Slip and falls, slip and trips, whatever the term used, a customer falling over in a retail outlet usually spelt doom and gloom for the occupier. For the customer, a clip on the heels by a shopping trolley or a slip on a grape on the floor could in some cases spell easy money. Often it cost less for a retailer to pay the customer to go away than defend the claim due to legal fees and the time-consuming nature of litigation.

A retailer must take reasonable care to avoid acts or omissions which it can reasonably foresee would be likely to injure a customer. For example, do not leave boxes obstructing aisleways; do not leave spilt products on the floor.

As seen by recent publicity, increasing claims has resulted in difficulties for some organisations in obtaining appropriate public liability insurance, either at all or at affordable rates. It is important that retailers have access to affordable public liability insurance to protect them from occupier’s liability claims.

This “public liability crisis” led to governments in all Australian jurisdictions recently introducing new laws intended to reduce the number and cost of claims. The savings are intended to be passed on to consumers in the form of lower insurance premiums. Unfortunately, the new laws differ from State to State. Generally, the laws restrict the rights of injured persons to obtain damages for personal injuries sustained as a result of another party’s negligence. This should reduce the number of claims being made.

In Victoria, restrictions have been placed on an injured person’s right to sue for damages depending on the severity of the injury sustained. The right of an injured person to obtain general damages, that is damages for pain and suffering, will be subject to a 5% whole person permanent impairment threshold for physical injuries and a 10% threshold for psychiatric impairment. Whilst 5% does not sound like a lot, it can take a fairly substantial injury to meet that threshold. For example if a customer fell and sustained soft tissue injuries, or even a fracture, but subsequently made a full recovery they would not have a 5% permanent impairment.

A claimant will be required to obtain a certificate from an appropriately qualified medical practitioner stating that the claimant does have a greater than 5% permanent impairment. Alternatively the claimant may contact the proposed defendant and seek a waiver.

It is important to note that if you receive a certificate from a claimant, if the assessment is in dispute, the matter must be referred to a medical panel for review within 30 days. If that is not done within that timeframe you will be deemed to have accepted the assessment and the claimant will have the right to claim damages for pain and suffering in the subsequent legal proceedings. It is therefore essential that the certificate be forwarded to your insurer, if applicable, immediately upon receipt. Failure to notify you insurer within the time frame could result in the insurer denying your claim.

A claimant that does not meet the threshold will still be entitled to pursue legal action but will only be able to recover economic loss only, such as medical and like expenses and loss of earnings.

Legislation also provides that an apology cannot be taken as an admission of liability. If a customer is injured on your premises, staff can express their regret or sympathy without the fear that this will make you liable for those injuries.

Other changes that will have an impact on occupier’s liability claims include:

• reducing the limitation periods for personal injury matters to three years from six years;
• placing limits on the amounts of some types of damages such as pain and suffering and loss of earning capacity; and
• providing that issues such as intoxication and illegal activity on the part of the injured person must be taken into account.

The changes in the law are intended to limit both the number and cost of claims in response to the public liability crisis. In addition to the new laws, the Commonwealth Government has enacted provisions giving the ACCC power to ensure that any cost savings from the changes are passed onto consumers in the form of lower insurance premiums.

It remains to be seen whether the changes will have any impact on insurance premiums. At the very least the effect of the changes should be to reduce the number of claims, particularly for minor injuries which will be of benefit to retailers.

Written by Leneen Forde and Caroline Dew