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Butler, Desmond A. (2002) An assessment of competing policy considerations in cases of psychiatric injury resulting from negligence. Torts Law Journal, 10. pp. 13-40.

Copyright 2002 LexisNexis

An assessment of competing policy considerations in cases of psychiatric injury resulting from negligence
Dr Des Butler*
Since liability for psychiatric injury was first recognised, it has been evident that the extent of recovery has been shaped by considerations of 'policy', in the sense of societal concerns external to the demands of the case at hand. Some of these considerations may be explained in terms of outdated understandings concerning the relevant damage, while others may be regarded as being of continued significance. This article seeks to examine policy considerations which have been asserted as being relevant to the question of the appropriate extent of liability for psychiatric injury, and seeks to determine their continued legitimacy against the standard of modern knowledge and understandings in psychiatric medicine. 1. Introduction

Perre v Apand Pty Ltd1 illustrated that the members of the High Court are divided on the appropriate approach to the determination of a duty of care in novel cases involving pure economic loss. However, their Honours did confirm a trend commenced relatively recently of overtly considering and balancing relevant policy considerations.2 Cases concerning the appropriate limit of liability for psychiatric injury have demonstrated that they are also a class with a particular susceptibility to the influence of policy considerations.3 With the issue once again before the High Court, it is timely to explore the policy concerns that have been identified as being of influence in this area and to subject them to a systematic assessment so as to form a view concerning their continued legitimacy. Before embarking upon this task, it is worthwhile making a number of observations concerning the use of policy in the determination of a duty of care. First, the essential function of policy in the common law is to bring into judicial consideration the broader social interest of the public at large.4 Secondly, the concept of policy is value laden: any given policy stands for certain values or a sense of morality with which we intend or expect most of society to abide.5 Thirdly, while policy may no longer be an unruly horse which judges should be reluctant to mount,6 it is nevertheless not a 'Pegasus that might soar beyond the momentary needs of the community'.7 Policy therefore reflects contemporary values: thus as society develops, its values may change and with them the expectations of the collective welfare that forms public policy. The public policy of today therefore need not necessarily be the same as that of yesterday.8 In this sense, reference to policy considerations when considering the scope of liability may be seen as a tool or device by which the law may keep itself relevant to modern times. Fourthly, a court is naturally limited in relation to the type of public consideration that it is able to take into account: the adversarial process lacks the sources of information and means of inquiry available to, for example, a parliament.9 This is, however, no justification for failing to take external matters into account.10 Finally, evaluation of relevant policy considerations does not involve a court exercising an unfettered discretion. A judge is not a 'knight errant, roaming at will in pursuit of his own ideal of beauty or of goodness'.11 Instead, as Windeyer J in Mount Isa Mines Ltd v Pusey cautioned, 'courts must ... act in company and not alone'.12 2. A useful standard: Modern psychiatric knowledge

A systematic assessment requires a defensible standard. The standard adopted in this article is modern psychiatric knowledge. The reason for adopting this standard lies in the basic notion that the law should be informed by its context. Law is an instrument of society, a means to an end, not an end in itself. As society changes, so must the instruments which regulate it.13 The law would fall into disrepute if courts sought to determine disputes in the 2000s by concepts and standards suited to the 1890s or 1940s.14 This is particularly important in an area so dependent upon a science such as knowledge and understanding in psychiatric medicine, which is constantly advancing. Oliver Wendell Holmes once stressed the importance of showing 'the

rational connection between your fact and the frame of the universe. To be master of any branch of knowledge you must master those which lie next to it.'15 This entreaty has been interpreted not so much in its literal sense of advocating that complete mastery of one branch of knowledge is not possible without complete mastery of those that touch upon it, but rather as showing that 'knowledge of any given subject or the approach to any given problem is immeasurably enriched if one does not shut off one's knowledge and interest as one reaches the peripheries of one's discipline'.16 Where there is an interconnectedness between branches of knowledge there is mutual benefit by each being informed by the other and the interface being used to its full advantage.17 Modern psychiatric medicine accepts that the aetiology of trauma involves the interaction of a person's characteristics (including age, state of health, previous experiences, any prior trauma, and personality factors); the traumatic event (the stressor); and the recovery environment that follows the event (including the availability and use of social supports).18 Notwithstanding the individualism of personality and other characteristics, clinical observation and field studies have shown that many persons exposed to traumatic events exhibit patterned behaviour. The properties of that behaviour, as distinguished from the content of individual thinking, can identify the phases in response to traumatic events in a way that allows a generalisation across different types of events, and even to a large extent across different types of people and different cultures. 19 A widely accepted model20 is that proposed by the US psychologist Mardi Horowitz, comprising phases of outcry (such as fear or sadness), denial, intrusion (such as unbidden thoughts of the event), working through, and completion (resumption of life).21 Grief and bereavement processes are also seen to follow a more or less predictable course and have a similar prototypical course of resolution.22 It is acknowledged that no individual necessarily fits the Horowitz prototype. There also may not be any sharply defined interface between one phase and another. Working through, for example, may involve aspects of denial and intrusion. Also, the intrusive phase may precede or even alternate with the denial phase.23 For most people, however, the reactive processes after a traumatic event settle and homeostatic equilibrium is recovered.24 The typical pattern following even catastrophic experiences is resolution of symptoms rather than development of a disorder.25 In only comparatively few cases do reactions continue into the development of mental disorder.26 It should be noted that recent studies have challenged the Horowitz model of a process of adaptation. In particular, one theory holds that once certain biological systems are hyperaroused, depleted, or deregulated, other metabolic functions aimed at restoring equilibrium may be set in motion. A consequence of this process may be that it is difficult to psychologically process stress in a manner that leads towards adaptation.27 Some have suggested that rather than a normative process of adaptation, there is a distinct set of biological alterations that characterise a state of prolonged or persistent symptoms in response to a traumatic event. 28 In any event, detection of biological abnormalities may hold the hope of corroborating the legitimacy of claims of at least post-traumatic stress disorder and may ultimately allow prompt identification and evaluation of chronic symptoms, enable an accurate prognosis and lessen reliance on subjective assessments.29 3. Relevant policy considerations

Different policy considerations are relevant to different categories of case: the policy considerations that help shape the extent of liability for psychiatric injury are not necessarily the same as those that are relevant to, for example, liability for pure economic loss. Further, within the broad spectrum of psychiatric injury cases, different policy considerations may be considered relevant. In its report Liability for Psychiatric Illness, the English Law Commission identified six 'policy arguments' that may be posed as being grounds for limitation of liability, viz:
o o o

the possibility of a 'flood of claims'; the potential for fraud; the potential for conflicting medical opinions;

o o o

the notion that psychiatric illness is not worthy of compensation; the notion that the plaintiff is only a 'secondary' victim; and the potential for litigation to affect prognosis.30

This article considers those 'heads' of policy that have been regarded in the past and present as influencing the way liability for psychiatric injury should be circumscribed. It is not limited to those considerations identified by the English Law Commission. It should also be noted that any collection of relevant policy concerns is not a closed domain: it is possible for a court to be confronted with a novel case that brings into play a policy consideration that hitherto has not featured in previous cases.31 It would prove an endless and unnecessary task to attempt to conceive of and prejudge in advance every possible policy consideration that might militate for or against liability in the infinite variety of cases. For present purposes perhaps the best that can be achieved is to acknowledge the possibility of 'other policy considerations'. 3.1 Practical justice

The first group of policy considerations that is relevant in the psychiatric injury sphere reflect what Lord Goff described in another context as an 'impulse to do practical justice'.32 'Practical justice' is a loose description but may denote those factors relevant to the fairness or justice in practice of allowing or denying recovery by a particular plaintiff. For present purposes it may be seen as including three considerations: vindication of damage to the person, and the two goals of treating like claimants alike and of achieving a sufficient degree of certainty to enable litigants and their advisers to be able to predict outcomes. These latter two concerns may in practice entail a measure of tension since in a given case they may tend to pull in opposite directions. 3.1.1 Vindication of injury to the self

In a complex and interwoven society, it is inevitable that the activities of one will invade the lives of another or others.33 In past cases where the defendant has been held to be at fault, the law has shown little compunction in recognising a plaintiff's physical integrity as an interest worthy of protection. Indeed, as Lord Oliver has observed, 'the infliction of physical injury to the person ... universally requires to be justified'. 34 Jane Stapleton has described proper vindication of the law's concern with the physical security of persons and property as a 'trump' factor.35 As the law has been progressively enlightened by advances in medical knowledge, injury to one's psychic wellbeing has been recognised as being as deleterious, in some cases more so, than injury to physical wellbeing.36 A sound mind in a damaged body may be capable of achieving much, while a damaged mind in a sound body may be capable of achieving little. The integrity of the psyche should therefore be as worthy of protection as the integrity of the physical condition. They are but two species of personal injury.37 Mental injuries should not, on the whole, be an incident of living in a complex functioning society which sufferers are expected to endure without any hope of reparation.38 Nor is the fact that in some cases the psychiatric injury is a reaction to the physical injury or imperilment of another -- and in that sense is 'secondary' -- properly a ground for denigrating claims for psychiatric injury. It has long been acknowledged that any such actions for psychiatric injury and for any physical injury are independent.39 There is no basis therefore for suggesting that the claim for psychiatric injury is in some way derived from, and therefore in some way inferior to, the claim for physical injury.40 As distinct actions, each should be assessed on its own merits rather than on the basis of an imperfect deduction that since one injury is regarded as in some way more serious than another, the second does not warrant compensation. While an interest in psychic wellbeing is now widely recognised as deserving of protection, the degree of harm necessary is a separate issue. In Anglo-Australian law, the courts have been satisfied with a requirement that the plaintiff suffer a 'recognisable psychiatric illness' or its equivalent, whereas different approaches have been taken in different US jurisdictions, such as a willingness to compensate 'serious mental

distress' or emotional distress that is objectively or physically manifested.41 The Anglo-Australian requirement is sometimes contrasted with more transient emotions such as 'ordinary grief or sorrow'.42 Limiting recovery to longer-lasting, more deleterious conditions -- conditions which might conveniently be described as 'pathological reactions' -- may be sufficient to dispel the policy concerns sometimes raised in the United States that compensating mental distress will enable plaintiffs to recover for mere trivial afflictions.43 It might be justifiably argued that trivial afflictions are merely incidents of living, which sufferers should have to bear as best they can: the law is only one technique for coping with and ameliorating the effects of life's adversities, and people should be discouraged from using it when some other way of coping would be just as good or better.44 The impulse to do justice by compensating a person who has had his or her psychic integrity disrupted by the defendant's conduct with serious, debilitating effects is a substantial impetus in favour of the imposition of liability. Lord Bridge indicated that he would require strong arguments before leaving a loss to fall upon an innocent victim, remarking that 'it is well to remember that we are concerned only with the question of liability of a defendant who is, ex hypothesi, guilty of fault in causing the death, injury or danger, which has in turn triggered the psychiatric illness'.45 3.1.2 Like cases alike

