A University of Queensland academic has developed a model approach for determining liability in cases involving claims for economic loss.
If adopted, the model could lead to more consistent and coherent development of the law making it easier for both practitioners and academics to predict the future direction of liability for economic loss.
Law School senior lecturer Dr Karen Vaggelas developed the model for her PhD. For her thesis, she compared the approaches taken to economic loss cases by the High Court of Australia, the House of Lords in England, the Canadian Supreme Court and the New Zealand Court of Appeal.
The law dealing with liability for economic loss relates to cases where a plaintiff has not suffered physical harm or property damage but rather claims financial loss because of the alleged negligent actions of another. It covers bad advice from financiers or government officials to shoddy workmanship by builders leading to economic loss.
Dr Vaggelas said the aim of the comparison was to identify an appropriate method for dealing with the duty of care issue in such economic loss law suits. This duty of care issue - the question of whether a defendant has a legal responsibility to the plaintiff to attain a certain standard of care - must be established before a case can proceed.
Dr Vaggelas said the comparative analysis revealed such divergences and differences of opinion that she turned her back on the Commonwealth courts' approaches and returned to basic principles to develop a model to deal with these cases.
'The model presented in the thesis dictates that the law should develop in the traditional manner - practitioners should look at decided cases and draw out principles they can then apply to cases at hand - rather than evolve on a case-by-case basis.
'Public policy considerations such as the so-called floodgates issue - whether a successful claim could lead to many more in a similar vein - should override the duty of care only in rare cases.
'The liability for negligence should be determined according to a common standard which is applied in a consistent and coherent manner.'
Dr Vaggelas said she developed the model because of the lack of consistency in economic loss cases to date. 'The courts are reaching decisions but there is not necessarily any uniformity or consistency in approach. It's very difficult for a solicitor faced with a novel case to advise a client about this area of the law because of this uncertainty,' she said.
'As a teacher, my role is to understand and then explain to students the theories in the economic loss law area, for example the High Court's proximity theory of negligence. This theory represents the High Court's attempt to rationalise the law of negligence. In practice, it has been of little assistance to practitioners in determining the duty issue in a novel case.'
To complete her PhD, Dr Vaggelas received a Short Term Staff Fellowship from the University.
Introduced in 1993, the fellowships assist women who are experiencing difficulties completing postgraduate studies due to demanding work and/or family responsibilities.
The fellowships release recipients from academic or administrative duties to undertake a final intensive period of study.
Dr Vaggelas, who will receive her doctorate at a graduation ceremony on Monday, May 18, is the first person to be awarded a PhD from the Law School through the recently-introduced oral examination system.
On February 20 this year, Dr Vaggelas presented her PhD to a group of around 30 peers then faced intense questioning from a panel of three examiners. She said the advantage of the system was a more speedy resolution of the PhD marking process. 'I knew the same day, subject to amendments made to the approval of the internal examiner, that I had my doctorate,' she said.
For more information, contact Dr Vaggelas (telephone 07 3365 2293).
