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November 14, 2024
One. (a) What constitutes a class action, and what significance do class actions have for engineers in their efforts to mitigate claims?
(b) Identify the individual or collective entities mentioned in the case that may have a legal claim for damages against AusNet Electricity Services Pty Ltd, previously known as SPI Electricity Pty Ltd, hereinafter referred to as 'SPI', and a maintenance contractor responsible for conducting a periodic inspection of the power line, referred to as 'UAM'.
2. What is the foundation for assigning liability for the damage resulting from the fire to AusNet Electricity Services Pty Ltd, previously known as SPI Electricity Pty Ltd, and referred to as 'SPI' in this judgment, and what portion of the liability should be attributed to the maintenance contractor responsible for conducting periodic inspections of the power line, referred to as 'UAM'?
3. In instances of legal culpability, what limitations are placed on recovery for the different categories of individuals mentioned above who suffered damage?
4. Considering the encountered issues, what measures would you implement to mitigate the risk of negligence claims? Reference the legal principles applied in the relevant cases and incorporate the examples cited therein. Does adherence to existing standards preclude successful negligence claims?
In conventional lawsuits, the plaintiff initiates the action, and the defendant is personally served with a complaint. The involved parties present themselves before a court with the necessary jurisdiction to adjudicate the issues presented (Picker and Seidman, 2015). Based on this outward appearance, the parties are given the chance to submit their reasons, leading to the eventual verdict (Dickerson, 2016).
The class action serves as an exception to the conventional litigation format. In a class action, the plaintiff or defendant represents the interests of other individuals in a court of law. However, such persons are not physically present in court, and only their representatives attend (Quinn, 2011). The adjudication of class action procedures requires courts to carefully watch the whole case for these reasons. The participants in a class action are those who have been collectively damaged by the defendant or defendants (Find Law, 2017). Therefore, to prevent several minor claims from being filed individually, the aggrieved parties unite to begin claims against the culpable party. This also aids in the conservation of both financial resources and time for people and the court (Grave, Adams and Betts, 2012).
Class actions may be important in mitigating claims against engineers. To minimize the risk of a class action against the engineer, the connection between them and their customers must be thoroughly assessed and carefully managed. This may also serve as a means to refute the overall assertion. If the engineers can demonstrate that they are not responsible to a specific set of claimants in the class action, they may reduce the total claim in the class action (McDermott Will & Emery, 2007).
The class actions initiated against others may serve as a reference for mitigating future claims (Johnson, 2013). Moreover, by referencing prior case law, engineers have successfully evaded negligence accusations as a result of court rulings. To clarify this further, let us apply it realistically. The High Court rendered a seminal ruling in Woolcock Street Investments v CDG Pty Ltd [2004] HCA 16. According to this ruling, the builder or architect of any commercial structure shall have no responsibility for construction or design flaws to a future buyer. If engineers encounter a class action initiated by later consumers, the Woolcock ruling might be used for protection against such claims (The Federation Press, 2017).
In Matthews v AusNet Electricity Services Pty Ltd & Ors [2014] VSC 663, the class action was initiated against three defendants:
The first class action was initiated by Leo Keane. She was subsequently replaced by Carol Ann Matthews (State Government of Victoria, 2014). The complaint was initiated by those who had bodily injuries from the fire, those who lost their residences and sources of income, as well as the dependents of these individuals. The individuals in the class actions were categorized into four distinct groups:
This case addressed the determination of the settlement amount rather than the imposition of criminal culpability on the parties involved (Emmerig and Legg, 2015). Consequently, the conclusion made was to settle for around Australian $500 million (ABC News, 2014). The decision to pursue the settlement stemmed from the defendants' carelessness. Therefore, the assertions in this case are to negligence, with some instances involving negligent pure economic loss. Nevertheless, the defense of negligent pure economic loss will be addressed in the subsequent section. This section mostly addresses the defendants' carelessness.
Negligence is a tort that imposes accountability on an individual who inadequately fulfills their responsibilities, resulting in injury to another party. When an individual engages in an action that may potentially harm another person, that individual is obligated to use due diligence to prevent such an incident (Harvey and Marston, 2009). An person owes a responsibility of care. When a person breaches their duty of care, resulting in substantial loss or injury to another, a negligence lawsuit may be initiated (Kennedy, 2009).
To demonstrate negligence, some crucial factors must be present. The first need is the existence of a duty of care, followed by a violation of this obligation, which must culminate in damage or harm (Strong and Williams, 2011). Furthermore, there must be foreseeability of the loss and a direct causal link between the carelessness and the resultant injury. The harm must be significant and cannot be distant in nature (Turner, 2013). In Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd [1961] UKPC 2, the plaintiff was denied damages due to the determination that the source of the fire was distant (Swarb, 2016a).
