—a scheme to quarantine awards of damages and compensation to offenders into a trust fund to enable victims to lodge claims against them. Under the scheme, when an offender is awarded damages or compensation from a government department, the offender's personal injury victims will get the first opportunity to access the damages. The issue of inmate litigation remains topical. Notwithstanding the limitations on offender damages imposed by part 2A of the Civil Liability Act 2002, introduced by the Civil Liability (Offender Damages) Act 2004, the community is rightly outraged when offenders receive large amounts of compensation for injuries received in custody, particularly when the amount awarded is compared with the victims compensation available to their victims.
The community perceives such offenders to be using the law for their own purposes when it suits them, but disrespecting the law and the community in the commission of their crimes. Under this bill, damages awarded to offenders will be held in a trust fund. The offender's victims will be notified, and will have six months in which to make a claim against the offender in a civil court if they wish. All victims have a right to sue an offender for civil damages; they have always had such a right. In most cases this right is illusory since an offender rarely has sufficient assets with which to pay any damages awarded. It is all the more galling for a victim to forego the right to sue an offender on this reasoning and then to see the offender paid a large amount of compensation, even more so when the offender can spend or hide that compensation before the victim can bring a civil case against the offender. If the limitation period for an intentional tort has expired, the victim has no recourse at all.
The scheme to be introduced by this bill will redress that balance from the offender's favour to the victim's favour. The scheme will facilitate a process whereby victims may, if they wish, take their own civil action against the offender, at their own expense, in the knowledge that quarantined funds exist to satisfy claims. The scheme will be facilitative, not administrative. The Government will not be involved in any such legal action, nor will any new bureaucracy be established to determine litigation or administer the scheme. The normal qualification criteria will apply to victim litigants seeking legal aid. This is not a scheme to redress all wrongs done by offenders to their victims. It is a scheme to redress, as far as possible, serious wrongs committed by particular offenders against victims in light of the changed financial standing of the offenders.
I now turn to the detail of the bill. Schedule 1 [1] inserts a new division 6 into part 2A of the Civil Liability Act 2002. Proposed section 26K contains definitions, including definitions of "offender", "offender damages", "victim claims" and "victim trust fund". The definitions, together with part 7 of schedule 1, apply the scheme to an offender, as defined in existing section 26A, who receives an award of personal injury damages from a protected defendant, also defined in section 26A, whether those proceedings were conducted under Part 2A or otherwise and whether a court entered a verdict and damages or the parties reached a settlement that was entered as a judgment. Proposed section 26L requires offender damages to be held in trust in a Victim Trust Fund for victims of the offender. There is an exception to cover amounts that a protected defendant is required to pay to some other person under an Act of the Commonwealth or the State, such as the Health Insurance Commission, the Australian Taxation Office, Centrelink, or other payments which, if unpaid, are enforceable against the protected defendant under statute.
Proposed section 26M provides that a Victim Trust Fund is available to satisfy claims for damages in respect of death or personal injury suffered by victims of offences committed by the offender. To be eligible to be satisfied from a Victim Trust Fund, a victim claim must be made within an eligibility period of six months after the award date of the offender's damages and must be notified to the protected defendant. The court in which the victim claim is made must also be notified that the claim is made as a claim that is eligible to be satisfied from the Victim Trust Fund. Proposed section 26N requires the protected defendant responsible for a Victim Trust Fund to give notice about the fund to persons who appear to be entitled to make a victim claim against the offender.
Proposed section 26O provides for the protected defendant to provide a victim with other information about the Victim Trust Fund and other victim claims against an offender. Proposed section 26P allows proceedings to be taken on a victim claim after the limitation period for the taking of those proceedings, but only during the six-month period after offender damages are awarded. An award of damages that results from such a claim may be satisfied only from the offender damages held in a Victim Trust Fund. Proposed section 26Q allows a court that awards damages on a victim claim that is eligible to be satisfied from a Victim Trust Fund to order the whole or part of the damages to be satisfied from the fund. In making such an order, a court must inform itself about, and allow for the making of, similar orders in respect of other claims that are eligible to be satisfied from the Victim Trust Fund.
