TREATMENT INJURY IN NEW ZEALAND
STEPHEN TODD*
INTRODUCTION
This article discusses medical malpractice and compensation in New
Zealand, but there is not much in it about liability. The reason is that in
New Zealand, a statutory accident compensation scheme makes provision
for the payment of compensation to the victims of personal injury that is
suffered in ways that are covered by the scheme. One of these ways is personal
injury caused by medical treatment, and in nearly all cases the victims
will receive compensation pursuant to the statutory scheme rather than
common law damages. If the circumstances are such that the scheme applies,
then actions for damages are barred. Only in rare cases falling outside
the ambit of the scheme might there be scope for suing the doctor or other
person responsible for causing the injury, or his or her employer, and in this
way recovering such damages.
Although the focus of the article is on compensation for medical injuries,
the initial part of the article is broader in that it places the discussion in
the context of the accident compensation scheme in New Zealand as a
whole. This part gives a brief overview of the nature of the scheme, its
relationship with rules of liability at common law, the benefits it provides,
and how it is funded and administered. Then the main part of the article
looks at the provisions in the scheme for compensation for the victims of
medical injury. It includes discussion of the extent of the statutory cover,
problems of causation, how the relevant provisions have operated in practice,
and the costs that have been incurred in administering the scheme and
delivering the benefits. It covers as well some consideration of the alternative
ways in which a doctor or other professional person may be held accountable
for the consequences of wrongful conduct notwithstanding the
bar on suing. In the final Part there is an evaluation of the scheme as a
whole and, more specifically, of the cover it provides in medical cases.1
* Professor of Law, University of Canterbury, New Zealand; Professor of Common Law, University
of Nottingham, United Kingdom.
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I. THE NEW ZEALAND ACCIDENT COMPENSATION SCHEME
A. The Woodhouse Report
The reasons for the introduction of the New Zealand accident compensation
scheme, and its fundamental design, are found in the Report of
the Royal Commission inquiring into personal injury law in New Zealand
(usually known as the Woodhouse Report after the name of its Chairman,
the Honorable Justice Woodhouse).2 The Royal Commission was charged
with investigating and reporting “upon the law relating to compensation
and claims for damages for incapacity or death arising out of accidents
(including diseases) suffered by” employees.3 Accordingly, it examined the
remedies for injured employees at common law and under the workers’
compensation legislation4 in order to determine whether change was
needed and, if it was, to consider what form it might take.5
Having made its inquiries, the Commission was convinced that both
the action for damages and the workers’ compensation system fell clearly
short of providing a satisfactory system of compensation. First, the common
law process could be seen to cause serious injustice and to perpetuate
a number of anomalies. The key objections were that the fault theory had
developed into a legal fiction, for the economic consequences of negligent
conduct were spread via insurance over the whole community; the risks of
litigation—the difficulties of proof, the ability of advocates, the reactions
of juries, and mere chance itself—turned the system into a lottery; and the
tort system was cumbersome, inefficient and extravagant in operation to the
point that the cost of administration absorbed more than forty percent of the
total amount of money flowing into the system.6 As for the workers’ compensation
scheme, this scheme worked upon a limited principle, was formal
in procedure, was meager in its awards, and was ineffective in the field of
prevention of accidents and the physical or vocational restoration of the
injured.7 These last two areas, it was said, “should be at the forefront of any
general scheme of compensation.”8
1. The descriptions of the history of the scheme and of some of its core provisions and the cases
interpreting them that follow in this article are based partly upon the accounts in STEPHEN TODD, THE
LAW OF TORTS IN NEW ZEALAND ch. 2, ¶ 2.2 (5th ed. 2009).
2. ROYAL COMM’N OF INQUIRY, COMPENSATION FOR PERSONAL INJURY IN NEW ZEALAND 19–
28 (1967) [hereinafter WOODHOUSE REPORT].
3. Id. at 11.
4. Workers’ Compensation Act 1956.
5. WOODHOUSE REPORT, supra note 2, at 19.
6. Id. at 49–50, 52.
7. Id. at 97.
8. Id.
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The Commission concluded that both the action for damages and
workers’ compensation fell clearly short of providing a satisfactory system
of compensation. It recognized that an overall solution might be the integration
of a comprehensive scheme of accident compensation into the social
security framework covering both accidents and illness.9 There would
be great advantage in doing this, for it would give an organic structure and
unity to the whole process. However, integration was not feasible if compensation
would then have to take the form of the same flat rate payments
for all, which would be unacceptable and unjust. The only way in which a
comprehensive system could operate equitably was by linking benefits to
earning capacity and by taking into account permanent physical disability.
The Commission thought that the next move might be in this direction, but
did not itself pursue the matter.10 It was seen as unwise to attempt one massive
leap when two considered steps might be taken, but the experience
gained by taking the first step would assist in moving towards a comprehensive
plan.
As for the first considered step, the Commission recommended that
there should be a comprehensive system of accident prevention, rehabilitation
and compensation which would avoid the disadvantages of the existing
processes, meet the requirements of “community responsibility, comprehensive
entitlement, complete rehabilitation, real compensation and administrative
efficiency,” and satisfy the requirement of financial affordability.11
The object should be compensation for all injuries, irrespective of fault and
regardless of cause. In due course Parliament acted on these recommendations,
but the second step has never been taken. So New Zealand has developed
two different systems for compensating incapacity, depending on the
cause of the incapacity in question, with markedly less generous benefits
being available under the social security scheme than those which apply in
the case of accident compensation. The distinction has returned periodically
to haunt the operation of the accident scheme and remains in full force
today.
B. Implementation
The Woodhouse proposals were enacted in the Accident Compensation
Act 1972.12 In its original form the proposed scheme covered only
employees injured at work and victims of motor accidents. However, be-
9. Id. at 179–80.
10. See id. at 181.
11. Id. at 107.
12. Accident Compensation Act 1972.
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fore it came into force there was a change of government, and the new
administration substantially widened its ambit so that it provided for compensation
for all accident victims suffering personal injury by accident.13
At the same time, the Act barred the right to sue or to claim workers’ compensation
for those covered by the scheme, following Woodhouse’s view
that these remedies became irrelevant.14 So the legislation denied access to
the courts in return for the perceived advantages of the statutory scheme.
The exchange has sometimes been spoken of as a “social charter,” “social
contract,” or “social compact.”15
The purposes of the 1972 Act were to promote safety, to promote the
rehabilitation of persons who suffered personal injury by accident covered
by the scheme, and to make provision for the compensation of those persons
or their dependants.16 Where coverage existed it was compulsory. No
one could opt out and seek damages instead.17 Victims of injury were entitled
to weekly compensation for loss of earnings at the rate of eighty percent
of the claimant’s earnings prior to the accident, up to a prescribed
maximum figure, lump sums for loss of bodily function, pain and suffering
and loss of amenity, again with prescribed maximum figures, medical expenses
and other incidental costs, and death benefits.18 Payments were
funded by levies payable by employers, the self-employed and motor vehicle
owners, and also out of general taxation.19 The scheme was administered
by the Accident Compensation Commission, with functions which
included the making of payments to those entitled and the taking of various
steps to promote safety and rehabilitation.20 Other features included the
processes for making a claim, limits on entitlements, dispute resolution,
incentives to safety and issues of economic deterrence, the basis for calculating
the levies, and further matters of management and administration.21
We will consider certain of these features to the scheme in some detail
when we turn to examine its operation in the particular field of medical
injuries.
13. Id. § 54.
14. Id. § 5.
15. Brightwell v. Accident Comp. Corp. [1985] 1 NZLR 132 (CA) 139–40; Queenstown Lakes
Dist. Council v. Palmer [1999] 1 NZLR 549 (CA) 555.
16. Id. § 4.
17. Accident Compensation Act § 5.
18. Id. § 103.
19. Id. §§ 71–74.
20. Id. §§ 6, 16.
21. Id. §§ 15–20.
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C. Developments to 2010
Since the passing of the 1972 Act there have been four reenactments
of the accident compensation scheme as a whole—in the Accident Compensation
Act 1982,22 the Accident Rehabilitation and Compensation Insurance
Act 1992,23 the Accident Insurance Act 1998,24 and the Injury
Prevention, Rehabilitation, and Compensation Act 2001.25 We need to look
briefly at the aims of each of these enactments.
The Accident Compensation Act 1982 left coverage untouched, made
some minor changes to entitlements, turned the Accident Compensation
Commission into the Accident Compensation Corporation (ACC) with a
board of directors, and, most significantly, placed the funding of the
scheme explicitly on a pay-as-you-go basis.26
Under pay-as-you-go funding, levies for the year pay all of that year’s
costs, including both new and old claims. They do not cover the continuing
costs of claims extending into future years. Under full funding, levies must
meet all the costs of claims made during the year. They do not include past
claims, but do include the continuing cost of claims for the full duration of
an injury. At its inception the scheme was not fully funded, but because
there were no old claims payments in were substantially greater than outgoings.
This partial funding in the early years meant that substantial reserves
were accumulated, leading to pressure from employers to reduce the
cost of accident compensation. The government of the day took heed and
made substantial cuts in the levies. As a result, the reserves were depleted
very rapidly, and this contributed to the scheme’s growing financial instability.
The government once again intervened, by imposing huge levy increases
(in some cases exceeding five hundred percent) and by asking the
Law Commission to review how the scheme was operating and to make
recommendations accordingly.
The Law Commission’s 1988 Report denied that the scheme was facing
a financial crisis and, far from recommending cuts, it strongly supported
expanding the scheme so as to bring sickness and non-accidental
incapacity under its umbrella.27 The Commission considered that the demarcation
between injury and illness was clearly anomalous and that it
22. Accident Compensation Act 1982.
23. Accident Rehabilitation and Compensation Insurance Act 1992.
24. Accident Insurance Act 1998.
25. Injury Prevention, Rehabilitation, and Compensation Act 2001.
26. Accident Compensation Act 1982.
27. NEW ZEALAND LAW COMMISSION, REPORT NO. 4 PERSONAL INJURY: PREVENTION AND
RECOVERY (Government Printer, Wellington 1988) [hereinafter 1988 REPORT].
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ought to disappear, sooner rather than later. It thought that this could be
done in stages, by accepting congenital incapacities already supported by
the social welfare system, by later taking in higher level disabilities and
finally including others less serious.28 On the other hand, lump sum payments
were seen as illogical in relation to the income maintenance purposes
of the injury scheme, and for sickness they would become incongruous.29
Serious lost physical capacity and any economic loss were better met by
periodic payments. Lump sums should, therefore, be abolished.
The Commission was satisfied that their scheme would not lead to an
explosion in costs and could be funded by levies, investment income and
taxation, much as already happened. While the costs of the scheme had
been rapidly going up, by far the largest area of increase was in the
amounts payable to those who claimed in earlier years who were still in
receipt of payments from the Corporation. The cost of claims in the first
year had increased only by small amounts. In 1987 the whole of the real
increase in spending was for earlier years.30 So the scheme was doing what
it was intended to do—compensating the seriously incapacitated without a
limit of time. The Labour government accepted the Commission’s recommendations
and tabled a Bill creating a comprehensive income maintenance
and rehabilitation scheme available to all persons who suffered
incapacity, regardless of cause. However, shortly afterwards, the government
lost power in the election of 1990, and the Bill accordingly lapsed.
The incoming National government then came to the conclusion that the
existing scheme was too expensive and abruptly changed direction.
Following the election the new Minister of Labour issued a Policy
Statement reviewing the state of the scheme.31 This condemned the funding
base for the scheme as unfair, because employers were funding nearly seventy
percent of the total costs while work accidents accounted for only
about forty percent of those costs, and earners paid nothing towards the
cost of non-work injuries.32 And more critically, the review maintained that
the increasing numbers of people receiving compensation, higher benefits,
and the expansive interpretation by the courts of “personal injury by accident”
in delimiting coverage had caused costs to run out of control.33 It was
proposed to solve these difficulties by a reform of the scheme that widened
28. Id.
29. Id.
30. Id.
31. DEP’T OF LABOUR, ACCIDENT COMPENSATION—A FAIRER SCHEME, (Government Printer,
Wellington 1991).
32. Id.
33. Id.
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and reallocated its funding base, reduced its costs and removed some of the
judicial extensions to its coverage.
The Accident Rehabilitation and Compensation Insurance Act 1992
was intended to meet these concerns and achieve these objectives.34 As
regards funding, pay-as-you-go was retained, but substantial changes were
made to existing sources of funding and new sources were introduced.35 In
particular, employers met only the cost of providing coverage for injury
sustained in the course of employment (except where a motor vehicle was
involved), and all earners paid a levy to meet the cost of coverage for accidental
injury.36 As regards benefits, there was a new “work capacity” test
aimed at moving accident compensation claimants who could not find work
onto the unemployment benefit; rehabilitation assistance was available only
in restricted circumstances; lump sum payments for loss of faculty and pain
and suffering were abolished and replaced by an “independence allowance”
set at low levels; and entitlement to compensation ended when a claimant
became entitled to superannuation payments.37 Further savings were sought
to be made by reining in the ability of the judges to give an expansive interpretation
to the provisions governing the ambit of the scheme.38 The
bases for cover formerly all fell within the broad concept of “personal injury
by accident,” but now they were treated as separate categories and
made subject to a series of detailed definitions.39 Judicial discretion in determining
their limits was largely removed.
The next significant development came with the passing of the Accident
Insurance Act 1998.40 This left cover and benefits as they were but
privatized the delivery of the statutory benefits for the victims of accidents
at work.41 The monopoly control exercised by the Accident Compensation
Corporation was removed and employers were obliged to insure with a
private insurance company or a new state-owned enterprise set up to compete
with the private companies.42 A regulatory regime aimed to make sure
34. Accident Rehabilitation and Compensation Insurance Act 1992.
35. Id. at pt. VII.
36. Id. §§ 100, 113.
37. Id. §§ 37–44.
38. Id. § 3.
39. Cover as presently provided continues to be based on the 1992 categories, but with some
amendment. See text accompanying notes 65–71.
40. Accident Insurance Act 1998. For evaluations see Stephen Todd, Privatization of Accident
Compensation: Policy and Politics in New Zealand, 39 WASHBURN L.J. 404, 474–87 (2000).
41. Accident Insurance Act 1998.
42. Accident Insurance Act 1998 § 169.
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that persons with cover received their entitlements.43 The purpose behind
the reform was to facilitate freedom of choice, promote a greater emphasis
on safety and rehabilitation, and encourage the efficient management of
claims.44 The government view was that a publicly-administered scheme
lacked sufficient incentives to safety and efficiency. The introduction of
private enterprise would reduce the overall costs of injury, by an increased
focus on prevention and rehabilitation and on the monitoring of workplace
safety performance. Further, pay-as-you-go funding restricted the ability of
the Corporation to reward innovation in injury prevention, as employers
paid premiums that related largely to injuries that had already occurred. So
henceforth the scheme was to be financed on a fully funded basis.
Whether these hopes for efficiency and accident prevention would
have been fulfilled cannot be known, for the new privatized regime was in
force for just one year. A new Labour government was elected at the end of
1999, and one of its first acts was to restore the public monopoly. It saw no
necessary or sufficient connection between the issues of paying victims and
reducing accidents. It also rejected the view that the ACC operated inefficiently.
On the contrary, there was no duplication in the provision of services
and administrative costs were very low.45 However, full funding was
thought to be desirable and this was retained in the new legislation that the
government introduced shortly afterwards.
This legislation—the Injury Prevention, Rehabilitation, and Compensation
Act 2001—once again left the provisions for coverage largely undisturbed.
46 Entitlements also were not much changed, the significant
exception being the reintroduction of lump sum compensation for impaired
amenity (but not for pain and suffering).47 So in core respects the previously
existing law continued. The new developments in the 2001 Act were
primarily in the field of accident prevention, and to this end it introduced
new processes and strategies aimed at reducing the incidence of injury and
promoting safety and security. However, provision for cover for medical
43. Id. § 168.
44. Id. at pmbl.
45. In the election in November 2008 the National Party regained power, and one of its policies is
to reintroduce private insurance covering accident compensation liabilities. INCREASING CHOICE IN
WORKPLACE ACCIDENT COMPENSATION (June, 2011), (available at
http://dol.govt.nz/consultation/increasing-choice/increasing-choice.pdf) has made a number of proposals.
These include extending the Accredited Employers Programme (as to which see infra text accompanying
note 286), allowing choice of workplace insurance cover in competition with the ACC,
subjecting insurers to prudential regulation, and appointing a market regulator to monitor and enforce
employer and insurer compliance with legal requirements.
46. Injury Prevention, Rehabilitation, and Compensation Act 2001 pt. 2.
47. Id. § 69.
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accidents was extended by amendment in 2005,48 in a way which will be
explained below and which has had very significant practical consequences.
A further amendment in 2008 extended cover to include workrelated
mental injury.49 Finally, in 2010, the name of the 2001 Act was
changed to the Accident Compensation Act 2001,50 thus returning to the
original, and surely appropriate, title.
D. Relationship with the Common Law
From the inception of the accident compensation scheme there has
been a bar on suing in New Zealand for damages for personal injuries or
death. The bar is presently found in section 317(1) of the 2001 Act, which
simplifies the original wording in the 1972 and 1982 Acts. It provides: “No
person may bring proceedings independently of this Act, whether under
any rule of law or any enactment, in any court in New Zealand, for damages
arising directly or indirectly out of–(a) personal injury covered by this
Act; or (b) personal injury covered by the former Acts.”51
The bar cannot be avoided by failure to make a claim or a purported
denial or surrender of rights under any of the Acts or a lack of entitlement
to any particular benefit.52 A similar bar applies in the case of personal
injury caused by a work-related gradual process, disease, or infection.53
The scope of the statutory bar was examined by the Court of Appeal in
Queenstown Lakes District Council v. Palmer.54 In this case the plaintiff
sought damages for the shock and mental injury that he suffered after witnessing
the death of his wife in a rafting accident which was caused, he
alleged, by the negligence of the defendant.55 It was argued that this was a
claim for damages “arising . . . ‘indirectly’ out of a personal injury covered
by the Act,” that is, the death of Mrs. Palmer, but Thomas J, delivering the
judgment of the court, was satisfied that the common law action was not
barred.56 Section 14(1) of the 1992 Act (the predecessor to section 317(1)
of the 2001 Act) did not apply, because the proceedings brought by Mr.
48. Injury Prevention, Rehabilitation, and Compensation Amendment Act (No 2) 2005 § 13.
49. Injury Prevention, Rehabilitation, and Compensation Amendment Act 2008 § 9.
50. Accident Compensation Amendment Act 2010 § 5.
51. Accident Compensation Act 2001 § 317(1). For the earlier bars, see Accident Compensation
Act 1972 § 5(1); Accident Compensation Act 1982 § 27(1); Accident Rehabilitation and Compensation
Insurance Act 1992 § 14(1); Accident Insurance Act 1998 § 394(1).
52. Accident Compensation Act 2001 § 317(7).
53. Id. § 318(1)–(2). Oddly there are no similar anti-avoidance provisions as in section 317(7), but
these are implicit in the bar itself and are in fact unnecessary.
54. [1999] 1 NZLR 549 (CA).
55. Id.
56. Id.
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Palmer did not arise indirectly out of Mrs. Palmer’s death.57 The critical
words in section 14(1) were “personal injury covered by this Act,” and the
relevant personal injury had to be personal injury for which damages were
sought.58 Yet Mr. Palmer was not seeking damages for his wife’s death.
The relevant injuries for which he was seeking damages were the mental
injuries which he himself suffered as a result of the alleged breach of a duty
of care owed to him by the defendants. Mrs. Palmer’s death was simply
part of the sequence of events which provided the factual basis for his
claim.
Thomas J was satisfied that the legislative history and the policy behind
the legislation, and indeed common sense, supported this view.59 Persons
covered under the Act were denied access to the courts at common
law in return for the perceived advantages of the statutory scheme. The
legislation reflected this policy from the outset. The purpose of the provision
barring common law claims was to prevent persons who suffered personal
injury being compensated twice over, once under the statute and then
at common law, not to prevent them recovering any compensation at all. So
the application of the Act and the corresponding scope for common law
proceedings would automatically adjust as and when the scope of the cover
provided by the Act was extended or contracted.60 To the extent that the
statutory cover was extended, the right to sue at common law would be
removed; to the extent that the cover was withdrawn or contracted, the right
to sue at common law would be revived. Any other view would lead to
fundamental injustice, depriving a person in Mr. Palmer’s position both of
compensation and of damages.
The bar on suing does not extend to any proceedings relating to any
damage to property, or any express term of any contract or agreement,61 or
any personal grievance arising out of a contract of employment.62 However,
there can be no award of compensation in such proceedings for personal
injury covered by the scheme,63 nor indeed in any other kinds of
proceedings, such as a criminal prosecution.64
57. Id.
58. Id.
59. Id.
60. Id.
61. E.g., Brittain v. Telecom Corporation of New Zealand Ltd [2001] 2 NZLR 201 (CA) (confirming
that proceedings for a benefit founded on an insurance contract providing for additional payments in
the event of injury are not barred).
62. Accident Compensation Act 2001 § 317(2).
63. Id. § 317(3).
64. Sentencing Act 2002 § 32(5) provides that a court making a sentence of reparation “must not
order the making of reparation in respect of . . . loss or damage . . . for which the court believes that a
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E. Cover
1. Categories of Cover
The provisions for cover under the accident compensation scheme
over the years have become increasingly detailed, and presently they are
divided up under twelve specific heads of claim. However, cutting through
this prolixity, the various bases for cover fall broadly into four core categories.
These are personal injury caused by an accident;65 personal injury by
way of medical treatment;66 personal injury caused by employment-related
disease or infection;67 and personal injury by way of mental injury suffered
as a consequence of physical injury,68 by the victims of certain specified
sexual offences,69 or which is work-related.70 The victim in any of these
cases can make a claim for compensation to the Accident Compensation
Corporation pursuant to a simple administrative process.71
2. Personal Injury
In every case the cover provided under the Act depends on the claimant
having suffered “personal injury.” This is defined as meaning death;
physical injuries; mental injury suffered because of the claimant’s physical
injury, or caused by certain criminal acts, or which is work-related; or
damage (other than wear or tear) to dentures or prostheses.72 Personal injury
does not include personal injury caused wholly or substantially by a
gradual process, disease, or infection unless it is work-related, caused by
treatment, is consequential on another, covered, personal injury, or is consequential
on another treatment injury.73 Nor does it include a heart attack
or stroke unless this constitutes a treatment injury or is work-related.74
person has entitlements under the Accident Compensation Act 2001.” In Davies v. Police [2009] 3
NZLR 189 (SC) paras. [2], [24]–[25], [34], [37] the Supreme Court held that the inquiry should be into
whether there was cover for the type of loss for which there were entitlements under the Act, not into
the sums actually payable. Accordingly, a criminal court could not make a reparation order to compensate
a victim for the difference between her full loss of income and the eighty percent loss for which she
was compensated under the 2001 Act.
65. Accident Compensation Act 2001, § 20(2)(a).
66. Id. § 20(2)(b)–(d), (f)–(i).
67. Id. § 20(2)(e), (j).
68. Id. § 26(1)(c).
69. Id.§§ 21, 26(1)(d), sched. 3.
70. Id. §§ 21B, 26(1)(d).
71. Id. § 48.
72. Id. § 26(1).
73. Id. § 26(2).
74. Id. § 26(3).
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It is clear that the reference to “physical injuries” in the definition is
intended to be all-embracing. The definition specifically states that such
injuries include “a strain or a sprain,” but otherwise the concept is not further
defined.75 Seemingly it should be understood as meaning any condition
involving harm to the human body, including harm by sickness or
disease, that is more than merely trifling or fleeting.76 Mental injury, by
contrast, is statutorily defined, this being a “clinically significant behavioural,
cognitive, or psychological dysfunction.”77
3. Residual Actions for Damages
It is apparent at least that “physical injuries” has a very broad meaning.
But there may still be certain forms of injury which do not qualify
under the statutory definition and which may be actionable at common law.
A clear example is mental injury in secondary victim cases. Further, assuming
that some form of personal injury, as defined, has been suffered, it may
fall outside the particular categories which are covered for compensation
and, again, may be potentially actionable. The most significant examples
probably are personal injury which is not caused by an “accident,”78 and
injury by disease or by heart attack or stroke which is not otherwise covered
as having been caused by treatment or as being work-related. In these
and certain other cases a common law action can still be maintained where
the harm is alleged to have been caused by tortious conduct by another.
The ambit of cover in each of the four core categories is defined by
the Act in close detail. Our concern is with the provisions governing injury
caused by medical treatment, and we will be looking at these in Part II
below.79
75. Id. § 26(1)(b).
76. TODD, supra note 1, at para 2.4.01. This suggestion was approved in Falwasser v. Attorney-
General. [2010] NZHC 410 para [90]. It was held in this case that a plaintiff suffered physical injuries
from exposure to pepper spray, and that his common law claim against the police accordingly was
barred. Id. at para [91].
77. Accident Compensation Act 2001 § 27. The definition is based upon the American Psychiatric
Association’s Diagnostic and Statistical Manual of Mental Disorders.
78. The core meaning of “accident” (defined at length in section 25(1)) is “a specific event”
involving “the application of a force . . . or resistance external to the human body.” Accident Compensation
Act 2001 § 25(1). It does not cover, for example, seeing or hearing about injury to another, or a
child suffering from foetal alcohol syndrome due to her mother having drunk alcohol during the pregnancy,
Winikerei v. ARCIC 27/7/05, Fogarty J, HC Wellington CIV-1999-485-000008, or a child suffering
from cerebral palsy caused by an antenatal force external to the foetus but occurring within the
mother, Sam v. ACC [2009] 1 NZLR 132 (HC) at para [43], or a person inhaling smoke, Simm v. ACC
[2006] NZHC 1634 (HC) at paras [1]–[3].
79. For discussion of the other categories, see TODD, supra note 1, at para 2.4.02 (personal injury
by an accident), para 2.4.03 (mental injury), para 2.4.05 (work-related disease, heart attacks and
strokes).
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A further possible basis for an action is where the plaintiff seeks to recover
exemplary, rather than compensatory, damages. Quite early on, in
Donselaar v. Donselaar, the Court of Appeal decided that actions for exemplary
damages could still be maintained.80 Richardson J explained that
proceedings for exemplary damages were not “proceedings for damages
arising directly or indirectly out of” a person’s injury or death, where the
statutory bar applied, because exemplary damages did not arise out of the
plaintiff’s injury and were not directed to the plaintiff’s loss.81 In its contemporaneous
decision in Taylor v. Beere, the Court of Appeal confirmed
that exemplary or punitive damages were intended to punish and deter a
defendant guilty of outrageous or contumelious conduct.82 Recently, in
Couch v. Attorney-General, the New Zealand Supreme Court limited the
remedy by deciding that it should be available only in cases of advertent or
reckless wrongdoing.83 Negligence, even where gross, would not suffice.
F. Claimants
All persons who suffer personal injury in New Zealand are entitled to
claim,84 although non-residents are eligible only for limited benefits.85 The
scheme also applies to persons ordinarily resident in New Zealand who
suffer death, physical injuries and consequential mental injuries or personal
injury as a result of medical treatment while outside New Zealand, and the
injury is one for which there would be cover if the personal injury had occurred
within New Zealand.86
G. Benefits
Where there is cover there is a right to compensation. The statutory
entitlements available to victims of personal injury are treatment and rehabilitation,
earnings-related compensation, lump sum compensation for permanent
impairment, and death benefits.87
80. [1982] 1 NZLR 97 (CA) 98, 107.
81. Id. at 109.
82. [1982] 1 NZLR 81 (CA) 84–86.
83. [2010] 3 NZLR 149 (SC) at para [1].
84. Accident Compensation Act 2001 § 20. There is an exception in section 23, concerning accidents
on ships or aircraft coming to, travelling around or leaving New Zealand. Id. § 23.
85. In particular, non-residents do not qualify for earnings-related compensation, because they
must be persons receiving income as defined in the Income Tax Act 1994. See the definition of “employee”
in section 6. Id. § 6.