Most substantive theories of justice emphasise a concept of justice as equality.46 In other words, fairness and justice dictate that parties in similar situations should be treated similarly unless there is some significant and relevant difference between them: the law should not act capriciously in relation to persons in like positions. A corollary is that litigants are entitled to expect that if an aggrieved person is allowed to recover compensation in one set of circumstances, a similarly aggrieved party in similar circumstances is entitled to expect that he or she will also recover. Arbitrary demarcation of liability is seen as producing incongruous and indefensible results.47 Not infrequently, however, courts have chosen to act pragmatically rather than as a matter of logic, and imposed limits to liability that may be arbitrary.48 In the context of psychiatric injury, 'bright lines' of liability have been justified by reference to countervailing concerns such as the perception of the possibility of fraud or disproportionate or boundless liability.49 Acknowledging the artificiality of choosing between competing approaches has led some judges to seek the 'less arbitrary' as being the 'less unjust' and therefore more desirable.50 The notion of similarity has an inherent difficulty: in a way no two cases are exactly alike. The issue is what constitutes a 'significant and relevant' difference. Arbitrariness, in the sense of the failure to deal in a consistent manner with cases that appear to be the same, is a matter of perception. Even the definition of the damage deemed compensable involves a measure of arbitrary choice.51 A limitation of liability that is supported by an accepted policy argument might be called 'arbitrary' if it is narrower or even broader than the policy suggests it should be. However, any given limitation will rarely be the focus of only one policy consideration. A limitation that is the subject of a number of policy concerns may appear arbitrary when measured against one of those concerns, but as a compromise among competing and inconsistent policies the limitation might overall be justifiable.52 Treating like cases alike may also be invoked in a negative fashion, with the result of denying recovery. This is reflected in the obtuse reasoning of several members of the House of Lords in White v Chief Constable of South Yorkshire Police.53 Following in the wake of an imposition of arbitrary distinctions in Alcock v Chief Constable of South Yorkshire Police that allowed the law to capriciously choose between claims by relatives of the victims of the Hillsborough disaster, Lords Hoffmann and Steyn were moved by the prospect that an 'ordinary person'54 or 'man on the Underground'55 might think it:

unfair between one class of claimants and another, at best not treating like cases alike and, at worst, favouring the less deserving against the more deserving. He would think it wrong that policemen, even as part of a general class of persons who rendered assistance, should have the right to compensation for psychiatric injury out of public funds while the bereaved relatives are sent away with nothing.56 Such a result, it was suggested, would be against the ordinary person's 'notions of distributive justice'. 57 However, it might be queried whether the experience of the relatives -- losing a loved one -- was truly 'alike' that of the police -- being confronted by a disaster involving large-scale loss of life.58 Even leaving that question aside, perhaps such an argument would have been more persuasive had the Law Lords asked whether it would offend the 'ordinary person' to deny recovery in the first place to a relative who, perforce of circumstances rather than by choice, could only confirm the loss of their loved one by, for example, seeing his or her body in a mortuary, outside some arbitrary 'aftermath' period. It may not be possible to do practical justice for plaintiffs by removing all arbitrary distinctions or limitations. However, removal of unnecessarily arbitrary distinctions based on spurious grounds should minimise instances of the law capriciously choosing between otherwise worthy claims. Take, for example, the diagnosis of post-traumatic stress disorder in the commonly used diagnostic instrument, the fourth revision of the Diagnostic and Statistical Manual of Mental Disorders (DSM-IV). This diagnosis provides as follows: The person has been exposed to a traumatic event in which both of the following were present:
(1)

(2)

the person experienced, witnessed, or was confronted with an event or events that involved actual or threatened death or serious injury, or a threat to the physical integrity of self or others the person's response involved intense fear, helplessness, or horror. Note: in children, this may be expressed instead by disorganized or agitated behaviour.

In the narrative adjacent to the diagnosis, the manual states that being 'confronted with an event' includes but is not limited to learning about the violent personal assault, serious accident, or serious injury experienced by a family member or a close friend; learning about the sudden, unexpected death of a family member or close friend; or learning that one's child has a life-threatening disease.59 This diagnosis may therefore be applied to the same symptoms suffered whether, for example, the plaintiff personally perceived the accident or its aftermath or was instead 'confronted' by a third party communication about the accident. The sense of loss remains the same.60 Accordingly, a limitation based on the means of perception would impose an arbitrary distinction without medical legitimacy and may result in the law capriciously distinguishing between otherwise meritorious claims. 3.1.3 Predictability

Another form of arbitrariness arises where a rule is stated vaguely and gives insufficient guidance to both courts and litigants. No rule can be so stated that all uncertainty is removed: vagueness is a relative notion. However, the more uncertainty in a rule, the less a court is constrained by the rule and the more it is left to its own predilections. To observers, although perhaps not the court making the decision, such a resolution may appear more as an ad hoc exercise than an adherence to a generally accepted rule.61 Sufficient certainty to enable some degree of predictability so that litigants and their advisers may make some assessment as to the relative chances of their cases is a matter not only of fairness to the parties but also the overall administration of justice.62 As Brennan J remarked, 'the law of negligence should be capable of application in solicitors' offices'.63 People should know where they stand: they should be able to have some measure of assuredness in the state of the law to enable them to order their affairs on the basis of what their rights are rather than needing to await a court determination of what their rights were.

The desire for certainty or predictability has been placed higher by some courts than concerns such as the prospect of arbitrarily excluding some claims.64 That attitude is not, however, universally held.65 As McHugh J recently observed, while the needs of the litigant, legal adviser and trial judge should guide the formulation of applicable principles, this 'does not mean ... that the common law must adopt arbitrary "bright-line" rules for the sake of certainty at the expense of what most people including judges would regard as a desirable result'.66 Whatever its desirability in other areas of the law, such as that dealing with commercial transactions, 67 in an area involving matters of fact and degree such as psychiatric injury,68 certainty is a valuable servant but a dangerous master. Recognising that psychiatric medicine is in some, but not all, ways still an imprecise science, such degree of certainty as practicable nevertheless is a matter that warrants accommodation in any proposed approach to determining the appropriate extent of liability. 3.2 Proof of damage

There have been at least three manifestations of concerns relating to the proof of the requisite damage where the damage is psychiatric injury: suspicions concerning the genuineness of claims, perceived difficulties in assessing damages for such intangible damage, and the phenomenon known as 'compensation neurosis'. 3.2.1 Genuineness of claims

One of the policy grounds cited by the Privy Council in Victorian Railways Commissioners v Coultas69 for denial of all claims for 'nervous or mental shock' was the difficulty of proof and the fear of 'a wide field [being] open for imaginary claims'. Medical literature indicates that the heyday for feigned psychiatric illness was shortly before and after World War I,70 but even the diagnostic instrument DSM-IV advises psychiatrists to be alert to the possibility to this day.71 Equally problematic is self-deception, prompting one Massachusetts court to express its wonder at 'the tricks that the human mind can play upon itself'.72 The essential problem that has been perceived, therefore, is one of the difficulty of proof.73 Many courts have met the danger by requiring physical manifestation or of objective proof of emotional distress as a precondition to recovery.74 In early times, however, some US jurisdictions were prepared to recognise exceptional cases where emotional distress alone would be compensated, the guarantee of genuineness of the claim being provided by the circumstances in which the distress was caused, such as the negligent handling of corpses. 75 This caution may be measured against early signs of altruism, combined with faith in the judicial system, demonstrated by some judges such as Kennedy J in Dulieu v White & Sons.76 The genuineness of claims has been acknowledged as being, in the final analysis, a question of fact for the judge and jury to determine on a case-by-case basis,77 with the adversarial process an important factor:78 'factual, legal, and medical charlatans are unlikely to emerge from a trial unmasked.'79 Allied with the law's confidence in its own systems to detect fraud, has been the marked advances in medical science and psychiatric techniques since the Coultas decision in 1888. As Kirby P has pointed out, there is no warrant today for a court to exhibit the same resistance and antipathy that the claims for psychiatric injury attracted in the late 19th and early 20th centuries.80 In any event, it has been recognised that the risk of fabricated claims is not a problem solely confined to the field of claims for psychiatric injury. Any intangible damage provides an opportunity for attempted deception: certain physical injuries, such as a bad back, are as susceptible, if not more susceptible, to fraud as a complex neurosis.81 For some, the involvement of expert testimony has been transformed from a positive reassurance concerning proof of the relevant damage into a policy consideration warranting restriction of recovery.82 However, it is common for courts to be called upon to choose between conflicting expert evidence in a wide range of cases, including construction and engineering litigation and claims involving some physical injuries. There is no justification for singling out claims for psychiatric injury for special treatment in this respect. 83

However legitimate the Privy Council's fears of imaginary claims may have been in 1888, the altruistic approach heralded in Dulieu in 1901 combined with the faith in the judicial system and the great advances in medical knowledge lead to a conclusion that in Australia today it should be accorded much less significance as a relevant policy concern than it was in a bygone era.84 3.2.2 Ability to assess damages

Lord Wensleydale once generalised that 'mental pain or anxiety the law cannot value, and does not pretend to redress, when the lawful act complained of causes that alone'.85 Basically, the argument was that damages for mental injury could not be ascertained with any degree of certainty and that therefore no court could with confidence assign a definite monetary value for the injury.86 Instead, it was suggested that any assessment must be based on mere risk, conjecture or speculation.87 The simplest response to this argument may be to recognise that there is an inherent uncertainty in a tort system which attempts to restore the plaintiff to the position he or she occupied prior to an accident through the medium of a monetary award. Also, the law has no qualms in compensating other intangible losses that are no less uncertain than psychiatric injury, such as physical pain and suffering, loss of expectation of life, loss of amenities and enjoyment of life and loss of consortium,88 as well as compensating torts such as assault, false imprisonment and defamation.89 If it is accepted that modern medicine is able to detect and suggest treatment of psychiatric conditions, there would appear to be no reason why psychiatric injury should not be treated in the same way as physical injury in terms of assessing both general and special damages.90 The appropriate approach may be to 'look at the human being in question and seek to consider what is appropriate for the damage that has been done to [him/]her and to [his/]her way of life, and to assess an appropriate amount'.91 There may even be merit in the notion of an influential tariff, although it has been pointed out that the High Court has resisted such an idea in personal injury claims on the basis that no two injuries are the same. 92 There would be a danger linking a tariff to diagnoses in instruments such as DSM-IV,93 since such diagnoses are not indicative of specific entities, in the same way as an epithet such as 'a broken femur' may be said to be. There is no such 'thing' as, for example, a post-traumatic stress disorder, only a presentation of symptoms that might conveniently attract that label. There is a variability inherent not only in diagnoses (the symptoms attracting post-traumatic stress disorder may range from mild to severe effects) but also in cross-diagnoses. For example, following a reassessment of diagnostic indicia, symptoms resulting from damage to property that would have attracted a diagnosis of 'post-traumatic stress disorder' under the previous edition of the DSM (DSM-IIIR) are now likely to attract a diagnosis of 'adjustment disorder' under DSM-IV. The stressor and symptoms have not changed, merely the label applied for clinical purposes. Nevertheless, 'adjustment disorder' is a diagnosis that might also be applied to symptoms suffered in circumstances which are not considered by the law as warranting compensation, such as those resulting from changed life circumstances like divorce, financial difficulties or change of job. For this reason, the diagnosis of adjustment disorder would presumably rank lower than post-traumatic stress disorder (as now defined) for the purposes of any tariff. Thus, while the symptoms and their effect on the plaintiff may have remained the same, due to the change of label the applicable compensation would be different. The DSM is designed for clinical diagnosis and treatment, not for grading reactions for the purposes of differential compensation. Any tariff would therefore need to be based on a catalogue of effects, not labels that may be inconsistently applied. Since assessment of damages for psychiatric injury is, or should be, treated in the same fashion as assessment of damages for physical injury, those damages are subject to the normal rules such as the plaintiff's duty to take reasonable steps to mitigate the damage, although the plaintiff's idiosyncrasies may be relevant when adjudging the reasonableness of the efforts to mitigate.94 In the psychiatric injury context this rule might come into play, in an appropriate case, where there is a refusal to seek psychotherapy and it is clear that such therapy would speed up recovery and the plaintiff is advised accordingly. This may include a case where a plaintiff has had pre-trauma education or training, which has alerted him or her to the symptoms of stress reactions and a means of alleviating or overcoming those symptoms. Moreover, the award is subject to a

discount on account of the vicissitudes of life. Where the plaintiff has an existing condition that predisposes him or her to psychiatric injury, a discount must be made for damage that might have been suffered even in the absence of the defendant's negligence.95 3.2.3 Compensation neurosis

