Earlier today, the High Court of Australia refused special leave to appeal against the Supreme Court of Western Australia Court of Appeal’s decision in AME Hospitals Pty Ltd v Dixon [2015] WASCA 63.

The High Court’s refusal of special leave confirms that, in claims that require expert evidence on the physical cause of a plaintiff’s injury and/or whether that injury was due to anyone’s negligence, the receipt of unsupportive expert evidence prior to the expiration of the limitation period will not preclude an extension of time being granted later if fresh evidence is obtained. Despite making an active decision not to commence proceedings on the basis of ‘negative’ expert opinion, plaintiffs will be able to revisit the issue as medical knowledge advances and different experts become available for consultation.

The case concerned a plaintiff who allegedly suffered hypoxic ischaemic encephalopathy (HIE) during birth in 2001. She now has cerebral palsy. Prior to the limitation period expiring in 2011, the plaintiff’s father engaged lawyers to investigate whether the plaintiff had a cause of action against the doctor who managed the plaintiff’s mother’s labour and/or the hospital where the plaintiff was born. The lawyers obtained an expert opinion on the management of the labour and delivery. The expert did not identify any injury occurring to the plaintiff during that period and did not criticise the medical and nursing care provided. After considering that opinion and his legal advice, the plaintiff’s father decided not to proceed with a claim against either the doctor or the hospital.

The lawyers reviewed the matter after the limitation period expired and the father instructed them to obtain an opinion from a different expert. The new expert expressed an opinion on when the plaintiff had suffered hypoxia and concluded that the hypoxia had occurred during labour and delivery. He also expressed a different opinion on the management of the labour and delivery as compared to the expert who had first been consulted.

In light of this new expert evidence, the plaintiff’s father instructed the lawyers to apply for an extension of the limitation period so the plaintiff could sue the doctor and the hospital. The plaintiff obtained the extension of time at first instance after the court found that, at the time the limitation period expired, the plaintiff’s father was not aware of the physical cause of the plaintiff’s injury and/or was not aware that the injury was attributable to anyone’s conduct.
The extension was granted despite evidence of an active decision being made by the plaintiff’s father to not commence proceedings before the limitation period expired, which had been based on the expert evidence and legal advice he received at that point. This was because, notwithstanding the medical and legal advice provided to the father prior to the expiration of the limitation period, at the time the limitation period expired, the father did not know, and had not been told, that:

  • the plaintiff’s cerebral palsy, HIE or any other injury had been caused by intrapartum events;
  • the plaintiff’s cerebral palsy was caused by the HIE;
  • the plaintiff’s cerebral palsy was connected with the labour and delivery process; and
  • the doctor and the hospital’s nursing staff had done anything (whether negligently or not) which had caused the plaintiff’s HIE or her cerebral palsy or had failed to do anything (either negligently or not) which might have avoided it.

The plaintiff’s father did not become aware of the physical cause of the plaintiff’s injury until the time he received the second expert report. He also ought not reasonably have become aware of the physical cause of the plaintiff’s injury before that date. As such, the plaintiff satisfied the necessary criteria to be given an extension of time to commence proceedings against the defendants.

The High Court’s refusal of special leave to appeal will be troubling news to insurers of long-tail injury claims and personal injury claims generally. As the current law stands, it appears that plaintiffs will be able to revisit claims notwithstanding the expiration of limitation periods. Insurers of such claims should therefore approach the reserving of notifications with caution.

The High Court’s refusal to grant special leave to appeal results in the following uncertainties for defendants and insurers:

  • What type or complexity of injury will require expert medical evidence to be provided to the plaintiff before a plaintiff is said to be ‘aware’ of the cause of an injury or that the injury may be attributable to the conduct of another person?
  • At what point does a plaintiff ‘ought to have been reasonably aware’ of a cause of action accruing?

The refusal of special leave may prompt the Western Australian parliament to review the provisions of theLimitation Act 2005 (WA) to determine whether this apparent flexibility of limitation periods was the intention of the legislature. In the meantime, however, insurers of risks of this nature should approach the reserving of notifications with caution, notwithstanding the apparent abandonment of a claim by a plaintiff. Given the provisions of the Act clearly permit extensions to be granted a substantial period after the expiry of the limitation period, the passage of time should not give insurers any cause for confidence in reducing reserves.

This blog was co-authored by DLA Piper graduate, Hanwen Chan.