86. Id. § 22. Special provision is made for injury by work-related disease where this is suffered
outside New Zealand. Id. § 24.
87. Id. § 69.
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1182 CHICAGO-KENT LAW REVIEW [Vol 86:3
The Corporation is liable to pay the cost of necessary and appropriate
medical treatment and of social or vocational rehabilitation.88 The purpose
of social rehabilitation is to assist in restoring a claimant’s independence to
the maximum extent practicable, and it can cover such benefits as aids and
appliances, home help, child care, modifications to the home, assistance
with transport and training for independent living.89 Vocational rehabilitation
is available to persons covered by the Act who are entitled to weekly
compensation.90 It seeks to help a claimant maintain or obtain employment
or regain or acquire vocational independence.91
Earnings-related compensation has always been, and remains, a key
benefit.92 It is payable to claimants who were earners at the time of the
personal injury and who are unable, because of their injury, to engage in
their employment.93 There are special provisions dealing with, inter alios,
earners not in permanent employment, the self-employed, low earners and
potential earners.94 The amount payable is eighty percent of the claimant’s
weekly earnings, as calculated in accordance with detailed statutory formulae.
95 All calculations are subject to a maximum weekly payment of
NZ$1,341.31, which is adjustable in relation to movements in average
weekly earnings.96
Lump sums may be awarded to compensate for permanent impairment,
but not for pain and suffering.97 There is a minimum impairment
threshold of ten percent and the minimum payment is NZ$2,500.98 The
maximum sum, which is payable for impairment of eighty percent or more,
is set at NZ$100,000.99 These figures are adjusted annually in line with the
Consumer Price Index.100 The amount payable in any particular case is
calibrated so that more seriously injured claimants receive proportionately
more than less seriously injured claimants.
88. Id. §§ 69(1)(a), 75–96, sched. 1, pt. 1.
89. Id. §§ 79, 81(1).
90. Id. § 85.
91. Id. § 80(1).
92. Id. §§ 69(1)(b)–(c), 100–06, sched. 1, pt. 2.
93. Id. § 103.
94. Id. at sched. 1, pt. 2, cls. 35–38, 42, 47.
95. Id. sched. 1, pt. 2, cl. 32.
96. Id. sched. 1, pt. 2, cl. 46.
97. Id. § 69(1)(d), sched. 1, pt. 3, cl. 54.
98. Id. sched. 1, pt. 3, cl. 56(3).
99. Id. sched. 1, pt. 3, cl. 56(4).
100. Id. §§ 116, sched. 1, pt. 3, cl. 56(5).
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Where death ensues, the Act makes provision for the payment of benefits
to the deceased’s dependants.101 These include funeral grants, certain
survivors’ grants, and weekly compensation for loss of dependency.102
A claimant who qualifies for compensation may be disentitled to relief,
fully or partially, on a number of grounds. They include: the claimant
wilfully inflicting injury on himself or herself or committing suicide;103 the
claimant seeking compensation as a spouse or dependant in circumstances
where he or she has been convicted of the murder of the deceased person;
104 the claimant being in prison;105 and the claimant being injured in
the course of committing a criminal offence punishable by a maximum
term of imprisonment of at least two years, unless the Minister responsible
for the scheme is satisfied that there are exceptional circumstances exempting
the claimant from the operation of this provision.106 These ultimately
are penal provisions, preventing payment of what would otherwise be perfectly
valid claims, for reasons of public policy.
H. Claims Process
The Act sets out a simple process for making a claim. All that is necessary
is that a person should lodge a claim for cover and/or a specified
entitlement.107 On receiving it the Corporation must decide whether it accepts
that cover exists, and if satisfied that it does, provide information
about relevant entitlements and facilitate access to those entitlements.108
There is a one year time limit for making a claim, the start of the period
running from the date of the personal injury, but the Corporation must not
decline a late claim unless its lateness prejudices the Corporation’s ability
to make decisions about the claim.109 The Corporation must make reasonable
decisions in a timely manner, give notice in writing of any decision,
give reasons if the decision is adverse to the claimant, and provide information
about review and appeal rights.110 A dissatisfied claimant may apply
for a review of any of the Corporation’s decisions, including a decision
101. Id. § 69(1)(e).
102. Id. § 69(1)(e), sched. 1, pt. 4, cls. 64–66, 70–71.
103. Id. § 119.
104. Id. § 120.
105. Id. § 121.
106. Id. §§ 122.
107. Id. § 48.
108. Id. § 50.
109. Id. § 53.
110. Id. §§ 54–64.
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1184 CHICAGO-KENT LAW REVIEW [Vol 86:3
under a Code of Claimants’ Rights.111 An independent reviewer conducts
the review hearing in accordance with detailed rules of procedure.112 An
appeal lies to the District Court,113 and further appeals on matters of law
may be taken, with leave, to the High Court114 and thence to the Court of
Appeal.115
I. Funding
The funding for accident compensation comes from levies on activities
where accidents tend to occur and also from general taxation.116 The
levies originally were payable by employers, the self-employed and motor
vehicle owners, and over the years new sources of funding have been added.
Today the levies fund four accounts: the Work Account (for workrelated
injuries of employees, private domestic workers and self-employed
persons); the Motor Vehicle Account (for motor vehicle injuries); the Earners’
Account (for earners’ non-work injuries); and the Treatment Injury
Account (for injuries caused by treatment).117 In addition there is the Non-
Earners’ Account (for injuries to non-earners other than motor vehicle injuries
or treatment injuries), funded out of general taxation.118
As was earlier explained, the levies in the 1980s and 1990s were calculated
on a pay-as-you-go basis. However, since the Accident Insurance
Act of 1998 all of the accounts save for the Non-Earners’ Account have
been required to be fully funded.119 The premiums for each account must
cover all the costs of claims made in any particular year, including all future
costs.120 Formerly a separate Residual Claims Account funded the
continuing cost of past claims which were unfunded on a pay-as-you-go
basis, but in 2010 this account was folded into the Work Account.121 These
outstanding residual liabilities are required to be fully funded by 31 March
2019.122
111. Id. § 134.
112. See id. pt. 5.
113. Id. § 149.
114. Id. § 162.
115. Id. § 163.
116. Id. pt. 6.
117. Id. § 392.
118. Id. § 392(1)(c).
119. Accident Insurance Act 1998 §§ 282-307.
120. Accident Compensation Act 2001 § 169.
121. Id. § 21.
122. Id. § 169.
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The levies funding the Work Account are collected from employers,
private domestic workers and the self-employed, those for the Motor Vehicle
Account from vehicle registrations and from the sale of petrol, and
those for the Earners’ Account directly from employees’ earnings.123 In the
case of the Treatment Account, a statutory power to impose levies on registered
health professionals and organizations that provide treatment under
the Act has never been implemented. Rather, the Account is funded from
the Earners’ and Non-Earners’ Accounts according to the mix of earner and
non-earner clients.124
J. Administration
The Accident Compensation Corporation (ACC) is responsible for
administering the accident compensation scheme.125 The Corporation is a
Crown entity,126 and is managed by a Board appointed by the Minister.127
The duties of the Corporation are, inter alia, to determine cover, provide
entitlements, manage the Accounts, collect levies, and administer dispute
resolution procedures.128 Its functions include carrying out these duties,
promoting “measures to reduce the incidence and severity of personal injury,”
and managing “assets, liabilities and risks in relation to the Accounts.”
129 The Corporation must comply with the Minister’s directions
relating to the policy of the Government in relation to its functions, duties
and powers.130 An annual “service agreement” sets out the quality and
quantity of services provided by the Corporation, including its desired outcomes
and objectives in performing its functions, duties and powers.131 An
Annual Report provided to Parliament gives an overview of its performance
over the past year and its plans for the future.132
123. Id. §§ 167(2), 213, 218.
124. Id. § 228(2).
125. Id. § 3.
126. Id. § 259(4).
127. Id. § 267. “The Minister” means “the Minister of the Crown who . . . is . . . responsible for the
administration of [the] Act. Id. § 6.
128. Id. § 165.
129. Id. § 262.
130. Id. § 270.
131. Id. § 271.
132. See, e.g., ACCIDENT COMP. CORP., ANNUAL REPORT (2010), available at
http://www.acc.co.nz/search-results/index.htm?ssUserText=annual+report+2010 [hereinafter 2010
REPORT].
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1186 CHICAGO-KENT LAW REVIEW [Vol 86:3
II. MEDICAL INJURIES
As originally enacted, the accident compensation legislation provided
cover for “personal injury by accident” without specific reference to adverse
outcomes of medical treatment.133 Then shortly after its introduction
the Act was amended, by adding “medical, surgical, dental or first aid misadventure”
as an illustrative category but without any further definition.
So, within the one general concept, the courts had a largely unfettered discretion
in deciding quite where the parameters of the scheme ought to be
set. And they took advantage of this statutory flexibility, by emphasizing
that a generous approach was in keeping with the policy of the Act of providing
comprehensive cover for all those suffering personal injury in New
Zealand, “wherever, whenever, and however occurring.”134 More particularly,
we can see this kind of approach being taken in the cases considering
the meaning of medical misadventure.
Early decisions show the courts developing a two-limb test, by asking
whether there had been either medical negligence or medical mishap.135 As
regards negligence, the Court of Appeal in Green v. Matheson accepted
that this was medical misadventure, which included insufficient or wrong
treatment, failure to inform, misdiagnosis, misrepresentation (innocent or
fraudulent) or administrative shortcomings.136 If the plaintiff’s claim was
mishandled, it was her misfortune or ill-luck, and this fell squarely within
the idea of misadventure.137 As regards mishap, this was a quite unforeseeable
adverse consequence of treatment which had been properly administered
and which did not involve negligence.138
In Childs v. Hillock the two-limb approach was confirmed in the Court
of Appeal.139 Hardie Boys J considered that it achieved a proper balance
between recognizing (i) that the patient’s misfortune or mishap could be the
result of negligence, or other non-culpable error in treatment, or an unintended
consequence of correct treatment, and (ii) that not every medical
intervention is successful and that many are attended by risk.140 So his
Honour accepted the need to differentiate between medical patients who
were covered for compensation and patients who were simply receiving
133. Accident Compensation Act 1972 § 4(b).
134. ACC v.Mitchell [1992] 2 NZLR 436 (CA) 438–39.
135. See ACC v. Auckland Hosp. Bd. [1980] 2 NZLR 748 (HC) 751; Bridgeman v. ACC [1993]
NZAR 199 (HC).
136. [1989] 3 NZLR 564 (CA) 572–73.
137. Id. at 573.
138. See Auckland Hosp. Bd., supra note 135, at 751.
139. [1994] 2 NZLR 65, 72 (CA).
140. Id.
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medical treatment because they were ill.141 Some unexpected or “accidentlike”
event was required so that the case was removed from the category of
sickness or disease, which was not covered, to medical misadventure,
which was.142 Indeed, the legislature then followed the lead taken by the
courts, by providing in the 1992 Act that medical misadventure meant personal
injury caused by medical error or medical mishap.143 “Medical error”
was defined as meaning medical negligence, and “medical mishap” as
meaning an adverse consequence of properly administered treatment that
was “rare” and “severe.”144 These further requirements were defined in
their turn in close detail.145
The provisions introduced in 1992 were carried over into the Accident
Insurance Act 1998 and then the Injury Prevention, Rehabilitation and
Compensation Act 2001.146 Shortly afterwards, however, a review undertaken
by the ACC jointly with the Department of Labour expressed dissatisfaction
with the very concept of medical misadventure as defined in the
statute.147 In particular, the need to prove a medical error was seen as quite
anomalous in the context of a no fault compensation scheme. It perpetuated
a blaming culture and meant that the scheme was required to resolve the
same kinds of difficulties that arose under the tort system that it replaced.
This in turn led to considerable cost in investigating claims and delay in
deciding them. The medical mishap provisions also were criticized, being
seen as confusing and arbitrary. They often bore little relationship to the
circumstances of the patient, resulting in claimants unfairly missing out on
cover.
Following a consultation process the review recommended that the
concept of medical misadventure be abandoned and that instead there
141. Id.
142. Id.
143. Accident Rehabilitation and Compensation Insurance Act 1992 § 5(1).
144. Id. More specifically, the Act stated that “medical error” meant the failure of a registered
health professional to observe a standard of care and skill reasonably to be expected in the circumstances.
Id. It was not medical error solely because desired results were not achieved, or subsequent
events showed that different decisions might have produced better results, or the failure in question
consisted of a delay or failure attributable to the resource allocation decisions of the organization. Id.
145. Id § 5. An adverse consequence was “rare” only if the probability was that it would not occur
in more than one percent of cases in which that treatment was given. Id. § 5(2). There was no medical
mishap where an adverse consequence was rare in the ordinary course but was not rare for that particular
person, and the greater risk was known to the person prior to the treatment. Id. § 5(3). The consequence
was “severe” only if it resulted in the patient dying, or being hospitalized as an inpatient for
more than fourteen days, or suffering significant restriction or lack of ability lasting more than twentyeight
days in total. Id. § 5(4).
146. Accident Insurance Act 1998 §§ 34–37; Injury Prevention, Rehabilitation and Compensation
Act 2001 §§ 32–34.
147. ACCIDENT COMP. CORP., REVIEW OF ACC MEDICAL MISADVENTURE: CONSULTATION
DOCUMENT (2003).
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1188 CHICAGO-KENT LAW REVIEW [Vol 86:3
should be cover for unintended injuries in the treatment process. This
would include all adverse medical events, whether or not preventable, provided
they were unintended or, on another formulation, outside the expected
and likely range of consequences of treatment. This
recommendation formed the basis for the amendments to the scheme in
2005,148 introducing the concept of “treatment injury.”149 Their primary
aim was to move away from any need by a claimant to prove fault by a
registered health professional in order to qualify for compensation. The
hope was that professionals would be more willing to cooperate in the
claims process and that there would be a partnership between ACC and the
health sector that encouraged a climate of learning and also protected public
safety.
A. Cover
The extent of coverage for medical injury now is defined in six overlapping
heads of claim. These are: personal injury that is treatment injury
suffered by the person;150 personal injury that is a secondary infection
passed on by a victim of treatment injury to his or her spouse or child or to
any other third party, whether directly or through his or her spouse;151 personal
injury caused by treatment for personal injury for which the person
has cover;152 personal injury caused by gradual process, disease, or infection
that is treatment injury suffered by the person;153 personal injury
caused by a gradual process, disease or infection consequential on treatment
given to the person for personal injury for which the person has cover;
154 and personal injury that is a cardiovascular or cerebrovascular
episode that is treatment injury suffered by the person.155
Subparagraphs (b), (c), (f) and (i) are the exclusive determinants of
cover for personal injury that is suffered by way of some form of “treatment
injury,” which is defined as meaning, inter alia, personal injury suffered
by a person seeking or receiving treatment from a registered health
148. Injury Prevention, Rehabilitation, and Compensation Amendment Act (No 2) 2005, § 13.
149. See Ken Oliphant, Beyond Misadventure: Compensation for Medical Injuries in New Zealand,
15 MED. L. REV. 357 (2007) [hereinafter Oliphant (2007)].
150. Accident Compensation Act 2001 § 20(2)(b).
151. Id. §§ 20(2)(c), 32(7).
152. Id. § 20(2)(d).
153. Id. § 20(2)(f).
154. Id. § 20(2)(h).
155. Id. § 20(2)(i).
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professional.156 Until 1992 it was possible to mount alternative arguments,
that what had occurred either was medical misadventure or was personal
injury by accident in the ordinary sense. However, the Act provides now
that an “accident” does not include an occurrence which is treatment given
“by or at the direction of a registered health professional.”157 So coverage
for personal injury by an accident and for medical treatment does not overlap.
However, the Act provides separate coverage under paragraph (d) for
personal injury that is a consequence of treatment for another “personal
injury for which the person has cover,” and under paragraph (h) for “personal
injury caused by a gradual process, disease, or infection consequential
on treatment given to the person for personal injury for which the
person has cover.”158 It is not clear why these provisions have been included,
for in each case there must be an initial personal injury for which a
person has cover under another head. If treatment for personal injury is
given by a registered health professional, at least as a general rule it appears
that the provisions for treatment injury and for the consequences of
treatment will cover the same ground.159 We do not need to take this question
any further and will turn to the provisions governing treatment injury,
looking first at relevant principles of causation and then at the meaning of
this newly-introduced concept.
B. Treatment Injury
1. Proof of Cause
In order for there to be cover for a treatment injury, the personal injury
must be “caused by” the medical treatment.160 In the context of litigation
the ordinary rules of proof, invoking the so-called “but for” test, require
that a plaintiff prove on the balance of probabilities that the defendant’s
conduct was a cause of his or her loss. But sometimes the cause may not be
capable of such proof, perhaps because of the particular circumstances in
which an accident or event happened or because of the limits to scientific
156. Id. §§ 20(2), 32(1)(a). “Registered health professional” means, inter alia, “a chiropractor,
clinical dental technician, dental technician, dentist, medical laboratory technologist, medical radiation
technologist, midwife, nurse, occupational therapist, optometrist, pharmacist, physiotherapist, podiatrist,
or registered medical practitioner.”Id. § 6(1).
157. Id. § 25(2)(a).
158. Id. § 20(2)(d), (h).
159. See Childs v. Hillock [1993] NZAR 249 (not discussed on appeal at [1994] 2 NZLR 65
(CA)).
160. Accident Compensation Act 2001 § 32(1)(b).
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1190 CHICAGO-KENT LAW REVIEW [Vol 86:3
understanding in the particular field. In such cases it is perfectly possible
for the courts to hold the plaintiff to the normal requirements, so that if the
necessary evidence cannot be adduced the action fails. But this strict approach
can have harsh consequences, and in certain special cases the courts
have been persuaded to modify the ordinary rules. In an outstanding example,
the House of Lords in England has developed a doctrine of risk, pursuant
to which a plaintiff can succeed if he or she can prove that the
defendant caused or increased the risk of an outcome, as opposed to proving
that the defendant caused the outcome itself.161 The question we must
now consider is whether this or other similar modifications to the ordinary
principles of causation can apply in New Zealand in the context of a claim
for accident compensation.
a. Atkinson and Ambros
The clear answer, as laid down in the decision of the Court of Appeal
in Atkinson v. Accident Rehabilitation Compensation and Insurance Corporation,
is that modifications of this kind cannot apply to disputes about
cover for accident compensation.162 A child received negligent medical
treatment in the course of surgery shortly after birth, leading to hypoxia.163
The child later was found to be suffering from brain damage, and a claim
for accident compensation was made on his behalf.164 The claim failed, on
the ground that the hypoxia could not be causatively linked to the brain
damage.165 Richardson P, delivering the judgment of the court, recognized
that it may have contributed to the damage, but it was not proved that it had
contributed.166 The statute focused on outcomes, not on risk of injury or
potential for injury. To accept a lesser statutory test of increased risk or to
adopt a reversed onus approach would be inconsistent with the statutory
language and scheme.167 Public policy considerations had led to common
law modifications of this kind in relation to causation, but the public policy
of the accident compensation scheme had to be drawn from its statutory
provisions and these were outcomes-focused.168 “Risk or potentiality of
161. See Lara Khoury, Causation and Risk in the Highest Courts of Canada, England and France,
124 L. Q. REV. 103, 110–13 (2008); M H Tse, Tests for Factual Causation: Unravelling the Mystery of
Material Contribution, Contribution to Risk, the Robust and Pragmatic Approach and the Inference of
Causation, 16 TORTS L.J. 249 (2008).
162. [2002] 1 NZLR 374 (CA) paras [19]–[26].
163. Id. at para [22].
164. Id. at para [2].
165. Id. at paras [22]–[26].
166. Id.
167. Id. at para [24].
168. Id. at para [25].
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injury [was] not enough to attract cover.”169 And that conclusion “may well
have been seen as part of the policy package” governing the scheme as a
whole.170
The view taken in Atkinson came under challenge in ACC v. Ambros,
where the Court of Appeal returned to the causation question and gave it
extended consideration.171 Mrs. Ambros died of a heart attack which was
secondary to a rare condition called spontaneous coronary artery dissection
(SCAD).172 She had just given birth to her first child, and SCAD was
commonly associated with pregnancy and childbirth.173 The question at
issue was whether her death was caused by medical error in failing to diagnose
her condition and, accordingly, was covered under the Accident Insurance
Act 1998.174 The High Court upheld the claim,175 and the Accident
Compensation Corporation appealed from that decision.
Glazebrook J, delivering the judgment of the court, noted that the
1998 Act was passed against a background of the causation principles set
out in Atkinson, and was satisfied both that it had to be seen as legislative
acceptance of those principles and also that the case was correctly decided.
176 “In ordinary usage, one would not normally say that an injury was
caused by medical error when that injury was highly likely to have occurred
without the error.”177 Atkinson also was consistent with English
authority, and in particular with Wilsher v. Essex Area Health Authority,
where the House of Lords declined to hold that causing an increase in the
risk of harm by contributing one of several possible causes could be treated
as causing the harm.178 Accordingly, as the High Court test did not accord
with Atkinson, and there were no grounds for reviewing that decision, the
appeal should be allowed.179
Glazebrook J then turned to consider an alternative causal test put
forward by counsel appearing as amicus curiae, that where a personal injury
is alleged to arise from a failure of medical diagnosis and/or treatment,
169. Id.
170. Id.
171. [2008] 1 NZLR 340 at paras [8]–[9]. The description of this case is based upon a section of
my article, Stephen Todd, The Court of Appeal, Accident Compensation and Tort Litigation in THE
PERMANENT NEW ZEALAND COURT OF APPEAL: A CELEBRATION OF 50 YEARS (Rick Bigwood, ed.,
2009).
172. [2008] 1 NZLR 340 at para [1].
173. Id.
174. Id. at paras [2]–[3].
175. Ambros v. ACC (unreported) High Court, Auckland, CIV 2004-404-3261, 21 March 2005).
176. [2008] 1 NZLR 340 at paras [17]–[18].
177. Id. at para [18].
178. Id. at para [19]; Wilsher v. Essex Area Health Auth. [1998] A.C. 1074 (H.L.) 1090–92.
179. Id. at para [21].
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1192 CHICAGO-KENT LAW REVIEW [Vol 86:3
and (a) is the very injury which the diagnosis and/or treatment was intended
to prevent, and (b) is part of the medical event in respect of which
the diagnosis and/or treatment was given, then, prima facie, the injury has
been caused by the failure of the diagnosis and/or treatment.180In her Honour’s
opinion, whether this modification of ordinary principle ought to be
accepted required examination of the manner in which courts in other jurisdictions
had dealt with difficulties of proof and uncertainty in the evidence.
181
There were a number of situations where dissatisfaction with the result
of the traditional test of causation had led to calls for modification to the
“but for” test. One of these was the principle laid down in McGhee v. National
Coal Board182 and applied in Fairchild v. Glenhaven Funeral Services
Ltd.183 and Barker v. Corus UK Ltd.,184 that where there was one
noxious agent rather than multiple agents, a material contribution to the
risk posed by that agent was equivalent to a material contribution to the
damage.185 However, the principle was contrary to Atkinson and was not
applicable in New Zealand. Another was the possibility of claiming damages
for the loss of a chance of avoiding a bad outcome, but Hotson v. East
Berkshire Area Health Authority186 declined to extend the relevant principles
to a claim of medical negligence in failing to diagnose an injury.
Rather, it affirmed the traditional test, asking if a failure to diagnose or treat
was on the balance of probabilities a cause of the harm.187 Applying Hotson
in New Zealand, a claimant might not receive accident compensation
cover if an injury had two possible causes, and it was more likely that the
injury was caused by an event which did not attract cover as opposed to
other events which did. Furthermore in Gregg v. Scott,188 decided after
Fairchild, the House of Lords still maintained the rule in Hotson. Loss of
chance analysis had had a mixed reception in other common law jurisdictions,
189 but whatever the developments elsewhere, the analysis was in-
180. Id. at para [9].
181. Id. at paras [79]–[84].
182. [1973] 1 W.L.R. 1 (H.L.) 4–5.
183. [2003] 1 A.C. 32 (H.L.) 68.
184. [2006] 2 A.C. 572 (H.L.) 593–94.
185. For later discussion of the principle, see Sienkiewicz v. Greif (UK) Ltd [2011] 2 WLR 523
(S.C.).
186. [1987] 1 A.C. 750 (H.L.) 760–63.
187. Id.
188. [2005] 2 A.C. 176 (H.L.) 234..
189. Ambros, [2008] 1 NZLR 340 paras [44]-[45], where Glazebrook J noted that the analysis was
rejected by the Supreme Court of Canada in Laferrière v. Lawson, (1991), 78 D.L.R. 4th 609, 657(h)–
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compatible with the accident compensation regime. Either there was cover
or there was not. There was no ability to discount compensation, and no
conceptual need to do so where a wrongdoer was not himself or herself
liable for the injury. Applying Atkinson, any risk needed to be realized in
the occurrence of personal injury which was proved to have been caused by
the risk factor involved. So if an omission to treat caused an identifiable
added injury, cover would be available for that injury.
Turning to informed consent cases, Glazebrook J noted that in both
Chappel v. Hart190 and Chester v. Afshar191 a surgeon who had failed to
warn of a risk was held liable in circumstances where an explanation would
on the balance of probabilities have caused delay, but the same treatment
would have been likely to have been undertaken at a later date with a similar
risk of injury. The decisions were primarily based on a policy choice to
impose liability in order to ensure that the duty to obtain informed consent
was respected by medical practitioners, which policy had little relevance to
a no fault accident compensation regime. Another view, which could be
seen as being in accordance with the Atkinson test, was that the claims were
attributable to the materialization of the risk and not to the exposure to the
risk.192 So the “but for” test could be seen as met if the chances of the risk
materializing on the later occasion were slight. Yet her Honour declined to
endorse that approach, noting Lord Hoffmann’s view that the argument was
similar to saying that a win at the casino was caused by going there on
Tuesday because the chances were slight that there would have been a win
had the punter gone there on Wednesday.193
Glazebrook J accordingly determined that none of these developments
applied in the context of the accident compensation scheme.194 Even so,
there were a number of ways in which the courts had otherwise dealt with
difficulties of proof and uncertainty. These included a shifting of the evidential
burden of proof, the drawing of inferences of cause in circumstances
where science could not determine the matter, showing a statistical
link between particular events and an injury, and establishing proximity
between an alleged cause and its alleged effect. Taking these factors into
658(a), that differing views were expressed in the High Court of Australia in Naxakis v. West General
Hospital (1999) 197 CLR 269, and that a number of decisions in state jurisdictions in Australia had
accepted it. See also Tabet v. Gett (2010) 240 CLR 537.
190. (1998) 195 CLR 232, 285 (H.C.A.).
191. [2005] 1 A.C. 134 (H.L.) 140–42.
192. See CLERK AND LINDSELL ON TORTS paras. 2-15 (Anthony Dugdale & Michael A. Jones, eds.
19th ed. 2006).
193. Ambros [2008] 1 NZLR 340 at paras [48]–[52]; Lord Hoffmann, Causation, 121 L. Q. REV.
592, 602 (2005).
194. Ambros, [2008] 1 NZLR 340 at paras [51]–[52].
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1194 CHICAGO-KENT LAW REVIEW [Vol 86:3
account, her Honour was satisfied that a combination of some very limited
statistics, the proximity between the omissions and Mrs. Ambros’ death
and the increased monitoring had her condition been diagnosed sufficed to
make the question of causation arguable.195 So the matter was referred back
to the High Court for determination.196
b. Modification of Ordinary Rules?
Ambros considered, and declined to apply, three different routes pursuant
to which an ordinary approach to causation might be modified. First,
there is the risk principle articulated by the House of Lords in McGhee,
Fairchild, and Barker, holding that in defined circumstances it may be
sufficient to prove that the defendant caused an increased risk of a damaging
outcome, as opposed to the outcome itself. A core control on this principle
is the so-called single agency rule, applied in Wilsher, holding that the
principle cannot apply where there are multiple possible causal agents. Yet
the claims in Fairchild were not obviously more deserving than the claim
in Wilsher, and the causal uncertainty was no less acute. The House of
Lords seemingly settled on proof of a risk posed by a single agent for essentially
pragmatic reasons, to provide a remedy in deserving cases and to
have a workable rule that does not undermine the application of ordinary
rules of causation in other cases. However, even accepting the single agency
rule, at common law it remains uncertain whether or when the risk principle
can apply outside mesothelioma cases.197 Acceptance of the principle
only in some limited circumstances is likely to lead to inconsistency in the
law, although it may be that this is a price worth paying in order to allow
compensation in particularly deserving cases.
