31 August, 2012

 

Legal News & Analysis – Asia Pacific – Australia – Dispute Resolution

 

In brief

 

  • A recent NSW Supreme Court case applied the two-stage statutory causation test.
  • The plaintiff established factual causation but could not prove scope of liability, that is, whether the defendant should be held liable for the damage because there was no increase in the relevant risk.
  • Chappel v Hart was distinguished.
  • Judicial comments were made on the operation of "inherent risk".

 

Introduction

 

There are few areas of liability law that have inspired such vigorous academic and judicial debate as the legal notion of "causation".

 

It is a fundamental tenet of the common law that a defendant should not be liable for the loss suffered by a plaintiff unless the defendant's actionable conduct caused the plaintiff's loss.

 

However the law is not just concerned with determining how damage was caused and who caused it. The law is concerned primarily with whether legal responsibility should attach to the person whose wrongful conduct caused that damage.

 

Common law

 

The common sense test for causation at common law was articulated by the High Court in March v E and M H Stramare Pty Ltd (1991) 171 CLR 506.

 

The judgment of Mason CJ (with whom Toohey J and Gaudron J agreed) stands for the proposition that causation is a question of fact that must be answered using common sense and experience. Policy and value judgments will enter into this analysis, but they are also questions of fact. His Honour had reservations about the two stage test because he felt that it detracted from the fundamentally factual nature of causation analysis.

 

The Ipp report

 

In 2002 Justice Ipp of the NSW Court of Appeal was commissioned by the Federal Government to conduct a review of the law of negligence.

 

Justice Ipp recommended a two-stage causation test because he considered that at least some of the confusion and uncertainty in this area of the law resulted from a failure to distinguish clearly between whether the negligent act or omission was a necessary condition of the harm, and whether the defendant should be held liable for the consequences of that act or omission.

 

Following the Ipp Report legislative reforms were uniformly enacted by all the States and Territories.

 

NSW Civil Liability Act 2002

 

Section 5D is the causation provision. The relevant Victorian provision is section 51 of the Wrongs Act. The relevant parts of section 5D are set out below.

 

"5D General principles (1)

 

  1. A determination that negligence caused particular harm comprises the following elements: (a) that the negligence was a necessary condition of the occurrence of the harm (factual causation), and (b) that it is appropriate for the scope of the negligent person’s liability to extend to the harm so caused (scope of liability).
  2. In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.
  3.  …….
  4. For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party."

 

Section 5D(1) requires that causation be approached by making two separate and distinct (but cumulative) inquiries:

 

  • The first inquiry, "factual causation", is the "but for" test by another name.
  • The second, the "scope of liability" inquiry, involves a normative analysis, namely whether it is appropriate for the scope of the negligent person’s liability to extend to the injury.

 

To make this abundantly clear to those undertaking the second inquiry, further guidance is given in section 5D(4) as to how the "scope of the liability" is to be determined.

 

In a number of recent cases, the NSW Court of Appeal has said that section 5D(1) requires an approach to causation that accords with the common law concept of causation. The principles developed by the common law in determining questions of causation will, therefore, continue to be relevant to the determination of causation under the statutory test. However, it is clear that these will be applied strictly within the framework of the two-stage inquiry required by section 5D(1).

 

Paul v Cooke

 

On 25 July 2012 his Honour Justice Brereton handed down a decision in a negligence action brought by the plaintiff, Mrs Paul, against the Defendant, Dr Cooke. He found in favour of the defendant primarily on the issue of causation ( breach of duty having been admitted). Ashurst Australia acted for Dr Cooke.

 

His Honour confirmed the significance of the two stage test in the state based Civil Liability legislation.

 

The proceedings primarily turned on the "scope of liability" inquiry to be conducted under section 5D(1)(b) of the (NSW) Civil Liability Act 2002 (CLA) and the application of the High Court's decision in Chappel v Hart to that inquiry.

 

Outline of facts

 

The plaintiff had a family history of cerebral aneurysm. Her twin sister had died in 1989, at the age of 37, as a result of ruptured cerebral aneurysm.

 

In July 2003 the plaintiff underwent a cerebral CT angiogram to investigate headaches and other symptoms that she was suffering. The defendant, a radiologist, reviewed the angiogram and reported that it was normal.

 

In January 2006 the plaintiff underwent another cerebral CT angiogram, at the request of a surgeon whom she consulted for an unrelated condition. The CT angiogram was ordered because of the plaintiff's family history. The second CT angiogram revealed a 7-8mm aneurysm.

 

The plaintiff was referred to a neurosurgeon, Dr Jerry Day, who reviewed the July 2003 CT angiogram and concluded that it was wrongly reported as it demonstrated an aneurysm identical in anatomy to that seen in the second CT angiogram.