The preceding observation concerning assessment of damages may also sufficiently accommodate the phenomenon known as 'compensation neurosis'. Compensation neurosis was first recognised soon after the Prussian government introduced legislation in the 1870s to compensate railway accident victims.96 As long as it remains unclear whether or how much compensation the patient will receive, he or she may be inclined to maintain the sick role, focus on it and even emphasise it since he or she may believe that the more sick he or she appears the greater the prospective gain. Also, until litigation is finalised the entire situation remains unresolved: because of the uncertainty, individuals may be unable to emotionally accept the situation, adapt and go on living as effectively as they can, and continued discussion of the case during the process of litigation may keep alive the various feelings, resentments and hurts.97 An individual's sense of vulnerability and victimisation may be exacerbated by an adversarial system which pits an individual against a defendant, who may already be viewed as the enemy, and which allows aggressive cross-examination.98 Compensation neurosis is not, however, a phenomenon confined to psychiatric injury. It may equally attend claims for physical injury where the plaintiff alleges that he or she has suffered or is suffering pain. Moreover, compensation neurosis does not arise in all cases of psychiatric injury. Why then should the risk of it occurring in some cases influence the extent of recovery in all cases?99 Instead, in a case where compensation neurosis is seen to have occurred, it would be more rational to take account of the fact when assessing the appropriate measure of damages.100 3.3 Opening the floodgates

A frequent counter to a novel claim, not just in the context of psychiatric injury, is the argument that the suggested extension will inevitably lead to a proliferation of claims.101 Such concerns were carried into the field of psychiatric injury as early as the 1888 Privy Council decision in Victorian Railways Commissioners v Coultas. The fundamental concern of opening the floodgates operates on a number of levels. It is manifested in the administrative concern that the legal system will be inundated and will be unable to cope, the social and public interest dimensions of whether unbridled liability will serve as an impediment to the wider activities and operations of a properly functioning society, and practical justice fears concerning a possible imposition of limitless liability. Although some might place little credence on floodgates arguments,102 they should not be automatically dismissed.103 A crucial question, as stated by Nolan LJ in the Court of Appeal in Alcock v Chief Constable of South Yorkshire Police, is the 'breadth of the terms in which the question is answered'.104 While unpleasant emotions such as fear, anxiety, grief or sorrow are a part of the human condition and are therefore ubiquitous, it has been noted that the cases of an individual suffering a pathological reaction to traumatic stress, in the sense of the individual being incapable of restoring homeostatic equilibrium due to a 'fracture of his/her psychic integrity', and suffering serious and debilitating effects are relatively rare. It is a fallacy to believe, for example, that merely because a physically injured person has a family, every member of that family, or even any member of that family will necessarily suffer a pathological reaction as a result of the physical injury, although it is reasonable to expect that all or most members of the family might to varying degrees experience any combination of unpleasant emotions. Fears of opening the floodgates too wide should therefore be allayed by recognition that few will jump the first hurdle of establishing the requisite degree of injury.105 The class of plaintiffs whose pathological reactions are caused by negligent defendants is therefore properly regarded as 'important, though no doubt small'.106

A further, more philosophical reason might be asserted for rebutting the application of the 'floodgates' argument to liability for psychiatric injury. It may be that fear of giving rise to a proliferation of claims originated in a comparison, either consciously or unconsciously, with claims for physical injury. Opening the floodgates to a multitude of claims was not a concern that troubled courts in determining liability for physical injury due to a perception that the circle of people at risk of being physically injured as a result of a defendant's act was necessarily limited.107 The 'obvious difference' between physical injury and, for example, economic loss is that 'a negligently made article will only cause one accident'.108 Applied to cases of psychiatric injury, this reasoning is understandable for a less sophisticated age: if a defendant drove his or her buggy or even motor vehicle negligently there was a limit to the number of people that could be run down. A person standing in a field adjacent to, but a safe distance away from, the highway would be at no risk of physical injury whereas such a person might nevertheless be at risk of 'nervous shock' if he or she witnessed an accident. However, in a more technologically advanced age this rationale may no longer be universally sound. Today, a relatively minor but negligent act or omission may cause widespread physical damage to property and/or person: an accident at a nuclear or industrial plant may result in radioactive or chemical poisoning of thousands if not millions of people and of vast areas of land, as illustrated by the explosion in one of the reactors at the nuclear plant at Chernobyl, Ukraine, on 26 April 1986 and the escape of a large quantity of deadly methyl isocyanate from the Union Carbide Battery Plant in Bhopal, India, on 3 December 1984. Defects in the production of goods may likewise physically injure a very large number of people, as has been alleged in the case of defective silicone breast implants. The possibility of a multitude of claims from the one incident is not, however, a ground on which the courts would deny relief in actions for physical injury or property damage caused by such an accident.109 Accordingly, as was previously pointed out in relation to the question of genuineness of the claim, if the fear of opening the floodgates is asserted as justifying restrictions on recovery for psychiatric injury, proceeding on a purported contradistinction to the position pertaining to physical injury, it is without substance. Whatever its original validity, such an argument today might be viewed as resting on an unsound foundation, in as much as the same concerns may be said to be equally relevant to some cases of physical injury. The experience has been that an expansion in the extent of liability for psychiatric injury in jurisdictions such as New South Wales, California and Hawaii did not result in a proliferation of claims.110 This is support for, at least, the pragmatic response suggested by Davies JA in the course of expanding liability to include psychiatric injury resulting from telephone communication of an accident involving a loved one: 'The truth is we do not know what, if any, increase in claims any extension of the law in this area will be likely to bring. Nevertheless the risk of such increase may be a reason for advancing in this area cautiously and, where possible, incrementally.'111 It should not be a reason for not advancing at all. Specific observations may also be made with respect to the three manifestations of concern at increased claims. 3.3.1 Overtaxing the legal system

Opening the floodgates to litigation conjures up the spectre of creating an overtaxing burden for courts, thereby having a detrimental effect on the overall administration of justice and derivatively obstructing a society which contemplates a properly functioning judicial system. The drain on judicial resources consequent upon an extension of liability is considered even more significant when viewed in light of the overall increasing demand upon limited judicial resources in modern times.112 Beyond the debate over the apparent or real increases in the amount of litigation, this aspect of the floodgates argument may be met on a more fundamental, and perhaps more compelling basis. It has been repeatedly declared that courts will not exclude meritorious claims no matter what burden for the judicial system results: 'It is a pitiful confession of incompetence on the part of any court of justice to deny relief upon the ground that it will give the courts too much work to do.'113

3.3.2

Impediments to a functioning society

A relevant question concerning any possible extension of liability is whether 'it would be too great a tax on the ordinary business of life'.114 A judicial system at risk of being clogged and overtaxed may be only one instrument of a functioning society that may be thought to be at risk of being detrimentally affected by a flood of mental injury litigation. There may be a concern that expansion of liability will cause the class of persons potentially affected to become circumspect in their conduct to such a degree that those activities become affected, to the disadvantage of the public at large.115 It may be argued that, rather than thinking how best to render services, potential defendants would be predisposed to adopting 'defensive practices' by thinking firstly how best to protect themselves from possible allegations of negligence.116 Such observations are equally applicable to many service providers such as police, doctors, lawyers and teachers.117 Moreover, an imposition of liability may involve diverting already stretched resources away from their intended functions to instead defending litigation.118 Additional possible effects of a particular extension of liability may be that persons simply elect not to engage in the particular activities for fear of the risk of potential liability.119 Indeed it may be claimed that an extension of liability could force the discontinuance of an activity altogether. For example, if recovery were permitted by even those particularly sensitive, a department store could not even safely hold an annual sale for fear that such a person might aggravate his or her pre-existing mental illness when confronted by crowds of avid bargain hunters.120 If every person who felt disturbed or distressed by what he or she read in a newspaper or saw on television were entitled to recover, the newspaper and television proprietors might make the commercial decision that engaging in such a business was so risky an activity that it was prohibitory.121 These are strong reasons for resisting an expansion of liability. However, these concerns may again be allayed to some degree by reference to the comparatively low number of claims that would be expected to be able to meet a threshold of compensable damage fixed as a 'pathological' reaction. A further answer to the concern that the imposition of duty may have an adverse impact on the manner in which society conducts its affairs is to treat the issue more as one relating to breach of the relevant standard, rather than the existence of a duty of care.122 That would mean that rather than foreclose all claims of otherwise meritorious claimants against an entire class of defendants, liability would depend upon whether in the particular circumstances the defendant had failed to take the appropriate precautions to prevent the injury.123 In relation to psychiatric injury, in Guay v Sun Publishing Co124 two of the five judges of the Supreme Court of Canada were unconcerned at the prospect of a newspaper proprietor being liable for mental injury caused by a false report since 'inquiries occupying only a few minutes would have revealed the truth',125 that is to say, the standard of care required was easily discharged. Recognition of a duty in such cases does not necessarily mean that if there is a psychiatric injury caused then there will be liability: the duty is as always to take reasonable care in the circumstances. Blanket denial of duty in all cases in which a duty could conceivably obstruct some social function may merely provide protection for those disposed to carry on those activities in a haphazard or cavalier fashion.126 For some, the debate goes further and suggests that by compensating mental injury, society effectively 'pampers' to the susceptible in society at the expense of 'prime movers'.127 Perhaps at the extreme of this argument is the assertion that there is 'considerable evidence' that society is pampering to the overly-sensitive, with people becoming more easily offended and quick to demand official vindication of perceived slights to the psyche as shown by 'sensitive', 'thin-skinned' people seeking to eliminate offensive qualities from advertisements, television programs and films whereas a 'toughening of the mental hide is the best defence against assault on psychic well-being'.128 However, such an argument misses the point. The issue is what should be the limits of liability for a certain type of injury. Whatever other remedies may today be available for a member of a 'special interest group' who may feel insulted by something that they may have seen in an advertisement, television program or film, under Anglo-Australian law the only mental injury that is compensated is a 'recognisable psychiatric illness' or pathological response. If that objective is kept in mind, the

question is not one of pandering to the indulgences or sensitivities of individuals, but rather the compensation of an injury which has been recognised as deserving of reparation. If that degree is not suffered, any issue of compensation is outside the ambit of the negligence action and instead is a matter to be resolved by other legal avenues. 3.3.3 Disproportionality or indeterminate liability