Second, there is the idea of a lost chance. The concept of risk describes
the probability of a negative outcome. Its “mirror image” is the loss
of the chance of a positive outcome.198 Sometimes the courts redefine the
nature of the plaintiff’s loss. They award damages not for an outcome but
for the loss of a chance of a better outcome, whether in actions founded
upon statute, for breach of contract, or for tort. The recovery of damages in
such a case does not depend on proof that the benefit of the chance could
be assessed as being more likely than not. Rather, the question is whether
the chance that was lost was “real” or “substantial,” as opposed to the loss
195. Id. at paras [53]–[78].
196. Id. at paras [113], [115].
197. In the UK the recovery of damages in mesothelioma cases is now governed by section 3 of
Compensation Act 2006, reversing the rule of proportionate liability introduced by the House of Lords
in the Barker decision. Compensation Act, 2006, c. 29, § 3 (U.K.).
198. JOHN G. FLEMING, THE LAW OF TORTS 229 (9th ed. 1998), 229.
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2011] TREATMENT INJURY IN NEW ZEALAND 1195
of a mere speculative possibility.199 So when exactly can claims properly
be framed as being for the loss of a chance? The decisions show that in
cases involving hypothetical physical injury the chance principle is not
applied and the plaintiff must adduce proof on the balance of probabilities
that he or she would have avoided the adverse physical outcome in question.
In particular, Hotson200 and Gregg201 in the UK, Laferrière v. Lawson202
in Canada and Tabet v. Gett203 in Australia decline to apply a chance
analysis to negligent omissions to provide medical treatment or advice. By
contrast, in cases involving hypothetical financial damage, many decisions
show that the plaintiff need prove only that he or she lost a substantial
chance of avoiding that outcome.204 A possible justification for the distinction,
to which Gregg lends some support,205 lies in the distinction between
deterministic events in the natural world and indeterministic events involving
the unfathomable actions of human agents.206 Speaking very broadly,
uncertainty about the cause of harm may be the result of lack of knowledge,
not random unpredictability of outcome, in which case the cause
may be classified as deterministic and is for the plaintiff to prove. Harshly
perhaps, an analysis of this kind puts the risk of losing due to scientific
uncertainty on the plaintiff. Only inherent uncertainty can be the subject of
a lost chance.
Third, there are the decisions of the High Court of Australia in Chappel
and of the House of Lords in Chester. On one view, the decisions were
primarily based on a policy choice to impose liability in order to ensure that
the duty to obtain informed consent was respected by medical practitioners.
On another, the claims were attributable to the materialization of the risk
and not to the exposure to the risk. So the “but for” test could be seen as
met if the chances of the risk materializing on the later occasion were
slight. Yet we have seen that the latter argument is not convincing, for the
reasons explained by Lord Hoffmann and endorsed by Glazebrook J in
Ambros. So the decisions stand as significant departures from orthodox
199. Davies v. Taylor, [1974] A.C. 207 (H.L.) 216; Benton v. Miller & Poulgrain [2005] 1
NZLR 66 (C.A.) at paras [57]–[58].
200. Hotson v. E. Berkshire Area Health Auth., [1987] 1 A.C. 750 (H.L.) 760–61.
201. Gregg v. Scott [2005] 2 A.C. 176 (H.L.) 187–90.
202. [1991] 1 S.C.R. 541, 608.
203. (2010) 240 CLR 537, paras [150]–[52].
204. See, e.g., Sellars v. Adelaide Petroleum NL (1994) 179 CLR 332, 355–56; White v. Jones
[1995] 2 A.C. 207 (H.L.) 234; Jackson v. Royal Bank of Scotland [2005] 1 W.L.R. 377 (H.L.) 387–
88; Benton v. Miller & Poulgrain [2005] 1 NZLR 66 (C.A.), at paras [78]–[86].
205. [2005] 2 A.C. 176 (H.L.), at paras [79], [220].
206. See generally Helen Reece, Losses of Chances in the Law, 59 MOD. L. REV. 188, 192–94
(1996).
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1196 CHICAGO-KENT LAW REVIEW [Vol 86:3
principles of causation. One commentator has observed that Chester not
only opens the door to full recovery in almost all cases involving the breach
of the medical duty to inform, but could easily be extended to all instances
of professionally rendered advice.207 While there is no sign as yet of this
happening, we remain in the dark about when exactly policy will justify
departing from a subjective test of causation in cases where the plaintiff has
relied on another to give skilled advice.
None of the principles considered above could operate to modify the
need to prove the cause of Mrs. Ambros’ death. The question was whether
Mrs. Ambros died as a result of her underlying condition or of medical
error in failing to diagnose that condition. The increased risk arose out of
separate agencies, only one of which was covered for compensation.208 So
the case was similar in principle to the decision in Wilsher and the risk
principle could not apply. The damage could not be analyzed in terms of a
lost chance of a better outcome either, for we have seen that the chance
principle has not been applied in medical cases involving physical harm.
As for the special rule about informed consent, this obviously was not relevant
to the particular facts in issue. So the case had to be determined on the
basis of ordinary principles governing proof of cause.
The question remains whether any of the modifying principles ought
to be imported into an inquiry into the cause of an injury for the purpose of
cover for accident compensation. Glazebrook J thought not, and this very
arguably is the better view. If a risk principle were to be introduced into the
scheme, the same difficulty would arise in deciding what kinds of risks
ought to justify compensation. While this question perhaps could be resolved
pragmatically, it is certainly doubtful whether a step of this kind
ought to be taken at all. There is no special justification for modifying the
ordinary rules of causation in the context of a no fault, non-liability based,
compensation system. The compensation scheme must have defined boundaries,
and proof on the balance of probabilities that a victim’s injury
comes within them is the appropriate test. Parliament having set these
boundaries, they cannot be expanded simply because the concept of accident
compensation is seen as deserving of support or a particular victim has
needs which, without cover, cannot easily be met. Why include a person
exposed by medical treatment to a small risk of disease in circumstances
where the treatment probably did not cause the disease, yet exclude a per-
207. Lara Khoury, Chester v. Afshar: Stepping Further Away from Causation?, 2005 SING. J.
LEGAL STUD. 246, 258–59 (2005).
208. However, if there is an injury and a finite set of possible causes all within the definition of
“accident” then there is proof that the injury was caused by accident. Sam v. ACC [2009] 1 NZLR 132
(HC) paras [20], [46].
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2011] TREATMENT INJURY IN NEW ZEALAND 1197
son suffering from the same harm who has not been exposed to that risk? A
victim who cannot prove that “but for” medical treatment he or she would
not have contracted a disease must be in the same position as all other victims
of the disease. Again, it is hard to see that compensation for loss of a
chance of a better medical outcome ought to have a place in the scheme. To
repeat Glazebrook’s J observation, there is no ability to discount compensation,
and no conceptual need to do so where liability is not in issue. Indeed,
the concept has in any event been rejected at common law, this primarily
because of its very significant implications. In Gregg, Lord Hoffmann
thought that the wholesale adoption of possible rather than probable causation
as the criterion of liability would be so radical a change in the law as to
amount to a legislative act.209 It would have enormous consequences for
insurance companies and the health service. In similar vein, Lord Phillips
and Baroness Hale both emphasized that the change would introduce very
great and unwarranted complexity into the law.210 Seemingly it would do
something similar to the accident compensation scheme. As for the informed
consent principle, the policy in Chappel and Chester of imposing
liability in order to encourage medical practitioners to obtain their patients’
informed consent to treatment is hardly relevant to a no fault scheme. So
once again we can support Ambros in deciding that these cases should not
apply.
2. Nature of Treatment Injury
“Treatment injury” means personal injury suffered by a person seeking
or receiving treatment from a registered health professional that is
caused by treatment and that is not a necessary part or ordinary consequence
of the treatment, taking into account all the circumstances including
the person’s underlying health condition and the clinical knowledge at the
time of the treatment.211 It does not include: (a) personal injury that is
wholly or substantially caused by a person’s underlying health condition;
(b) personal injury that is solely attributable to a resource allocation decision;
or (c) personal injury that is a result of a person unreasonably withholding
or delaying consent to undergo treatment.212 The fact that
treatment did not achieve a desired result does not of itself constitute treatment
injury.213 There is no cover in certain cases, considered below, where
209. Gregg v. Scott [2005] 2 A.C. 176 (H.L.) 198–99.
210. Id. at 210, 234.
211. Accident Compensation Act 2001 § 32(1).
212. Id. § 32(2).
213. Id. § 32(3).
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1198 CHICAGO-KENT LAW REVIEW [Vol 86:3
personal injury is suffered in the course of a clinical trial.214 Where treatment
results in an infection suffered by a patient, cover extends to secondary
victims of that infection in certain cases.215
“Treatment” (for the purpose of deciding whether or when treatment
injury has occurred) is given a wide definition. It includes: (a) the giving of
treatment; (b) a diagnosis of a condition; (c) a decision on the treatment to
be provided (including a decision not to provide treatment); (d) failure or
delay in providing treatment; (e) obtaining or failing to obtain a person’s
consent to treatment; (f) the provision of prophylaxis; (g) the failure of any
equipment used as part of the treatment process; and (h) the application of
any support systems used by the organisation responsible for providing the
treatment.216
Formerly, in order to establish medical misadventure, a claimant had
to establish that there had been a “mishap” or “error,” as defined. The definition
of “treatment injury” abandons any reference to either concept, yet
both are necessarily relevant in determining whether a treatment injury has
occurred. First, as regards mishap, there is no cover for personal injury that
is a necessary part or ordinary consequence of treatment. The only example
given in the explanatory note to the Bill introducing the new provisions
was a surgical incision during an operation. That may be clear, but the answers
to many other questions are not. Treatment very frequently will pose
a risk of recognized but unwanted side effects. Are these an “ordinary consequence”
of treatment? Of course, the risks of treatment can vary enormously,
from those that are certain or virtually certain to those that are
vanishingly small. At some point a court must be able to say that they were
not “necessary” or “ordinary.”217
ACC takes the view that known complications are not necessarily excluded,
as the ordinary consequence criterion is interpreted to refer to inju-
214. Id. § 32.
215. Id. § 32(7).
216. Id. § 33(1).
217. The relevant question here is whether the injury can be seen as a necessary part or ordinary
consequence at the time when the treatment commenced rather than when the nature of the claimant’s
condition became apparent during the course of treatment. In McEnteer v. ACC [2010] NZCA 126 the
claimant had suffered an aneurysm which ruptured during surgery and which had to be clipped temporarily
for longer than normal, resulting in brain damage. It was argued for the claimant that while the
surgeon knew a temporary clipping was needed, so cover for that was excluded, he was not to know
that the aneurysm would rupture needing a longer clipping, and that this was therefore an unanticipated
development causing injury for which there was cover. Id. at [13]. The Court of Appeal rejected the
argument, holding that it would require an abstracted expectation of an average outcome based on
hypothetical treatment and would open up much scope for debate for no discernable reason. Id. at paras
[18]–[19].
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2011] TREATMENT INJURY IN NEW ZEALAND 1199
ries which are “expected” or “usual.”218 But how this threshold might be
represented in percentage terms is hard to say. There must indeed be a risk
of “category creep,” whereby increasingly probable consequences are accepted
as treatment injuries.219 Without a doubt the threshold for coverage
has shifted, from consequences that were “rare” in the determination of
whether there had been medical misadventure to those now that are not
necessary or ordinary. But the courts still must determine whether there has
been some kind of mishap justifying coverage. In this respect the law has
reverted from detailed definition back to judicial discretion.
Second, as regards error, let us take the requirement that the personal
injury should not be wholly or substantially caused by a person’s underlying
health condition. Where there is a failure to treat and the patient’s condition
gets worse, or treatment does not alleviate a condition, how do we
determine whether the continuing injury is caused by the treatment or by
the underlying condition? It may be that we need to make an inquiry into
the causal potency of the underlying treatment relative to that of treatment.
220 Perhaps a claimant must establish on the balance of probabilities
that treatment, or different treatment, would have improved the patient’s
condition or prevented it from getting worse. The Corporation is no longer
required to find fault, but the requirement that the claimant show that the
health professional should have treated or should have treated differently is
likely to involve the claimant needing to show that the health professional
was negligent in making his or her decisions about treatment. Furthermore,
the Act provides that it is not of itself treatment injury because desired
results are not achieved. So the scheme is not intended to underwrite a lack
of success in medical treatment. But when might there be treatment injury
when desired results are not obtained? An obvious answer is when the
wrong treatment is given. In addition, “treatment” is defined as including,
inter alia, a decision not to provide treatment, a failure to provide treatment
or to provide treatment in a timely manner, failing to obtain a person’s
consent to undergo treatment, and the failure of any equipment, device, or
tool used as part of the treatment process. While negligence is not formally
required, all of these points suggest that it necessarily reappears in deciding
whether treatment injury can be shown to exist.
218. ACCIDENT COMP. CORP., TREATMENT INJURY PROFILE 3 (Sept. 2010) (kindly provided to the
author by Dylan Tapp, Clinical Analyst, ACC) [hereinafter ACC TREATMENT INJURY PROFILE].
219. Oliphant (2007), supra note 149, at 383.
220. Id. at 384.
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1200 CHICAGO-KENT LAW REVIEW [Vol 86:3
3. Treatment Injury in Operation
Evidence of the continuing significance of mishap and error can be
found when we consider the figures showing how claims for medical misadventure
used to be handled and how treatment injury has operated in
practice in the five years since its introduction. Prior to 2005 the difficulties
facing claimants seeking to prove that they had suffered medical misadventure
led to frequent disagreement as between claimant and the ACC, both in
determining whether the closely defined requirements for “mishap” were
satisfied and also in resolving contested issues of negligent error. Fewer
than three thousand medical misadventure claims were made annually, and
only forty percent were accepted as being entitled to cover.221 Of these,
eighty-six percent were based on medical mishap and fourteen percent on
medical error.222 They comprised only a small percentage of all injuries
accepted under the accident compensation scheme and took much longer
than the average to resolve.223 But the picture now is very different.
The most significant change is a dramatic increase in the number of
claims lodged with ACC. There were 1,434 medical injury claims in 2004–
05, 2,846 in 2005–06, 3,964 in 2006–07, 5,073 in 2007–08, 5,472 in 2008–
09 and then a small drop to 5,210 in 2009-10.224 In June 2010 the total
number of treatment injury claims reached 31,103, and the overall acceptance
rate climbed to sixty-six percent.225 By comparison, the total number
of ACC claims made over the same period has risen only slowly, and the
most recent figures show a small decrease. There were 1,523,946 claims in
2004–05; 1,604,359 in 2005–06; 1,685,995 in 2006–07; 1,755,899 in
221. ACCIDENT COMP. CORP.. CLAIMANT PROFILE: MEDICAL MISADVENTURE CLAIMANTS (Feb.
2003).
222. Id. at 3.
223. In 2002 medical misadventure claims comprised only 0.05% of all accepted injuries. See
WELLINGTON DEPT. OF LABOUR & ACC, ACC BACKGROUND PAPER: A COMPREHENSIVE STUDY OF
THE COST OF ACCEPTED MEDICAL MISADVENTURE CLAIMS 4 (Mar. 2003).
224. ACCIDENT COMP. CORP, ANNUAL REPORT 56 (2006), available at
http://www.acc.co.nz/publications/index.htm?ssUserText=annual+report [hereinafter 2006 REPORT];
ACCIDENT COMP. CORP., ANNUAL REPORT 26 (2007), available at
http://www.acc.co.nz/publications/index.htm?ssUserText=annual+report [hereinafter 2007 REPORT];
ACCIDENT COMP. CORP., ANNUAL REPORT 12 (2008), available at
http://www.acc.co.nz/publications/index.htm?ssUserText=annual+report [hereinafter 2008 REPORT];
ACCIDENT COMP. CORP., ANNUAL REPORT 2009, 48, available at http://www.acc.co.nz/searchresults/
index.htm?ssUserText=annual+report+2009 [hereinafter 2009 REPORT]; 2010 REPORT, supra
note 132, at 9. Oliphant (2007), supra note 149, at 385–86 notes that that most of the rise in the number
of claims in 2005–06 as compared to 2004–05 could be attributed to treatment-only claims. This strongly
suggested that the abandonment of the “severity” threshold in the definition of medical mishap had
led to a pronounced increase in the number of claims for minor treatment injury. The rise in account
expenditure was not considered likely to be commensurate, but, as will be seen, this may have been too
sanguine a view.
225. Figures supplied in ACC TREATMENT INJURY PROFILE, supra note 218.
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2011] TREATMENT INJURY IN NEW ZEALAND 1201
2007–08; 1,752,452 in 2008–09; and 1,662,347 in 2009-10.226 So treatment
injury claims constitute only a very small percentage of the total number of
claims for accident compensation, but that percentage has risen a little over
the five year period.
There also has been a doubling of the acceptance rate. While ACC still
declines many more claims for treatment injury than claims under the other
accounts, the disparity has been reduced in recent years. In 2004–05, the
last year of the medical misadventure regime, 70.6% of claims were declined,
whereas in 2008–09, under the treatment injury regime, the figure
was 35.5%.227 The most common reasons for declining a claim were that
no physical injury could be identified (16%), there was no causal link between
treatment and the injury (9%), the injury was an ordinary consequence
of treatment (4%), and the injury was wholly or substantially
caused by the underlying health condition (4%).228 If we make a comparison
with all claims once again, the overall percentage of declined claims in
2004–05 was 3.9% and in 2008–09 it was 2.5%.229 It seems likely that this
latter small drop is attributable or mainly attributable to the substantial drop
in declined claims for treatment injury.
The median time taken to determine the question of cover has dropped
dramatically. Whereas the average time taken to determine a misadventure
claim was approximately five months, in 2009 it was thirty-seven days.230
Some decisions are taken very quickly, while others still can take up to
nine months. Commonly accepted injuries include wound infection, allergic
reaction, hematoma and bruising claims, nerve damage, dental damage,
skin damage or injury or tear, and pressure ulcers. The top ten treatment
injuries are generally high volume, low cost claims, although in aggregate
they entail substantial cost.
A number of observations can be made about these developments.
First, the data collected by ACC concerns (necessarily) the “adverse
events” providing the foundation for claims for treatment injury, bearing
out the point that mishap and error are inherent in that concept. ACC is an
accident scheme, not an illness scheme, and an accident-like event remains
necessary in order for there to be cover for a medical injury. Second, before
226. 2006 REPORT, supra note 224, at 56; 2007 REPORT, supra note 224, at 26; 2008 REPORT, supra
note 224, at 12; 2009 REPORT, supra note 224, at 48; 2010 REPORT, supra note 132, at 9.
227. ACCIDENT COMP. CORP., ACC INJURY STATISTICS 2008/2009 9 (2010),
http://www.acc.co.nz/PRD_EXT_CSMP/groups/external_ip/documents/reports_results/wpc088561.pdf.
228. Figures supplied in ACC TREATMENT INJURY PROFILE, supra note 218, at 4.
229. ACCIDENT COMP. CORP., ACC INJURY STATISTICS 2008/2009 8 (2010),
http://www.acc.co.nz/PRD_EXT_CSMP/groups/external_ip/documents/reports_results/wpc088561.pdf.
230. Figures supplied in ACC TREATMENT INJURY PROFILE, supra note 218, at 4.
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1202 CHICAGO-KENT LAW REVIEW [Vol 86:3
2005 most medical misadventure claims were for a “rare” and “severe”
medical mishap. In the new definition there must still be a mishap of some
kind, but now it is an injury that is not a necessary part or ordinary consequence
of treatment, is not caused by the patient’s underlying health condition,
and is not simply a failure to achieve the desired result of the
treatment. It seems highly likely—perhaps certain—that the very substantial
increase in claims noted above is due to the lowering of the threshold
for what qualifies as a mishap. The concept, albeit unexpressed, is implicit
in the notion of treatment injury. Third, negligent error remains highly
significant in establishing such injury. We do not know with any confidence
whether instances of negligence have gone up or down or stayed the
same, as ACC no longer makes findings of error,231 but for reasons already
stated every case of negligent treatment will constitute treatment injury.
ACC does provide statistics about adverse event notifications,232 and the
most common of these concern delays in giving treatment or failures to
diagnose or to treat, and mistakes in the administration, dispensing and
prescribing of medicines.
The task of defining what is and what is not covered for accident
compensation in the context of medical treatment is bound to be difficult
and probably cannot be resolved in an entirely satisfactory fashion. Medical
injury frequently lies near the dividing line between accident and illness.
For as long as the accident compensation scheme provides cover for accidents
but not for illness (save for occupational disease), it will remain necessary
to search for an unexpected accident or event which can separate a
medical injury from ordinary treatment of an illness or disease.
4. Costs
In light of the escalating number of claims, it is not surprising that
ACC’s accounts show a dramatic increase in the costs of compensation for
treatment injury. Annual expenditure on the account, including the continuing
costs of the former medical misadventure account, has risen from
$48.6m in 2004–05 to $56.5m in 2005–06, $69.2m in 2006–07, $86.3m in
231. However, there is some evidence that the number of public hospital errors that caused or could
have caused major harm to patients has recently increased. The Health Quality and Safety Commission
has reported that in 2009–10 there were 374 patients involved in a “serious” or “sentinel” event (as to
which see infra text accompanying note 246), of whom 127 died, whereas in 2008–9 there were 308
such events including ninety-two deaths. Martin Johnston, Hospital Errors Causing Serious Harm
Climb, N.Z. HERALD (Nov. 17, 2010, 2:04 PM),
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10688172. The chairman of the
Commission’s interim board has suggested that the rise is probably the result of better reporting by the
staff involved. Id.
232. See infra on reporting of medical risks.
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2007–08, $109.8m in 2008–09, and then down a little to $106m in 2009-
10.233 This spectacular increase has far exceeded the Treasury estimates of
the costs of the 2005 reform. Replacing medical misadventure with treatment
injury was predicted to result in an annual increase of $8.7m, with
transitional costs amounting to a one-off $12m.234
Expenditure on the ACC scheme as a whole over the same period also
has risen, but not so quickly. Total expenditure was $2.2 billion in 2004–
05, $2.5 billion in 2005–06, $2.8 billion in 2006–07, $3.1 billion in 2007–
08, $3.5 billion in 2008–09, and just under $3.3 billion in 2009-10.235
Until recently the escalating costs of the treatment injury account were
not matched by an equivalent rise in funding. The net annual deficit rose
from $103.5 million in 2004–05 to $598.6 million in 2008–09, but then a
small surplus of $4.7m was recorded in 2009-10, while the account deficit
rose from $332.5 million in 2004–05 to $1.4 billion in 2009-10.236 At the
same time ACC’s outstanding claims liabilities have grown from $9.4 billion
in 2004–05 to $23.8 billion in 2008–09 and $24.4 billion in 2009-
10.237
The above figures indicate that notwithstanding some recent improvement
the accident compensation scheme is facing severe financial
problems. Some commentators would dispute this conclusion. While certain
increased costs are the consequence of expanded cover and entitlements,
238 most, it is said, flow from the requirement introduced in 1998
233. ACCIDENT COMP. CORP., ANNUAL REPORT 100 (2005), available at
http://www.acc.co.nz/publications/index.htm?ssUserText=annual+report [hereinafter 2005 REPORT];
2006 REPORT, supra note 224, at 97; 2007 REPORT, supra note 224, at 93; 2008 REPORT, supra note
224, at 90; 2009 REPORT, supra note 219, at 79; 2010 REPORT, supra note 132, at 57. Ken Oliphant,
Compensation, Ideology and Patient Safety in New Zealand’s No Fault System, 3 OPINIO JURIS IN
COMPARATIONE, 1, 12 n. 29 (2009) [hereinafter Oliphant (2009)] notes that up to and including the
2007 Report, a figure was given for “total expenditure” whereas in 2008, a comparable figure required
the aggregation of the figures for “total claims paid,” “claims handling costs,” “net operating costs,”
and “injury prevention costs.” I have followed this example for 2009 and 2010.
234. Ruth Dyson, Cabinet Social Development Committee, Medical Misadventure Review—
Conclusions and Recommendations 2004, ¶¶ 14, 38, 66–71.
235. 2005 REPORT, supra note 233, at 92; 2006 REPORT, supra note 224, at 88; 2007 REPORT,
supra note 224, at 83; 2008 REPORT, supra note 224, at 80; 2009 REPORT, supra note 219, at 71; 2010
REPORT, supra note 132, at 47. The figures for 2008, 2009 and 2010 are an aggregation of ”total claims
paid,” “claims handling costs,” “net operating costs,” “injury prevention costs,” and “levy collection
costs,”
236. 2005 REPORT, supra note 233, at 100; 2006 REPORT, supra note 224, at 97; 2007 REPORT,
supra note 224, at 93; 2008 REPORT, supra note 224, at 90; 2009 REPORT, supra note 219, at 79; 2010
REPORT, supra note 132, at 57.
237. 2009 REPORT, supra note 224, at 3; 2010 REPORT, supra note 132, at 29.
238. Geoff Cumming, Truth the Casualty of Crisis Management, N.Z. HERALD (Mar. 14, 2009),
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10561589 (stating that these extra
costs accounted for $537 million of ACC’s total liability of $21.8 billion in the 2009 financial year).
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1204 CHICAGO-KENT LAW REVIEW [Vol 86:3
that the scheme be fully funded, initially by 2014 and now by 2019.239 This
requirement is seen as unnecessary and driven by a political ideology favouring
eventual privatisation of the scheme.240 This, however, is not the
view of the New Zealand Government. The Minister for ACC stated in the
2009 Report that the growth in ACC’s liabilities should have been recognized
and addressed some years earlier and was unsustainable. The annual
report disclosed financial difficulties in all of ACC’s accounts, driven by
years of significant increases in costs and increasing numbers of claims.
The underlying cause had been a shift from ACC being a public insurance
scheme to it becoming an extension of the welfare state. So the Government
had embarked upon a programme of reform aimed at strengthening
ACC’s governance, improving rehabilitation and promoting injury prevention,
and embarking on a substantial stocktake taking a long-term view on
how the scheme’s performance could deliver better value for money.241
Indeed, recent figures show that ACC’s liabilities have stabilized and that
there was a surplus of about $2.5 billion in 2009-10.242
C. Professional Accountability
The accident compensation regime can provide compensation for the
victims of medical injury. But such victims may wish to achieve various
objectives apart from compensation, in particular to find out how their injury
happened, to help prevent it happening again, to receive an acknowledgment
of responsibility and to hold a negligent professional accountable
for his or her conduct. These kinds of objectives can be met to a greater or
lesser extent in a number of different ways. In addition, if a medical injury
is not covered for accident compensation, there may remain the option of
bringing a civil action for damages.
1. Reporting of Medical Risks
Before 2005, the ACC had a responsibility to report all findings of
medical error to the relevant professional body and to the Health and Disability
Commissioner. However, the requirement was seen as a reason why
health professionals were reluctant to co-operate in the claims process,
239. See supra note 122 and accompanying text.
240. See Joanna Manning, Access to Justice for New Zealand Health Consumers 17 (Mar. 24,
2010) (unpublished paper) available at http://www.hdc.org.nz/education/hdc-medico-legal-conference-
2010-a-decade-of-change (summarizing arguments from the Retirement Policy and Research Centre).
241. 2009 REPORT, supra note 224, at 3.
242. 2010 REPORT, supra note 132, at 2.
