Professional Liability Guide
PROFESSIONAL LIABILITY GUIDE
In Strong v Woolworths Ltd , the plurality of the High Court observed:
‘Whether negligent conduct resulting in a material increase in risk may be said to admit of proof of causation in accordance with established principles under the common law of Australia has not been considered by this Court. Negligent conduct that materially contributes to the plaintiff’s harm but which cannot be shown to have been a necessary condition of its occurrence may, in accordance with established principles, be accepted as establishing factual causation, subject to the normative considerations to which s 5D(2) requires that attention be directed.’ 97 In Wallace , a medical practitioner failed to exercise reasonable care to warn a patient of one or more material risks inherent in a proposed treatment. To establish factual causation, a patient would need to prove, on the balance of probabilities, that they had sustained, as a result of choosing to undergo the medical treatment, a physical injury they would not have had if warned of all material risks. 98 This duty has been applied to other treatment providers, such as beauty therapists. 99 The duty to warn a client about the material risks of expenditure has recently been imposed on financial advisers in some circumstances in light of the Court of Appeal’s decision in HAP2 Pty Ltd v Bankier . 100 In that case, the plaintiff received $2 million in damages from injuries sustained in a car accident and engaged a financial adviser to provide advice on investing part of the award. Importantly, HAP2’s adviser had acted for the plaintiff’s father, who died in the car accident, and was aware of the need for the award to support the plaintiff in the future. The Court, at first instance, found that the financial adviser failed to warn the plaintiff about the impact that her expenditure would have on her ability to fund her future medical expenses. The Court of Appeal upheld the trial judge’s decision, observing that the financial adviser was to participate in an ‘ ongoing business relationship … to ensure [the plaintiff’s] investment strategy continues to meet [her needs]’ and not merely provide initial advice and portfolio review. The duty was not to oversee a client’s spending but to ‘ warn a client about the imminent dangers that would be caused by the client’s proposed interference in the adviser’s investment plan by the withdrawal of capital in amounts that the advisor knows will be significant in their effect’ . 101 This was also considered by the High Court in Tabet v Gett , 102 where the plaintiff alleged that a delay by a doctor in diagnosing her brain tumour resulted in her losing the chance of avoiding brain damage. She was successful at first instance, 103 but the decision was reversed on appeal. 104 Her appeal to the High Court was unsuccessful, with the Court finding that the chance of a better medical outcome amounted to a mere possibility, as opposed to a probability as required by the legislation. This principle has been recently applied in Williams v Fraser, 105 where the Court restated that the chance of avoiding current problems with conservative management is not sufficient to amount to a breach of duty. In Jamieson v Westpac Banking Corporation , 106 the primary judge (upheld on appeal to the Queensland Court of Appeal 107 ) said that in a ‘ no transaction’ case against a financial advisor over a failed investment, the question of factual causation required consideration of whether the plaintiff would not have entered into the subject investment had the found breaches of duty not occurred. 108 Chapter 4 has more to say about ‘no transaction’ cases. 97 (2012) 246 CLR 182 [194]. 98 Wallace v Kam (2013) 250 CLR 375, 383. 99 Jiang v BCDS International P/L t/as Serendipity Miss Beauty ACN 603 133 911 [2019] NSWDC 578. 100 (2020) 93 MVR 256. 101 Ibid 275. 102 (2010) 240 CLR 537.
103 Tabet v Mansour [2007] NSWSC 36. 104 Gett v Tabet (2009) 254 ALR 504. 105 [2021] NSWSC 416 [224]. 106 (2014) 283 FLR 286. 107 Westpac Banking Corporation v Jamieson [2016] 1 Qd R 495. 108 Jamieson v Westpac Banking Corporation (2014) 283 FLR 286 [113].
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