The floodgates argument also has a practical justice dimension, in the sense that permitting wide recovery may result in the imposition of 'disproportionate' or 'indeterminate' liability. While these terms have been treated as synonymous by some, they are distinct concepts. Disproportionality It has been argued that to expand the boundaries of liability may expose the defendant to a 'crushing' burden out of all proportion to the degree of culpability. The perceived risk of disproportionate liability is present both in the sense of the extent of liability to an individual plaintiff and the number of potential claimants. 129 In support of the argument, reference is sometimes made to liability in negligence being momentary or slight inadvertence or misjudgment.130 However, fault does not necessarily equate with moral blameworthiness.131 Once a defendant has been proved to be negligent, he or she is liable for all the damage the act of negligence inflicted on the plaintiff, provided it is not too remote, regardless of how large that damage may be or how slight and insignificant or morally forgivable the defendant's carelessness might have been. The difficulty with levelling the 'disproportion of burden' argument at liability for psychiatric injury is that unless this rule of damages is abandoned for all types of damage and replaced with some rule making liability proportionate to the degree of fault, there is no justification for abandoning it for one type of damage only. No court denies recovery for physical injury for fear that damages will be a crushing burden on a defendant.132 As Jane Stapleton has pointed out, 'it would be very odd if a defendant could argue in his own favour that he should not owe a duty because he had many victims!'.133 Further, if the result is out of all proportion to the defendant's fault, it can be no less out of proportion to the plaintiff's entire innocence.134 Indeterminacy Instead, it is more persuasive to cast the fear in terms of the risk of an 'indeterminate amount for an indeterminate time to an indeterminate class'.135 This resolves to an issue of fairness in that a person should know what the law requires of him or her: liability should not be open-ended.136 However, as McHugh J recently remarked, it is not the size or number of potential claims that makes liability 'indeterminate'. Liability will only be indeterminate when both the likely number of claims and the nature of them cannot be realistically calculated.137 If recovery is restricted to individuals who suffer a pathological reaction after being confronted by an event the number of claims should be finite and identifiable. Attention has already been brought to the fallacy of thinking that an accident must inevitably lead to a pathological response from all, or even any, members of the victim's family (let alone friends and acquaintances). Similarly, although it is possible for trauma to be transferred -- for example, from sufferer to treating psychiatrist138 -- there simply does not exist in the case of psychiatric injury the same risk of a potentially endless 'ripple effect' of successive losses that attends many pure economic loss cases, and which demands the imposition of controls on the extent of liability for such damage.139 For those seeking to expand the debate to a broader issue of the capacity of the insurance industry and ultimately the consumer public to cope with the increased cost of any proposed extension of liability,140 it is important to bear in mind that it is easy to mistake the interests of one group, especially a vocal group, as representing the public interest and courts must be vigilant not to neglect less vocal but equally deserving interests. There may be a danger that moulding liability for a particular kind of damage according to a perception that expansive liability will result in an overburdening of the insurance industry effectively equates the inter-

ests of that industry with the public interest. Moreover, a willingness to take into account the 'plight of the insurance industry' when assessing the effect of the liability for mental injury is far from universal. 141 A significant problem inherent in attempts to gauge any adverse effect of a proposed extension on the insurance industry, and thereby the public, lies in the limits of the forensic process, already alluded to: courts are rarely able to evaluate mere assertion and speculation.142 If there is in fact a crisis facing the insurance industry, the appropriate place for the debate is not in a court trying to decide whether to compensate a particular plaintiff but rather 'the market place of ideas and public opinion and ... the halls of the legislatures'. 143 Perhaps the greatest reassurance that might be offered to the courts is the anecdotal experience in California, a state of large population which might be expected to generate a proportionately large number of claims, following the expansion of liability to unendangered bystanders in Dillon v Legg.144 The experience of one underwriter, writing 15 years after the judgment, was that it had not altered its actuarial tables to reflect liability for psychiatric injury and that separate data on claims for psychiatric injury were not even kept since there had only been one or two claims annually since the decision.145 Finally, an indeterminate liability in terms of amount is unlikely to result from a more expansive approach if there is a measure of circumspection in the damages awarded. In McLoughlin v O'Brian, Lord Wilberforce referred to 'the modest sums recovered' in previous cases.146 Lord Bridge reached a similar conclusion: 'However liberally the criterion of reasonable foreseeability is interpreted, both the number of successful claims in this field and the quantum of damages they will attract are likely to be moderate.'147 3.4 Other policy considerations

The preceding survey of policy considerations that have overtly or covertly influenced the shaping of the law is not intended to be exhaustive of all possible concerns that may be raised in the future. Just as the law does not automatically close its door to a claim simply because it is a novel claim, the law should be amenable to the relevance of policy considerations outside those already recognised. For example, in considering whether a media defendant should be held liable for causing psychiatric injury by its negligence, free speech considerations may be a significant factor in the determination of the existence of a duty of care.148 Alternatively, in another context, the potential expansion of liability in negligence into the settled domain of another tort, such as defamation, has also been treated as being significant.149 It may be, however, that in such a case these concerns may be addressed by focusing on the different interests protected by the different torts.150 An economic analysis might focus on the economic notions of deterrence and better loss distribution as relevant policy considerations.151 When applied in the psychiatric injury realm it has been argued that an economic analysis approach is capable of reducing the miscellany of policy concerns into a single compound concern of reducing overall accident costs.152 Such an approach has been subjected to detailed rebuttal, which has argued (inter alia) that it is premised on people knowing what the law is and being motivated to take it into account when deciding how to behave. This might be unreasonable to expect outside of, for example, members of a profession who quickly become acquainted with conduct deemed to be culpable via means such as professional associations, by word of mouth, media reports or otherwise.153 It might also assume a large degree of conscious decision-making ability, which might be appropriate in the case of, for example, trauma in the workplace that may be preventable by safer work practices or environments but are much less so in the case of the momentary neglect that normally features in, for example, most motor vehicle accidents.154 Finally, economic theory entirely ignores the significance today of the availability of liability insurance and its effect on personal responsibility.155 The availability or otherwise of insurance or other loss spreading device156 itself has not been addressed consistently in courts in relation to whether it is a policy consideration relevant to negligence generally. Several High Court judges have rejected the availability of insurance or the possibility of loss spreading as valid considerations in relation to the existence of a duty of care in pure economic loss cases.157 In the sphere of liability for psychiatric injury in Australia and England the availability or non-availability of insurance, or loss spreading ability, was not a factor that overtly influenced the High Court's decision in Jaensch v Coffey158 nor

the House of Lords in McLoughlin v O'Brian,159 Alcock v Chief Constable of South Yorkshire Police,160 or Page v Smith.161 This may be contrasted with US judges who have not been reticent in expressly referring to the availability of liability insurance when determining whether to extend liability for emotional distress. 162 The availability of insurance to the plaintiff may also be proffered as a reason for not expanding the limits of liability. Thus, it may be argued that a business claiming damages for pure economic loss may obtain a degree of protection through insuring against a loss of profits. In White v Chief Constable of South Yorkshire Police,163 some members of the House of Lords referred to the plaintiff employees' access to pension schemes as a reason for limiting liability. Australian courts considering claims arising from trauma in the workplace have not taken a similar stance.164 Further, the plaintiff in a psychiatric injury case could hardly be expected to insure himself or herself against what is for most a once-in-a-lifetime experience which may occur in an infinite variety of ways. 4. Balancing competing considerations

It would be specious to believe that competing policy considerations could be arranged in a universally applicable ranking of importance.165 Such an exercise would presume a linear relationship that is antithetic to matters of qualitative and multi-dimensional character. Instead, what is demanded in any assessment of policy considerations, which in a given case may be simultaneously pulling in different directions, is striking a balance that is suited to the case at hand.166 The necessity for an individualised evaluation and balance of the considerations pertinent to a particular case is demonstrated by the fact that the same considerations are not applicable to all cases. Policy considerations relevant to a case of psychiatric injury caused by an erroneous statement167 are obviously different from those relevant to the same injury resulting from a motor vehicle accident.168 There are some concerns, however, that may be considered as impacting upon the majority, if not all, cases of psychiatric injury for which general assessment may prove beneficial. Concerns regarding proof of the damage, including fears of fabrication of a relevant injury, are today of much less weight than they were in times of less sophisticated science, so much so that they may hardly warrant a foreclosure of all claims for psychiatric injury or even a curtailment of such claims. The decline in the influence of concerns regarding proof of damage as a consequence of expanding psychiatric knowledge and understanding has corresponded with a strengthening, for the same reason, of the notion that an individual suffering a psychological reaction following traumatic stress may be as disabled as, if not more disabled in some cases than, an individual suffering physical injury. The imperative to vindicate the law's interest in the integrity of the psyche may accordingly be considered as strong as that for the integrity of physical security, at least in the case of a person suffering a pathological response and not merely transient effect. Floodgates arguments should not be summarily dismissed. The ubiquity of transient reactions means that to allow substantial recovery for such reactions would indeed impose a number of problems, including an overtaxing of judicial resources with a resulting deleterious effect upon the administration of justice generally, the creation of disincentive for carrying on activities that involve a risk of prompting emotional reactions and the imposition of a limitless liability. Allowing recovery for mere emotional distress, as occurs in several US jurisdictions, rightly requires a counter-balance such as the clear, although arbitrary, delimitation of preconditions for such recovery. The floodgates problem assumes lesser significance if, again, the threshold of compensable damage is fixed at a pathological reaction: present day psychiatric knowledge and understanding, supporting concepts such as the widely accepted Horowitz prototype for the phases of psychological response to traumatic stress, or even more recent notions of a difficult to reverse biological change, regard pathological reactions as rare occurrences.169 Besides the class of potential claimants reaching that threshold being small in number, a further factor mitigating fears of limitless liability would be for courts to pursue a line of moderate awards for general damages when compensating meritorious claims. If this were the case, then proceeding to also stipulate further limits on liability -- such as limiting the class of claimant, proximity to the accident and means of perception -- may appear to be overkill.

Drawing 'bright lines', of course, has the virtue of certainty, and provides clear direction to those involved in the trial of claims. But such clear demarcation comes at the price of creating artificial, arbitrary and medically unsustainable distinctions between otherwise equally deserving claims. This then creates the risk of the law producing results that may be difficult to justify to the wider community. It is perhaps a measure of the degree of dissatisfaction in the community with the position adopted by the House of Lords in Alcock v Chief Constable of South Yorkshire Police and White v Chief Constable of South Yorkshire Police170 that the English Law Commission recommended that all bar one of the controls supported by the House -- the degree of relationship with the victim -- be abandoned. On the other hand, removal of all restrictions or guidelines for recovery may counter fears of capriciousness in the law, but do little for predictability. It does not bespeak well of a legal system where not even legal advisers and trial judges know with some degree of certainty what is required by the law and the only time that litigants can be sure is when an appellate court makes a determination. 'Bright lines' are not, however, the only means of achieving such a degree of certainty as practicable in a qualitative field involving questions of fact and degree. For example, pursuing an incremental approach, utilising where appropriate the tools of analogy, induction and deduction from previous cases, provides a measure of predictability that allows those involved in testing novel cases a solid foundation on which to proceed. Combined with an approach fixing the damage deemed worthy of compensation, it would be a way of addressing floodgates concerns while treating like cases alike. The question would then be whether, on an assessment of the other policy concerns arising in the particular case, the corpus of recognised cases should be expanded to include the new case. 5. Conclusion

It is clear that today courts are called upon to assess overtly competing policy considerations in novel cases. Claims for psychiatric injury will typically raise a range of common concerns. However, in the infinite variety of circumstances that may give rise to a claim a novel case may raise novel policy considerations. Accordingly, any abstract assessment of policy considerations, such as that undertaken in this article, must be subject to the rider that it cannot be regarded as a closed domain. Any exercise of balancing competing policy considerations will involve an assessment of the comparative influence of each concern. Using a standard of modern psychiatric knowledge, it is possible to make an assessment regarding the commonly raised concerns. This reveals not only that some concerns that were considered paramount at the end of the nineteenth century are of much reduced significance at the beginning of the twenty-first century, but also that it is possible -- by fixing the damage worthy of compensation at the level of the comparatively rare long-lasting pathological response -- to accommodate a variety of concerns which may be seen as pulling in different directions. In so doing, such an assessment may call into question the imposition of further artificial limits on liability of the kind currently supported in England and several US jurisdictions.
* LLB (Hons), PhD, Associate Professor and Assistant Dean, Research, Faculty of Law, Queensland University of Technology; member of Centre for Commercial and Property Law, QUT. I am grateful to the General Editor, Prof Harold Luntz, and an anonymous referee for their comments on an earlier draft. 1 (1999) 198 CLR 180; 164 ALR 606.