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fearing the possible repercussions.243 So when the new treatment injury
provisions abandoned the need to prove error, the reporting requirements
were changed as well. A reporting obligation now arises if the Corporation
believes, from information collected in the course of processing claims for
treatment injury, that there is risk of harm to the public, in which case “the
Corporation must report the risk, and any other relevant information, to the
authority responsible for patient safety in relation to the treatment that
caused the personal injury.”244 In this respect, then, public safety concerns
must prevail when balanced against the objectives underlying the 2005
changes of encouraging co-operation and promoting a shift away from a
blaming culture.
The ACC has well-developed processes for assessing risk and notifying
the appropriate persons or bodies. Its Treatment Injury Centre considers
the potential for risk of harm to the public using information collected
when assessing cover, and events posing sufficiently serious risks are considered
and assessed by an internal ACC panel.245 All “sentinel” events—
events during treatment resulting in unanticipated death or major permanent
loss of function—are notified to the Director General of Health, together
with all “serious” events—those with the potential for causing death
or major permanent loss of function—in cases where there is a high or
moderate likelihood of recurrence.246 The Director-General then decides
whether the notification is disseminated to the treating facility, and also
determines the response that is needed to improve safety. In rare cases the
ACC will notify a registration authority if it has expert clinical advice that
there are serious competence concerns. If there is a serious and immediate
risk of harm to the public notifications can be made very quickly.247
The change in the statutory requirements for cover, and in particular
the removal of the formal requirements that there should be a finding of
error or mishap, has had the consequence that ACC does not now collect
detailed information about the causes of medical injuries. Accordingly, the
onus has shifted to the notified authorities to make their own investigations
into any issue of culpability.
243. Summary of ACC Medical Misadventure Consultation, August 2003, p 1.
244. Accident Compensation Act 2001 § 284. It is likely that the ACC will also report to a newly
instituted National Health Safety and Quality Commission, which will act as a central agency for adverse
data event collection and promotion of patient safety. An interim board was set up in June 2010,
with the new Commission planned to be up and running in 2011.
245. ACC TREATMENT INJURY PROFILE, supra note 218.
246. Id.
247. Id. at 7.
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1206 CHICAGO-KENT LAW REVIEW [Vol 86:3
Over the period from July 2005 to June 2010 ACC made 1,661 notifications
of its belief that there was a risk of harm to the public.248 Easily the
most common reason was delay and failure to treat in relation to the diagnosis
and management of cancer and, less commonly, to visual problems,
birth asphyxia, and testicular torsion. Other common reasons were wrong
medication administration in relation to the person, drug, dose, route, and
time; bile duct injuries and bowel perforations involving, inter alia, identifiable
technical issues with surgical technique, premature failure of hip, and
knee prostheses; and cerebrovascular accidents and hypoxic brain injury
relating to coronary artery bypass graft, angiograms, cardiac valve surgery,
and insertion of cardiac catheters.249
2. Complaints
A Code of ACC Claimants’ Rights seeks to meet the reasonable expectations
of claimants seeking accident compensation in their dealings with
the Corporation. It provides, inter alia, a procedure for the lodging and
dealing with complaints about breaches of the Code and the consequences
and remedies for breach.250
A regime for making complaints about medical treatment is provided
by the Health and Disability Commissioner Act 1994.251 The Act lays
down a procedure for making complaints to the Health and Disability
Commissioner in respect of breaches of the Code. The Commissioner may
investigate a complaint, deliver an opinion and make recommendations for
remedial action. There is no power to award damages. Serious cases may
be referred to the Director of Proceedings, who can institute disciplinary
proceedings or civil proceedings in a Human Rights Review Tribunal.252
The Tribunal has the power to award damages to compensate for pecuniary
loss and expense, loss of any benefit, and humiliation, loss of dignity and
injury to feelings, and to punish for any action that was in flagrant disregard
of the rights of the aggrieved person.253 Compensatory damages for
248. Id.
249. Id.
250. Health and Disability Commissioner Act 1994 §§ 39–47.
251. Id.; see generally Manning, supra note 240.
252. Health and Disability Commissioner Act 1994 §§ 45(2)(f), 49(1)(a).
253. Id. at §§ 52, 54, 57. In Marks v. Dir. of Health and Disability Proceedings [2009] 3 NZLR 108
(C.A.) at para [62] the Court of Appeal held that an “aggrieved person” was a consumer whose rights
under the Code had allegedly been infringed and that the parents of a suicide victim seeking to bring an
action against their son’s psychiatrist did not qualify. Manning criticizes the decision and recommends
its reversal on the grounds that this would give a wider group the opportunity to bring proceedings and
would promote accountability and improvements in the quality of services. Manning, supra note 240, at
6–7.
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personal injury covered by the Accident Compensation Act 2001 are excluded.
254 So proceedings before the Tribunal are likely to be brought only
by consumers seeking exemplary damages or who have suffered no physical
injury.
3. Actions for Damages
A medical professional also may be held accountable by way of a civil
action for damages. Yet in light of the cover for treatment injury, there is
very limited scope for bringing such an action in a medical context. Obviously
any common law liability will depend on proof of negligence, yet
negligence by a registered health professional, including negligence in
relation to treatment, diagnosis, failing to treat, giving advice and obtaining
consent to treatment, normally gives rise to coverage for treatment injury.
Conversely, if conduct is not negligent and there is no cover, there is no
scope for a common law action either. Even so, there remains the possibility
of actionable negligence in exceptional cases where there is no cover,
perhaps because there is a special statutory exclusion, or there is no “personal
injury” as defined in the statute.
a. Clinical Trials
An exception to cover arises out of certain special rules applying to
clinical trials.255 Persons who suffer injury as a result of treatment given as
part of a clinical trial who have not agreed in writing to participate in the
trial are covered, as are persons who suffer such injury in the course of a
trial certified by an accredited ethics committee as not being principally for
the benefit of the manufacturer or distributor of the medicine being trialled.
But if a person has agreed in writing to participate in a trial which is certified
only as being for the benefit of the manufacturer or distributor, injury
suffered by the participant is not covered. So a common law remedy
founded on negligence by a sponsoring company or an investigator might
be available.256
254. Accident Compensation Act 2001 § 52(2).
255. Accident Compensation Act 2001 § 32(4)-(6); Nicola Peart & Andrew Moore, Compensation
for Injuries Suffered by Participants in Commercially Sponsored Clinical Trials in New Zealand, 5
MED. L. REV. 1 (1997).
256. The practice of ethics committees in certifying a trial is to ensure that adequate compensation
is available in the event of injury, by requiring the company concerned to abide by the New Zealand
Researched Medicines Industry Guidelines on Clinical Trials. These provide for payment for “more
serious injury of an enduring and disabling nature” irrespective of proof of negligence, but state that
compensation may be abated to the extent that injury has arisen through a significant departure from the
agreed trial protocol, or the wrongful act of a third party, or contributory negligence by the patient. The
amount of any compensation “should be appropriate to the nature, severity and persistence of the in
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1208 CHICAGO-KENT LAW REVIEW [Vol 86:3
The justification for this exception to cover is obscure. Seemingly it is
founded upon the participant’s consent to any risk, but consent is not a bar
to compensation in other contexts. A drunken driver and his passenger
arguably consent to the risk of injury in a collision, yet both can make
claims for compensation.
b. Stillbirths
Whether a stillbirth is a personal injury to the mother can be disputed.
In Harrild v. Director of Proceedings257 a majority in the Court of Appeal
held that a mother had suffered personal injury on account of the death of
the foetus in consequence of negligence by her doctor. Elias CJ was not
attracted by the stark choice of treating the unborn child either as the same
as the mother or as distinct. She considered that where severance of the
physical link between mother and unborn child occurs through the death of
the child as a result of medical error, then physical injury is suffered by the
mother.258 Keith and McGrath JJ thought similarly.259 Blanchard and
Glazebrook JJ, by contrast, considered that on the majority view a mother
and foetus are treated as a single entity, which ignores biological reality.260
This perhaps is the more convincing view, but unless the question comes to
be reconsidered by the Supreme Court, there is cover for a negligently
caused stillbirth and there can be no action for damages.
c. Pregnancy and Unwanted Births
Cases involving pregnancy and unwanted births also require special
consideration. The question arose in Accident Comp. Corp. v. D,261 where
the Court of Appeal, in a majority decision, determined that unwanted
pregnancy was not a “personal injury” under the 2001 Act because it was
not a “physical injury.”262 In Arnold and Ellen France JJ’s view, these
phrases suggested a need for harm or damage, and the denial of cover also
fitted better with the consistent exclusion of various gradual processes unjury.”
The Preamble contemplates that adherence to the guidelines is without legal commitment, and
certainly the question whether or how they might be legally enforceable by a patient is unclear. Guidelines
on Clinical Trials Compensation for Injury Resulting from Participation in an Industry-Sponsored
Clinical Trial, RESEARCHED MEDICINES INDUSTRY (Aug. 2008),
http://www.medicinesnz.co.nz/assets/Uploads/compensation-guidelines-0808-final.pdf.
257. [2003] 3 NZLR 289 (C.A.) at paras [22], [42], [135].
258. Id. at para [21].
259. Id. at paras [42], [135].
260. Id. at paras [66]–[69].
261. [2008] NZCA 576 (C.A.) at para [54]; affirmed in Allenby v. Hannam [2011] NZCA 251
(C.A.).
262. Id.
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der the differing accident compensation regimes.263 While the common law
illustrated that pregnancy could be described as an injury, the starting point
was the statutory scheme, which did not give cover in the case at hand.
Their Honours accepted that there was something odd about the fact that an
unwanted pregnancy would be the only result of medical misadventure for
which cover was not available. But there were inevitable oddities in a nonexhaustive
scheme that had to draw the line somewhere. And there might in
most cases be good public policy reasons for not regarding a pregnancy and
the delivery of a baby as physical injuries. It was for the legislature to determine
where the balance lay.
d. Informed Consent Cases
We have seen that in Accident Comp. Corp. v. Ambros Glazebrook J
considered that the informed consent cases apparently relaxing the requirement
of proof of cause of an injury should not be imported into the
accident compensation regime.264 Accordingly, a failure to warn of a small
risk of medical treatment, which risk later eventuates, is not covered for
compensation and to this extent might be actionable in damages. However,
the occurrence of the adverse event following a failure to warn is likely
nonetheless to amount to treatment injury, on the basis that this is not a
necessary part or ordinary consequence of the treatment, with cover accordingly.
e. Mental Injury
A patient suffering mental injury as a consequence of physical injury
caused by medical negligence is covered for compensation.265 However,
cover does not extend to mental injury suffered by a secondary victim. An
example is where a husband suffered “reactive depression” as a result of
being unable to continue sexual relations with his wife after she was injured
due to medical misadventure.266 So an action for damages could lie in
this kind of case.
f. Miscellaneous
There arguably is no personal injury where surgery leads to no physical
or mental health problems, but, due to the doctor’s negligence, it does
263. Id. at para [55].
264. [2008] 1 NZLR 340 (C.A.) at para [51].
265. Accident Compensation Act 2001, § 26(1)(c).
266. ACC v. F [1991] 1 NZLR 234 (HC) 240.
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1210 CHICAGO-KENT LAW REVIEW [Vol 86:3
not produce the desired results.267 Again, a doctor can be liable in battery
for wrongful physical contact not causing actual injury. Mental injury to a
patient caused by professional misconduct is actionable as well.268
g. Exemplary Damages
The option of a claim for exemplary damages remains. In A v.
Bottrill269 the Privy Council upheld the availability of exemplary damages
in a bad case of medical negligence, but the decision was overruled in
Couch v. Attorney-General,270 where the Supreme Court required that there
be advertent or reckless wrongdoing. The test is likely to be difficult to
satisfy, certainly in a medical context.
CONCLUSION
Let us now attempt to evaluate New Zealand’s scheme, with particular
reference to the way in which it operates in the field of medical injury. We
will consider whether it provides adequate compensation, has defensible
boundaries, is administratively efficient, and operates as an incentive or a
disincentive to safety-conscious behavior.
A. Adequate Compensation?
The statutory scheme in operation in New Zealand arguably performs
well in its core function of providing a source of compensation for the victims
of accidents. The statutory benefits, in particular earnings-related
compensation, are reasonably generous and compare favorably with flat
rate social security payments. Inevitably there will be winners and losers by
comparison with common law damages. In Queenstown Lakes271 Thomas J
remarked on the notion of a social contract and a trade-off between the loss
of common law rights and the gaining of accident compensation benefits,
and said also that damages and compensation were never intended to correspond.
Uncertainty of recovery at common law was exchanged for a nofault
scheme which included provision for rehabilitation as well as ongoing
earnings-related compensation. Disparity between the two would always
exist. So some injury victims will or might in some sense be worse off, but
267. Kate Tokeley, Accident Compensation and Cosmetic Surgery, 1998 N.Z. L. J. 5, 5–6 (1998)
(discussing the question in relation to wrong-sized breast implants).
268. L v. Robinson [2000] 3 NZLR 499 (HC) at para [1], [44].
269. [2003] 1 AC 449 (PC).
270. [2010] 3 NZLR 149 (SC); see supra note 83.
271. [1999] 1 NZLR 549 (CA) 557.
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most will benefit from the scheme. And, of course, the key advantage of
accident compensation is that it is available for nearly all injury victims,
not just those who can establish the liability of another to pay compensation.
B. Defensible Boundaries?
There is no accident compensation simply for disease or illness, unless
work-related. In Queenstown Lakes, Thomas J drew attention to this point
as well, commenting that difficulties would necessarily arise out of the line
between injuries arising from accidents and other injuries and conditions
which were not attributable to accidents.272 These difficulties are acute in
the case of alleged medical injury by way of sickness or illness, for treatment
is given (or is not given when it should be) to patients who are already
sick or ill. As we have seen, the solution has been to allow claims for
injury caused by unexpected mishaps or wrongful treatment or failure to
treat. The line between such compensable treatment injury and the noncompensable
condition requiring the treatment is bound to be hard to draw.
Ultimately any compensation scheme has to set boundaries. The
boundaries to the accident compensation scheme as they presently exist are
founded very broadly on a distinction between human and natural causes.
These may be hard to defend, but there is no natural limit upon which all
can agree. A line has to be drawn somewhere, and wherever it is it will
create difficulties and anomalies in relation to cases which are excluded. So
if illness were to be included, it would still be necessary to define the qualifying
circumstances, and some borderline cases would be excluded. And
there is practical value in the accident/illness divide. Most cases giving rise
to the question whether another was liable for the injury are covered, the
difficulties created by tort litigation are largely avoided, and victims by and
large receive adequate compensation. More generally, if illness and disease
were to be covered there would be major financial implications, the scheme
would transmute into part of the social security system, and payments inevitably
would at least be substantially reduced.273
272. Id.
273. Social security payments in New Zealand are made pursuant to the provisions of the Social
Security Act 1964 § 1A. These may supplement accident compensation entitlements, particularly in
cases where the claimant is a non-earner whose entitlement is limited to a lump sum. Where there is no
accident compensation cover, a person’s only source of income may be a social security benefit. The
relationship between accident compensation and social security is governed by the Accident Compensation
Act 2001 and the Social Security Act 1964, which seek to prevent double payments and which
make provision for transfers or reimbursements of money between the ACC and the Work and Income
Service of the Ministry of Social Development. Accident Compensation Act 2001, §§ 252–53; Social
Security Act 1964 §§ 71, 71A. The social security scheme makes provision for three main types of
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1212 CHICAGO-KENT LAW REVIEW [Vol 86:3
Of course, accepting the need to show some kind of “accidental”
event, the question remains quite how to define that event. The 2005
amendments lowered the bar in medical injury cases and made the qualifying
conditions much easier to satisfy. The predictable result has been the
striking increase in the number of treatment injury claims over the last five
years. The reforms of 2005 have been said to cement the distinction between
incapacities caused by human interaction and incapacities which are
natural,274 which no doubt is true in that we must still distinguish between
the treatment (human cause) and the underlying condition (natural cause).
But the reform might equally be seen as weakening the distinction, in allowing
many more claims for injuries which are attributable to unexpected
developments and events which are neither especially rare nor, it may be,
easily separable from the underlying condition. At all events the reform
widens the idea of an accident in this context and extends cover to more
people suffering harm in the course of medical treatment. This is at the cost
of rather greater uncertainty as to the extent of cover, coupled with the need
for an increase in funding for the treatment account.
C. Administratively Efficient?
This brings us to consider the whole question of costs and funding. A
major advantage of an event-based compensation scheme is that claims can
be made quickly and processed efficiently. The cost of delivering the statutory
benefits avoids the very substantial costs associated with the need to
prove liability before compensation can be paid. The costs of administering
the scheme are relatively low and have remained stable over the last five
years. In 2009, the scheme’s operating costs amounted to 13.4% of claims
paid, levy collection costs were 1.6% of total revenue, and investment costs
were 0.34% of investment assets.275 A comparison between the administrative
costs in the work account and those of similar Australian schemes
shows that in 2006–07 ACC spent 19.7% of total scheme expenditure on
benefit for incapacitated persons. The invalid’s benefit is payable to New Zealand residents over the age
of 18 who are totally blind or permanently or severely restricted in their capacity for work (but excluding
self-inflicted conditions). Social Security Act 1964 § 40. An emergency benefit is payable on
grounds of hardship where a person cannot qualify for any other benefit and by reason of disability
cannot earn a sufficient livelihood. Id. § 61. Survivors’ benefits or domestic purposes benefits are
payable in certain circumstances to wives or husbands or those who had been in a relationship in the
nature of marriage on the death of the other in respect of the costs of bringing up dependent children,
and an orphan’s benefit is payable to the principal caregiver of a child whose parents are both dead. Id.
§§ 21, 27B, 28. Further supplementary allowances and grants, such as the disability allowance and the
child disability allowance are available. Id. §§ 39A, 69C.
274. Oliphant (2009), supra note 233, at 17.
275. 2009 REPORT, supra note 224, at 21 (total operating costs include both “operating costs/claims
paid” and “injury prevention costs/claims paid”).
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claims management and other administration, whereas the Australian average
was 25.2%.276 Comparisons with the costs of litigation are revealing.
An estimate of the cost of tort litigation in the UK concluded that about
fifty-five pence of the insurance pound was paid out to injured victims, and
about forty-five pence was swallowed up in administration.277
Critics might argue that administrative efficiency can be bought at too
high a cost. They might say, inter alia, that removing a right to sue for injury
and substituting a right to make a claim from a compulsorily funded
statutory body, irrespective of the claimant’s or anyone else’s responsibility
for the injury, is likely to encourage malingering and to lead to bureaucratic
inertia and ever-increasing costs. Perhaps there is some evidence in support
of this kind of thesis in the seemingly relentless rise in the costs of accident
compensation that we have already noted. But at least some of the increase
is due to widening provisions for cover and entitlements, and it is in any
event impossible to come to a considered conclusion without good evidence
about all the causes of the increase. We can say only that some element
of abuse is endemic in all compensation systems, that steps are being
taken to control costs and improve ACC’s finances, and that better performance
is perfectly achievable.
D. Disincentive to Safety-Conscious Behavior?
Possibly a stronger argument, and certainly one that attracts articulate
support, is that a compensation scheme of this kind removes a deterrent to
injury-producing activity and operates as a disincentive to safety conscious
behavior. This raises large questions which cannot be addressed adequately
here. However, we might note that the Woodhouse Report did not see proof
of fault as useful in injury prevention,278 and the New Zealand Law Commission
concluded that the alleged deterrent role of tort was not significant.
279 Let us, briefly, consider the evidence.
A number of studies starting back in the 1960s show that the value of
tort liability as a deterrent to unsafe conduct or as an incentive to take care
is certainly unproven and is likely to be negligible.280 Evidence provided
276. Id.
277. P CANE, ATIYAH’S ACCIDENTS, COMPENSATION AND THE LAW 397 (7th ed., 2006) (commenting
that no other compensation system is anything like as expensive).
278. WOODHOUSE REPORT, supra note 2, at para 319.
279. 1988 REPORT, supra note 27, at para 81.
280. See, e.g., TERENCE GEORGE ISON, THE FORENSIC LOTTERY: A CRITIQUE ON TORT LIABILITY
AS A SYSTEM OF PERSONAL INJURY COMPENSATION (1967); ELI P. BERNZWEIG, BY ACCIDENT NOT
DESIGN: THE CASE FOR COMPREHENSIVE INJURY REPARATIONS (1980); STEPHEN D. SUGARMAN,
DOING AWAY WITH PERSONAL INJURY LAW: NEW COMPENSATION MECHANISMS FOR VICTIMS,
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1214 CHICAGO-KENT LAW REVIEW [Vol 86:3
by some more recent studies confirms this conclusion. For example, Tess
and Armstrong, comparing empirical evidence on fault, no-fault and hybrid
schemes across a number of dimensions, including availability of benefits,
costs of the scheme and prevention incentives, saw no-fault schemes as
coming out ahead.281 As regards prevention of accidents in particular, their
conclusion was that fault, no-fault and blended systems appeared to perform
similarly and, importantly, that there were far more important drivers
of safety improvements than the threat of tort.282 In the specific field of
medical malpractice the consensus is similar. So Mello and Brennan, in a
US study, considered that evidence of a deterrent effect was limited and
vulnerable to methodological criticism.283 The data did not support the
notion that the malpractice system sent a strong deterrent system to providers.
Sloan and Chepke, in like vein, stated that it was difficult to find good
evidence that negligence liability deterred medical errors.284 As regards the
New Zealand scheme in particular, Oliphant concluded that it remained an
open question whether introducing no-fault in place of liability in private
law had had a positive or negative effect on patient safety, or no effect at
all.285
At best, evidence about the deterrent impact of imposing tort liability
for causing injury is equivocal, and certainly a link with lower accident
rates is not easily shown. Indeed it is strongly arguable that holding people
accountable for their conduct can be achieved in other, more effective,
ways. We have seen that there are a number of alternative methods of
achieving accountability by medical professionals operating in New Zealand.
CONSUMERS, AND BUSINESS (1989); Don Dewees & Michael Trebilcock, The Efficacy of the Tort
System and Its Alternatives: A Review of the Empirical Evidence, 30 OSGOODE HALL L. J. 57 (1992).
Compare Gary T. Schwarz, Reality in the Economic Analysis of Tort Law: Does Tort Law Really Deter?,
42 UCLA L. REV. 377, (relying on anecdotal evidence to conclude that tort law might still be
“somewhat successful” in achieving its stated deterrence goals). In Stephen Todd, Privatization of
Accident Compensation: Policy and Politics in New Zealand 39 WASHBURN L. J. 404, 478–82 (2000) I
attempted to review the literature on this topic, and found it was difficult to come to any clear conclusion.
For a recent and helpful review, see Harold Luntz, Torts and Insurance: The Effect on Deterrence,
in TORTS IN COMMERCIAL LAW (Simone Degeling & James Edelman eds.) (forthcoming 2011).
281. Kirsten Armstrong & Daniel Tess, Institute of Actuaries of Australia, Fault Versus No Fault—
Reviewing the International Evidence (Nov. 9–12, 2008),
http://www.actuaries.asn.au/library/GIS08_3d_Paper_Tess,Armstrong_Fault%20versus%20No%20Fau
lt%20-%20reviewing%20the%20international%20evidence.pdf.
282. Id. at 27.
283. Michelle M. Mello & Troyen A. Brennan, Deterrence of Medical Errors: Theory and Evidence
for Malpractice Reform, 80 TEX. L. REV. 1595 (2002).
284. Frank Sloan & Lindsey Chepke, THE LAW AND ECONOMICS OF PUBLIC HEALTH (2007).
285. Oliphant (2009), supra note 233, at 19.
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A further point deserving note is that market incentives aimed at reducing
accidents can of course operate within the accident compensation
scheme. The ACC Accredited Employers Programme (AEP) gives employers
significant discounts on their ACC levies in exchange for taking responsibility
for their employees’ work injury claims. Recent proposals to
extend the scheme include reducing barriers on participation by providing a
greater range of risk-sharing arrangements, reducing compliance costs
faced by employers by providing more flexibility in meeting financial entry
requirements, and offering other risk-sharing arrangements to small employers
outside the AEP.286 The ACC Workplace Safety Management
Practices Programme and the Workplace Safety Discount Programme also
provide levy discounts for businesses showing sound health and safety
practices. Until recently there was no general discount on levies, analogous
to an insurance no-claims discount, for businesses showing a good safety
record.287 Historically the work levy has been based on injury rates across
industry categories, without any differentiation according to a particular
business’s safety record. However, in April 2011 ACC introduced a system
of experience rating, under which a business’s work levy can be modified
based on its claims history.288 So experience rating seeks to reward those
businesses with safer workplaces and to encourage a focus on improving
workplace safety.
A further proposed reform, as already noted,289 will allow private insurers
to provide insurance cover in respect of accident compensation entitlements
in competition with the ACC. The aim of the proposal is to
improve safety, rehabilitation and efficiency in the workplace. The document
asks a number of questions about the proposed changes, and feedback
from interested persons has been invited.
286. INCREASING CHOICE IN WORKPLACE ACCIDENT COMPENSATION (June, 2011),
supra note 45.
287. Whether this should be attempted has been debated. The Law Commission in its 1988 Report
drew attention to the uncertainties involved and also to possible inequities. Small firms might be subject
to statistically random fluctuations in accident rates, which might occur despite taking all proper precautions.
See 1988 REPORT, supra note 27, at para 140–49. Subsequent studies show inconclusive
results.
288. EXPERIENCE RATING – MAKING ACC WORK LEVIES FAIRER FOR INDIVIDUAL
BUSINESSES (2011) (available at http://www.acc.co.nz/for-business/experiencerating/
index.htm?IdcService).
289. INCREASING CHOICE IN WORKPLACE ACCIDENT COMPENSATION (June, 2011),
supra, note 45.
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1216 CHICAGO-KENT LAW REVIEW [Vol 86:3
E. Overview
One’s assessment of the accident compensation scheme may turn very
much on personal disposition concerning the legislative imposition of a
compulsory, state-controlled, scheme, funded by levies in the nature of
taxation, in a field which traditionally has been the preserve of private action
and initiative. If one is happy with the idea, or at least can live with it,
one can attempt to judge the scheme on its results, unhampered by ideological
conviction.290
In summary, the compensation is reasonably generous and is available
with the minimum of formality; the boundaries are defensible, with the
result that, broadly speaking, medical injury outside the ordinary consequences
of treatment and not attributable to a patient’s pre-existing condition
is compensable; the scheme operates quite efficiently, so for the most
part available resources are used to meet the needs of qualifying claimants
rather than for administrative purposes; there is little evidence that barring
tort claims has compromised safety standards; the need in some cases to
hold individuals accountable for wrongdoing can be met by the use of a
detailed statutory process for the making of complaints; the level of funding
needed to meet the costs of the scheme can be achieved by levies which
compare favorably with the costs of alternatives, such as by insurance
against tort liability; and while there certainly have been escalating costs,
these are explicable at least partly by the change from pay-as-you-go to full
funding, and seemingly they are reasonably manageable.
The accident compensation scheme has survived many challenges,
some financial, some operational, some ideological, and no doubt these will
continue. All difficulties will not simply disappear. However, by comparison
with the tort system it has been and continues to be a distinct success.
290. For a variety of reviews of the first thirty years, see Looking Back at Accident Compensation:
Finding Lessons for the Future, 34 VICT. U. WELLINGTON L. REV. 189, 467 (2003) (containing the
papers delivered at a conference at Victoria University of Wellington in August 2002); The Future of
Accident Compensation, 35 VICT. U. WELLINGTON L. REV. 775-974 (2004) (containing the papers
delivered at a second conference in December 2003); see also Accident Compensation Symposium,
2008 N.Z. L. REV. 3, 140 (containing papers paying tribute to Sir Owen Woodhouse on the 40th anniversary
of the day the Woodhouse Report was presented to Parliament). For an overview see Accident
Compensation Corporation New Zealand: Scheme Review (2008), a report commissioned by the ACC
by Price Waterhouse Coopers, Sydney, which concluded that the implementation of the Woodhouse
Principles via the ACC scheme had afforded New Zealand’s society and economy four decades of
added economic and social value.