Proposed section 26R requires payment to the offender of any surplus remaining in a Victim Trust Fund after payment of all victim claims ordered to be paid from the fund and administrative expenses of the fund. Proposed section 26S provides for victim trust funds to be held and invested by the Public Trustee. The section also provides for a protected defendant to enter into arrangements with the Public Trustee to exercise functions on behalf of the protected defendant. Proposed section 26T provides for legal costs awarded against a protected defendant in connection with an award of offender damages to not form part of a Victim Trust Fund. Proposed section 26U fixes a scale of maximum legal costs for legal services provided to a plaintiff on a victim claim that is eligible to be satisfied from a Victim Trust Fund. This provision ensures that the money actually goes to victims and not lawyers. The cap is justified because in most cases there should be little argument over liability, only quantum.
Proposed section 26V confers protection from liability for acts and omissions in good faith for the purpose of executing the proposed division. Proposed section 26W provides that the proposed division overrides proposed division 2 of part 7, which deals with offender damages awarded to persons who are not guilty of what would otherwise be an offence because of mental illness. Schedule 1, items [2] and [3] enact savings and transitional provisions for the proposed amendments. The amendments will apply prospectively to all awards of offender damages, including awards in respect of proceedings commenced and causes of action that arose before the commencement of the amendments, even though other provisions of part 2A have a more limited application to damages awarded and proceedings commenced before the commencement of that part.
In practice, the scheme will operate as follows. First, an award of offender damages will be frozen in an Offender Trust Fund for six months to enable victims to commence civil actions against the offender. The relevant protected defendant is to notify victims reasonably known to it within 28 days of the award date. Secondly, if no civil actions by victims against the offender have been started and notified to the relevant protected defendant in the six months freeze period, the money in the Offender Trust Fund is to be paid to the offender, together with interest. Thirdly, if one or more civil actions are commenced against the offender, the Offender Trust Fund will continue until the resolution of all victim claims. Fourthly, where there is a single victim claim the court hearing the claim may award damages to the victim from the Victim Trust Fund. If the damages amount exceeds the amount of the trust fund the victim will be awarded total damages and the court will order payment of moneys to the extent of the trust fund amount. The victim will be entitled to enforce any shortfall as a judgment debt under normal civil enforcement procedures except if the claim would have been statute barred but for the scheme, in which case the victim will be entitled only to be awarded damages in the amount of the Victim Trust Fund.
Fifthly, where there are multiple victims suing the offender the scheme contains a mechanism to ensure that the first successful litigant does not exhaust the trust fund, leaving little or nothing for the other victims. Here each court hearing a victim claim is to award total damages against an offender and specify how much of that total damages is to be awarded against the Victim Trust Fund, having regard to the existence of other claims and the amounts likely to be awarded in respect of those claims. The remainder of the damages will be enforceable against the other assets of the offender under normal civil enforcement procedures except if a claim would have been statute barred but for the scheme, in which case the victim will be entitled to receive only damages from the Victim Trust Fund notwithstanding that a larger amount of total damages would have been payable if the claim had not been otherwise statute barred.
Sixthly, in order for victims to be able to consider whether or not it is worthwhile to pursue a victim claim against the offender, victims may seek information from the protected defendant of any victim claims notified to the protected defendant. Victims and their legal practitioners may then consult other claimants in considering whether or not to pursue their own claim. It may not be worthwhile to pursue their claim in light of their injury, another claimant's injury, the amount in the Victim Trust Fund and the potential legal costs of bringing a claim. The bill contains provisions to ensure that information may be provided by a protected defendant notwithstanding a non-disclosure clause in a settlement agreement. That information so provided is not to be provided to any person for any other purpose.
Victims who have received victims compensation will not be allowed to double dip. There is existing provision under the Victims Support and Rehabilitation Act 1996 for a victim to be subrogated to the Victims Compensation Fund for the amount of victim compensation paid from any award of damages received. Protected defendants will be required to notify the Director of the Victims Compensation Fund of any victim claims notified to it. The remaining amendments in the bill are procedural in nature. I commend the bill to the House.
The Hon. DAVID CLARKE [6.10 p.m.]: This bill is not opposed by the Opposition. Its purpose is to amend the Civil Liability Act 2002 so that damages awarded against the Department of Corrective Services, and other public sector defendants, to an offender for injuries suffered while in custody will be available to satisfy claims for damages suffered by victims of the offender. The bill provides that any damages awarded to an offender for injuries sustained while in custody are to be held in a trust fund to satisfy a claim for damages from a victim of the offender. There is an exception to cover amounts that a protected defendant is required under an Act of the State or Commonwealth to pay to some other person. Surplus funds remaining after any victim claims are satisfied will be paid to the offender.