2 See also Bryan v Maloney (1995) 182 CLR 609; 128 ALR 163; Hill v Van Erp (1997) 188 CLR 159; 142 ALR 687. 3 See, eg, Alcock v Chief Constable of South Yorkshire Police [1992] 1 AC 310; [1991] 4 All ER 907; White v Chief Constable of South Yorkshire Police [1999] 2 AC 455; [1999] 1 All ER 1.

4 R S Abella, 'Public Policy and Judicial Role' (1989) 34 McGill LJ 1021 at 1024; C R Symmons, 'The Duty of Care in Negligence: Recently Expressed Policy Elements' (1971) 34 MLR 394 at 401. 5 Abella, above n 4, at 1024; K Greenawalt, 'Policy, Rights, and Judicial Decision' (1977) 11 Georgia L Rev 991 at 1033; Symmons, above n 4, at 401; T A Cowan, 'Group Interests' (1958) 44 Virg L Rev 331 at 331. 6 Cf Richardson v Mellish (1824) 2 Bing 229 at 252; 130 ER 294 at 303 per Burrough J.

7 P H Winfield, 'Public Policy in English Common Law' (1928) 42 Harv L Rev 76 at 91, referring to Swinfen Eady J in In Re Beard [1908] 1 Ch 383 at 386-7; Warrington LJ in In Re Wallace [1920] 2 Ch 274 at 288; In Re Bowman [1915] 2 Ch 447 at 471. 8 See also M McHugh, 'The Law-making Function of the Judicial Process -- Part II' (1988) 62 ALJ 116 at 116; Winfield, above n 7, at 93-4. 9 A M Gleeson, 'Individualised Justice: The Holy Grail' (1995) 69 ALJ 421 at 431; I Richardson, 'Judicial Decision-Making: A New Zealand Perspective' (1984) 58 Law Inst J 545 at 547; McHugh, above n 8, at 120; J Bell, Policy Arguments in Judicial Decisions, OUP, Oxford, 1983, p 67; M H McHugh, 'The Judicial Method' (1999) 73 ALJ 37 at 44. Unlike US jurisdictions, courts in Australia and England and other Commonwealth jurisdictions rarely consider amicus curiae briefs from government and affected industry and citizen groups. See also C Staker, 'Application to Intervene as Amicus Curiae in the High Court' (1996) 70 ALJ 387. For rare examples of the use of amicus curiae in the High Court of Australia, see Nafte v CES [1996] 7 Leg Rep SL3c (on appeal from CES v Superclinics (Australia) Pty Ltd (1995) 38 NSWLR 47); Ex parte Australian Catholic Bishops Conference: Re Sundberg (C22/2000, 6 September 2001) (application for special leave to appeal from McBain v State of Victoria (2000) 99 FCR 116; 177 ALR 320). 10 11 12 Egerton v Brownlow (1853) 4 HL Cas 1 at 151; 10 ER 359 at 419 per Pollock CB. B N Cardozo, The Nature of the Judicial Process, Yale University Press, New Haven, 1921, p 141. (1970) 125 CLR 383 at 396; [1971] ALR 253.

13 M McHugh, 'The Law-making Function of the Judicial Process -- Part I' (1988) 62 ALJ 15 at 16; McHugh, above n 9, at 39, 42; see also A Mason, 'Future Directions in Australian Law' (1987) 13 Mon U L Rev 149 at 158. 14 15 16 See also McHugh, above n 9, at 42. 'The Law as a Profession' (1886) 20 Amer L Rev 741 at 742. C G Weeramantry, An Invitation to the Law, Butterworths, Sydney, 1982, p 55.

17 Cf O Dixon, 'Concerning Judicial Method' in Jesting Pilate and other Papers and Addresses, Law Book Co, Melbourne, 1965, p 165. 18 See, eg, J L Herman, Trauma and Recovery, Pandora, London, 1992, p 58; B Green, 'Identifying Survivors at Risk: Trauma and Stressors across Events' in J P Wilson and B Raphael (Eds), International Handbook of Traumatic Stress Syndromes, Plenum Press, New York, 1993, p 135; J D Kinzie, 'Post-Traumatic Stress Disorder' in H I Kaplan and B J Sadock (Eds), Comprehensive Textbook of Psychiatry, 5th ed, Williams & Wilkins, Baltimore, 1989, pp 1002-3; N Parker, 'Accident Litigants with Neurotic Symptoms' [1977] 2 Med J of Aust 318 at 320-1; B L Green, J D Lindy and M C Grace, 'Posttraumatic Stress Disorder: Toward DSM-IV' (1985) 173 J of Nervous and Mental Disease 406 at 407; A McFarlane and R Yehuda, 'Resilience, Vulnerability, and the Course of Posttraumatic Reactions' in B van der Kolk, A C McFarlane and L Weisaeth (Eds), Traumatic Stress, Guilford Press, New York, 1996, p 162. See also H Kaplan, B Sadock and J Grebb, Synopsis of Psychiatry, 7th ed, Williams & Wilkins, Baltimore, 1994, p 608.

19 M J Horowitz, 'Stress-Response Syndromes: A Review of Posttraumatic Stress and Adjustment Disorders' in Wilson and Raphael (Eds), above n 18, p 50. 20 B Raphael and J P Wilson, 'Victims of Disaster' in Wilson and Raphael (Eds), above n 18, p 109; B L Green and J D Lindy, 'Post-Traumatic Stress Disorder in Victims of Disaster' (1994) 17 Psych Cl of N Amer 301 at 302. 21 Horowitz , above n 19, p 51.

22 Ibid, pp 53-4; G Engel, 'Grief and Grieving' (1964) 64 Amer J of Nurs 93; E Lindemann, 'Symptomatology and Management of Acute Grief' (1944) 101 Amer J of Psych 141. 23 Horowitz, above n 19, pp 50-3; see also M Horowitz, 'Post-traumatic Stress Disorders' (1983) 1 Beha Sc and the Law 9 at 10-14. A slightly modified model is proposed in T Williams, 'Trauma in the Workplace' in Wilson and Raphael (Eds), above n 18, pp 928-30; see also Herman, above n 18, p 47. 24 This point is also made in Law Commission, Liability for Psychiatric Illness, Law Com No 249, 1998, para 3.7. 25 A McFarlane and G de Girolamo, 'The Nature of Traumatic Stressors and the Epidemiology of Posttraumatic Reactions' in van der Kolk, McFarlane and Weisaeth (Eds), above n 18, pp 129-54; McFarlane and Yehuda, above n 18, pp 156, 160. 26 J T Shurley, 'Types of Psychiatric Disabilities Following Trauma' (1967) 3 Lawyers' Med J 257 at 262; N Breslau et al, 'Traumatic Events and Posttraumatic Stress Disorder in an Urban Population of Young Adults' (1991) 48 Arch of Gen Psych 216; Raphael and Wilson, above n 20, p 109; Turner, Thompson and Rosser in Wilson and Raphael (Eds), above n 18, p 455; Kinzie, above n 18, p 1002; P Saigh, 'Anxiety, Depression and Assertion Across Alternating Intervals of Stress' (1988) 97 J of Abn Psych 338; Kaplan, Sadock and Grebb, above n 18, pp 607-8. 27 Horowitz, above n 19, p 58. For a detailed discussion of the biological response to traumatic events see, eg, B A van der Kolk, 'The Trauma Spectrum: The Interaction of Biological and Social Events in the Genesis of the Trauma Response' (1988) 1 J of Traum Str 273 at 274-87; R O Pasnau and F I Fawzy, 'Stress and Psychiatry' in Kaplan and Sadock (Eds), above n 18, p 1236; B A van der Kolk and J Suporta, 'Biological Response to Psychic Trauma' in Wilson and Raphael (Eds), above n 18, pp 26-31. 28 M J Giller, Biological Assessment and Treatment of Post-Traumatic Stress Disorder, American Psychiatric Press, Washington DC, 1991; M M Murburg (Ed), Catecholamine Function in Posttraumatic Stress Disorder: Emerging Concepts, American Psychiatric Press, Washington DC, 1994; R Yehuda and A C McFarlane, 'Conflict between Current Knowledge about Posttraumatic Stress Disorder and its Original Conceptual Basis' (1995) 152 Amer J of Psych 1705. 29 R Newman and R Yehuda, 'PTSD in Civil Litigation: Recent Scientific and Legal Developments' (1997) 37 Jurim J 257 at 267. 30 Law Commission, op cit n 24, para 6.6.

31 See, eg, Lord Edmund-Davies in McLoughlin v O'Brian [1983] AC 410 at 426; [1982] 2 All ER 298 and Lord Reid in Rondel v Worsley [1969] 1 AC 191 at 227; [1967] 3 All ER 993, who held that public policy was not immutable, thereby acknowledging the possibility of a wholly new type of policy consideration being raised in a given case. 32 White v Jones [1995] 2 AC 207 at 259; [1995] 1 All ER 691.

33 See Deane J in Jaensch v Coffey (1984) 155 CLR 549 at 578; 54 ALR 417; D'Ambra v United States of America 338 A 2d 524 at 529 (RI, 1975); Sinn v Burd 404 A 2d 672 at 681 (Pa, 1979). 34 Murphy v Brentwood District Council [1991] 1 AC 398 at 487; [1990] 2 All ER 269.

35 J Stapleton, 'Duty of Care Factors: A Selection from the Judicial Menus' in P Cane and J Stapleton (Eds), The Law of Obligations: Essays in Celebration of John Fleming, Clarendon Press, Oxford, 1998, p 72. 36 See, eg, Lord Steyn in White v Chief Constable of South Yorkshire Police [1999] 2 AC 455 at 493: 'Nowadays we must accept the medical reality that psychiatric harm may be more serious than physical harm': [1999] 1 All ER 1. 37 Ravenscroft v Rederiaktieblaget Transatlantic [1991] 3 All ER 73 at 85; Alcock v Chief Constable of South Yorkshire Police [1992] 1 AC 310 at 407 per Lord Oliver; [1991] 4 All ER 907; White v Chief Constable of South Yorkshire Police [1999] 2 AC 455 at 463 per Lord Griffiths, 475 per Lord Goff; [1999] 1 All ER 1; cf the English Law Commission, which summarily dismissed as relevant the suggestion that psychiatric illness was not worthy of compensation: see Law Commission, op cit n 24, para 6.7. 38 See P A Bell, 'The Bell Tolls: Towards Full Tort Recovery for Psychic Injury' (1984) 36 Uni of Florida L Rev 333 at 341-4, rebutting suggestions to the contrary made in C Magruder, 'Mental and Emotional Disturbance in the Law of Torts' (1936) 49 Harvard L Rev 1033. Bell was criticised in R N Pearson, 'Liability for Negligently Inflicted Psychic Harm: A Response to Professor Bell' (1984) 36 Uni of Florida L Rev 413 at 414-16. See also Sinn v Burd 404 A 2d 672 at 681 (Pa, 1979). 39 Scala v Mammolitti (1965) 114 CLR 153; [1966] ALR 321.