STEPHEN TODD*
INTRODUCTION
This article discusses medical malpractice and compensation in New
Zealand, but there is not much in it about liability. The reason is that in
New Zealand, a statutory accident compensation scheme makes provision
for the payment of compensation to the victims of personal injury that is
suffered in ways that are covered by the scheme. One of these ways is personal
injury caused by medical treatment, and in nearly all cases the victims
will receive compensation pursuant to the statutory scheme rather than
common law damages. If the circumstances are such that the scheme applies,
then actions for damages are barred. Only in rare cases falling outside
the ambit of the scheme might there be scope for suing the doctor or other
person responsible for causing the injury, or his or her employer, and in this
way recovering such damages.
Although the focus of the article is on compensation for medical injuries,
the initial part of the article is broader in that it places the discussion in
the context of the accident compensation scheme in New Zealand as a
whole. This part gives a brief overview of the nature of the scheme, its
relationship with rules of liability at common law, the benefits it provides,
and how it is funded and administered. Then the main part of the article
looks at the provisions in the scheme for compensation for the victims of
medical injury. It includes discussion of the extent of the statutory cover,
problems of causation, how the relevant provisions have operated in practice,
and the costs that have been incurred in administering the scheme and
delivering the benefits. It covers as well some consideration of the alternative
ways in which a doctor or other professional person may be held accountable
for the consequences of wrongful conduct notwithstanding the
bar on suing. In the final Part there is an evaluation of the scheme as a
whole and, more specifically, of the cover it provides in medical cases.1
* Professor of Law, University of Canterbury, New Zealand; Professor of Common Law, University
of Nottingham, United Kingdom.
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1170 CHICAGO-KENT LAW REVIEW [Vol 86:3
I. THE NEW ZEALAND ACCIDENT COMPENSATION SCHEME
A. The Woodhouse Report
The reasons for the introduction of the New Zealand accident compensation
scheme, and its fundamental design, are found in the Report of
the Royal Commission inquiring into personal injury law in New Zealand
(usually known as the Woodhouse Report after the name of its Chairman,
the Honorable Justice Woodhouse).2 The Royal Commission was charged
with investigating and reporting “upon the law relating to compensation
and claims for damages for incapacity or death arising out of accidents
(including diseases) suffered by” employees.3 Accordingly, it examined the
remedies for injured employees at common law and under the workers’
compensation legislation4 in order to determine whether change was
needed and, if it was, to consider what form it might take.5
Having made its inquiries, the Commission was convinced that both
the action for damages and the workers’ compensation system fell clearly
short of providing a satisfactory system of compensation. First, the common
law process could be seen to cause serious injustice and to perpetuate
a number of anomalies. The key objections were that the fault theory had
developed into a legal fiction, for the economic consequences of negligent
conduct were spread via insurance over the whole community; the risks of
litigation—the difficulties of proof, the ability of advocates, the reactions
of juries, and mere chance itself—turned the system into a lottery; and the
tort system was cumbersome, inefficient and extravagant in operation to the
point that the cost of administration absorbed more than forty percent of the
total amount of money flowing into the system.6 As for the workers’ compensation
scheme, this scheme worked upon a limited principle, was formal
in procedure, was meager in its awards, and was ineffective in the field of
prevention of accidents and the physical or vocational restoration of the
injured.7 These last two areas, it was said, “should be at the forefront of any
general scheme of compensation.”8
1. The descriptions of the history of the scheme and of some of its core provisions and the cases
interpreting them that follow in this article are based partly upon the accounts in STEPHEN TODD, THE
LAW OF TORTS IN NEW ZEALAND ch. 2, ¶ 2.2 (5th ed. 2009).
2. ROYAL COMM’N OF INQUIRY, COMPENSATION FOR PERSONAL INJURY IN NEW ZEALAND 19–
28 (1967) [hereinafter WOODHOUSE REPORT].
3. Id. at 11.
4. Workers’ Compensation Act 1956.
5. WOODHOUSE REPORT, supra note 2, at 19.
6. Id. at 49–50, 52.
7. Id. at 97.
8. Id.
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The Commission concluded that both the action for damages and
workers’ compensation fell clearly short of providing a satisfactory system
of compensation. It recognized that an overall solution might be the integration
of a comprehensive scheme of accident compensation into the social
security framework covering both accidents and illness.9 There would
be great advantage in doing this, for it would give an organic structure and
unity to the whole process. However, integration was not feasible if compensation
would then have to take the form of the same flat rate payments
for all, which would be unacceptable and unjust. The only way in which a
comprehensive system could operate equitably was by linking benefits to
earning capacity and by taking into account permanent physical disability.
The Commission thought that the next move might be in this direction, but
did not itself pursue the matter.10 It was seen as unwise to attempt one massive
leap when two considered steps might be taken, but the experience
gained by taking the first step would assist in moving towards a comprehensive
plan.
As for the first considered step, the Commission recommended that
there should be a comprehensive system of accident prevention, rehabilitation
and compensation which would avoid the disadvantages of the existing
processes, meet the requirements of “community responsibility, comprehensive
entitlement, complete rehabilitation, real compensation and administrative
efficiency,” and satisfy the requirement of financial affordability.11
The object should be compensation for all injuries, irrespective of fault and
regardless of cause. In due course Parliament acted on these recommendations,
but the second step has never been taken. So New Zealand has developed
two different systems for compensating incapacity, depending on the
cause of the incapacity in question, with markedly less generous benefits
being available under the social security scheme than those which apply in
the case of accident compensation. The distinction has returned periodically
to haunt the operation of the accident scheme and remains in full force
today.
B. Implementation
The Woodhouse proposals were enacted in the Accident Compensation
Act 1972.12 In its original form the proposed scheme covered only
employees injured at work and victims of motor accidents. However, be-
9. Id. at 179–80.
10. See id. at 181.
11. Id. at 107.
12. Accident Compensation Act 1972.
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1172 CHICAGO-KENT LAW REVIEW [Vol 86:3
fore it came into force there was a change of government, and the new
administration substantially widened its ambit so that it provided for compensation
for all accident victims suffering personal injury by accident.13
At the same time, the Act barred the right to sue or to claim workers’ compensation
for those covered by the scheme, following Woodhouse’s view
that these remedies became irrelevant.14 So the legislation denied access to
the courts in return for the perceived advantages of the statutory scheme.
The exchange has sometimes been spoken of as a “social charter,” “social
contract,” or “social compact.”15
The purposes of the 1972 Act were to promote safety, to promote the
rehabilitation of persons who suffered personal injury by accident covered
by the scheme, and to make provision for the compensation of those persons
or their dependants.16 Where coverage existed it was compulsory. No
one could opt out and seek damages instead.17 Victims of injury were entitled
to weekly compensation for loss of earnings at the rate of eighty percent
of the claimant’s earnings prior to the accident, up to a prescribed
maximum figure, lump sums for loss of bodily function, pain and suffering
and loss of amenity, again with prescribed maximum figures, medical expenses
and other incidental costs, and death benefits.18 Payments were
funded by levies payable by employers, the self-employed and motor vehicle
owners, and also out of general taxation.19 The scheme was administered
by the Accident Compensation Commission, with functions which
included the making of payments to those entitled and the taking of various
steps to promote safety and rehabilitation.20 Other features included the
processes for making a claim, limits on entitlements, dispute resolution,
incentives to safety and issues of economic deterrence, the basis for calculating
the levies, and further matters of management and administration.21
We will consider certain of these features to the scheme in some detail
when we turn to examine its operation in the particular field of medical
injuries.
13. Id. § 54.
14. Id. § 5.
15. Brightwell v. Accident Comp. Corp. [1985] 1 NZLR 132 (CA) 139–40; Queenstown Lakes
Dist. Council v. Palmer [1999] 1 NZLR 549 (CA) 555.
16. Id. § 4.
17. Accident Compensation Act § 5.
18. Id. § 103.
19. Id. §§ 71–74.
20. Id. §§ 6, 16.
21. Id. §§ 15–20.
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C. Developments to 2010
Since the passing of the 1972 Act there have been four reenactments
of the accident compensation scheme as a whole—in the Accident Compensation
Act 1982,22 the Accident Rehabilitation and Compensation Insurance
Act 1992,23 the Accident Insurance Act 1998,24 and the Injury
Prevention, Rehabilitation, and Compensation Act 2001.25 We need to look
briefly at the aims of each of these enactments.
The Accident Compensation Act 1982 left coverage untouched, made
some minor changes to entitlements, turned the Accident Compensation
Commission into the Accident Compensation Corporation (ACC) with a
board of directors, and, most significantly, placed the funding of the
scheme explicitly on a pay-as-you-go basis.26
Under pay-as-you-go funding, levies for the year pay all of that year’s
costs, including both new and old claims. They do not cover the continuing
costs of claims extending into future years. Under full funding, levies must
meet all the costs of claims made during the year. They do not include past
claims, but do include the continuing cost of claims for the full duration of
an injury. At its inception the scheme was not fully funded, but because
there were no old claims payments in were substantially greater than outgoings.
This partial funding in the early years meant that substantial reserves
were accumulated, leading to pressure from employers to reduce the
cost of accident compensation. The government of the day took heed and
made substantial cuts in the levies. As a result, the reserves were depleted
very rapidly, and this contributed to the scheme’s growing financial instability.
The government once again intervened, by imposing huge levy increases
(in some cases exceeding five hundred percent) and by asking the
Law Commission to review how the scheme was operating and to make
recommendations accordingly.
The Law Commission’s 1988 Report denied that the scheme was facing
a financial crisis and, far from recommending cuts, it strongly supported
expanding the scheme so as to bring sickness and non-accidental
incapacity under its umbrella.27 The Commission considered that the demarcation
between injury and illness was clearly anomalous and that it
22. Accident Compensation Act 1982.
23. Accident Rehabilitation and Compensation Insurance Act 1992.
24. Accident Insurance Act 1998.
25. Injury Prevention, Rehabilitation, and Compensation Act 2001.
26. Accident Compensation Act 1982.
27. NEW ZEALAND LAW COMMISSION, REPORT NO. 4 PERSONAL INJURY: PREVENTION AND
RECOVERY (Government Printer, Wellington 1988) [hereinafter 1988 REPORT].
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1174 CHICAGO-KENT LAW REVIEW [Vol 86:3
ought to disappear, sooner rather than later. It thought that this could be
done in stages, by accepting congenital incapacities already supported by
the social welfare system, by later taking in higher level disabilities and
finally including others less serious.28 On the other hand, lump sum payments
were seen as illogical in relation to the income maintenance purposes
of the injury scheme, and for sickness they would become incongruous.29
Serious lost physical capacity and any economic loss were better met by
periodic payments. Lump sums should, therefore, be abolished.
The Commission was satisfied that their scheme would not lead to an
explosion in costs and could be funded by levies, investment income and
taxation, much as already happened. While the costs of the scheme had
been rapidly going up, by far the largest area of increase was in the
amounts payable to those who claimed in earlier years who were still in
receipt of payments from the Corporation. The cost of claims in the first
year had increased only by small amounts. In 1987 the whole of the real
increase in spending was for earlier years.30 So the scheme was doing what
it was intended to do—compensating the seriously incapacitated without a
limit of time. The Labour government accepted the Commission’s recommendations
and tabled a Bill creating a comprehensive income maintenance
and rehabilitation scheme available to all persons who suffered
incapacity, regardless of cause. However, shortly afterwards, the government
lost power in the election of 1990, and the Bill accordingly lapsed.
The incoming National government then came to the conclusion that the
existing scheme was too expensive and abruptly changed direction.
Following the election the new Minister of Labour issued a Policy
Statement reviewing the state of the scheme.31 This condemned the funding
base for the scheme as unfair, because employers were funding nearly seventy
percent of the total costs while work accidents accounted for only
about forty percent of those costs, and earners paid nothing towards the
cost of non-work injuries.32 And more critically, the review maintained that
the increasing numbers of people receiving compensation, higher benefits,
and the expansive interpretation by the courts of “personal injury by accident”
in delimiting coverage had caused costs to run out of control.33 It was
proposed to solve these difficulties by a reform of the scheme that widened
28. Id.
29. Id.
30. Id.
31. DEP’T OF LABOUR, ACCIDENT COMPENSATION—A FAIRER SCHEME, (Government Printer,
Wellington 1991).
32. Id.
33. Id.
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and reallocated its funding base, reduced its costs and removed some of the
judicial extensions to its coverage.
The Accident Rehabilitation and Compensation Insurance Act 1992
was intended to meet these concerns and achieve these objectives.34 As
regards funding, pay-as-you-go was retained, but substantial changes were
made to existing sources of funding and new sources were introduced.35 In
particular, employers met only the cost of providing coverage for injury
sustained in the course of employment (except where a motor vehicle was
involved), and all earners paid a levy to meet the cost of coverage for accidental
injury.36 As regards benefits, there was a new “work capacity” test
aimed at moving accident compensation claimants who could not find work
onto the unemployment benefit; rehabilitation assistance was available only
in restricted circumstances; lump sum payments for loss of faculty and pain
and suffering were abolished and replaced by an “independence allowance”
set at low levels; and entitlement to compensation ended when a claimant
became entitled to superannuation payments.37 Further savings were sought
to be made by reining in the ability of the judges to give an expansive interpretation
to the provisions governing the ambit of the scheme.38 The
bases for cover formerly all fell within the broad concept of “personal injury
by accident,” but now they were treated as separate categories and
made subject to a series of detailed definitions.39 Judicial discretion in determining
their limits was largely removed.
The next significant development came with the passing of the Accident
Insurance Act 1998.40 This left cover and benefits as they were but
privatized the delivery of the statutory benefits for the victims of accidents
at work.41 The monopoly control exercised by the Accident Compensation
Corporation was removed and employers were obliged to insure with a
private insurance company or a new state-owned enterprise set up to compete
with the private companies.42 A regulatory regime aimed to make sure
34. Accident Rehabilitation and Compensation Insurance Act 1992.
35. Id. at pt. VII.
36. Id. §§ 100, 113.
37. Id. §§ 37–44.
38. Id. § 3.
39. Cover as presently provided continues to be based on the 1992 categories, but with some
amendment. See text accompanying notes 65–71.
40. Accident Insurance Act 1998. For evaluations see Stephen Todd, Privatization of Accident
Compensation: Policy and Politics in New Zealand, 39 WASHBURN L.J. 404, 474–87 (2000).
41. Accident Insurance Act 1998.
42. Accident Insurance Act 1998 § 169.
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1176 CHICAGO-KENT LAW REVIEW [Vol 86:3
that persons with cover received their entitlements.43 The purpose behind
the reform was to facilitate freedom of choice, promote a greater emphasis
on safety and rehabilitation, and encourage the efficient management of
claims.44 The government view was that a publicly-administered scheme
lacked sufficient incentives to safety and efficiency. The introduction of
private enterprise would reduce the overall costs of injury, by an increased
focus on prevention and rehabilitation and on the monitoring of workplace
safety performance. Further, pay-as-you-go funding restricted the ability of
the Corporation to reward innovation in injury prevention, as employers
paid premiums that related largely to injuries that had already occurred. So
henceforth the scheme was to be financed on a fully funded basis.
Whether these hopes for efficiency and accident prevention would
have been fulfilled cannot be known, for the new privatized regime was in
force for just one year. A new Labour government was elected at the end of
1999, and one of its first acts was to restore the public monopoly. It saw no
necessary or sufficient connection between the issues of paying victims and
reducing accidents. It also rejected the view that the ACC operated inefficiently.
On the contrary, there was no duplication in the provision of services
and administrative costs were very low.45 However, full funding was
thought to be desirable and this was retained in the new legislation that the
government introduced shortly afterwards.
This legislation—the Injury Prevention, Rehabilitation, and Compensation
Act 2001—once again left the provisions for coverage largely undisturbed.
46 Entitlements also were not much changed, the significant
exception being the reintroduction of lump sum compensation for impaired
amenity (but not for pain and suffering).47 So in core respects the previously
existing law continued. The new developments in the 2001 Act were
primarily in the field of accident prevention, and to this end it introduced
new processes and strategies aimed at reducing the incidence of injury and
promoting safety and security. However, provision for cover for medical
43. Id. § 168.
44. Id. at pmbl.
45. In the election in November 2008 the National Party regained power, and one of its policies is
to reintroduce private insurance covering accident compensation liabilities. INCREASING CHOICE IN
WORKPLACE ACCIDENT COMPENSATION (June, 2011), (available at
http://dol.govt.nz/consultation/increasing-choice/increasing-choice.pdf) has made a number of proposals.
These include extending the Accredited Employers Programme (as to which see infra text accompanying
note 286), allowing choice of workplace insurance cover in competition with the ACC,
subjecting insurers to prudential regulation, and appointing a market regulator to monitor and enforce
employer and insurer compliance with legal requirements.
46. Injury Prevention, Rehabilitation, and Compensation Act 2001 pt. 2.
47. Id. § 69.
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accidents was extended by amendment in 2005,48 in a way which will be
explained below and which has had very significant practical consequences.
A further amendment in 2008 extended cover to include workrelated
mental injury.49 Finally, in 2010, the name of the 2001 Act was
changed to the Accident Compensation Act 2001,50 thus returning to the
original, and surely appropriate, title.
D. Relationship with the Common Law
From the inception of the accident compensation scheme there has
been a bar on suing in New Zealand for damages for personal injuries or
death. The bar is presently found in section 317(1) of the 2001 Act, which
simplifies the original wording in the 1972 and 1982 Acts. It provides: “No
person may bring proceedings independently of this Act, whether under
any rule of law or any enactment, in any court in New Zealand, for damages
arising directly or indirectly out of–(a) personal injury covered by this
Act; or (b) personal injury covered by the former Acts.”51
The bar cannot be avoided by failure to make a claim or a purported
denial or surrender of rights under any of the Acts or a lack of entitlement
to any particular benefit.52 A similar bar applies in the case of personal
injury caused by a work-related gradual process, disease, or infection.53
The scope of the statutory bar was examined by the Court of Appeal in
Queenstown Lakes District Council v. Palmer.54 In this case the plaintiff
sought damages for the shock and mental injury that he suffered after witnessing
the death of his wife in a rafting accident which was caused, he
alleged, by the negligence of the defendant.55 It was argued that this was a
claim for damages “arising . . . ‘indirectly’ out of a personal injury covered
by the Act,” that is, the death of Mrs. Palmer, but Thomas J, delivering the
judgment of the court, was satisfied that the common law action was not
barred.56 Section 14(1) of the 1992 Act (the predecessor to section 317(1)
of the 2001 Act) did not apply, because the proceedings brought by Mr.
48. Injury Prevention, Rehabilitation, and Compensation Amendment Act (No 2) 2005 § 13.
49. Injury Prevention, Rehabilitation, and Compensation Amendment Act 2008 § 9.
50. Accident Compensation Amendment Act 2010 § 5.
51. Accident Compensation Act 2001 § 317(1). For the earlier bars, see Accident Compensation
Act 1972 § 5(1); Accident Compensation Act 1982 § 27(1); Accident Rehabilitation and Compensation
Insurance Act 1992 § 14(1); Accident Insurance Act 1998 § 394(1).
52. Accident Compensation Act 2001 § 317(7).
53. Id. § 318(1)–(2). Oddly there are no similar anti-avoidance provisions as in section 317(7), but
these are implicit in the bar itself and are in fact unnecessary.
54. [1999] 1 NZLR 549 (CA).
55. Id.
56. Id.
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1178 CHICAGO-KENT LAW REVIEW [Vol 86:3
Palmer did not arise indirectly out of Mrs. Palmer’s death.57 The critical
words in section 14(1) were “personal injury covered by this Act,” and the
relevant personal injury had to be personal injury for which damages were
sought.58 Yet Mr. Palmer was not seeking damages for his wife’s death.
The relevant injuries for which he was seeking damages were the mental
injuries which he himself suffered as a result of the alleged breach of a duty
of care owed to him by the defendants. Mrs. Palmer’s death was simply
part of the sequence of events which provided the factual basis for his
claim.
Thomas J was satisfied that the legislative history and the policy behind
the legislation, and indeed common sense, supported this view.59 Persons
covered under the Act were denied access to the courts at common
law in return for the perceived advantages of the statutory scheme. The
legislation reflected this policy from the outset. The purpose of the provision
barring common law claims was to prevent persons who suffered personal
injury being compensated twice over, once under the statute and then
at common law, not to prevent them recovering any compensation at all. So
the application of the Act and the corresponding scope for common law
proceedings would automatically adjust as and when the scope of the cover
provided by the Act was extended or contracted.60 To the extent that the
statutory cover was extended, the right to sue at common law would be
removed; to the extent that the cover was withdrawn or contracted, the right
to sue at common law would be revived. Any other view would lead to
fundamental injustice, depriving a person in Mr. Palmer’s position both of
compensation and of damages.
The bar on suing does not extend to any proceedings relating to any
damage to property, or any express term of any contract or agreement,61 or
any personal grievance arising out of a contract of employment.62 However,
there can be no award of compensation in such proceedings for personal
injury covered by the scheme,63 nor indeed in any other kinds of
proceedings, such as a criminal prosecution.64
57. Id.
58. Id.
59. Id.
60. Id.
61. E.g., Brittain v. Telecom Corporation of New Zealand Ltd [2001] 2 NZLR 201 (CA) (confirming
that proceedings for a benefit founded on an insurance contract providing for additional payments in
the event of injury are not barred).
62. Accident Compensation Act 2001 § 317(2).
63. Id. § 317(3).
64. Sentencing Act 2002 § 32(5) provides that a court making a sentence of reparation “must not
order the making of reparation in respect of . . . loss or damage . . . for which the court believes that a
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E. Cover
1. Categories of Cover
The provisions for cover under the accident compensation scheme
over the years have become increasingly detailed, and presently they are
divided up under twelve specific heads of claim. However, cutting through
this prolixity, the various bases for cover fall broadly into four core categories.
These are personal injury caused by an accident;65 personal injury by
way of medical treatment;66 personal injury caused by employment-related
disease or infection;67 and personal injury by way of mental injury suffered
as a consequence of physical injury,68 by the victims of certain specified
sexual offences,69 or which is work-related.70 The victim in any of these
cases can make a claim for compensation to the Accident Compensation
Corporation pursuant to a simple administrative process.71
2. Personal Injury
In every case the cover provided under the Act depends on the claimant
having suffered “personal injury.” This is defined as meaning death;
physical injuries; mental injury suffered because of the claimant’s physical
injury, or caused by certain criminal acts, or which is work-related; or
damage (other than wear or tear) to dentures or prostheses.72 Personal injury
does not include personal injury caused wholly or substantially by a
gradual process, disease, or infection unless it is work-related, caused by
treatment, is consequential on another, covered, personal injury, or is consequential
on another treatment injury.73 Nor does it include a heart attack
or stroke unless this constitutes a treatment injury or is work-related.74
person has entitlements under the Accident Compensation Act 2001.” In Davies v. Police [2009] 3
NZLR 189 (SC) paras. [2], [24]–[25], [34], [37] the Supreme Court held that the inquiry should be into
whether there was cover for the type of loss for which there were entitlements under the Act, not into
the sums actually payable. Accordingly, a criminal court could not make a reparation order to compensate
a victim for the difference between her full loss of income and the eighty percent loss for which she
was compensated under the 2001 Act.
65. Accident Compensation Act 2001, § 20(2)(a).
66. Id. § 20(2)(b)–(d), (f)–(i).
67. Id. § 20(2)(e), (j).
68. Id. § 26(1)(c).
69. Id.§§ 21, 26(1)(d), sched. 3.
70. Id. §§ 21B, 26(1)(d).
71. Id. § 48.
72. Id. § 26(1).
73. Id. § 26(2).
74. Id. § 26(3).
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It is clear that the reference to “physical injuries” in the definition is
intended to be all-embracing. The definition specifically states that such
injuries include “a strain or a sprain,” but otherwise the concept is not further
defined.75 Seemingly it should be understood as meaning any condition
involving harm to the human body, including harm by sickness or
disease, that is more than merely trifling or fleeting.76 Mental injury, by
contrast, is statutorily defined, this being a “clinically significant behavioural,
cognitive, or psychological dysfunction.”77
3. Residual Actions for Damages
It is apparent at least that “physical injuries” has a very broad meaning.
But there may still be certain forms of injury which do not qualify
under the statutory definition and which may be actionable at common law.
A clear example is mental injury in secondary victim cases. Further, assuming
that some form of personal injury, as defined, has been suffered, it may
fall outside the particular categories which are covered for compensation
and, again, may be potentially actionable. The most significant examples
probably are personal injury which is not caused by an “accident,”78 and
injury by disease or by heart attack or stroke which is not otherwise covered
as having been caused by treatment or as being work-related. In these
and certain other cases a common law action can still be maintained where
the harm is alleged to have been caused by tortious conduct by another.
The ambit of cover in each of the four core categories is defined by
the Act in close detail. Our concern is with the provisions governing injury
caused by medical treatment, and we will be looking at these in Part II
below.79
75. Id. § 26(1)(b).
76. TODD, supra note 1, at para 2.4.01. This suggestion was approved in Falwasser v. Attorney-
General. [2010] NZHC 410 para [90]. It was held in this case that a plaintiff suffered physical injuries
from exposure to pepper spray, and that his common law claim against the police accordingly was
barred. Id. at para [91].
77. Accident Compensation Act 2001 § 27. The definition is based upon the American Psychiatric
Association’s Diagnostic and Statistical Manual of Mental Disorders.
78. The core meaning of “accident” (defined at length in section 25(1)) is “a specific event”
involving “the application of a force . . . or resistance external to the human body.” Accident Compensation
Act 2001 § 25(1). It does not cover, for example, seeing or hearing about injury to another, or a
child suffering from foetal alcohol syndrome due to her mother having drunk alcohol during the pregnancy,
Winikerei v. ARCIC 27/7/05, Fogarty J, HC Wellington CIV-1999-485-000008, or a child suffering
from cerebral palsy caused by an antenatal force external to the foetus but occurring within the
mother, Sam v. ACC [2009] 1 NZLR 132 (HC) at para [43], or a person inhaling smoke, Simm v. ACC
[2006] NZHC 1634 (HC) at paras [1]–[3].
79. For discussion of the other categories, see TODD, supra note 1, at para 2.4.02 (personal injury
by an accident), para 2.4.03 (mental injury), para 2.4.05 (work-related disease, heart attacks and
strokes).
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A further possible basis for an action is where the plaintiff seeks to recover
exemplary, rather than compensatory, damages. Quite early on, in
Donselaar v. Donselaar, the Court of Appeal decided that actions for exemplary
damages could still be maintained.80 Richardson J explained that
proceedings for exemplary damages were not “proceedings for damages
arising directly or indirectly out of” a person’s injury or death, where the
statutory bar applied, because exemplary damages did not arise out of the
plaintiff’s injury and were not directed to the plaintiff’s loss.81 In its contemporaneous
decision in Taylor v. Beere, the Court of Appeal confirmed
that exemplary or punitive damages were intended to punish and deter a
defendant guilty of outrageous or contumelious conduct.82 Recently, in
Couch v. Attorney-General, the New Zealand Supreme Court limited the
remedy by deciding that it should be available only in cases of advertent or
reckless wrongdoing.83 Negligence, even where gross, would not suffice.
F. Claimants
All persons who suffer personal injury in New Zealand are entitled to
claim,84 although non-residents are eligible only for limited benefits.85 The
scheme also applies to persons ordinarily resident in New Zealand who
suffer death, physical injuries and consequential mental injuries or personal
injury as a result of medical treatment while outside New Zealand, and the
injury is one for which there would be cover if the personal injury had occurred
within New Zealand.86
G. Benefits
Where there is cover there is a right to compensation. The statutory
entitlements available to victims of personal injury are treatment and rehabilitation,
earnings-related compensation, lump sum compensation for permanent
impairment, and death benefits.87
80. [1982] 1 NZLR 97 (CA) 98, 107.
81. Id. at 109.
82. [1982] 1 NZLR 81 (CA) 84–86.
83. [2010] 3 NZLR 149 (SC) at para [1].
84. Accident Compensation Act 2001 § 20. There is an exception in section 23, concerning accidents
on ships or aircraft coming to, travelling around or leaving New Zealand. Id. § 23.