The bill allows a victim claim to be made within six months after offender damages are awarded, despite the claim being barred because of the expiry of the limitation period for the making of the claim, but only for the purpose of the claim being satisfied from those offender damages. There is a requirement that the protected defendant responsible for a victim trust fund give notice about the fund to persons who appear to be entitled to make a victim claim against the offender. When a court makes an order awarding damages from a victim trust fund to a victim it must inform itself and allow for the making of similar awards in respect of other claims eligible to be satisfied from the same trust fund.
Provision is made for victim trust funds to be held and invested by the Public Trustee. Legal costs awarded against a protected defendant in connection with an award of offender damages are not to form part of a victim trust fund. Whilst the Opposition has concerns about aspects of some details of the bill, it supports the underlying concept that offenders who cause damage or injury to a victim should be liable to meet such claims from any award that the offender has obtained as a result of a claim for injury brought against the Department of Corrective Services, or other public sector body, arising during the period that the offender is in custody.
The public considers it to be a scandal that offenders can obtain financial compensation for injuries sustained in custody and yet their victims may receive far less, if indeed anything at all, for more serious injury at the hands of offenders. We currently have in this State a victim compensation scheme pursuant to which victims of crime can seek some recompense for their injuries and damage suffered. The State Government then in effect pays to claimants any award assessed by the Victims Compensation Tribunal and then seeks restitution from the offender. The problem is that, for a variety of reasons, including the economic circumstances of the offender and even a failure of the State Government to more vigorously pursue action against offenders to recompense the Government, only a small percentage of payout awards to victims under the scheme is recovered from offenders.
In addition, damages that may be awarded under the scheme are capped so that the victim will normally receive substantially less than would have been the case had civil proceedings been pursued against the offender and the offender had the means to meet a verdict against him or her. The advantage of what is proposed under the bill before us is that the victim will have access to awards given to offenders in custody, and the taxpayer will not have to fund such awards. The shadow attorney-general, Mr Andrew Tink, expressed some concerns about the bill, in particular concerns about multiple victim claims on one trust fund, and how the court will take into account such other existing claims and ensure that proportionality is safeguarded.
Mr Tink also outlined concerns in the other place and referred to questions raised by the New South Wales Law Society regarding the effective operation of the proposed arrangements. However, taking these concerns into account, and Government assurances that the scheme will achieve its overall object, the Opposition does not oppose this bill.
Reverend the Hon. FRED NILE [6.15 p.m.]: The Christian Democratic Party does not oppose the Civil Liability Amendment (Offender Damages Trust Fund) Bill. The object of the bill is to amend the Civil Liability Act 2002 to require that damages awarded against a government department for injuries suffered by an offender in custody are to be held in trust and used to satisfy a claim for damages for death or personal injury suffered by a victim of an offence committed by the offender. Any surplus remaining after the victim claims are satisfied will be paid to the offender. The Christian Democratic Party is strongly in favour of this bill. I note, however, that it restricts a claim for damages to death or personal injury. There may be some other legitimate grounds on which a victim of a crime should be able to exercise their rights under this legislation.
The terminology in the bill, whether intended by the Government or not, appears to restrict the operation of the bill to cases in which personal injury has been suffered. The Government may give consideration at some future time to widening the classification of personal injury. Similar bills have been passed in other jurisdictions. I understand that the New Zealand Parliament passed a Prisoner and Victim's Claims Bill by a narrow majority of two votes. The main argument against the bill in the New Zealand Parliament was to the effect that offenders should not be able to benefit from compensation at any point or in any way, and that there should not be a trust established to hold compensation awarded to offenders.
I sympathise with that view. I am suspicious about some claims for compensation where a prisoner is bashed and injured whilst in prison, as to whether it might involve a conspiracy with other prisoners so that the offender can legitimately claim compensation. Such an offender may be party to and even organise the bashing, complain to the authorities, and then seek and be awarded compensation. There could be a strong argument that there should not be compensation for prisoners abusing the existing arrangement. In Scotland a prisoner was awarded £2,400 after a judge ruled that his role in emptying the chemical toilets every morning violated his human rights. He submitted a claim and was awarded that large sum of money. I believe this is an area where the Government should review the eligibility criteria of prisoners to seek compensation. There must be a far more efficient way of investigating those claims to ensure that they do not involve a conspiracy.