40 Cf the Law Commission's summary dismissal of the suggestion that psychiatric illness was merely secondary and therefore less worthy of compensation: see Law Commission, op cit n 24, para 6.7. 41 See, eg, serious emotional distress: Leong v Takasaki 520 P 2d 758 at 766-7 (Haw, 1974); Thing v La Chusa 771 P 2d 814 at 830 (Cal, 1989); Culbert v Sampson's Supermarkets Inc 444 A 2d 433 at 437 (Me, 1982); physical/objective manifestation: Payton v Abbott Labs 437 NE 2d 171 at 181 (Mass, 1982); Corso v Merrill 406 A 2d 300 at 304 (NH, 1979); Ramirez v Armstrong 673 P 2d 822 at 826 (NM, 1983); Hunsley v Giard 553 P 2d 1096 at 1103 (Wash, 1976). 42 See, eg, Vana v Tosta (1967) 66 DLR (2d) 97 (SCC); Mount Isa Mines Ltd v Pusey (1971) 125 CLR 383 at 394 per Windeyer J; [1971] ALR 253; Alaffe v Kennedy (1973) 40 DLR (3d) 429 at 432 (NS SC); Griffiths v Canadian Pacific Railways (1978) 6 BCLR 115 at 121 (BC CA); McLoughlin v O'Brian [1983] AC at 418 per Lord Wilberforce, 431 per Lord Bridge; [1982] 2 All ER 298; Simpson v Imperial Chemical Industries Ltd 1983 SLT 601 at 605; Rhodes v Canadian National Railway (1991) 75 DLR (4th) 248 at 264-5; Marinko v Masri [2000] Aust Torts Reps 81-581 (NSW CA) at [50]-[51]. 43 See, eg, R N Pearson, 'Liability to Bystanders for Negligently Inflicted Emotional Harm -- A Comment on the Nature of Arbitrary Rules' (1982) 24 Uni of Florida L Rev 477 at 507-10; Bell, above n 38, at 383; Pearson, above n 38, at 426-9; P A Bell, 'Reply to a Generous Critic' (1984) 36 Uni of Florida L Rev 437 at 442-4. 44 F Trindade and P Cane, The Law of Torts in Australia, 3rd ed, OUP, Melbourne, 1999, p 359.

45 McLoughlin v O'Brian [1983] AC 410 at 441; [1982] 2 All ER 298. Cf Murphy J in Jaensch v Coffey (1984) 155 CLR 549; 54 ALR 417, where his Honour argued that persons causing damage by breach of duty should be liable for all the loss unless there are acceptable reasons of public policy for limiting recovery. 46 p 24. See, eg, S Bottomley, N Gunningham and S Parker, Law in Context, Federation Press, Sydney, 1991,

47 See, eg, Dziokonski v Babineau 380 NE 2d 1295 at 1302 (Mass, 1978); McLoughlin v O'Brian [1983] AC 410 at 441 per Lord Bridge; [1982] 2 All ER 298. 48 Murphy v Brentwood District Council [1991] 1 AC 398 at 486 per Lord Oliver; [1990] 2 All ER 269. This comment was originally directed to liability for pure economic loss, but may be equally applied to liability for psychiatric injury. 49 See, eg, Thing v La Chusa 771 P 2d 814 at 827 (Cal, 1989); Elden v Sheldon 758 P 2d 582 at 588 (Cal, 1988); Tobin v Grossman 249 NE 2d 419 at 423 (NY, 1969); Maloney v Conroy 545 A 2d 1059 at 1062-3 (Conn, 1988); Champion v Gray 478 So 2d 17 at 20 (Fla, 1985). These two countervailing considerations are considered further below. 50 See, eg, Deane J in Jaensch v Coffey (1984) 155 CLR 549 at 607; 54 ALR 417; Culbert v Sampson's Supermarkets Inc 444 A 2d 433 at 436 (Me, 1982). 51 See, eg, the suggestion by some Canadian judges that 'emotional scarring' should be compensated: Southin J in McDermott v Ramadanovic (1988) 44 CCLT 249 at 259; Rhodes v Canadian National Railway (1991) 75 DLR (4th) 248 at 289; applied in Cox v Fleming (1993) 13 CCLT (2d) 45; Mason v Westside Cemeteries (1996) 135 DLR (4th) 361; Vanek v Great Atlantic & Pacific Co of Canada [1997] OJ No 3304. See further the discussion in D Butler, 'Identifying the Compensable Damage in "Nervous Shock" Cases' (1997) 5 TLJ 67. 52 Pearson, above n 38, at 481-2. As Mason P pointed out in Morgan v Tame (2000) 49 NSWLR 21 at 49 an arbitrary rule is not necessarily indefensible. 53 54 55 56 57 [1999] 2 AC 455; [1999] 1 All ER 1. Ibid, at AC 510 per Lord Hoffmann. Ibid, at AC 495 per Lord Steyn. Ibid, at AC 510 per Lord Hoffmann. Ibid.

58 Cf the discussion of the plight of a rescuer who may be forced to confront the totality of a disaster, compared to even a victim who may experience only a small part of the incident, in H Boyts and L M Smith, 'The Collapse at the Hyatt Regency: The Psychological Trauma of Disaster Survival and Rescue' (1984) 52 University of Missouri-Kansas City L Rev 306. 59 60 61 DSM-IV, p 424. Cf Alcock v Chief Constable of South Yorkshire Police [1992] 1 AC 310; [1991] 4 All ER 907. White v Chief Constable of South Yorkshire Police [1999] 2 AC 455 at 483; [1999] 1 All ER 1.

62 Perre v Apand Pty Ltd (1999) 198 CLR 180 at 215 per McHugh J; 164 ALR 606; see also McHugh, above n 9, at 43: 'The natural inclination of most judges is to place a premium on certainty and predictability which are important characteristics of a stable legal system. Stability instils confidence in the institution of the judiciary and in the law.' 63 Bryan v Maloney (1995) 182 CLR 609 at 653; 128 ALR 163.

64 See, eg, Thing v La Chusa 771 P 2d 814 at 815 (1989); see also Lejeune v Rayne Branch Hospital 556 So 2d 559 at 569 (La, 1990). For argument that the certainty engendered in fixed limitations is a necessity for a functioning judicial system see D W Robinson, 'Liability in Negligence for Nervous Shock' (1994) 57 MLR 649. 65 See, eg, McLoughlin v O'Brian [1983] AC 410 at 442, where Lord Bridge preferred the element of uncertainty produced by a test of reasonable foreseeability simpliciter as the criterion of liability for psychiatric injury to the injustice that would be caused by the imposition of largely arbitrary limits of liability such as those proposed by Lord Wilberforce; [1982] 2 All ER 298. See also Lord Scarman at AC 430. 66 Perre v Apand Pty Ltd (1999) 198 CLR 180 at 216; 164 ALR 606.

67 See Gleeson, above n 9, at 432: 'There is an abiding need for predictability and certainty in any system of law. The willingness of people to engage in commercial transactions, for example, depends upon confidence in their ability to know the way in which the law will assign rights and obligations to their conduct and their relationships. There are still many areas of law in which people accept, and clearly prefer certainty to an assessment of individual merits. The value of reasonable certainty, and the demoralising consequences of unpredictability in the law, should not be underestimated.' 68 Cf A Mason, 'The Place of Equity and Equitable Remedies in the Contemporary Common Law World' (1994) 110 LQR 238 at 255-6, subordinating any quest for certainty in relation to unconscionability, another matter of fact and degree, to the desire to do justice in a given case. 69 (1888) 13 App Cas 222 at 226.

70 This is illustrated by the reference to the difficulty of detecting whether the plaintiff was 'shamming' in Eaves v Blaenclydach Colliery Company Ltd [1909] 2 KB 73 at 75-6 per Cozens-Hardy MR, 76 per Farwell LJ; the reference to avoiding 'the risk of malingering' in Yates v South Kirkby Collieries Ltd [1910] 2 KB 538 at 541 per Cozens-Hardy MR, 542 per Farwell LJ; and the reference in Brown v Corporation of the City of Glasgow 1922 SC 527 at 531 per Lord Salvesen to the danger of 'more or less bogus actions'. 71 DSM-IV, pp 431, 683.

72 Payton v Abbott Labs 386 Mass 540; 437 NE 2d 171 at 175 (1982). See also D B Marlowe, 'Negligent Infliction of Mental Distress: A Jurisdictional Survey of Existing Limitation Devices and a Proposal Based on an Analysis of Objective v Subjective Indices of Distress' (1988) 33 Vill L Rev 781 at 817. 73 See Evatt J in Chester v Waverley Corporation (1939) 62 CLR 1 at 43; (1939) 45 ALR 294: 'The risk of too wide an extension of liability in cases where proof is beset with special difficulties.' 74 See, eg, Payton v Abbott Labs 437 NE 2d 171 (Mass, 1982); Reilly v United States of America 547 A 2d 894 (RI, 1988). 75 See, eg, Torres v State 228 NYS 2d 1005 (1962); cf Edmonds v Armstrong Funeral Home Ltd [1931] 1 DLR 676 (Alb AD). 76 [1901] 2 KB 669 at 681; [1900-3] All ER Rep 353, cited with approval in, eg, Hambrook v Stokes Bros [1925] 1 KB 141 at 158; [1924] All ER Rep 110; Owens v Liverpool Corporation [1939] 1 KB 394 at 400; [1938] 4 All ER 727; McLoughlin v O'Brian [1983] AC 410 at 425; [1982] 2 All ER 298; Dillon v Legg 441 P 2d 912 at 917-18 (Cal, 1968); D'Ambra v United States of America 338 A 2d 524 at 530 (RI, 1975); Barnhill v Davis 300 NW 2d 104 at 106 (Iowa, 1981); cf Payton v Abbott Labs 437 NE 2d 171 at 180 (Mass, 1982); Gates v Richardson 719 P 2d 193 at 198 (Wyo, 1986). 77 Toronto Railway Company v Toms (1911) 44 SCR 268 at 276 (SCC); Dillon v Legg 441 P 2d 912 at 918 (Cal, 1968); Rodrigues v State of Hawaii 472 P 2d 509 at 519 (1970); Payton v Abbott Labs 437 NE 2d 171 at 193 (Mass, 1982).