85. In particular, non-residents do not qualify for earnings-related compensation, because they
must be persons receiving income as defined in the Income Tax Act 1994. See the definition of “employee”
in section 6. Id. § 6.
86. Id. § 22. Special provision is made for injury by work-related disease where this is suffered
outside New Zealand. Id. § 24.
87. Id. § 69.
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The Corporation is liable to pay the cost of necessary and appropriate
medical treatment and of social or vocational rehabilitation.88 The purpose
of social rehabilitation is to assist in restoring a claimant’s independence to
the maximum extent practicable, and it can cover such benefits as aids and
appliances, home help, child care, modifications to the home, assistance
with transport and training for independent living.89 Vocational rehabilitation
is available to persons covered by the Act who are entitled to weekly
compensation.90 It seeks to help a claimant maintain or obtain employment
or regain or acquire vocational independence.91
Earnings-related compensation has always been, and remains, a key
benefit.92 It is payable to claimants who were earners at the time of the
personal injury and who are unable, because of their injury, to engage in
their employment.93 There are special provisions dealing with, inter alios,
earners not in permanent employment, the self-employed, low earners and
potential earners.94 The amount payable is eighty percent of the claimant’s
weekly earnings, as calculated in accordance with detailed statutory formulae.
95 All calculations are subject to a maximum weekly payment of
NZ$1,341.31, which is adjustable in relation to movements in average
weekly earnings.96
Lump sums may be awarded to compensate for permanent impairment,
but not for pain and suffering.97 There is a minimum impairment
threshold of ten percent and the minimum payment is NZ$2,500.98 The
maximum sum, which is payable for impairment of eighty percent or more,
is set at NZ$100,000.99 These figures are adjusted annually in line with the
Consumer Price Index.100 The amount payable in any particular case is
calibrated so that more seriously injured claimants receive proportionately
more than less seriously injured claimants.
88. Id. §§ 69(1)(a), 75–96, sched. 1, pt. 1.
89. Id. §§ 79, 81(1).
90. Id. § 85.
91. Id. § 80(1).
92. Id. §§ 69(1)(b)–(c), 100–06, sched. 1, pt. 2.
93. Id. § 103.
94. Id. at sched. 1, pt. 2, cls. 35–38, 42, 47.
95. Id. sched. 1, pt. 2, cl. 32.
96. Id. sched. 1, pt. 2, cl. 46.
97. Id. § 69(1)(d), sched. 1, pt. 3, cl. 54.
98. Id. sched. 1, pt. 3, cl. 56(3).
99. Id. sched. 1, pt. 3, cl. 56(4).
100. Id. §§ 116, sched. 1, pt. 3, cl. 56(5).
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Where death ensues, the Act makes provision for the payment of benefits
to the deceased’s dependants.101 These include funeral grants, certain
survivors’ grants, and weekly compensation for loss of dependency.102
A claimant who qualifies for compensation may be disentitled to relief,
fully or partially, on a number of grounds. They include: the claimant
wilfully inflicting injury on himself or herself or committing suicide;103 the
claimant seeking compensation as a spouse or dependant in circumstances
where he or she has been convicted of the murder of the deceased person;
104 the claimant being in prison;105 and the claimant being injured in
the course of committing a criminal offence punishable by a maximum
term of imprisonment of at least two years, unless the Minister responsible
for the scheme is satisfied that there are exceptional circumstances exempting
the claimant from the operation of this provision.106 These ultimately
are penal provisions, preventing payment of what would otherwise be perfectly
valid claims, for reasons of public policy.
H. Claims Process
The Act sets out a simple process for making a claim. All that is necessary
is that a person should lodge a claim for cover and/or a specified
entitlement.107 On receiving it the Corporation must decide whether it accepts
that cover exists, and if satisfied that it does, provide information
about relevant entitlements and facilitate access to those entitlements.108
There is a one year time limit for making a claim, the start of the period
running from the date of the personal injury, but the Corporation must not
decline a late claim unless its lateness prejudices the Corporation’s ability
to make decisions about the claim.109 The Corporation must make reasonable
decisions in a timely manner, give notice in writing of any decision,
give reasons if the decision is adverse to the claimant, and provide information
about review and appeal rights.110 A dissatisfied claimant may apply
for a review of any of the Corporation’s decisions, including a decision
101. Id. § 69(1)(e).
102. Id. § 69(1)(e), sched. 1, pt. 4, cls. 64–66, 70–71.
103. Id. § 119.
104. Id. § 120.
105. Id. § 121.
106. Id. §§ 122.
107. Id. § 48.
108. Id. § 50.
109. Id. § 53.
110. Id. §§ 54–64.
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under a Code of Claimants’ Rights.111 An independent reviewer conducts
the review hearing in accordance with detailed rules of procedure.112 An
appeal lies to the District Court,113 and further appeals on matters of law
may be taken, with leave, to the High Court114 and thence to the Court of
Appeal.115
I. Funding
The funding for accident compensation comes from levies on activities
where accidents tend to occur and also from general taxation.116 The
levies originally were payable by employers, the self-employed and motor
vehicle owners, and over the years new sources of funding have been added.
Today the levies fund four accounts: the Work Account (for workrelated
injuries of employees, private domestic workers and self-employed
persons); the Motor Vehicle Account (for motor vehicle injuries); the Earners’
Account (for earners’ non-work injuries); and the Treatment Injury
Account (for injuries caused by treatment).117 In addition there is the Non-
Earners’ Account (for injuries to non-earners other than motor vehicle injuries
or treatment injuries), funded out of general taxation.118
As was earlier explained, the levies in the 1980s and 1990s were calculated
on a pay-as-you-go basis. However, since the Accident Insurance
Act of 1998 all of the accounts save for the Non-Earners’ Account have
been required to be fully funded.119 The premiums for each account must
cover all the costs of claims made in any particular year, including all future
costs.120 Formerly a separate Residual Claims Account funded the
continuing cost of past claims which were unfunded on a pay-as-you-go
basis, but in 2010 this account was folded into the Work Account.121 These
outstanding residual liabilities are required to be fully funded by 31 March
2019.122
111. Id. § 134.
112. See id. pt. 5.
113. Id. § 149.
114. Id. § 162.
115. Id. § 163.
116. Id. pt. 6.
117. Id. § 392.
118. Id. § 392(1)(c).
119. Accident Insurance Act 1998 §§ 282-307.
120. Accident Compensation Act 2001 § 169.
121. Id. § 21.
122. Id. § 169.
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The levies funding the Work Account are collected from employers,
private domestic workers and the self-employed, those for the Motor Vehicle
Account from vehicle registrations and from the sale of petrol, and
those for the Earners’ Account directly from employees’ earnings.123 In the
case of the Treatment Account, a statutory power to impose levies on registered
health professionals and organizations that provide treatment under
the Act has never been implemented. Rather, the Account is funded from
the Earners’ and Non-Earners’ Accounts according to the mix of earner and
non-earner clients.124
J. Administration
The Accident Compensation Corporation (ACC) is responsible for
administering the accident compensation scheme.125 The Corporation is a
Crown entity,126 and is managed by a Board appointed by the Minister.127
The duties of the Corporation are, inter alia, to determine cover, provide
entitlements, manage the Accounts, collect levies, and administer dispute
resolution procedures.128 Its functions include carrying out these duties,
promoting “measures to reduce the incidence and severity of personal injury,”
and managing “assets, liabilities and risks in relation to the Accounts.”
129 The Corporation must comply with the Minister’s directions
relating to the policy of the Government in relation to its functions, duties
and powers.130 An annual “service agreement” sets out the quality and
quantity of services provided by the Corporation, including its desired outcomes
and objectives in performing its functions, duties and powers.131 An
Annual Report provided to Parliament gives an overview of its performance
over the past year and its plans for the future.132
123. Id. §§ 167(2), 213, 218.
124. Id. § 228(2).
125. Id. § 3.
126. Id. § 259(4).
127. Id. § 267. “The Minister” means “the Minister of the Crown who . . . is . . . responsible for the
administration of [the] Act. Id. § 6.
128. Id. § 165.
129. Id. § 262.
130. Id. § 270.
131. Id. § 271.
132. See, e.g., ACCIDENT COMP. CORP., ANNUAL REPORT (2010), available at
http://www.acc.co.nz/search-results/index.htm?ssUserText=annual+report+2010 [hereinafter 2010
REPORT].
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1186 CHICAGO-KENT LAW REVIEW [Vol 86:3
II. MEDICAL INJURIES
As originally enacted, the accident compensation legislation provided
cover for “personal injury by accident” without specific reference to adverse
outcomes of medical treatment.133 Then shortly after its introduction
the Act was amended, by adding “medical, surgical, dental or first aid misadventure”
as an illustrative category but without any further definition.
So, within the one general concept, the courts had a largely unfettered discretion
in deciding quite where the parameters of the scheme ought to be
set. And they took advantage of this statutory flexibility, by emphasizing
that a generous approach was in keeping with the policy of the Act of providing
comprehensive cover for all those suffering personal injury in New
Zealand, “wherever, whenever, and however occurring.”134 More particularly,
we can see this kind of approach being taken in the cases considering
the meaning of medical misadventure.
Early decisions show the courts developing a two-limb test, by asking
whether there had been either medical negligence or medical mishap.135 As
regards negligence, the Court of Appeal in Green v. Matheson accepted
that this was medical misadventure, which included insufficient or wrong
treatment, failure to inform, misdiagnosis, misrepresentation (innocent or
fraudulent) or administrative shortcomings.136 If the plaintiff’s claim was
mishandled, it was her misfortune or ill-luck, and this fell squarely within
the idea of misadventure.137 As regards mishap, this was a quite unforeseeable
adverse consequence of treatment which had been properly administered
and which did not involve negligence.138
In Childs v. Hillock the two-limb approach was confirmed in the Court
of Appeal.139 Hardie Boys J considered that it achieved a proper balance
between recognizing (i) that the patient’s misfortune or mishap could be the
result of negligence, or other non-culpable error in treatment, or an unintended
consequence of correct treatment, and (ii) that not every medical
intervention is successful and that many are attended by risk.140 So his
Honour accepted the need to differentiate between medical patients who
were covered for compensation and patients who were simply receiving
133. Accident Compensation Act 1972 § 4(b).
134. ACC v.Mitchell [1992] 2 NZLR 436 (CA) 438–39.
135. See ACC v. Auckland Hosp. Bd. [1980] 2 NZLR 748 (HC) 751; Bridgeman v. ACC [1993]
NZAR 199 (HC).
136. [1989] 3 NZLR 564 (CA) 572–73.
137. Id. at 573.
138. See Auckland Hosp. Bd., supra note 135, at 751.
139. [1994] 2 NZLR 65, 72 (CA).
140. Id.
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medical treatment because they were ill.141 Some unexpected or “accidentlike”
event was required so that the case was removed from the category of
sickness or disease, which was not covered, to medical misadventure,
which was.142 Indeed, the legislature then followed the lead taken by the
courts, by providing in the 1992 Act that medical misadventure meant personal
injury caused by medical error or medical mishap.143 “Medical error”
was defined as meaning medical negligence, and “medical mishap” as
meaning an adverse consequence of properly administered treatment that
was “rare” and “severe.”144 These further requirements were defined in
their turn in close detail.145
The provisions introduced in 1992 were carried over into the Accident
Insurance Act 1998 and then the Injury Prevention, Rehabilitation and
Compensation Act 2001.146 Shortly afterwards, however, a review undertaken
by the ACC jointly with the Department of Labour expressed dissatisfaction
with the very concept of medical misadventure as defined in the
statute.147 In particular, the need to prove a medical error was seen as quite
anomalous in the context of a no fault compensation scheme. It perpetuated
a blaming culture and meant that the scheme was required to resolve the
same kinds of difficulties that arose under the tort system that it replaced.
This in turn led to considerable cost in investigating claims and delay in
deciding them. The medical mishap provisions also were criticized, being
seen as confusing and arbitrary. They often bore little relationship to the
circumstances of the patient, resulting in claimants unfairly missing out on
cover.
Following a consultation process the review recommended that the
concept of medical misadventure be abandoned and that instead there
141. Id.
142. Id.
143. Accident Rehabilitation and Compensation Insurance Act 1992 § 5(1).
144. Id. More specifically, the Act stated that “medical error” meant the failure of a registered
health professional to observe a standard of care and skill reasonably to be expected in the circumstances.
Id. It was not medical error solely because desired results were not achieved, or subsequent
events showed that different decisions might have produced better results, or the failure in question
consisted of a delay or failure attributable to the resource allocation decisions of the organization. Id.
145. Id § 5. An adverse consequence was “rare” only if the probability was that it would not occur
in more than one percent of cases in which that treatment was given. Id. § 5(2). There was no medical
mishap where an adverse consequence was rare in the ordinary course but was not rare for that particular
person, and the greater risk was known to the person prior to the treatment. Id. § 5(3). The consequence
was “severe” only if it resulted in the patient dying, or being hospitalized as an inpatient for
more than fourteen days, or suffering significant restriction or lack of ability lasting more than twentyeight
days in total. Id. § 5(4).
146. Accident Insurance Act 1998 §§ 34–37; Injury Prevention, Rehabilitation and Compensation
Act 2001 §§ 32–34.
147. ACCIDENT COMP. CORP., REVIEW OF ACC MEDICAL MISADVENTURE: CONSULTATION
DOCUMENT (2003).
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1188 CHICAGO-KENT LAW REVIEW [Vol 86:3
should be cover for unintended injuries in the treatment process. This
would include all adverse medical events, whether or not preventable, provided
they were unintended or, on another formulation, outside the expected
and likely range of consequences of treatment. This
recommendation formed the basis for the amendments to the scheme in
2005,148 introducing the concept of “treatment injury.”149 Their primary
aim was to move away from any need by a claimant to prove fault by a
registered health professional in order to qualify for compensation. The
hope was that professionals would be more willing to cooperate in the
claims process and that there would be a partnership between ACC and the
health sector that encouraged a climate of learning and also protected public
safety.
A. Cover
The extent of coverage for medical injury now is defined in six overlapping
heads of claim. These are: personal injury that is treatment injury
suffered by the person;150 personal injury that is a secondary infection
passed on by a victim of treatment injury to his or her spouse or child or to
any other third party, whether directly or through his or her spouse;151 personal
injury caused by treatment for personal injury for which the person
has cover;152 personal injury caused by gradual process, disease, or infection
that is treatment injury suffered by the person;153 personal injury
caused by a gradual process, disease or infection consequential on treatment
given to the person for personal injury for which the person has cover;
154 and personal injury that is a cardiovascular or cerebrovascular
episode that is treatment injury suffered by the person.155
Subparagraphs (b), (c), (f) and (i) are the exclusive determinants of
cover for personal injury that is suffered by way of some form of “treatment
injury,” which is defined as meaning, inter alia, personal injury suffered
by a person seeking or receiving treatment from a registered health
148. Injury Prevention, Rehabilitation, and Compensation Amendment Act (No 2) 2005, § 13.
149. See Ken Oliphant, Beyond Misadventure: Compensation for Medical Injuries in New Zealand,
15 MED. L. REV. 357 (2007) [hereinafter Oliphant (2007)].
150. Accident Compensation Act 2001 § 20(2)(b).
151. Id. §§ 20(2)(c), 32(7).
152. Id. § 20(2)(d).
153. Id. § 20(2)(f).
154. Id. § 20(2)(h).
155. Id. § 20(2)(i).
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professional.156 Until 1992 it was possible to mount alternative arguments,
that what had occurred either was medical misadventure or was personal
injury by accident in the ordinary sense. However, the Act provides now
that an “accident” does not include an occurrence which is treatment given
“by or at the direction of a registered health professional.”157 So coverage
for personal injury by an accident and for medical treatment does not overlap.
However, the Act provides separate coverage under paragraph (d) for
personal injury that is a consequence of treatment for another “personal
injury for which the person has cover,” and under paragraph (h) for “personal
injury caused by a gradual process, disease, or infection consequential
on treatment given to the person for personal injury for which the
person has cover.”158 It is not clear why these provisions have been included,
for in each case there must be an initial personal injury for which a
person has cover under another head. If treatment for personal injury is
given by a registered health professional, at least as a general rule it appears
that the provisions for treatment injury and for the consequences of
treatment will cover the same ground.159 We do not need to take this question
any further and will turn to the provisions governing treatment injury,
looking first at relevant principles of causation and then at the meaning of
this newly-introduced concept.
B. Treatment Injury
1. Proof of Cause
In order for there to be cover for a treatment injury, the personal injury
must be “caused by” the medical treatment.160 In the context of litigation
the ordinary rules of proof, invoking the so-called “but for” test, require
that a plaintiff prove on the balance of probabilities that the defendant’s
conduct was a cause of his or her loss. But sometimes the cause may not be
capable of such proof, perhaps because of the particular circumstances in
which an accident or event happened or because of the limits to scientific
156. Id. §§ 20(2), 32(1)(a). “Registered health professional” means, inter alia, “a chiropractor,
clinical dental technician, dental technician, dentist, medical laboratory technologist, medical radiation
technologist, midwife, nurse, occupational therapist, optometrist, pharmacist, physiotherapist, podiatrist,
or registered medical practitioner.”Id. § 6(1).
157. Id. § 25(2)(a).
158. Id. § 20(2)(d), (h).
159. See Childs v. Hillock [1993] NZAR 249 (not discussed on appeal at [1994] 2 NZLR 65
(CA)).
160. Accident Compensation Act 2001 § 32(1)(b).
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1190 CHICAGO-KENT LAW REVIEW [Vol 86:3
understanding in the particular field. In such cases it is perfectly possible
for the courts to hold the plaintiff to the normal requirements, so that if the
necessary evidence cannot be adduced the action fails. But this strict approach
can have harsh consequences, and in certain special cases the courts
have been persuaded to modify the ordinary rules. In an outstanding example,
the House of Lords in England has developed a doctrine of risk, pursuant
to which a plaintiff can succeed if he or she can prove that the
defendant caused or increased the risk of an outcome, as opposed to proving
that the defendant caused the outcome itself.161 The question we must
now consider is whether this or other similar modifications to the ordinary
principles of causation can apply in New Zealand in the context of a claim
for accident compensation.
a. Atkinson and Ambros
The clear answer, as laid down in the decision of the Court of Appeal
in Atkinson v. Accident Rehabilitation Compensation and Insurance Corporation,
is that modifications of this kind cannot apply to disputes about
cover for accident compensation.162 A child received negligent medical
treatment in the course of surgery shortly after birth, leading to hypoxia.163
The child later was found to be suffering from brain damage, and a claim
for accident compensation was made on his behalf.164 The claim failed, on
the ground that the hypoxia could not be causatively linked to the brain
damage.165 Richardson P, delivering the judgment of the court, recognized
that it may have contributed to the damage, but it was not proved that it had
contributed.166 The statute focused on outcomes, not on risk of injury or
potential for injury. To accept a lesser statutory test of increased risk or to
adopt a reversed onus approach would be inconsistent with the statutory
language and scheme.167 Public policy considerations had led to common
law modifications of this kind in relation to causation, but the public policy
of the accident compensation scheme had to be drawn from its statutory
provisions and these were outcomes-focused.168 “Risk or potentiality of
161. See Lara Khoury, Causation and Risk in the Highest Courts of Canada, England and France,
124 L. Q. REV. 103, 110–13 (2008); M H Tse, Tests for Factual Causation: Unravelling the Mystery of
Material Contribution, Contribution to Risk, the Robust and Pragmatic Approach and the Inference of
Causation, 16 TORTS L.J. 249 (2008).
162. [2002] 1 NZLR 374 (CA) paras [19]–[26].
163. Id. at para [22].
164. Id. at para [2].
165. Id. at paras [22]–[26].
166. Id.
167. Id. at para [24].
168. Id. at para [25].
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injury [was] not enough to attract cover.”169 And that conclusion “may well
have been seen as part of the policy package” governing the scheme as a
whole.170
The view taken in Atkinson came under challenge in ACC v. Ambros,
where the Court of Appeal returned to the causation question and gave it
extended consideration.171 Mrs. Ambros died of a heart attack which was
secondary to a rare condition called spontaneous coronary artery dissection
(SCAD).172 She had just given birth to her first child, and SCAD was
commonly associated with pregnancy and childbirth.173 The question at
issue was whether her death was caused by medical error in failing to diagnose
her condition and, accordingly, was covered under the Accident Insurance
Act 1998.174 The High Court upheld the claim,175 and the Accident
Compensation Corporation appealed from that decision.
Glazebrook J, delivering the judgment of the court, noted that the
1998 Act was passed against a background of the causation principles set
out in Atkinson, and was satisfied both that it had to be seen as legislative
acceptance of those principles and also that the case was correctly decided.
176 “In ordinary usage, one would not normally say that an injury was
caused by medical error when that injury was highly likely to have occurred
without the error.”177 Atkinson also was consistent with English
authority, and in particular with Wilsher v. Essex Area Health Authority,
where the House of Lords declined to hold that causing an increase in the
risk of harm by contributing one of several possible causes could be treated
as causing the harm.178 Accordingly, as the High Court test did not accord
with Atkinson, and there were no grounds for reviewing that decision, the
appeal should be allowed.179
Glazebrook J then turned to consider an alternative causal test put
forward by counsel appearing as amicus curiae, that where a personal injury
is alleged to arise from a failure of medical diagnosis and/or treatment,
169. Id.
170. Id.
171. [2008] 1 NZLR 340 at paras [8]–[9]. The description of this case is based upon a section of
my article, Stephen Todd, The Court of Appeal, Accident Compensation and Tort Litigation in THE
PERMANENT NEW ZEALAND COURT OF APPEAL: A CELEBRATION OF 50 YEARS (Rick Bigwood, ed.,
2009).
172. [2008] 1 NZLR 340 at para [1].
173. Id.
174. Id. at paras [2]–[3].
175. Ambros v. ACC (unreported) High Court, Auckland, CIV 2004-404-3261, 21 March 2005).
176. [2008] 1 NZLR 340 at paras [17]–[18].
177. Id. at para [18].
178. Id. at para [19]; Wilsher v. Essex Area Health Auth. [1998] A.C. 1074 (H.L.) 1090–92.
179. Id. at para [21].
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1192 CHICAGO-KENT LAW REVIEW [Vol 86:3
and (a) is the very injury which the diagnosis and/or treatment was intended
to prevent, and (b) is part of the medical event in respect of which
the diagnosis and/or treatment was given, then, prima facie, the injury has
been caused by the failure of the diagnosis and/or treatment.180In her Honour’s
opinion, whether this modification of ordinary principle ought to be
accepted required examination of the manner in which courts in other jurisdictions
had dealt with difficulties of proof and uncertainty in the evidence.
181
There were a number of situations where dissatisfaction with the result
of the traditional test of causation had led to calls for modification to the
“but for” test. One of these was the principle laid down in McGhee v. National
Coal Board182 and applied in Fairchild v. Glenhaven Funeral Services
Ltd.183 and Barker v. Corus UK Ltd.,184 that where there was one
noxious agent rather than multiple agents, a material contribution to the
risk posed by that agent was equivalent to a material contribution to the
damage.185 However, the principle was contrary to Atkinson and was not
applicable in New Zealand. Another was the possibility of claiming damages
for the loss of a chance of avoiding a bad outcome, but Hotson v. East
Berkshire Area Health Authority186 declined to extend the relevant principles
to a claim of medical negligence in failing to diagnose an injury.
Rather, it affirmed the traditional test, asking if a failure to diagnose or treat
was on the balance of probabilities a cause of the harm.187 Applying Hotson
in New Zealand, a claimant might not receive accident compensation
cover if an injury had two possible causes, and it was more likely that the
injury was caused by an event which did not attract cover as opposed to
other events which did. Furthermore in Gregg v. Scott,188 decided after
Fairchild, the House of Lords still maintained the rule in Hotson. Loss of
chance analysis had had a mixed reception in other common law jurisdictions,
189 but whatever the developments elsewhere, the analysis was in-
180. Id. at para [9].
181. Id. at paras [79]–[84].
182. [1973] 1 W.L.R. 1 (H.L.) 4–5.
183. [2003] 1 A.C. 32 (H.L.) 68.
184. [2006] 2 A.C. 572 (H.L.) 593–94.
185. For later discussion of the principle, see Sienkiewicz v. Greif (UK) Ltd [2011] 2 WLR 523
(S.C.).
186. [1987] 1 A.C. 750 (H.L.) 760–63.
187. Id.
188. [2005] 2 A.C. 176 (H.L.) 234..
189. Ambros, [2008] 1 NZLR 340 paras [44]-[45], where Glazebrook J noted that the analysis was
rejected by the Supreme Court of Canada in Laferrière v. Lawson, (1991), 78 D.L.R. 4th 609, 657(h)–
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compatible with the accident compensation regime. Either there was cover
or there was not. There was no ability to discount compensation, and no
conceptual need to do so where a wrongdoer was not himself or herself
liable for the injury. Applying Atkinson, any risk needed to be realized in
the occurrence of personal injury which was proved to have been caused by
the risk factor involved. So if an omission to treat caused an identifiable
added injury, cover would be available for that injury.
Turning to informed consent cases, Glazebrook J noted that in both
Chappel v. Hart190 and Chester v. Afshar191 a surgeon who had failed to
warn of a risk was held liable in circumstances where an explanation would
on the balance of probabilities have caused delay, but the same treatment
would have been likely to have been undertaken at a later date with a similar
risk of injury. The decisions were primarily based on a policy choice to
impose liability in order to ensure that the duty to obtain informed consent
was respected by medical practitioners, which policy had little relevance to
a no fault accident compensation regime. Another view, which could be
seen as being in accordance with the Atkinson test, was that the claims were
attributable to the materialization of the risk and not to the exposure to the
risk.192 So the “but for” test could be seen as met if the chances of the risk
materializing on the later occasion were slight. Yet her Honour declined to
endorse that approach, noting Lord Hoffmann’s view that the argument was
similar to saying that a win at the casino was caused by going there on
Tuesday because the chances were slight that there would have been a win
had the punter gone there on Wednesday.193
Glazebrook J accordingly determined that none of these developments
applied in the context of the accident compensation scheme.194 Even so,
there were a number of ways in which the courts had otherwise dealt with
difficulties of proof and uncertainty. These included a shifting of the evidential
burden of proof, the drawing of inferences of cause in circumstances
where science could not determine the matter, showing a statistical
link between particular events and an injury, and establishing proximity
between an alleged cause and its alleged effect. Taking these factors into
658(a), that differing views were expressed in the High Court of Australia in Naxakis v. West General
Hospital (1999) 197 CLR 269, and that a number of decisions in state jurisdictions in Australia had
accepted it. See also Tabet v. Gett (2010) 240 CLR 537.
190. (1998) 195 CLR 232, 285 (H.C.A.).
191. [2005] 1 A.C. 134 (H.L.) 140–42.
192. See CLERK AND LINDSELL ON TORTS paras. 2-15 (Anthony Dugdale & Michael A. Jones, eds.
19th ed. 2006).
193. Ambros [2008] 1 NZLR 340 at paras [48]–[52]; Lord Hoffmann, Causation, 121 L. Q. REV.
592, 602 (2005).
194. Ambros, [2008] 1 NZLR 340 at paras [51]–[52].
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1194 CHICAGO-KENT LAW REVIEW [Vol 86:3
account, her Honour was satisfied that a combination of some very limited
statistics, the proximity between the omissions and Mrs. Ambros’ death
and the increased monitoring had her condition been diagnosed sufficed to
make the question of causation arguable.195 So the matter was referred back
to the High Court for determination.196
b. Modification of Ordinary Rules?
Ambros considered, and declined to apply, three different routes pursuant
to which an ordinary approach to causation might be modified. First,
there is the risk principle articulated by the House of Lords in McGhee,
Fairchild, and Barker, holding that in defined circumstances it may be
sufficient to prove that the defendant caused an increased risk of a damaging
outcome, as opposed to the outcome itself. A core control on this principle
is the so-called single agency rule, applied in Wilsher, holding that the
principle cannot apply where there are multiple possible causal agents. Yet
the claims in Fairchild were not obviously more deserving than the claim
in Wilsher, and the causal uncertainty was no less acute. The House of
Lords seemingly settled on proof of a risk posed by a single agent for essentially
pragmatic reasons, to provide a remedy in deserving cases and to
have a workable rule that does not undermine the application of ordinary
rules of causation in other cases. However, even accepting the single agency
rule, at common law it remains uncertain whether or when the risk principle
can apply outside mesothelioma cases.197 Acceptance of the principle
only in some limited circumstances is likely to lead to inconsistency in the
law, although it may be that this is a price worth paying in order to allow
compensation in particularly deserving cases.