 

Dr Day had a lengthy discussion with the plaintiff about the options for treatment, clipping (open surgery), coiling (endovascular treatment) and having no treatment, and the potential risks of each option, including death, rupture of the aneurysm, haemorrhage and stroke. Dr Day recommended coiling but said that he would discuss the best approach with his colleagues.

Dr Day presented the case to a weekly cerebrovascular conference of his colleagues, following which he made a firmer recommendation for coiling. On 2 February 2006 he referred the plaintiff to Dr Richard Parkinson for "evaluation and probable endovascular treatment".

 

The plaintiff consulted Dr Parkinson on 9 February 2006 and 23 February 2006. He gave her a detailed explanation of the risks of both endovascular coiling and surgical clipping. He recommended coiling. She was booked in for a coiling procedure on 8 March 2006.

 

On 3 March 2006 the plaintiff presented to Shellharbour Hospital complaining of a headache, photophobia and nausea. She underwent a CT scan that day, which did not show any sign of rupture or any change in the aneurysm.

 

On 8 March 2006 the plaintiff underwent the coiling procedure by Dr Parkinson, assisted by an interventional radiologist. In the course of the procedure the aneurysm ruptured causing a sub-arachnoid haemorrhage and left sided stroke. The plaintiff was left with right hemiparesis, expressive aphasia and cognitive impairment.

 

The defendant was not involved in the diagnosis or treatment of the aneurysm in January-March 2006.

 

Cause of the rupture

 

There was no evidence that the rupture was caused by operator negligence. It was probably caused by the insertion of the first coil into the aneurysm. The experts who gave evidence in the case agreed that this outcome could not be totally avoided even by skilled, careful and prudent operators.

 

The plaintiff's claim

 

The plaintiff alleged that the defendant's failure to diagnose the aneurysm in July 2003 was the cause of the injuries she suffered in March 2006 because if she had obtained treatment in July 2003 (or on any occasion other than 8 March 2006) the overwhelming likelihood was that she would have avoided the rupture and consequential injuries.

The plaintiff conceded that there was no material change in the aneurysm between July 2003 and March 2006, and that there was no increase in the risk of intraoperative rupture as a result.

 

The defendant's defence

 

The defendant admitted failure to exercise reasonable care and skill by his failure to diagnose the aneurysm in July 2003. However, liability for the plaintiff's damages was denied on three grounds:

 

1. Scope of duty: the duty of care that he owed as a diagnostic radiologist did not extend to taking reasonable care to avoid harm occasioned by the treatment of a diagnosed condition;

2. Causation: the damage suffered by the plaintiff was not caused by the breach of duty as it did not satisfy the two stage causation test set out in section 5D(1) (NSW) CLA, that is, factual causation (section 5D(1)(a) and scope of liability (section 5D(1)(b); and

3. Inherent risk: the rupture was an inherent risk of the treatment and so there could be no liability for materialisation of that inherent risk pursuant to section 5I CLA.

 

Findings by Brereton J

 

Events from 2003-2006

 

His Honour found that after the defendant's failure to diagnose the aneurysm in July 2003 the plaintiff was unknowingly exposed to the risk of spontaneous rupture of the aneurysm until it was diagnosed in January 2006.

 

His Honour found that once the aneurysm was diagnosed the plaintiff was warned at all relevant times of the treatment options and the risks associated with those options, including the risk of intraoperative rupture during coiling. Although she was persuaded by the recommendations of her treating neurosurgeons, she made the choice freely, as she would have done if diagnosed in 2003.

 

If the plaintiff had been diagnosed in 2003 she would probably have been advised to have the aneurysm clipped rather than coiled.

 

His Honour also found that the intraoperative rupture was caused when the microcatheter or coil penetrated the wall of the aneurysm and that this could occur even with the exercise of all due care and skill.

 

Scope of duty

 

His Honour stated that "scope of duty" considerations are relevant primarily to whether or not there has been a breach of duty and that once breach is established the question becomes one of causation. The scope of the duty influences, but does not control, the inquiry into causation.

 

Accordingly, in these circumstances where the defendant's duty of care did not extend to responsibility for treatment once a diagnosis is made, is not a reason to deny that he is liable for damage done in the course of that treatment.

 

Once breach is established, the scope of the relevant duty is more appropriately considered under the "scope of liability" element of causation.

 

Causation

 

His Honour noted that the question of causation in this case must be resolved under section 5D CLA, however the principles developed by the common law continue to inform determination of causation within that statutory framework.

 

He confirmed that the plaintiff bears the onus of proving all matters relevant to the causation inquiry (see section 5E CLA).