I note that if no civil actions by victims against the offender have been commenced and notified to the relevant protected defendant in the six-months freeze period the money in the trust fund is to be paid to the offender, together with interest. In view of that fact I reiterate that six months is insufficient time in which claims must be initiated. For financial and emotional reasons victims may need more than six months to initiate a claim. I believe that is a strong point. It takes time for knowledge of such claims and the awarding of compensation to offenders to become known to the victim. I urge the Government at some time in the future to consider extending that six-months period so that victims are not discriminated against simply because they did not know about the possibility of claims. Do any of us in this House know what compensation has been awarded to New South Wales prisoners? How does one come to know, unless it is in a front-page newspaper story?
Where multiple victims are suing the offender, the scheme contains a mechanism to ensure that the first successful litigant does not exhaust the trust fund. Each court hearing a claim is to award total damages against an offender and specify how much of the total damages is to be awarded against the victim trust fund in light of the existence of other claims and the amounts likely to be awarded. The remainder will be enforceable against the other assets of the offender under normal civil enforcement procedures.
There is also a provision for claims that would otherwise be statute barred to be brought under the scheme. These claims may only be made against the victim trust fund and cannot be enforced against the other assets of the defendant. I have already referred to the situation in New Zealand and Scotland. I note with interest that last year in the United Kingdom a rapist won £7 million in a national lottery: he was one of three winners to share £21 million in the Lotto Extra jackpot. The prisoner was at the end of a life sentence for attempted rape and was on release from open prison when he bought his winning ticket.
Organisations representing the interests of rape victims came out saying that the prisoner should fund rehabilitation programs for rapists. Under Home Office guidelines, prisoners on temporary release from gaol are allowed to play the lottery and can claim a winning prize. However, the Home Office said that the prisoner's access to the money would be restricted while he was in custody—in other words, the money would be put into a trust and would not be paid out to the victims.
The scheme established by the bill will not be retrospective in its operation; it will commence upon assent of the Act. People who have received compensation as victims will not be allowed to claim under the victim's rehabilitation regime and this legislation. An existing provision under the Victims Support and Rehabilitation Act 1996 provides for a victim's subrogation under the Victims Compensation Fund for the amount of victim compensation paid from any award of damages received. For those reasons the Christian Democratic Party supports the bill.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS [6.21 p.m.]: Frankly, I am horrified by this bill; I can only think it is absolutely Kafkaesque. It arises from the decision of the Court of Appeal in Bujdoso v The State of New South Wales. On 16 February 1990 the plaintiff was sentenced to a minimum term of three years and four months imprisonment after pleading guilty to various charges of homosexual intercourse with a minor. At the time the victim was aged between 14 and 15 years. On the evening of 21 September 1991 at approximately 11.00 p.m. a number of assailants wearing balaclavas forced entry into the plaintiff's cell and assaulted him with iron bars, attacking his head, arms, back, torso and legs. He suffered a fractured skull, broken left arm, and injuries to his right knee and back. He was left with cognitive deficiencies and long-term orthopaedic problems.
The prison authorities had prior knowledge that the plaintiff was at risk of attack. For substantial periods within every two hours there was no officer on duty at the prison work release units where the plaintiff was held, and the prisoners were left entirely unguarded. The District Court at first instance and the Court of Appeal accepted that the lock on the plaintiff's cell door was inadequate to prevent forced access by the fellow prisoners who assaulted him. The lock was described by the Court of Appeal as "flimsy and out of date". A sustained campaign was then run in the Daily Telegraph. The proposition advanced by the Daily Telegraph in that campaign is summarised in the following words in its editorial of 24 September 2004:
By all means it is unacceptable that prisoners should attack other inmates and the culprits should have been punished appropriately.
But compensation for paedophiles? Most people would reason that those who commit such violent crimes can take their chances in prison.
The Government's High Court appeal was heard in Canberra on Wednesday 5 October 2005, and judgement has been reserved. I quote from a letter written to me by T D Kelly & Co, Solicitors:
Most members of the community would no doubt agree that whatever the offence committed in the past by a prisoner, when the State has deprived him of his liberty it has a duty to take reasonable steps to ensure his physical safety while in detention.
This Bill will clearly have the effect of discouraging prison inmates from ever taking proceedings against the State for a failure to carry out that duty.
The consequence of this will be that certain prisoners can be bashed with impunity and the prison authorities are unlikely ever to be called to account in the Courts for their failure to protect such inmates.