78 Dziokonski v Babineau 380 NE 2d 1295 at 1301 (Mass, 1978); Barnhill v Davis 300 NW 2d 104 at 106 (Iowa, 1981); Chappetta v Bowman Transportation 415 So 2d 1019 at 1022-3 (La, 1982). 79 Niederman v Brodsky 261 A 2d 84 at 88 (Pa, 1970); see also Sinn v Burd 404 A 2d 672 at 679 (Pa, 1979); Schultz v Barberton Glass Co 447 NE 2d 109 at 111 (Ohio, 1983). Lord Wilberforce in McLoughlin v O'Brian [1983] AC 410 at 421 expressed a similar view; [1982] 2 All ER 298: 'Fraudulent claims can be contained by the courts, who, also, can cope with evidentiary difficulties.' See also van Soest v Residual Health Management Unit [2000] 1 NZLR 179 (CA) at 205 per Thomas J (dissenting). Cf the more reserved attitude expressed by Hodgson JA (with whom Handley JA and Ipp AJA agreed) in Gifford v Strang Patrick Stevedoring Pty Ltd [2001] NSWCA 175 (14 June 2001, unreported, BC200103067) at [45]. 80 Coates v Government Insurance Office (NSW) (1995) 36 NSWLR 1 at 11; 21 MVR 169.

81 See, eg, Dillon v Legg 441 P 2d 912 at 918 (Cal, 1968); Schultz v Barberton Glass Co 447 NE 2d 109 at 112 (Ohio, 1983); Reilly v United States of America 547 A 2d 894 at 900 (RI, 1988). See also Bell, above n 38, at 351. 82 Law Commission, op cit n 24, para 6.6; White v Chief Constable of South Yorkshire Police [1999] 2 AC 455 at 493 per Lord Steyn; [1999] 1 All ER 1. 83 See also Hancock v Wallace (2001) Aust Torts Reps 81-616 (Qld CA) at [101] per Byrne J.

84 Cf, eg, Lord Bridge in McLoughlin v O'Brian [1983] AC 410 at 443; [1982] 2 All ER 298. See also Thomas J (dissenting) in van Soest v Residual Health Management Unit [2000] 1 NZLR 179 (CA) at 205. 85 Lynch v Knight (1861) 9 HLC 577; 11 ER 854 at 863. See also S Ingber, 'Rethinking Intangible Injuries: A Focus on Remedy' (1985) 73 Cal L Rev 772 at 778. 86 87 See Pearson, above n 43. See, eg, Mitchell v Rochester Rail Company 45 NE 354 at 355 (1896).

88 Where such a claim is still permitted: see, eg, Law Reform (Husband and Wife) Act 1995 (Qld) s 13; Wrongs Act 1936 (SA) s 33. 89 See, eg, van Soest v Residual Health Management Unit [2000] 1 NZLR 179 (CA) at 206 per Thomas J (dissenting). See also Magruder, above n 38, at 1033; Bell, above n 38, at 355, 394-5; cf Pearson, above n 38, at 423. 90 Government Insurance Office (NSW) v Maroulis (1990) 10 MVR 576; Carlin v Helical Bar Ltd (1970) 9 KIR 154; Brice v Brown [1984] 1 All ER 997. See also N J Mullany and P R Handford, Tort Liability for Psychiatric Damage, Law Book Co, Sydney, 1993, pp 263-82. 91 92 93 Bradford Kendall Foundries Pty Ltd v Rider (NSW CA, 4 June 1987, unreported). See Mullany and Handford, above n 90, p 276. Cf ibid, p 277.

94 Donjerkovic v Adelaide Steam Ship Industries Pty Ltd (1980) 24 SASR 347 at 355; Fazlic v Milingimbi Community Inc (1982) 150 CLR 345; 38 ALR 424; Karabotsos v Plastex Industries Pty Ltd [1981] VR 675.

95 See Wilson v Peisley (1975) 7 ALR 571; Malec v JC Hutton Pty Ltd (1990) 169 CLR 638; 92 ALR 545. For other cases involving psychiatric injury, see Donjerkovic v Adelaide Steam Ship Industries Pty Ltd (1980) 24 SASR 347 at 355; Harrison v Suncorp Insurance and Finance (Qld SC, Lee J, 12 December 1995, unreported, BC9502176); FAI General Insurance Co Ltd v Curtin (1997) 25 MVR 289 (Qld CA) at 293 per Macrossan CJ. 96 Parker, above n 18, at 321.

97 B A Singer, 'Psychological and Forensic Considerations in the Treatment of Post-Traumatic Stress Disorder' (1983) 1 Amer J of Forensic Psych 3 at 9; B Green et al, 'Buffalo Creek Survivors in the Second Decade: Stability of Stress Symptoms' (1990) 60 Amer J of Authopsych 43 at 50-1. 98 R Pitman et al, 'Legal Issues in Posttraumatic Stress Disorder' in van der Kolk, McFarlane and Weisaeth (Eds), above n 18, p 382. For a case citing compensation neurosis as a reason to limit liability see, eg, White v Chief Constable of South Yorkshire Police [1999] 2 AC 455 at 494; [1999] 1 All ER 1. 99 See also H Teff, 'Liability for Negligently Inflicted Psychiatric Harm: Justifications and Boundaries' (1998) 57 Cambridge LJ 91 at 100. 100 Hancock v Nominal Defendant (2001) Aust Torts Reps 81-616 at [101] per Byrne J.

101 In the psychiatric injury field, see, eg, Chester v Waverley Corporation (1939) 62 CLR 1 at 7 per Latham CJ, 11 per Rich J; (1939) 45 ALR 294; Currie v Wardrop 1927 SC 538 at 546, 550; Heighington v The Queen in Right of Ontario (1987) 41 DLR (4th) 208 at 224; Johnson v Jamaica Hospital 467 NE 2d 502 at 504 (NY, 1984); White v Chief Constable of South Yorkshire Police [1999] 2 AC 455 at 494 per Lord Steyn; [1999] 1 All ER 1. 102 Hambrook v Stokes Bros [1925] 1 KB 141 at 158; [1924] All ER Rep 110; McLoughlin v O'Brian [1983] AC 410 at 421 per Lord Wilberforce, 425 per Lord Edmund-Davies; [1982] 2 All ER 298; Toms v McConnell 207 NE 2d 140 at 145 (Mich, 1973). J G Fleming, The Law of Torts, 9th ed, LBC, Sydney, 1998, p 137 described recourse to the floodgates argument as 'vacuous', while in van Soest v Residual Health Management Unit [2000] 1 NZLR 179 (CA) at 203, Thomas J (dissenting) said of floodgates arguments that: 'Judges have tired of the point. Time and time again it has proved unfounded.' 103 See also Attia v British Gas Plc [1998] QB 304 at 320 per Bingham LJ; [1987] 3 All ER 455; Gifford v Strang Patrick Stevedoring Pty Ltd [2001] NSWCA 175 (14 June 2001, unreported, BC200103067) at [45]. 104 105 [1992] 1 AC 310 at 383; [1991] 3 All ER 88. Ravenscroft v Rederiaktieblaget Transatlantic [1991] 3 All ER 73 at 76 per Ward J.

106 McLoughlin v O'Brian [1983] AC 410 at 433 per Lord Bridge; [1982] 2 All ER 298; see also Mount Isa Mines Ltd v Pusey (1971) 125 CLR 383 at 403 per Windeyer J; [1971] ALR 253; Hevican v Ruane [1991] 3 All ER 65 at 68. 107 For instance, Kennedy LJ in Dulieu v White & Sons [1901] 2 KB 669 at 678 thought that floodgates concerns were not applicable because compensation was being awarded for physical injury, not mental hurt; [1900-3] All ER Rep 353. 108 Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 at 483 per Lord Reid; [1963] 2 All ER 575. 109 This was recognised by the fact that in the United Kingdom the legislature saw the need to enact the Nuclear Installations Act 1965 (UK), which limits the liability of nuclear operations to 5,000,000. Although

there have been suggestions that liability from disasters and products liability be subject to limitation there is no such legislation in Australia as yet: see Fleming, above n 102, pp 240-1. 110 NSW: see Law Commission, op cit n 24, para 6.14; California and Hawaii: see Corso v Merrill 406 A 2d 300 at 306 (NH, 1979); Campbell v Animal Quarantine Station 632 P 2d 1066 at 1071 (Haw, 1981); Ochoa v Superior Court of Santa Clara County 703 P 2d 1 at 26 (Cal, 1985). See also Bell, above n 38, at 366. 111 Hancock v Nominal Defendant (2001) Aust Torts Reps 81-616 at [85].

112 See Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (Reg) (1997) 188 CLR 241 at 284 per McHugh J; 142 ALR 750. See also Pearson, above n 43, at 506. 113 Niederman v Brodsky 261 A 2d 84 at 89 (Pa, 1970) citing from W Prosser, 'Intentional Infliction of Mental Suffering: A New Tort' (1939) 37 Mich L Rev 874; see also Gates v Richardson 719 P 2d 193 at 197 (Wyo, 1986); Johnson v Ruark Obstetrics and Gynaecology Associates 395 SE 2d 85 at 98 (NC, 1990); see also Marlowe, above n 72, at 819. 114 Haley v London Electricity Board [1964] 2 QB 121 at 129; Chester v Waverley Corporation (1939) 62 CLR 1 at 11 per Rich J; (1939) 45 ALR 294. 115 Symmons, above n 4, at 528.

116 Hill v Chief Constable of West Yorkshire [1989] AC 53 at 63; [1988] 2 All ER 238; Rondel v Worsley [1967] 1 QB 443 at 470-1 per Lawton J. In the context of the liability of barristers, Lord Denning MR in Rondel v Worsley [1967] 1 QB 443 at 501-2 referred to the prospect of liability causing a barrister to 'forever be looking over his shoulder to forestall liability'. Cf Lord Reid in the House of Lords [1969] 1 AC 191 at 228; [1967] 3 All ER 993. 117 See Hill v Chief Constable of West Yorkshire [1989] AC 53 at 63; [1988] 2 All ER 238 (police); Leach v Chief Constable of Gloucestershire Constabulary [1999] 1 WLR 1421; [1999] 1 All ER 215 at 235 (police); Strachan v John F Kennedy Memorial Hospital 507 A 2d 718 at 727 (NJ, 1986) (doctors); Elguzouli-Daf v Commissioner of Police of the Metropolis [1995] QB 335 (CA) at 349; [1995] 1 All ER 833 (Crown prosecutors); Symmons, above n 4, at 528; P C Heerey, 'Looking over the Advocate's Shoulder: An Australian View of Rondel v Worsley' (1968) 42 ALJ 3. 118 Hillman v Black (1996) 67 SASR 490; CLT v Connon (2000) 77 SASR 449, appeal dismissed sub nom Sullivan v Moody (2001) 183 ALR 404; M v Newham London Borough Council [1995] 2 AC 633 at 674-5 per Staughton LJ, 681-2 per Peter Gibson LJ; cf Bingham MR at 662-3, who preferred to treat the problem as one of whether reasonable care had been exercised in the circumstances; [1994] 4 All ER 602. 119 See, eg, Johnson v Ruark Obstetrics and Gynaecology Associates 395 SE 2d 85 at 102 (NC, 1990) per Meyer J dissenting (reduction in doctors prepared to practise obstetrics). 120 121 Loffo v Giang (1990) 13 MVR 59 (NSW CA) per Meagher JA. Cf Guay v Sun Publishing Co [1953] 4 DLR 577.

122 Liability for psychiatric injury will not in all cases involve a question of duty of care. Other aspects of the negligence action may have predominance in some cases. For example, claims based on stress in the workplace may turn on issues such as breach and/or causation in fact: see, eg, Zammit v Queensland Corrective Services Commission [1998] QSC 169 (Muir J, 1 September 1998, unreported, BC9804330); Queensland Corrective Services Commission v Gallagher [1998] QCA 426 (18 December 1998, unreported, BC9806819); Russo v Carpentaria Transport Pty Ltd [2000] QSC 83 (Williams J, 17 April 2000, unreported, BC200001900).