Second, there is the idea of a lost chance. The concept of risk describes
the probability of a negative outcome. Its “mirror image” is the loss
of the chance of a positive outcome.198 Sometimes the courts redefine the
nature of the plaintiff’s loss. They award damages not for an outcome but
for the loss of a chance of a better outcome, whether in actions founded
upon statute, for breach of contract, or for tort. The recovery of damages in
such a case does not depend on proof that the benefit of the chance could
be assessed as being more likely than not. Rather, the question is whether
the chance that was lost was “real” or “substantial,” as opposed to the loss
195. Id. at paras [53]–[78].
196. Id. at paras [113], [115].
197. In the UK the recovery of damages in mesothelioma cases is now governed by section 3 of
Compensation Act 2006, reversing the rule of proportionate liability introduced by the House of Lords
in the Barker decision. Compensation Act, 2006, c. 29, § 3 (U.K.).
198. JOHN G. FLEMING, THE LAW OF TORTS 229 (9th ed. 1998), 229.
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of a mere speculative possibility.199 So when exactly can claims properly
be framed as being for the loss of a chance? The decisions show that in
cases involving hypothetical physical injury the chance principle is not
applied and the plaintiff must adduce proof on the balance of probabilities
that he or she would have avoided the adverse physical outcome in question.
In particular, Hotson200 and Gregg201 in the UK, Laferrière v. Lawson202
in Canada and Tabet v. Gett203 in Australia decline to apply a chance
analysis to negligent omissions to provide medical treatment or advice. By
contrast, in cases involving hypothetical financial damage, many decisions
show that the plaintiff need prove only that he or she lost a substantial
chance of avoiding that outcome.204 A possible justification for the distinction,
to which Gregg lends some support,205 lies in the distinction between
deterministic events in the natural world and indeterministic events involving
the unfathomable actions of human agents.206 Speaking very broadly,
uncertainty about the cause of harm may be the result of lack of knowledge,
not random unpredictability of outcome, in which case the cause
may be classified as deterministic and is for the plaintiff to prove. Harshly
perhaps, an analysis of this kind puts the risk of losing due to scientific
uncertainty on the plaintiff. Only inherent uncertainty can be the subject of
a lost chance.
Third, there are the decisions of the High Court of Australia in Chappel
and of the House of Lords in Chester. On one view, the decisions were
primarily based on a policy choice to impose liability in order to ensure that
the duty to obtain informed consent was respected by medical practitioners.
On another, the claims were attributable to the materialization of the risk
and not to the exposure to the risk. So the “but for” test could be seen as
met if the chances of the risk materializing on the later occasion were
slight. Yet we have seen that the latter argument is not convincing, for the
reasons explained by Lord Hoffmann and endorsed by Glazebrook J in
Ambros. So the decisions stand as significant departures from orthodox
199. Davies v. Taylor, [1974] A.C. 207 (H.L.) 216; Benton v. Miller & Poulgrain [2005] 1
NZLR 66 (C.A.) at paras [57]–[58].
200. Hotson v. E. Berkshire Area Health Auth., [1987] 1 A.C. 750 (H.L.) 760–61.
201. Gregg v. Scott [2005] 2 A.C. 176 (H.L.) 187–90.
202. [1991] 1 S.C.R. 541, 608.
203. (2010) 240 CLR 537, paras [150]–[52].
204. See, e.g., Sellars v. Adelaide Petroleum NL (1994) 179 CLR 332, 355–56; White v. Jones
[1995] 2 A.C. 207 (H.L.) 234; Jackson v. Royal Bank of Scotland [2005] 1 W.L.R. 377 (H.L.) 387–
88; Benton v. Miller & Poulgrain [2005] 1 NZLR 66 (C.A.), at paras [78]–[86].
205. [2005] 2 A.C. 176 (H.L.), at paras [79], [220].
206. See generally Helen Reece, Losses of Chances in the Law, 59 MOD. L. REV. 188, 192–94
(1996).
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1196 CHICAGO-KENT LAW REVIEW [Vol 86:3
principles of causation. One commentator has observed that Chester not
only opens the door to full recovery in almost all cases involving the breach
of the medical duty to inform, but could easily be extended to all instances
of professionally rendered advice.207 While there is no sign as yet of this
happening, we remain in the dark about when exactly policy will justify
departing from a subjective test of causation in cases where the plaintiff has
relied on another to give skilled advice.
None of the principles considered above could operate to modify the
need to prove the cause of Mrs. Ambros’ death. The question was whether
Mrs. Ambros died as a result of her underlying condition or of medical
error in failing to diagnose that condition. The increased risk arose out of
separate agencies, only one of which was covered for compensation.208 So
the case was similar in principle to the decision in Wilsher and the risk
principle could not apply. The damage could not be analyzed in terms of a
lost chance of a better outcome either, for we have seen that the chance
principle has not been applied in medical cases involving physical harm.
As for the special rule about informed consent, this obviously was not relevant
to the particular facts in issue. So the case had to be determined on the
basis of ordinary principles governing proof of cause.
The question remains whether any of the modifying principles ought
to be imported into an inquiry into the cause of an injury for the purpose of
cover for accident compensation. Glazebrook J thought not, and this very
arguably is the better view. If a risk principle were to be introduced into the
scheme, the same difficulty would arise in deciding what kinds of risks
ought to justify compensation. While this question perhaps could be resolved
pragmatically, it is certainly doubtful whether a step of this kind
ought to be taken at all. There is no special justification for modifying the
ordinary rules of causation in the context of a no fault, non-liability based,
compensation system. The compensation scheme must have defined boundaries,
and proof on the balance of probabilities that a victim’s injury
comes within them is the appropriate test. Parliament having set these
boundaries, they cannot be expanded simply because the concept of accident
compensation is seen as deserving of support or a particular victim has
needs which, without cover, cannot easily be met. Why include a person
exposed by medical treatment to a small risk of disease in circumstances
where the treatment probably did not cause the disease, yet exclude a per-
207. Lara Khoury, Chester v. Afshar: Stepping Further Away from Causation?, 2005 SING. J.
LEGAL STUD. 246, 258–59 (2005).
208. However, if there is an injury and a finite set of possible causes all within the definition of
“accident” then there is proof that the injury was caused by accident. Sam v. ACC [2009] 1 NZLR 132
(HC) paras [20], [46].
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son suffering from the same harm who has not been exposed to that risk? A
victim who cannot prove that “but for” medical treatment he or she would
not have contracted a disease must be in the same position as all other victims
of the disease. Again, it is hard to see that compensation for loss of a
chance of a better medical outcome ought to have a place in the scheme. To
repeat Glazebrook’s J observation, there is no ability to discount compensation,
and no conceptual need to do so where liability is not in issue. Indeed,
the concept has in any event been rejected at common law, this primarily
because of its very significant implications. In Gregg, Lord Hoffmann
thought that the wholesale adoption of possible rather than probable causation
as the criterion of liability would be so radical a change in the law as to
amount to a legislative act.209 It would have enormous consequences for
insurance companies and the health service. In similar vein, Lord Phillips
and Baroness Hale both emphasized that the change would introduce very
great and unwarranted complexity into the law.210 Seemingly it would do
something similar to the accident compensation scheme. As for the informed
consent principle, the policy in Chappel and Chester of imposing
liability in order to encourage medical practitioners to obtain their patients’
informed consent to treatment is hardly relevant to a no fault scheme. So
once again we can support Ambros in deciding that these cases should not
apply.
2. Nature of Treatment Injury
“Treatment injury” means personal injury suffered by a person seeking
or receiving treatment from a registered health professional that is
caused by treatment and that is not a necessary part or ordinary consequence
of the treatment, taking into account all the circumstances including
the person’s underlying health condition and the clinical knowledge at the
time of the treatment.211 It does not include: (a) personal injury that is
wholly or substantially caused by a person’s underlying health condition;
(b) personal injury that is solely attributable to a resource allocation decision;
or (c) personal injury that is a result of a person unreasonably withholding
or delaying consent to undergo treatment.212 The fact that
treatment did not achieve a desired result does not of itself constitute treatment
injury.213 There is no cover in certain cases, considered below, where
209. Gregg v. Scott [2005] 2 A.C. 176 (H.L.) 198–99.
210. Id. at 210, 234.
211. Accident Compensation Act 2001 § 32(1).
212. Id. § 32(2).
213. Id. § 32(3).
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1198 CHICAGO-KENT LAW REVIEW [Vol 86:3
personal injury is suffered in the course of a clinical trial.214 Where treatment
results in an infection suffered by a patient, cover extends to secondary
victims of that infection in certain cases.215
“Treatment” (for the purpose of deciding whether or when treatment
injury has occurred) is given a wide definition. It includes: (a) the giving of
treatment; (b) a diagnosis of a condition; (c) a decision on the treatment to
be provided (including a decision not to provide treatment); (d) failure or
delay in providing treatment; (e) obtaining or failing to obtain a person’s
consent to treatment; (f) the provision of prophylaxis; (g) the failure of any
equipment used as part of the treatment process; and (h) the application of
any support systems used by the organisation responsible for providing the
treatment.216
Formerly, in order to establish medical misadventure, a claimant had
to establish that there had been a “mishap” or “error,” as defined. The definition
of “treatment injury” abandons any reference to either concept, yet
both are necessarily relevant in determining whether a treatment injury has
occurred. First, as regards mishap, there is no cover for personal injury that
is a necessary part or ordinary consequence of treatment. The only example
given in the explanatory note to the Bill introducing the new provisions
was a surgical incision during an operation. That may be clear, but the answers
to many other questions are not. Treatment very frequently will pose
a risk of recognized but unwanted side effects. Are these an “ordinary consequence”
of treatment? Of course, the risks of treatment can vary enormously,
from those that are certain or virtually certain to those that are
vanishingly small. At some point a court must be able to say that they were
not “necessary” or “ordinary.”217
ACC takes the view that known complications are not necessarily excluded,
as the ordinary consequence criterion is interpreted to refer to inju-
214. Id. § 32.
215. Id. § 32(7).
216. Id. § 33(1).
217. The relevant question here is whether the injury can be seen as a necessary part or ordinary
consequence at the time when the treatment commenced rather than when the nature of the claimant’s
condition became apparent during the course of treatment. In McEnteer v. ACC [2010] NZCA 126 the
claimant had suffered an aneurysm which ruptured during surgery and which had to be clipped temporarily
for longer than normal, resulting in brain damage. It was argued for the claimant that while the
surgeon knew a temporary clipping was needed, so cover for that was excluded, he was not to know
that the aneurysm would rupture needing a longer clipping, and that this was therefore an unanticipated
development causing injury for which there was cover. Id. at [13]. The Court of Appeal rejected the
argument, holding that it would require an abstracted expectation of an average outcome based on
hypothetical treatment and would open up much scope for debate for no discernable reason. Id. at paras
[18]–[19].
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2011] TREATMENT INJURY IN NEW ZEALAND 1199
ries which are “expected” or “usual.”218 But how this threshold might be
represented in percentage terms is hard to say. There must indeed be a risk
of “category creep,” whereby increasingly probable consequences are accepted
as treatment injuries.219 Without a doubt the threshold for coverage
has shifted, from consequences that were “rare” in the determination of
whether there had been medical misadventure to those now that are not
necessary or ordinary. But the courts still must determine whether there has
been some kind of mishap justifying coverage. In this respect the law has
reverted from detailed definition back to judicial discretion.
Second, as regards error, let us take the requirement that the personal
injury should not be wholly or substantially caused by a person’s underlying
health condition. Where there is a failure to treat and the patient’s condition
gets worse, or treatment does not alleviate a condition, how do we
determine whether the continuing injury is caused by the treatment or by
the underlying condition? It may be that we need to make an inquiry into
the causal potency of the underlying treatment relative to that of treatment.
220 Perhaps a claimant must establish on the balance of probabilities
that treatment, or different treatment, would have improved the patient’s
condition or prevented it from getting worse. The Corporation is no longer
required to find fault, but the requirement that the claimant show that the
health professional should have treated or should have treated differently is
likely to involve the claimant needing to show that the health professional
was negligent in making his or her decisions about treatment. Furthermore,
the Act provides that it is not of itself treatment injury because desired
results are not achieved. So the scheme is not intended to underwrite a lack
of success in medical treatment. But when might there be treatment injury
when desired results are not obtained? An obvious answer is when the
wrong treatment is given. In addition, “treatment” is defined as including,
inter alia, a decision not to provide treatment, a failure to provide treatment
or to provide treatment in a timely manner, failing to obtain a person’s
consent to undergo treatment, and the failure of any equipment, device, or
tool used as part of the treatment process. While negligence is not formally
required, all of these points suggest that it necessarily reappears in deciding
whether treatment injury can be shown to exist.
218. ACCIDENT COMP. CORP., TREATMENT INJURY PROFILE 3 (Sept. 2010) (kindly provided to the
author by Dylan Tapp, Clinical Analyst, ACC) [hereinafter ACC TREATMENT INJURY PROFILE].
219. Oliphant (2007), supra note 149, at 383.
220. Id. at 384.
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1200 CHICAGO-KENT LAW REVIEW [Vol 86:3
3. Treatment Injury in Operation
Evidence of the continuing significance of mishap and error can be
found when we consider the figures showing how claims for medical misadventure
used to be handled and how treatment injury has operated in
practice in the five years since its introduction. Prior to 2005 the difficulties
facing claimants seeking to prove that they had suffered medical misadventure
led to frequent disagreement as between claimant and the ACC, both in
determining whether the closely defined requirements for “mishap” were
satisfied and also in resolving contested issues of negligent error. Fewer
than three thousand medical misadventure claims were made annually, and
only forty percent were accepted as being entitled to cover.221 Of these,
eighty-six percent were based on medical mishap and fourteen percent on
medical error.222 They comprised only a small percentage of all injuries
accepted under the accident compensation scheme and took much longer
than the average to resolve.223 But the picture now is very different.
The most significant change is a dramatic increase in the number of
claims lodged with ACC. There were 1,434 medical injury claims in 2004–
05, 2,846 in 2005–06, 3,964 in 2006–07, 5,073 in 2007–08, 5,472 in 2008–
09 and then a small drop to 5,210 in 2009-10.224 In June 2010 the total
number of treatment injury claims reached 31,103, and the overall acceptance
rate climbed to sixty-six percent.225 By comparison, the total number
of ACC claims made over the same period has risen only slowly, and the
most recent figures show a small decrease. There were 1,523,946 claims in
2004–05; 1,604,359 in 2005–06; 1,685,995 in 2006–07; 1,755,899 in
221. ACCIDENT COMP. CORP.. CLAIMANT PROFILE: MEDICAL MISADVENTURE CLAIMANTS (Feb.
2003).
222. Id. at 3.
223. In 2002 medical misadventure claims comprised only 0.05% of all accepted injuries. See
WELLINGTON DEPT. OF LABOUR & ACC, ACC BACKGROUND PAPER: A COMPREHENSIVE STUDY OF
THE COST OF ACCEPTED MEDICAL MISADVENTURE CLAIMS 4 (Mar. 2003).
224. ACCIDENT COMP. CORP, ANNUAL REPORT 56 (2006), available at
http://www.acc.co.nz/publications/index.htm?ssUserText=annual+report [hereinafter 2006 REPORT];
ACCIDENT COMP. CORP., ANNUAL REPORT 26 (2007), available at
http://www.acc.co.nz/publications/index.htm?ssUserText=annual+report [hereinafter 2007 REPORT];
ACCIDENT COMP. CORP., ANNUAL REPORT 12 (2008), available at
http://www.acc.co.nz/publications/index.htm?ssUserText=annual+report [hereinafter 2008 REPORT];
ACCIDENT COMP. CORP., ANNUAL REPORT 2009, 48, available at http://www.acc.co.nz/searchresults/
index.htm?ssUserText=annual+report+2009 [hereinafter 2009 REPORT]; 2010 REPORT, supra
note 132, at 9. Oliphant (2007), supra note 149, at 385–86 notes that that most of the rise in the number
of claims in 2005–06 as compared to 2004–05 could be attributed to treatment-only claims. This strongly
suggested that the abandonment of the “severity” threshold in the definition of medical mishap had
led to a pronounced increase in the number of claims for minor treatment injury. The rise in account
expenditure was not considered likely to be commensurate, but, as will be seen, this may have been too
sanguine a view.
225. Figures supplied in ACC TREATMENT INJURY PROFILE, supra note 218.
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2007–08; 1,752,452 in 2008–09; and 1,662,347 in 2009-10.226 So treatment
injury claims constitute only a very small percentage of the total number of
claims for accident compensation, but that percentage has risen a little over
the five year period.
There also has been a doubling of the acceptance rate. While ACC still
declines many more claims for treatment injury than claims under the other
accounts, the disparity has been reduced in recent years. In 2004–05, the
last year of the medical misadventure regime, 70.6% of claims were declined,
whereas in 2008–09, under the treatment injury regime, the figure
was 35.5%.227 The most common reasons for declining a claim were that
no physical injury could be identified (16%), there was no causal link between
treatment and the injury (9%), the injury was an ordinary consequence
of treatment (4%), and the injury was wholly or substantially
caused by the underlying health condition (4%).228 If we make a comparison
with all claims once again, the overall percentage of declined claims in
2004–05 was 3.9% and in 2008–09 it was 2.5%.229 It seems likely that this
latter small drop is attributable or mainly attributable to the substantial drop
in declined claims for treatment injury.
The median time taken to determine the question of cover has dropped
dramatically. Whereas the average time taken to determine a misadventure
claim was approximately five months, in 2009 it was thirty-seven days.230
Some decisions are taken very quickly, while others still can take up to
nine months. Commonly accepted injuries include wound infection, allergic
reaction, hematoma and bruising claims, nerve damage, dental damage,
skin damage or injury or tear, and pressure ulcers. The top ten treatment
injuries are generally high volume, low cost claims, although in aggregate
they entail substantial cost.
A number of observations can be made about these developments.
First, the data collected by ACC concerns (necessarily) the “adverse
events” providing the foundation for claims for treatment injury, bearing
out the point that mishap and error are inherent in that concept. ACC is an
accident scheme, not an illness scheme, and an accident-like event remains
necessary in order for there to be cover for a medical injury. Second, before
226. 2006 REPORT, supra note 224, at 56; 2007 REPORT, supra note 224, at 26; 2008 REPORT, supra
note 224, at 12; 2009 REPORT, supra note 224, at 48; 2010 REPORT, supra note 132, at 9.
227. ACCIDENT COMP. CORP., ACC INJURY STATISTICS 2008/2009 9 (2010),
http://www.acc.co.nz/PRD_EXT_CSMP/groups/external_ip/documents/reports_results/wpc088561.pdf.
228. Figures supplied in ACC TREATMENT INJURY PROFILE, supra note 218, at 4.
229. ACCIDENT COMP. CORP., ACC INJURY STATISTICS 2008/2009 8 (2010),
http://www.acc.co.nz/PRD_EXT_CSMP/groups/external_ip/documents/reports_results/wpc088561.pdf.
230. Figures supplied in ACC TREATMENT INJURY PROFILE, supra note 218, at 4.
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1202 CHICAGO-KENT LAW REVIEW [Vol 86:3
2005 most medical misadventure claims were for a “rare” and “severe”
medical mishap. In the new definition there must still be a mishap of some
kind, but now it is an injury that is not a necessary part or ordinary consequence
of treatment, is not caused by the patient’s underlying health condition,
and is not simply a failure to achieve the desired result of the
treatment. It seems highly likely—perhaps certain—that the very substantial
increase in claims noted above is due to the lowering of the threshold
for what qualifies as a mishap. The concept, albeit unexpressed, is implicit
in the notion of treatment injury. Third, negligent error remains highly
significant in establishing such injury. We do not know with any confidence
whether instances of negligence have gone up or down or stayed the
same, as ACC no longer makes findings of error,231 but for reasons already
stated every case of negligent treatment will constitute treatment injury.
ACC does provide statistics about adverse event notifications,232 and the
most common of these concern delays in giving treatment or failures to
diagnose or to treat, and mistakes in the administration, dispensing and
prescribing of medicines.
The task of defining what is and what is not covered for accident
compensation in the context of medical treatment is bound to be difficult
and probably cannot be resolved in an entirely satisfactory fashion. Medical
injury frequently lies near the dividing line between accident and illness.
For as long as the accident compensation scheme provides cover for accidents
but not for illness (save for occupational disease), it will remain necessary
to search for an unexpected accident or event which can separate a
medical injury from ordinary treatment of an illness or disease.
4. Costs
In light of the escalating number of claims, it is not surprising that
ACC’s accounts show a dramatic increase in the costs of compensation for
treatment injury. Annual expenditure on the account, including the continuing
costs of the former medical misadventure account, has risen from
$48.6m in 2004–05 to $56.5m in 2005–06, $69.2m in 2006–07, $86.3m in
231. However, there is some evidence that the number of public hospital errors that caused or could
have caused major harm to patients has recently increased. The Health Quality and Safety Commission
has reported that in 2009–10 there were 374 patients involved in a “serious” or “sentinel” event (as to
which see infra text accompanying note 246), of whom 127 died, whereas in 2008–9 there were 308
such events including ninety-two deaths. Martin Johnston, Hospital Errors Causing Serious Harm
Climb, N.Z. HERALD (Nov. 17, 2010, 2:04 PM),
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10688172. The chairman of the
Commission’s interim board has suggested that the rise is probably the result of better reporting by the
staff involved. Id.
232. See infra on reporting of medical risks.
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2007–08, $109.8m in 2008–09, and then down a little to $106m in 2009-
10.233 This spectacular increase has far exceeded the Treasury estimates of
the costs of the 2005 reform. Replacing medical misadventure with treatment
injury was predicted to result in an annual increase of $8.7m, with
transitional costs amounting to a one-off $12m.234
Expenditure on the ACC scheme as a whole over the same period also
has risen, but not so quickly. Total expenditure was $2.2 billion in 2004–
05, $2.5 billion in 2005–06, $2.8 billion in 2006–07, $3.1 billion in 2007–
08, $3.5 billion in 2008–09, and just under $3.3 billion in 2009-10.235
Until recently the escalating costs of the treatment injury account were
not matched by an equivalent rise in funding. The net annual deficit rose
from $103.5 million in 2004–05 to $598.6 million in 2008–09, but then a
small surplus of $4.7m was recorded in 2009-10, while the account deficit
rose from $332.5 million in 2004–05 to $1.4 billion in 2009-10.236 At the
same time ACC’s outstanding claims liabilities have grown from $9.4 billion
in 2004–05 to $23.8 billion in 2008–09 and $24.4 billion in 2009-
10.237
The above figures indicate that notwithstanding some recent improvement
the accident compensation scheme is facing severe financial
problems. Some commentators would dispute this conclusion. While certain
increased costs are the consequence of expanded cover and entitlements,
238 most, it is said, flow from the requirement introduced in 1998
233. ACCIDENT COMP. CORP., ANNUAL REPORT 100 (2005), available at
http://www.acc.co.nz/publications/index.htm?ssUserText=annual+report [hereinafter 2005 REPORT];
2006 REPORT, supra note 224, at 97; 2007 REPORT, supra note 224, at 93; 2008 REPORT, supra note
224, at 90; 2009 REPORT, supra note 219, at 79; 2010 REPORT, supra note 132, at 57. Ken Oliphant,
Compensation, Ideology and Patient Safety in New Zealand’s No Fault System, 3 OPINIO JURIS IN
COMPARATIONE, 1, 12 n. 29 (2009) [hereinafter Oliphant (2009)] notes that up to and including the
2007 Report, a figure was given for “total expenditure” whereas in 2008, a comparable figure required
the aggregation of the figures for “total claims paid,” “claims handling costs,” “net operating costs,”
and “injury prevention costs.” I have followed this example for 2009 and 2010.
234. Ruth Dyson, Cabinet Social Development Committee, Medical Misadventure Review—
Conclusions and Recommendations 2004, ¶¶ 14, 38, 66–71.
235. 2005 REPORT, supra note 233, at 92; 2006 REPORT, supra note 224, at 88; 2007 REPORT,
supra note 224, at 83; 2008 REPORT, supra note 224, at 80; 2009 REPORT, supra note 219, at 71; 2010
REPORT, supra note 132, at 47. The figures for 2008, 2009 and 2010 are an aggregation of ”total claims
paid,” “claims handling costs,” “net operating costs,” “injury prevention costs,” and “levy collection
costs,”
236. 2005 REPORT, supra note 233, at 100; 2006 REPORT, supra note 224, at 97; 2007 REPORT,
supra note 224, at 93; 2008 REPORT, supra note 224, at 90; 2009 REPORT, supra note 219, at 79; 2010
REPORT, supra note 132, at 57.
237. 2009 REPORT, supra note 224, at 3; 2010 REPORT, supra note 132, at 29.
238. Geoff Cumming, Truth the Casualty of Crisis Management, N.Z. HERALD (Mar. 14, 2009),
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10561589 (stating that these extra
costs accounted for $537 million of ACC’s total liability of $21.8 billion in the 2009 financial year).
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1204 CHICAGO-KENT LAW REVIEW [Vol 86:3
that the scheme be fully funded, initially by 2014 and now by 2019.239 This
requirement is seen as unnecessary and driven by a political ideology favouring
eventual privatisation of the scheme.240 This, however, is not the
view of the New Zealand Government. The Minister for ACC stated in the
2009 Report that the growth in ACC’s liabilities should have been recognized
and addressed some years earlier and was unsustainable. The annual
report disclosed financial difficulties in all of ACC’s accounts, driven by
years of significant increases in costs and increasing numbers of claims.
The underlying cause had been a shift from ACC being a public insurance
scheme to it becoming an extension of the welfare state. So the Government
had embarked upon a programme of reform aimed at strengthening
ACC’s governance, improving rehabilitation and promoting injury prevention,
and embarking on a substantial stocktake taking a long-term view on
how the scheme’s performance could deliver better value for money.241
Indeed, recent figures show that ACC’s liabilities have stabilized and that
there was a surplus of about $2.5 billion in 2009-10.242
C. Professional Accountability
The accident compensation regime can provide compensation for the
victims of medical injury. But such victims may wish to achieve various
objectives apart from compensation, in particular to find out how their injury
happened, to help prevent it happening again, to receive an acknowledgment
of responsibility and to hold a negligent professional accountable
for his or her conduct. These kinds of objectives can be met to a greater or
lesser extent in a number of different ways. In addition, if a medical injury
is not covered for accident compensation, there may remain the option of
bringing a civil action for damages.
1. Reporting of Medical Risks
Before 2005, the ACC had a responsibility to report all findings of
medical error to the relevant professional body and to the Health and Disability
Commissioner. However, the requirement was seen as a reason why
health professionals were reluctant to co-operate in the claims process,
239. See supra note 122 and accompanying text.
240. See Joanna Manning, Access to Justice for New Zealand Health Consumers 17 (Mar. 24,
2010) (unpublished paper) available at http://www.hdc.org.nz/education/hdc-medico-legal-conference-
2010-a-decade-of-change (summarizing arguments from the Retirement Policy and Research Centre).
241. 2009 REPORT, supra note 224, at 3.
242. 2010 REPORT, supra note 132, at 2.
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fearing the possible repercussions.243 So when the new treatment injury
provisions abandoned the need to prove error, the reporting requirements
were changed as well. A reporting obligation now arises if the Corporation
believes, from information collected in the course of processing claims for
treatment injury, that there is risk of harm to the public, in which case “the
Corporation must report the risk, and any other relevant information, to the
authority responsible for patient safety in relation to the treatment that
caused the personal injury.”244 In this respect, then, public safety concerns
must prevail when balanced against the objectives underlying the 2005
changes of encouraging co-operation and promoting a shift away from a
blaming culture.