When all these requisite factors are shown in a specific situation, the aggrieved party may commence claims for negligence (Howarth, 2016). In such circumstances, the aggrieved party may seek financial restitution. In addition to financial recompense for the injuries sustained, non-pecuniary damages may be sought for mental suffering. In Baltic Shipping v Dillon High Court of Australia (1993) 176 CLR 344, the plaintiff received damages for mental anguish caused by the sinking of a ship, leading to the loss of the plaintiff's possessions (Holmes, 2017).
The case of Donoghue v Stevenson [1932] UKHL 100 is cited whenever a negligence claim is presented. This is the seminal case in which the first ingredient of negligence, namely the existence of a duty of care, was established. In this instance, Donoghue ingested a ginger beer produced by Stevenson. This bottle contained a deceased snail, which caused Donoghue to get ill. She filed a lawsuit against Stevenson for his carelessness when a dead snail was discovered inside a container he produced. Stevenson said that he had no duty of care in this instance. The Court determined that the manufacturer had a duty of care to all persons who were its customers. Consequently, he was requested to indemnify Donoghue for his carelessness (British and Irish Legal Information Institute, 2017).
In Grant v The Australian Knitting Mills [1935] UKPC 2, a perspective akin to that in Donoghue v Stevenson was embraced, wherein the manufacturer of the woolen underpants, The Australian Knitting Mills, was obligated to compensate the consumer Grant, who developed dermatitis after donning their product (Swarb, 2016b).
In Mathews' case, the allegations were to carelessness, specifically under the Wrongs Act 1958. Section 48 of this legislation delineates the fundamental concepts, which correspond to the key aspects of negligence. This provision stipulates that an individual cannot be deemed accountable for negligence unless it is shown that the danger of injury was foreseeable, significant, and that a reasonable person in similar circumstances would have implemented appropriate precautions. The court assesses whether a reasonable person would have implemented safeguards by evaluating the likelihood of damage, the severity of that harm, the societal usefulness of the activity, and the burden of the measures necessary to mitigate the risk. Section 49 delineates the additional principles applicable in proceedings concerning negligence responsibility (Australasian Legal Information Institute, 2014).
The court determined that SPI was aware of, or should have been aware of, the danger of injury. A prudent person in a comparable circumstance would have implemented several precautions that SPI neglected to establish. Furthermore, section 51(1) of this legislation required the Matthews to demonstrate that SPI's carelessness was a fundamental cause of the loss incurred. Consequently, according to section 52, the plaintiff was required to establish the claim based on the balance of probability. SPI was found accountable for negligence related to the targeted damper, asset management, power infrastructure management, and legal nuisance (Australasian Legal Information Institute, 2014).
The culpability of UAM arises from his negligence in exercising the necessary care and skill during the planned inspection conducted a full year prior to the fire incident in February 2008 at Pentadeen Spur. He did not conduct the inspection with enough attention (Australasian Legal Information Institute, 2014). Therefore, his share of the responsibility pertains to the obligation of care he owes to the plaintiff.
The ongoing dispute underscores the culpability of both SPI and UAM for negligence, stemming from their inability to fulfill the required duty of care. However, there exists a concept that may limit the recovery of damages against SPI and UAM. This pertains to the carelessness that leads to sheer economic loss for the participants in the class action. The obligation arising from the loss, classified as economic loss, may be limited. Nonetheless, the restitution for losses resulting from physical damages cannot be constrained by any concept.
Pure economic loss due to carelessness pertains to the financial detriment experienced by individuals as a result of another's negligence (Palmer and Bussani, 2009). Nonetheless, this is not associated with a physical harm. The economic loss incurred is included by this premise. A no recovery rule applies to pure economic damage in negligence cases. According to this rule, an injured person cannot claim damages for carelessness that resulted only in economic loss (Ward, 2010).
This principle was formulated in the case of Rylands v Fletcher [1868] UKHL 1. A reservoir was erected on property held by the defendant, who was also the proprietor of the mill. The reservoir was situated on an abandoned mine. The water from the reservoir was filtered through the abandoned mine and then spilled onto an operational mine owned by the plaintiff. This resulted in significant damage to the plaintiff's mine, prompting him to sue the defendant for compensation. The court determined that the defendant had no liability for the purely economic damage, so establishing the no recovery rule (Rush and Ottley, 2006).