It seems that there is an incentive for people in prison to bash other prisoners. If someone is bashed, and indeed the victim successfully sues for damages—which, for a prisoner in New South Wales, is not an easy thing to do—presumably if the bashing is so severe that it causes permanent injury, whatever the circumstances, at any time in the future a doctor can state that the victim has long-term injuries. It is a matter of great concern that there is a financial incentive for a prisoner to bash another prisoner, and that that action may result in the victim of the bashing being awarded damages. It seems that we are drawing a distinction between a prisoner who is bashed—who, of course, can never be a victim!—and a person who is injured, deliberately or otherwise, during the commission of a crime for which a person is sentenced.
Theoretically, under the rule of law, if a person is sentenced to prison for a period that is what society deems to be his or her sentence. The sentence is for that person to be put in gaol for the term determined by the judge. The sentence is not for the person to be put in a cell where somebody can bash him or her at any time, resulting in money being awarded to the person bashed. This provision is almost beyond belief. It amounts to an extraordinary trampling on the civil rights of prisoners. I know that the Government is innovative in finding ways of getting together moneys to do what needs to be done—and certainly giving compensation to victims through the Victims Compensation Fund is something that needs to be done—but the Government's notion is too simplistic. It is not all about money and squeezing as much as possible out of innovative schemes.
A tax on diving for grey nurse sharks is being debated at the moment. This innovative Government is short of cash because it refuses to borrow for its major infrastructure projects; it tries to fund everything from current revenue, and it therefore has a perpetual cash flow crisis as its infrastructure falls apart. But this bill is just another innovative way of getting money for the Victims Compensation Fund. I have a lot of sympathy for victims, and I do not want anyone to accuse me of not having sympathy for victims. But I believe that restitution for victims should be built into a restorative justice model.
I do not believe that I could be accused of being unsympathetic to victims. I have treated in my medical practice people who have been victims of armed hold-ups. In one such case I provided treatment to two young women who were working in a hotel in south Burwood that was held up by a gang a little after closing time, at 11.30 p.m. The gang bashed down the door and held up the two women, whose job it was to take the money out of the poker machines and count it. One of the women was a young university student doing an unpleasant evening job to pay for her studies. The other was from middle Europe. She was in her early thirties and had a bad experience with regard to men. This hold-up engendered a huge amount of anxiety in her: she could not tolerate being in dark places, she was frightened, and she was scared of aggression in men.
Both women had relationships at the time, which subsequently fell apart. They had both begged their employer to engage security guards or install stronger doors at the hotel, on the basis that there had been a number of armed hold-ups in the area and they were handling roughly $30,000 a night. All their requests were turned down: their employer was quite unsympathetic to their cause. It took a couple of years for them to get their lives back on track. The workers compensation and employment framework was not conducive to rehabilitation in their case. Fortunately for them, they were covered by workers compensation and they received some payment for their psychological treatment, which was ongoing and certainly necessary.
So in a sense they did better than most victims. But most victims do not have any sort of restitution plan with the perpetrator, if that is possible. I am not saying that is so in all cases but it is in some cases. The counselling is niggardly, the victims accident compensation fund is underfunded, and this needs to be addressed. But to create an incentive for people to be bashed in prison in order to top up the victims compensation fund seems to be a step far beyond what is reasonable. Members who have heard me speak in this Chamber recently would know that I was very enthusiastic about the establishment of the Legislation Review Committee. Indeed, I wanted a more extensive review of legislation than is currently being carried out by that committee. The committee stated:
The committee is of the view that having regard to the limitations in the bill, it does not unduly trespass on an offender's right to be free from discrimination.
It sounds an extraordinary conclusion to me. It would seem to me that this bill provides an incentive for prisoners to bash other prisoners without providing any protection to people in prison who are likely to suffer from prison bashings. It is as if this legislation is imposing an additional penalty on people sentenced to gaol by saying, "You shall get the sentence of the court and you shall get whatever anarchic sentence is imposed on you in the cells of New South Wales prisons." This very bad bill sets a very dangerous precedent and it has to be opposed. It is not simply a matter of members being sympathetic to victims—and certainly I am very sympathetic to victims. We have to look at the bigger picture. This bill is appalling and I oppose it.
Debate adjourned on motion by Ms Lee Rhiannon.
[The Deputy-President (The Hon. Christine Robertson) left the chair at 6.32 p.m. The House resumed at 8.00 p.m.]
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