 

Factual causation – section 5D(1)(a) CLA

 

His Honour stated that Chappel v Hart dictated that he must compare what would have happened if the plaintiff was treated following diagnosis in July 2003 and what happened on 8 March 2006.

 

He found that if the plaintiff had been treated around in 2006 she would have had the aneurysm clipped and the aneurysm would have been obliterated without rupturing.

 

Accordingly he found factual causation was established.

 

Scope of liability – s 5D(1)(b) & 5D(4) CLA

 

His Honour stated that the scope of liability inquiry involves a policy judgment as to whether it is appropriate, taking into account all the relevant circumstances, for the defendant's liability to the harm. For this purpose the court must consider, among other things, why responsibility for the harm should be imposed on the defendant.

 

In order to come to a conclusion that the scope of liability should not extend to the harm, there needs to be a conclusion that the factual link is tenuous, or that there is some limitation by reference to the rule of responsibility that applies in the circumstances.

 

The relevant rule of responsibility in these circumstances was to promptly and accurately diagnose the aneurysm so that the plaintiff could obtain treatment and remove the risk that the aneurysm could spontaneously rupture.

 

The relevant rule of responsibility in this case was not analogous to the duty to warn of material risks (as contended by the plaintiff). The rationale of the duty to warn is to protect the patient from harm from material inherent risks that are unacceptable to her. The rationale of the duty to diagnose is to protect the patient from harm that can be avoided or alleviated by treatment.

 

In this case the exposure of the plaintiff to the foreseeable risk of intraoperative rupture had nothing to do with the defendant's failure to diagnose. The risk arose because of diagnosis, not failure to diagnose.

 

In this case the passage of time did not make treatment of the aneurysm more difficult, in fact with improved treatment options it made treatment less difficult. The delay was causally irrelevant.

 

A "scope of risk" analysis also resulted in a finding that there was no causal connection between the defendant's breach and the harm, because the breach did not create or increase the risk of intraoperative rupture.

 

Chappel v Hart was distinguished on the basis that the High Court's predominant reasoning relevant to "scope of liability" was that the risk that materialised and harmed Mrs Hart was the very risk that gave rise to the duty to warn. The patient's right to make an informed choice about treatment options is not applicable to the duty to diagnose, which serves a different purpose, that is to protect the patient from harm by enabling timely treatment.

 

In this case the defendant had no duty to warn the plaintiff of inherent risks of any treatment that might follow diagnosis.

His Honour disagreed with the plaintiff's argument that policy dictated that, because of the importance of timely and accurate diagnosis, the defendant should be liable for the plaintiff's damage given that breach of duty was established and should not be able to benefit from his good fortune that his breach did not cause the harm. His Honour noted that this is not the law and that the law of negligence dictates that if negligent acts or omissions do not cause damage, even if only by good luck, a remedy does not arise.

 

Section 5I CLA

 

His Honour rejected the defendant's submission that he could rely on section 5I CLA in circumstances where he was not directly associated with the inherent risk that materialised.

 

He also rejected the plaintiff's submission that section 5I CLA is a defence and that the defendant bears the onus of proving that the risk was an inherent one, and that the plaintiff assumed that risk.

 

His Honour found that at common law no liability arises for negligence that arises out of the materialisation of an inherent risk, but this is not a matter of a defence. Rather, its significance was in the content of the duty to warn of the risk.

 

Comments in the Ipp Report and in the second reading speech indicate the extent section 5I CLA was meant to codify, rather than radically change, the common law to, for example, exonerate defendants from liability for non-negligent exacerbation of injuries caused by them.

 

Conclusion

 

In summary, notwithstanding an admission of breach of duty, and factual causation the plaintiff failed because the harm suffered (intraoperative rupture) was not the harm from which the relevant rule of responsibility was intended to protect her (spontaneous rupture). Accordingly scope of liability – section 5D(1)(b) of the CLA – was not satisfied.

 

Implications for corporations, professionals and insurers

 

  • The two-stage causation test set out in the Civil Liability legislation (which was uniformly adopted by all States and Territories) is the legal framework for determining causation, informed by the common law.
  • Proof of factual causation is not enough, The plaintiff must also prove that it is appropriate that the scope of liability extends to the damage. There are various policy considerations to be taken into account by the court.
  • If the risk that arose because of the negligent conduct is different from the risk of the damage that in fact occurred, causation cannot be established.

 

 

For further information, please contact:

 

John Pavlakis,  Partner, Ashurst

hn.pavlakis@ashurst.com

 

Louise Mallon, Ashurst

louise.mallon@ashurst.com

 

Ashurst Dispute Resolution Practice Profile in Australia

 

Homegrown Dispute Resolution Law Firms – Australia

 

 

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