The ACC has well-developed processes for assessing risk and notifying
the appropriate persons or bodies. Its Treatment Injury Centre considers
the potential for risk of harm to the public using information collected
when assessing cover, and events posing sufficiently serious risks are considered
and assessed by an internal ACC panel.245 All “sentinel” events—
events during treatment resulting in unanticipated death or major permanent
loss of function—are notified to the Director General of Health, together
with all “serious” events—those with the potential for causing death
or major permanent loss of function—in cases where there is a high or
moderate likelihood of recurrence.246 The Director-General then decides
whether the notification is disseminated to the treating facility, and also
determines the response that is needed to improve safety. In rare cases the
ACC will notify a registration authority if it has expert clinical advice that
there are serious competence concerns. If there is a serious and immediate
risk of harm to the public notifications can be made very quickly.247
The change in the statutory requirements for cover, and in particular
the removal of the formal requirements that there should be a finding of
error or mishap, has had the consequence that ACC does not now collect
detailed information about the causes of medical injuries. Accordingly, the
onus has shifted to the notified authorities to make their own investigations
into any issue of culpability.
243. Summary of ACC Medical Misadventure Consultation, August 2003, p 1.
244. Accident Compensation Act 2001 § 284. It is likely that the ACC will also report to a newly
instituted National Health Safety and Quality Commission, which will act as a central agency for adverse
data event collection and promotion of patient safety. An interim board was set up in June 2010,
with the new Commission planned to be up and running in 2011.
245. ACC TREATMENT INJURY PROFILE, supra note 218.
246. Id.
247. Id. at 7.
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Over the period from July 2005 to June 2010 ACC made 1,661 notifications
of its belief that there was a risk of harm to the public.248 Easily the
most common reason was delay and failure to treat in relation to the diagnosis
and management of cancer and, less commonly, to visual problems,
birth asphyxia, and testicular torsion. Other common reasons were wrong
medication administration in relation to the person, drug, dose, route, and
time; bile duct injuries and bowel perforations involving, inter alia, identifiable
technical issues with surgical technique, premature failure of hip, and
knee prostheses; and cerebrovascular accidents and hypoxic brain injury
relating to coronary artery bypass graft, angiograms, cardiac valve surgery,
and insertion of cardiac catheters.249
2. Complaints
A Code of ACC Claimants’ Rights seeks to meet the reasonable expectations
of claimants seeking accident compensation in their dealings with
the Corporation. It provides, inter alia, a procedure for the lodging and
dealing with complaints about breaches of the Code and the consequences
and remedies for breach.250
A regime for making complaints about medical treatment is provided
by the Health and Disability Commissioner Act 1994.251 The Act lays
down a procedure for making complaints to the Health and Disability
Commissioner in respect of breaches of the Code. The Commissioner may
investigate a complaint, deliver an opinion and make recommendations for
remedial action. There is no power to award damages. Serious cases may
be referred to the Director of Proceedings, who can institute disciplinary
proceedings or civil proceedings in a Human Rights Review Tribunal.252
The Tribunal has the power to award damages to compensate for pecuniary
loss and expense, loss of any benefit, and humiliation, loss of dignity and
injury to feelings, and to punish for any action that was in flagrant disregard
of the rights of the aggrieved person.253 Compensatory damages for
248. Id.
249. Id.
250. Health and Disability Commissioner Act 1994 §§ 39–47.
251. Id.; see generally Manning, supra note 240.
252. Health and Disability Commissioner Act 1994 §§ 45(2)(f), 49(1)(a).
253. Id. at §§ 52, 54, 57. In Marks v. Dir. of Health and Disability Proceedings [2009] 3 NZLR 108
(C.A.) at para [62] the Court of Appeal held that an “aggrieved person” was a consumer whose rights
under the Code had allegedly been infringed and that the parents of a suicide victim seeking to bring an
action against their son’s psychiatrist did not qualify. Manning criticizes the decision and recommends
its reversal on the grounds that this would give a wider group the opportunity to bring proceedings and
would promote accountability and improvements in the quality of services. Manning, supra note 240, at
6–7.
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personal injury covered by the Accident Compensation Act 2001 are excluded.
254 So proceedings before the Tribunal are likely to be brought only
by consumers seeking exemplary damages or who have suffered no physical
injury.
3. Actions for Damages
A medical professional also may be held accountable by way of a civil
action for damages. Yet in light of the cover for treatment injury, there is
very limited scope for bringing such an action in a medical context. Obviously
any common law liability will depend on proof of negligence, yet
negligence by a registered health professional, including negligence in
relation to treatment, diagnosis, failing to treat, giving advice and obtaining
consent to treatment, normally gives rise to coverage for treatment injury.
Conversely, if conduct is not negligent and there is no cover, there is no
scope for a common law action either. Even so, there remains the possibility
of actionable negligence in exceptional cases where there is no cover,
perhaps because there is a special statutory exclusion, or there is no “personal
injury” as defined in the statute.
a. Clinical Trials
An exception to cover arises out of certain special rules applying to
clinical trials.255 Persons who suffer injury as a result of treatment given as
part of a clinical trial who have not agreed in writing to participate in the
trial are covered, as are persons who suffer such injury in the course of a
trial certified by an accredited ethics committee as not being principally for
the benefit of the manufacturer or distributor of the medicine being trialled.
But if a person has agreed in writing to participate in a trial which is certified
only as being for the benefit of the manufacturer or distributor, injury
suffered by the participant is not covered. So a common law remedy
founded on negligence by a sponsoring company or an investigator might
be available.256
254. Accident Compensation Act 2001 § 52(2).
255. Accident Compensation Act 2001 § 32(4)-(6); Nicola Peart & Andrew Moore, Compensation
for Injuries Suffered by Participants in Commercially Sponsored Clinical Trials in New Zealand, 5
MED. L. REV. 1 (1997).
256. The practice of ethics committees in certifying a trial is to ensure that adequate compensation
is available in the event of injury, by requiring the company concerned to abide by the New Zealand
Researched Medicines Industry Guidelines on Clinical Trials. These provide for payment for “more
serious injury of an enduring and disabling nature” irrespective of proof of negligence, but state that
compensation may be abated to the extent that injury has arisen through a significant departure from the
agreed trial protocol, or the wrongful act of a third party, or contributory negligence by the patient. The
amount of any compensation “should be appropriate to the nature, severity and persistence of the in
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1208 CHICAGO-KENT LAW REVIEW [Vol 86:3
The justification for this exception to cover is obscure. Seemingly it is
founded upon the participant’s consent to any risk, but consent is not a bar
to compensation in other contexts. A drunken driver and his passenger
arguably consent to the risk of injury in a collision, yet both can make
claims for compensation.
b. Stillbirths
Whether a stillbirth is a personal injury to the mother can be disputed.
In Harrild v. Director of Proceedings257 a majority in the Court of Appeal
held that a mother had suffered personal injury on account of the death of
the foetus in consequence of negligence by her doctor. Elias CJ was not
attracted by the stark choice of treating the unborn child either as the same
as the mother or as distinct. She considered that where severance of the
physical link between mother and unborn child occurs through the death of
the child as a result of medical error, then physical injury is suffered by the
mother.258 Keith and McGrath JJ thought similarly.259 Blanchard and
Glazebrook JJ, by contrast, considered that on the majority view a mother
and foetus are treated as a single entity, which ignores biological reality.260
This perhaps is the more convincing view, but unless the question comes to
be reconsidered by the Supreme Court, there is cover for a negligently
caused stillbirth and there can be no action for damages.
c. Pregnancy and Unwanted Births
Cases involving pregnancy and unwanted births also require special
consideration. The question arose in Accident Comp. Corp. v. D,261 where
the Court of Appeal, in a majority decision, determined that unwanted
pregnancy was not a “personal injury” under the 2001 Act because it was
not a “physical injury.”262 In Arnold and Ellen France JJ’s view, these
phrases suggested a need for harm or damage, and the denial of cover also
fitted better with the consistent exclusion of various gradual processes unjury.”
The Preamble contemplates that adherence to the guidelines is without legal commitment, and
certainly the question whether or how they might be legally enforceable by a patient is unclear. Guidelines
on Clinical Trials Compensation for Injury Resulting from Participation in an Industry-Sponsored
Clinical Trial, RESEARCHED MEDICINES INDUSTRY (Aug. 2008),
http://www.medicinesnz.co.nz/assets/Uploads/compensation-guidelines-0808-final.pdf.
257. [2003] 3 NZLR 289 (C.A.) at paras [22], [42], [135].
258. Id. at para [21].
259. Id. at paras [42], [135].
260. Id. at paras [66]–[69].
261. [2008] NZCA 576 (C.A.) at para [54]; affirmed in Allenby v. Hannam [2011] NZCA 251
(C.A.).
262. Id.
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der the differing accident compensation regimes.263 While the common law
illustrated that pregnancy could be described as an injury, the starting point
was the statutory scheme, which did not give cover in the case at hand.
Their Honours accepted that there was something odd about the fact that an
unwanted pregnancy would be the only result of medical misadventure for
which cover was not available. But there were inevitable oddities in a nonexhaustive
scheme that had to draw the line somewhere. And there might in
most cases be good public policy reasons for not regarding a pregnancy and
the delivery of a baby as physical injuries. It was for the legislature to determine
where the balance lay.
d. Informed Consent Cases
We have seen that in Accident Comp. Corp. v. Ambros Glazebrook J
considered that the informed consent cases apparently relaxing the requirement
of proof of cause of an injury should not be imported into the
accident compensation regime.264 Accordingly, a failure to warn of a small
risk of medical treatment, which risk later eventuates, is not covered for
compensation and to this extent might be actionable in damages. However,
the occurrence of the adverse event following a failure to warn is likely
nonetheless to amount to treatment injury, on the basis that this is not a
necessary part or ordinary consequence of the treatment, with cover accordingly.
e. Mental Injury
A patient suffering mental injury as a consequence of physical injury
caused by medical negligence is covered for compensation.265 However,
cover does not extend to mental injury suffered by a secondary victim. An
example is where a husband suffered “reactive depression” as a result of
being unable to continue sexual relations with his wife after she was injured
due to medical misadventure.266 So an action for damages could lie in
this kind of case.
f. Miscellaneous
There arguably is no personal injury where surgery leads to no physical
or mental health problems, but, due to the doctor’s negligence, it does
263. Id. at para [55].
264. [2008] 1 NZLR 340 (C.A.) at para [51].
265. Accident Compensation Act 2001, § 26(1)(c).
266. ACC v. F [1991] 1 NZLR 234 (HC) 240.
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1210 CHICAGO-KENT LAW REVIEW [Vol 86:3
not produce the desired results.267 Again, a doctor can be liable in battery
for wrongful physical contact not causing actual injury. Mental injury to a
patient caused by professional misconduct is actionable as well.268
g. Exemplary Damages
The option of a claim for exemplary damages remains. In A v.
Bottrill269 the Privy Council upheld the availability of exemplary damages
in a bad case of medical negligence, but the decision was overruled in
Couch v. Attorney-General,270 where the Supreme Court required that there
be advertent or reckless wrongdoing. The test is likely to be difficult to
satisfy, certainly in a medical context.
CONCLUSION
Let us now attempt to evaluate New Zealand’s scheme, with particular
reference to the way in which it operates in the field of medical injury. We
will consider whether it provides adequate compensation, has defensible
boundaries, is administratively efficient, and operates as an incentive or a
disincentive to safety-conscious behavior.
A. Adequate Compensation?
The statutory scheme in operation in New Zealand arguably performs
well in its core function of providing a source of compensation for the victims
of accidents. The statutory benefits, in particular earnings-related
compensation, are reasonably generous and compare favorably with flat
rate social security payments. Inevitably there will be winners and losers by
comparison with common law damages. In Queenstown Lakes271 Thomas J
remarked on the notion of a social contract and a trade-off between the loss
of common law rights and the gaining of accident compensation benefits,
and said also that damages and compensation were never intended to correspond.
Uncertainty of recovery at common law was exchanged for a nofault
scheme which included provision for rehabilitation as well as ongoing
earnings-related compensation. Disparity between the two would always
exist. So some injury victims will or might in some sense be worse off, but
267. Kate Tokeley, Accident Compensation and Cosmetic Surgery, 1998 N.Z. L. J. 5, 5–6 (1998)
(discussing the question in relation to wrong-sized breast implants).
268. L v. Robinson [2000] 3 NZLR 499 (HC) at para [1], [44].
269. [2003] 1 AC 449 (PC).
270. [2010] 3 NZLR 149 (SC); see supra note 83.
271. [1999] 1 NZLR 549 (CA) 557.
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most will benefit from the scheme. And, of course, the key advantage of
accident compensation is that it is available for nearly all injury victims,
not just those who can establish the liability of another to pay compensation.
B. Defensible Boundaries?
There is no accident compensation simply for disease or illness, unless
work-related. In Queenstown Lakes, Thomas J drew attention to this point
as well, commenting that difficulties would necessarily arise out of the line
between injuries arising from accidents and other injuries and conditions
which were not attributable to accidents.272 These difficulties are acute in
the case of alleged medical injury by way of sickness or illness, for treatment
is given (or is not given when it should be) to patients who are already
sick or ill. As we have seen, the solution has been to allow claims for
injury caused by unexpected mishaps or wrongful treatment or failure to
treat. The line between such compensable treatment injury and the noncompensable
condition requiring the treatment is bound to be hard to draw.
Ultimately any compensation scheme has to set boundaries. The
boundaries to the accident compensation scheme as they presently exist are
founded very broadly on a distinction between human and natural causes.
These may be hard to defend, but there is no natural limit upon which all
can agree. A line has to be drawn somewhere, and wherever it is it will
create difficulties and anomalies in relation to cases which are excluded. So
if illness were to be included, it would still be necessary to define the qualifying
circumstances, and some borderline cases would be excluded. And
there is practical value in the accident/illness divide. Most cases giving rise
to the question whether another was liable for the injury are covered, the
difficulties created by tort litigation are largely avoided, and victims by and
large receive adequate compensation. More generally, if illness and disease
were to be covered there would be major financial implications, the scheme
would transmute into part of the social security system, and payments inevitably
would at least be substantially reduced.273
272. Id.
273. Social security payments in New Zealand are made pursuant to the provisions of the Social
Security Act 1964 § 1A. These may supplement accident compensation entitlements, particularly in
cases where the claimant is a non-earner whose entitlement is limited to a lump sum. Where there is no
accident compensation cover, a person’s only source of income may be a social security benefit. The
relationship between accident compensation and social security is governed by the Accident Compensation
Act 2001 and the Social Security Act 1964, which seek to prevent double payments and which
make provision for transfers or reimbursements of money between the ACC and the Work and Income
Service of the Ministry of Social Development. Accident Compensation Act 2001, §§ 252–53; Social
Security Act 1964 §§ 71, 71A. The social security scheme makes provision for three main types of
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1212 CHICAGO-KENT LAW REVIEW [Vol 86:3
Of course, accepting the need to show some kind of “accidental”
event, the question remains quite how to define that event. The 2005
amendments lowered the bar in medical injury cases and made the qualifying
conditions much easier to satisfy. The predictable result has been the
striking increase in the number of treatment injury claims over the last five
years. The reforms of 2005 have been said to cement the distinction between
incapacities caused by human interaction and incapacities which are
natural,274 which no doubt is true in that we must still distinguish between
the treatment (human cause) and the underlying condition (natural cause).
But the reform might equally be seen as weakening the distinction, in allowing
many more claims for injuries which are attributable to unexpected
developments and events which are neither especially rare nor, it may be,
easily separable from the underlying condition. At all events the reform
widens the idea of an accident in this context and extends cover to more
people suffering harm in the course of medical treatment. This is at the cost
of rather greater uncertainty as to the extent of cover, coupled with the need
for an increase in funding for the treatment account.
C. Administratively Efficient?
This brings us to consider the whole question of costs and funding. A
major advantage of an event-based compensation scheme is that claims can
be made quickly and processed efficiently. The cost of delivering the statutory
benefits avoids the very substantial costs associated with the need to
prove liability before compensation can be paid. The costs of administering
the scheme are relatively low and have remained stable over the last five
years. In 2009, the scheme’s operating costs amounted to 13.4% of claims
paid, levy collection costs were 1.6% of total revenue, and investment costs
were 0.34% of investment assets.275 A comparison between the administrative
costs in the work account and those of similar Australian schemes
shows that in 2006–07 ACC spent 19.7% of total scheme expenditure on
benefit for incapacitated persons. The invalid’s benefit is payable to New Zealand residents over the age
of 18 who are totally blind or permanently or severely restricted in their capacity for work (but excluding
self-inflicted conditions). Social Security Act 1964 § 40. An emergency benefit is payable on
grounds of hardship where a person cannot qualify for any other benefit and by reason of disability
cannot earn a sufficient livelihood. Id. § 61. Survivors’ benefits or domestic purposes benefits are
payable in certain circumstances to wives or husbands or those who had been in a relationship in the
nature of marriage on the death of the other in respect of the costs of bringing up dependent children,
and an orphan’s benefit is payable to the principal caregiver of a child whose parents are both dead. Id.
§§ 21, 27B, 28. Further supplementary allowances and grants, such as the disability allowance and the
child disability allowance are available. Id. §§ 39A, 69C.
274. Oliphant (2009), supra note 233, at 17.
275. 2009 REPORT, supra note 224, at 21 (total operating costs include both “operating costs/claims
paid” and “injury prevention costs/claims paid”).
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claims management and other administration, whereas the Australian average
was 25.2%.276 Comparisons with the costs of litigation are revealing.
An estimate of the cost of tort litigation in the UK concluded that about
fifty-five pence of the insurance pound was paid out to injured victims, and
about forty-five pence was swallowed up in administration.277
Critics might argue that administrative efficiency can be bought at too
high a cost. They might say, inter alia, that removing a right to sue for injury
and substituting a right to make a claim from a compulsorily funded
statutory body, irrespective of the claimant’s or anyone else’s responsibility
for the injury, is likely to encourage malingering and to lead to bureaucratic
inertia and ever-increasing costs. Perhaps there is some evidence in support
of this kind of thesis in the seemingly relentless rise in the costs of accident
compensation that we have already noted. But at least some of the increase
is due to widening provisions for cover and entitlements, and it is in any
event impossible to come to a considered conclusion without good evidence
about all the causes of the increase. We can say only that some element
of abuse is endemic in all compensation systems, that steps are being
taken to control costs and improve ACC’s finances, and that better performance
is perfectly achievable.
D. Disincentive to Safety-Conscious Behavior?
Possibly a stronger argument, and certainly one that attracts articulate
support, is that a compensation scheme of this kind removes a deterrent to
injury-producing activity and operates as a disincentive to safety conscious
behavior. This raises large questions which cannot be addressed adequately
here. However, we might note that the Woodhouse Report did not see proof
of fault as useful in injury prevention,278 and the New Zealand Law Commission
concluded that the alleged deterrent role of tort was not significant.
279 Let us, briefly, consider the evidence.
A number of studies starting back in the 1960s show that the value of
tort liability as a deterrent to unsafe conduct or as an incentive to take care
is certainly unproven and is likely to be negligible.280 Evidence provided
276. Id.
277. P CANE, ATIYAH’S ACCIDENTS, COMPENSATION AND THE LAW 397 (7th ed., 2006) (commenting
that no other compensation system is anything like as expensive).
278. WOODHOUSE REPORT, supra note 2, at para 319.
279. 1988 REPORT, supra note 27, at para 81.
280. See, e.g., TERENCE GEORGE ISON, THE FORENSIC LOTTERY: A CRITIQUE ON TORT LIABILITY
AS A SYSTEM OF PERSONAL INJURY COMPENSATION (1967); ELI P. BERNZWEIG, BY ACCIDENT NOT
DESIGN: THE CASE FOR COMPREHENSIVE INJURY REPARATIONS (1980); STEPHEN D. SUGARMAN,
DOING AWAY WITH PERSONAL INJURY LAW: NEW COMPENSATION MECHANISMS FOR VICTIMS,
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1214 CHICAGO-KENT LAW REVIEW [Vol 86:3
by some more recent studies confirms this conclusion. For example, Tess
and Armstrong, comparing empirical evidence on fault, no-fault and hybrid
schemes across a number of dimensions, including availability of benefits,
costs of the scheme and prevention incentives, saw no-fault schemes as
coming out ahead.281 As regards prevention of accidents in particular, their
conclusion was that fault, no-fault and blended systems appeared to perform
similarly and, importantly, that there were far more important drivers
of safety improvements than the threat of tort.282 In the specific field of
medical malpractice the consensus is similar. So Mello and Brennan, in a
US study, considered that evidence of a deterrent effect was limited and
vulnerable to methodological criticism.283 The data did not support the
notion that the malpractice system sent a strong deterrent system to providers.
Sloan and Chepke, in like vein, stated that it was difficult to find good
evidence that negligence liability deterred medical errors.284 As regards the
New Zealand scheme in particular, Oliphant concluded that it remained an
open question whether introducing no-fault in place of liability in private
law had had a positive or negative effect on patient safety, or no effect at
all.285
At best, evidence about the deterrent impact of imposing tort liability
for causing injury is equivocal, and certainly a link with lower accident
rates is not easily shown. Indeed it is strongly arguable that holding people
accountable for their conduct can be achieved in other, more effective,
ways. We have seen that there are a number of alternative methods of
achieving accountability by medical professionals operating in New Zealand.
CONSUMERS, AND BUSINESS (1989); Don Dewees & Michael Trebilcock, The Efficacy of the Tort
System and Its Alternatives: A Review of the Empirical Evidence, 30 OSGOODE HALL L. J. 57 (1992).
Compare Gary T. Schwarz, Reality in the Economic Analysis of Tort Law: Does Tort Law Really Deter?,
42 UCLA L. REV. 377, (relying on anecdotal evidence to conclude that tort law might still be
“somewhat successful” in achieving its stated deterrence goals). In Stephen Todd, Privatization of
Accident Compensation: Policy and Politics in New Zealand 39 WASHBURN L. J. 404, 478–82 (2000) I
attempted to review the literature on this topic, and found it was difficult to come to any clear conclusion.
For a recent and helpful review, see Harold Luntz, Torts and Insurance: The Effect on Deterrence,
in TORTS IN COMMERCIAL LAW (Simone Degeling & James Edelman eds.) (forthcoming 2011).
281. Kirsten Armstrong & Daniel Tess, Institute of Actuaries of Australia, Fault Versus No Fault—
Reviewing the International Evidence (Nov. 9–12, 2008),
http://www.actuaries.asn.au/library/GIS08_3d_Paper_Tess,Armstrong_Fault%20versus%20No%20Fau
lt%20-%20reviewing%20the%20international%20evidence.pdf.
282. Id. at 27.
283. Michelle M. Mello & Troyen A. Brennan, Deterrence of Medical Errors: Theory and Evidence
for Malpractice Reform, 80 TEX. L. REV. 1595 (2002).
284. Frank Sloan & Lindsey Chepke, THE LAW AND ECONOMICS OF PUBLIC HEALTH (2007).
285. Oliphant (2009), supra note 233, at 19.
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2011] TREATMENT INJURY IN NEW ZEALAND 1215
A further point deserving note is that market incentives aimed at reducing
accidents can of course operate within the accident compensation
scheme. The ACC Accredited Employers Programme (AEP) gives employers
significant discounts on their ACC levies in exchange for taking responsibility
for their employees’ work injury claims. Recent proposals to
extend the scheme include reducing barriers on participation by providing a
greater range of risk-sharing arrangements, reducing compliance costs
faced by employers by providing more flexibility in meeting financial entry
requirements, and offering other risk-sharing arrangements to small employers
outside the AEP.286 The ACC Workplace Safety Management
Practices Programme and the Workplace Safety Discount Programme also
provide levy discounts for businesses showing sound health and safety
practices. Until recently there was no general discount on levies, analogous
to an insurance no-claims discount, for businesses showing a good safety
record.287 Historically the work levy has been based on injury rates across
industry categories, without any differentiation according to a particular
business’s safety record. However, in April 2011 ACC introduced a system
of experience rating, under which a business’s work levy can be modified
based on its claims history.288 So experience rating seeks to reward those
businesses with safer workplaces and to encourage a focus on improving
workplace safety.
A further proposed reform, as already noted,289 will allow private insurers
to provide insurance cover in respect of accident compensation entitlements
in competition with the ACC. The aim of the proposal is to
improve safety, rehabilitation and efficiency in the workplace. The document
asks a number of questions about the proposed changes, and feedback
from interested persons has been invited.
286. INCREASING CHOICE IN WORKPLACE ACCIDENT COMPENSATION (June, 2011),
supra note 45.
287. Whether this should be attempted has been debated. The Law Commission in its 1988 Report
drew attention to the uncertainties involved and also to possible inequities. Small firms might be subject
to statistically random fluctuations in accident rates, which might occur despite taking all proper precautions.
See 1988 REPORT, supra note 27, at para 140–49. Subsequent studies show inconclusive
results.
288. EXPERIENCE RATING – MAKING ACC WORK LEVIES FAIRER FOR INDIVIDUAL
BUSINESSES (2011) (available at http://www.acc.co.nz/for-business/experiencerating/
index.htm?IdcService).
289. INCREASING CHOICE IN WORKPLACE ACCIDENT COMPENSATION (June, 2011),
supra, note 45.
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1216 CHICAGO-KENT LAW REVIEW [Vol 86:3
E. Overview
One’s assessment of the accident compensation scheme may turn very
much on personal disposition concerning the legislative imposition of a
compulsory, state-controlled, scheme, funded by levies in the nature of
taxation, in a field which traditionally has been the preserve of private action
and initiative. If one is happy with the idea, or at least can live with it,
one can attempt to judge the scheme on its results, unhampered by ideological
conviction.290
In summary, the compensation is reasonably generous and is available
with the minimum of formality; the boundaries are defensible, with the
result that, broadly speaking, medical injury outside the ordinary consequences
of treatment and not attributable to a patient’s pre-existing condition
is compensable; the scheme operates quite efficiently, so for the most
part available resources are used to meet the needs of qualifying claimants
rather than for administrative purposes; there is little evidence that barring
tort claims has compromised safety standards; the need in some cases to
hold individuals accountable for wrongdoing can be met by the use of a
detailed statutory process for the making of complaints; the level of funding
needed to meet the costs of the scheme can be achieved by levies which
compare favorably with the costs of alternatives, such as by insurance
against tort liability; and while there certainly have been escalating costs,
these are explicable at least partly by the change from pay-as-you-go to full
funding, and seemingly they are reasonably manageable.
The accident compensation scheme has survived many challenges,
some financial, some operational, some ideological, and no doubt these will
continue. All difficulties will not simply disappear. However, by comparison
with the tort system it has been and continues to be a distinct success.
290. For a variety of reviews of the first thirty years, see Looking Back at Accident Compensation:
Finding Lessons for the Future, 34 VICT. U. WELLINGTON L. REV. 189, 467 (2003) (containing the
papers delivered at a conference at Victoria University of Wellington in August 2002); The Future of
Accident Compensation, 35 VICT. U. WELLINGTON L. REV. 775-974 (2004) (containing the papers
delivered at a second conference in December 2003); see also Accident Compensation Symposium,
2008 N.Z. L. REV. 3, 140 (containing papers paying tribute to Sir Owen Woodhouse on the 40th anniversary
of the day the Woodhouse Report was presented to Parliament). For an overview see Accident
Compensation Corporation New Zealand: Scheme Review (2008), a report commissioned by the ACC
by Price Waterhouse Coopers, Sydney, which concluded that the implementation of the Woodhouse
Principles via the ACC scheme had afforded New Zealand’s society and economy four decades of
added economic and social value.
Please help four years fight after hospital caused heart faiure and other injury's left sitting up 12 hours adu with ruptured brachial artey sent home ruptured already told don't come back till mourning but pain to much finally after weeks looked at diagnosed compartment syndrome Dr wrenched arm caused ruptured hematoma tissue to go backwards into left side heart heart faiure no help for arm heart told prove it
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