The no recovery rule was also affirmed in the instance of Weller v Foot and Mouth Disease Research Institute [1966] 1 QB 569. The livestock were afflicted by a virus that escaped from the defendant's premises. The virus prevented the sale of the livestock. The plaintiff, an auctioneer, incurred financial losses as a result of the defendant's carelessness. The plaintiff Weller was denied claims for economic damage, judged irrecoverable due to the no recovery rule (Steele, 2014).
Therefore, using these two case rules in conjunction with the concept of negligence pure economic damage, the defendants in this case may formulate a defense. Consequently, individuals in the third category, namely those who experienced economic loss not stemming from property damage or personal injury, along with the fourth category of individuals who incurred damage or loss to their property, may be precluded from seeking recovery for damages due to pure economic loss.
The presented case study of the fire, resulting from the defendants' carelessness, serves as a significant example for handling claims against an organization. Utilizing these precedents, in conjunction with other precedent decisions, helps limit liability to such claims. Organizations may use precedents to their benefit, either to prevent a case from arising or to utilize them as advice if a case is initiated. Precedents are the verdicts, judgments, or decisions rendered by a judge in a court case (Queenby, 2013). The precedents are applicable in courts that are subordinate to the court that rendered the ruling. The Supreme Court of Australia's ruling is applicable to the High Court of Australia (Katter, 2011). As previously said, landmark or precedent case laws may also be used to negate claims. This may be clarified further by some case laws that support Matthews' position and others that do not.
In Caltex Oil v The Dredge "Willemstadt" (1976) 136 CLR 529, the defendant, Dredge, caused damage to a pipeline during dredging operations. The pipeline was used by Caltex, the plaintiff, for the transport of oil, despite not being the owner. Caltex initiated legal action against Dredge for the economic harm incurred. The collection of damages was permitted since the defendant was aware of the plaintiff, making the loss predictable (Sappideen et al. 2009).
In Perre v Apand (1999) 198 CLR 180, Perre served as the plaintiff in a contractual agreement in Western Australia for the selling of potatoes. Apand was the defendant who provided defective supplies to Perre, resulting in an illness affecting the plaintiff's neighbor. Owing to the rules in WA, the potatoes were cultivated near contaminated ground, rendering them unsellable. Consequently, Perre initiated legal action for financial damages. In this instance, Apand's awareness of the seeds resulted in liability for carelessness, and the claims were upheld (Swarb, 2016c).
These two instances demonstrate that a claim may be asserted notwithstanding the existence of economic damage. Consequently, these issues may be used by the plaintiff in the Matthews class action lawsuit. Nonetheless, the defendants possess certain situations that may absolve them of guilt for the economic damage. In addition to the two aforementioned decisions, Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2003] VSC 27 may also serve as a defense for economic loss.
In Johnson Tiles Pty Ltd v Esso Australia Pty Ltd, an explosion occurred as a result of Esso's negligence in plant maintenance. The allegation against Esso was presented at the Supreme Court of Victoria, mostly concerning economic damage. The Court referenced the seminal instances of Grant and Donoghue, saying that Esso was obligated to exercise due diligence towards its consumers, as it had a duty of care to them. Consequently, Esso ought to have implemented precautions to prevent the cessation of gas, which eventually resulted in property damage. The court determined that Esso was not liable for damages resulting from economic loss, since the legislative framework did not impose a responsibility for pure economic harm (Australasian Legal Information Institute, 2017).
The Engineers Australia Code of Ethics is the prevailing norm that engineers in Australia must adhere to rigorously. This code pertains to the expertise and proficiency of the nation's engineers. The Code has been categorized into four main categories, which are as follows:
Strict adherence to the established code of ethics assists engineers in avoiding allegations of negligence. The primary cause for this is the divisions within the regions. The code mandates that engineers operate in a way that is both knowledgeable and current. Additionally, their job must be characterized by integrity and reliability, while upholding and respecting the dignity of every human. Engineers must be informed about the newest reforms and continuously enhance their knowledge to stay current on recent changes in regulations or standards. Engineers must consider the requirements and demands of numerous stakeholders when executing any job. These stakeholders include not just the current generation but also future generations (Engineers Australia, 2015). This assists engineers in doing their job meticulously to safeguard against any negligence claims.
If the engineers choose to disregard or violate the code, allegations of carelessness might readily arise. The code necessitates that engineers operate with diligence and precision, so limiting the risk of carelessness and ensuring high-quality output. Negligence claims may only be asserted upon a violation of the Code. In other words, adherence to the established criteria precludes valid negligence claims.
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