123 Cf the approach taken in Dorset Yacht Co v Home Office [1970] AC 1004 at 1035 per Lord Morris, 1053 per Lord Pearson (liability for damage caused by escapees); [1969] 2 All ER 564; Cassidy v Ministry of Health [1951] 2 KB 343; [1951] 1 All ER 574; Roe v Ministry of Health [1954] 2 QB 66; [1954] 2 All ER 131 (liability of hospitals for physical injury). 124 125 [1953] 4 DLR 577. Ibid, at 613 per Cartwright J with Rinfret CJC concurring.

126 See also D Butler, 'Media Negligence in the Information Age: a New Frontier for a New Century?' (2000) 8 TLJ 159 at 176. 127 128 H W Smith, 'Relation of Emotions to Injury and Stimulus' (1944) 30 Virg L Rev 193 at 228-34, 255. Pearson, above n 38, at 420. See also Magruder, above n 38, at 1035.

129 Cf Spartan Steel & Alloys Ltd v Martin & Co (Contractors) Ltd [1973] QB 27 at 38-9 per Lord Denning MR. 130 See, eg, Corso v Merrill 406 A 2d 300 at 309 (NH, 1979) per Grimes J; White v Chief Constable of South Yorkshire Police [1999] 2 AC 455 at 494 per Lord Steyn; [1999] 1 All ER 1. 131 132 133 Bell, above n 38, at 409. See McHugh J in Perre v Apand Pty Ltd (1999) 198 CLR 180 at 221-2; 164 ALR 606. Stapleton, above n 35, p 66.

134 W P Keeton (Ed), Prosser and Keeton on the Law of Torts, 5th ed, West Publishing Co, St Paul, 1984, p 287; Fleming, above n 102, p 209; see also Gates v Richardson 719 P 2d 193 at 198 (Wyo, 1986). 135 See the oft-cited dictum (in relation to economic loss) of Cardozo CJ in Ultramares Corp v Touche 174 NE 441 at 444 (NY, 1931), adopted in Bryan v Maloney (1995) 182 CLR 609 at 618-19; 128 ALR 163. 136 137 Stapleton, above n 35, p 76. Perre v Apand Pty Ltd (1999) 198 CLR 180 at 221; 164 ALR 606. See also Hayne J at CLR 303.

138 This phenomenon is known as 'trauma counter transference' or 'vicarious traumatisation': Herman, above n 18, p 140; S Turner, A C McFarlane and B A van der Kolk, 'The Therapeutic Environment and New Explorations in the Treatment of Posttraumatic Stress Disorder' in van der Kolk, McFarlane and Weisaeth (Eds), above n 18, pp 552-5. 139 Cf J Stapleton, 'Duty of Care and Economic Loss: A Wider Agenda' (1991) 107 LQR 249 at 255.

140 See, eg, Amadio v Levin 501 A 2d 1085 at 1101 (Pa, 1985) per Nix CJ (dissenting), approved by the majority of the Supreme Court of Pennsylvania in Mazzagatti v Everingham 516 A 2d 672 at 678 (1986); James v Lieb 735 NW 2d 109 at 117-18 (Neb, 1985) per Caporale, Boslaugh and Hastings JJ (dissenting). 141 See, eg, Mazzagatti v Everingham 516 A 2d 672 at 682 (Pa, 1986) per Larsen J (dissenting).

142 Cf Thing v La Chusa 771 P 2d 814 (1989) where the California Supreme Court took account of an amici curiae brief instructed by the National Association of Independent Insurers, the Association of California Insurance Companies and the American Insurance Association. This still did not sway all judges against extending liability: see Broussard J at 843 and Mosk J at 839 (both dissenting). It might be suggested that a difficulty

with acting upon such evidence is the questionable capacity of the injured individual to challenge the evidence such bodies choose to put forward. 143 144 Mazzagatti v Everingham 516 A 2d 672 at 683 (1986) per Larsen J (dissenting). 441 P 2d 912 (1968).

145 Bell, above n 38, at 366; cf Law Commission, op cit n 24, paras 1.12-1.13 where it was estimated that the commission's proposed expansion in liability would result in a 2-5% increase in motor insurance premiums. 146 [1983] AC 410 at 421; [1982] 2 All ER 298.

147 Ibid at 441; cf Lord Hoffmann in White v Chief Constable of South Yorkshire Police [1999] 2 AC 455 at 510; [1999] 1 All ER 1. See also Corso v Merrill 406 A 2d 300 at 305 (NH, 1979) (referring to the Californian experience); Ochoa v Superior Court of Santa Clara County 703 P 2d 1 at 26 (Cal, 1985) (referring to the Hawaiian experience). Cf the lack of such confidence expressed by Staughton LJ in M v Newham London Borough Council [1995] 2 AC 633 at 675; [1994] 4 All ER 602; White v Chief Constable of South Yorkshire Police [1999] 2 AC 455 at 496 per Lord Steyn; [1999] 1 All ER 1. Assessments of general damages for psychiatric injury have been relatively modest, generally in the range of $15,000-$60,000: see the cases identified in Mullany and Handford, above n 90, pp 264-7; Zammit v Queensland Corrective Services Commission [1998] QSC 169 (Muir J, 1 September 1998, unreported, BC9804330) ($20,000 general damages awarded to prison officer); FAI General Insurance Co Ltd v Curtin (1997) 25 MVR 289 (Qld CA) ($25,000 damages for pain and suffering awarded to driver of broken-down vehicle struck by another vehicle); Curlile v Kilkivan Shire Council (Qld DC, 21 December 1995, unreported) ($45,000 general damages awarded for workplace bullying and harassment). Lately, however, there have been some awards in excess of this range: see, eg, Scrase v Jarvis [2000] 2 Qd R 92 (CA) ($80,000 and $65,000 general damages awarded to parents witnessing aftermath of vehicle running down their 10-year-old daughter); Road & Traffic Authority of NSW v Jelfs [2000] Aust Torts Reps 81-583 ($80,000 general damages awarded for husband's 'extreme and catastrophic' reaction to death of wife as the result of pulmonary embolism following a fall on defendant's premises); Sloss v NSW [1999] NSWSC 995 (Hidden J, 6 October 1999, unreported, BC9906412) ($70,000 general damages awarded to mother when son murdered in prison); Hunter Area Health Service v Marchlewski (2000) 51 NSWLR 268 (general damages of $180,000 and $200,000 awarded to a father and mother respectively, but aggravated damages not awarded, in a case where a hospital deliberately disregarded the wishes of parents to have a new born child resuscitated by ventilator even though it knew non-ventilator resuscitation would probably be ineffective). The size of awards may be more of a problem in the United States. In some cases the awards have been modest: for example, contrast D'Ambra v United States of America 338 A 2d 524 (1975) ($10,000); Krouse v Graham 562 P 2d 1022 (1977) ($52,000) with Dlosovic v City of New York 541 NYS 2d 685 (1989) (jury award of $25 million reduced to $2.5 million). 148 See D Butler, 'Mass Media Liability for Nervous Shock: A Novel Test for Proximity' (1995) 3 TLJ 75 at 93; Butler, above n 126, at 163. 149 Sullivan v Moody (2001) 183 ALR 404; South Pacific Manufacturing Co Ltd v New Zealand Security Consultants & Investigations Ltd [1992] 2 NZLR 282 at 317; Fleming, above n 102, p 140. 150 Spring v Guardian Assurance Plc [1995] 2 AC 296 at 324 per Lord Goff, 334 per Lord Slynn, 350 per Lord Woolf; see also Butler, above n 126. 151 See G Calabresi, The Costs of Accidents: A Legal and Economic Analysis, Yale University Press, New Haven, 1970; and the writings listed in I Englard, 'The System Builders: A Critical Appraisal of Modern American Tort Theory' (1980) 9 JLS 27 at 33 n 22. 152 153 Bell, above n 38, at 347. Pearson, above n 38, at 417; cf Bell, above n 43, at 438.

154

Englard, above n 151, at 43; Fleming, above n 102, p 12; cf Bell, above n 43, at 441.

155 See, eg, Staughton LJ in M v Newham London Borough Council [1995] 2 AC 633 at 675; [1994] 4 All ER 602. Cf, however, the accommodation of insurance by some economic theorists: see, eg, L Kaplow and S Shavell, 'Fairness Versus Welfare' (2001) 114 Harv L Rev 961. 156 Such as the ability of a business to factor the risk of liability into the price of its goods or services or of a government to factor the risk into its rates or taxes: see also J A Jolowicz, 'Liability for Accidents' (1968) 26 Cambridge LJ 50 at 58; Keeton, above n 134, p 287; cf C R Symmons, 'The Function and Effect of Public Policy in Contemporary Common Law' (1977) 51 ALJ 185 at 193. 157 See, eg, Stephen J in Caltex Oil (Australia) Pty Ltd v The Dredge 'Willemstad' (1976) 136 CLR 529 at 580-1; 11 ALR 227; McHugh J in Perre v Apand Pty Ltd (1999) 198 CLR 180 at 230; 164 ALR 606. 158 (1984) 155 CLR 549; 54 ALR 417, although cf the comments of Murphy J regarding the national health scheme and social welfare. 159 160 [1983] 1 AC 410; [1982] 2 All ER 298. [1992] 1 AC 310; [1991] 4 All ER 907.

161 [1996] AC 155; [1995] 2 All ER 736. Cf White v Chief Constable of South Yorkshire Police [1999] 2 AC 455; [1999] 1 All ER 1 where Lords Steyn and Hoffmann appear to have been influenced by arguments that police were 'better off' than other claimants through pension schemes and other benefits. 162 See, eg, D'Ambra v United States of America 338 A 2d 524 at 530 (1975); see also Bell, above n 38, at 376, 234. The possibility of insurance has been used to meet 'dollars and cents' concerns of imposing unbearable liability to the ruin of the defendant: see, eg, Gates v Richardson 719 P 2d 193 at 197 (Wyo, 1986); James v Lieb 735 NW 2d 109 at 117 (Neb, 1985). 163 [1999] 2 AC 455; [1999] 1 All ER 1.

164 See, eg, Mount Isa Mines v Pusey (1971) 125 CLR 383; [1971] ALR 253; New South Wales v Seedsman [2000] NSWCA 119 (12 May 2000, unreported, BC200002477). 165 Cf McHugh, above n 9, at 49: 'There is no scale upon which the various consequences can be weighed.' 166 Bell, above n 9, p 70.

167 See, eg, Barnes v Commonwealth (1937) 37 SR (NSW) 511; Morgan v Tame (2000) 49 NSWLR 21; (1999) 31 MVR 155. 168 See, eg, Jaensch v Coffey (1984) 155 CLR 549; 54 ALR 417.

169 This may involve revisiting or refining the 'recognisable psychiatric illness' definition of the damage regarded as worthy of compensation to ensure that compensation is reserved for such conditions as are accompanied by more serious effects: see Butler, above n 51. Cf van Soest v Residual Health Management Unit [2000] 1 NZLR 179 (CA) at 206, where Thomas J (dissenting) recently suggested the formula 'mental illness plainly outside the range of ordinary human experience'. However, such a test was not supported by the majority: ibid, at 200. 170 Law Commission, op cit n 24, para 1.1.