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Log of Correspondence Second Business Plan Detailed Summary Second Business Plan Summary of Annexures Second Business Plan Defined Terms Second Business Plan No Compulsory Third Party ("CTP") Green Slip insurance coverage or equivalent for cyclists in Australia
Ride Organisers need to explicitly “Warn” cyclists that they invite to a bicycle ride of the high cost of litigation due to negligence if they are uninsured for their negligence whilst riding a bicycle, in order for Ride Organisers to avoid being liable for damages under legislation enacted in 2002 ¨ The financial safety net that a Green Slip provides doesn’t extend to cyclists ¨ The law Ride Organisers and Community Bicycle Groups to “Warn” their invitees to hold third party public liability insurance cover
1. Explanation of the merit of CTP Green Slip for motor vehicles which does not extend to covering negligence by a user of another means of transport, namely a bicycle Motor vehicle owners, operators and road users should be familiar with the CTP Green Slip procedure, integral to registering a vehicle, as well as the insurance coverage a Green Slip provides in the event of an accident. The cost that a vehicle owner pays for a Green Slip policy is paid into a revenue pool which is accumulated within a larger pool of revenue - managed by insurance companies licensed to sell CTP insurance. Those insurers settle CTP claims made under those policies. CTP insurance protects vehicle owners and drivers when using their vehicle from legal liability for personal injury to any other parties in the event of a personal injury claim. CTP insurance does not cover damage to any property or other vehicles: Without CTP coverage, vehicle owners and operators - (i) could be exposed to litigation, incurring significant legal costs coupled with the prospect of a court order to pay an injured third party a very large settlement – potentially millions of dollars – in the event that the vehicle owner or operator is found to be negligent and legally liable in the circumstances of the accident; (ii) may not be able to afford to defend such actions brought against them; and (iii) may face serious financial hardship or they may be bankrupted by the consequences of a court award made against them. In the event of an injury claim lodged by a third party, the negligent vehicle owner's CTP insurer will - (a) conduct the running of the claim, (b) carry out any investigations that may be required; and, MOST IMPORTANTLY, (c) fund from the CTP “pool” any litigation, award or settlement that may be made or agreed. The merit of a national motor CTP system is patent. 2. CTP Green Slip does not cover a vehicle owner whilst riding his bicycle However, there is no such similar “pool”, or system of coverage for a vehicle owner whilst riding his bicycle or a or system of coverage for cyclists in the event that a cyclist causes, or is held fully or partially liable for causing, an accident which results in a serious injury to a third party. Conversely, if you, as a cyclist, is injured as a result of the negligence of another cyclist then you may need to pursue the liable cyclist “in tort” in the knowledge that he or she may be impecunious and without any insurance coverage in place. Unlike the CTP Green Slip for motor vehicles which is collectively recognised for its manifest merit, there is no statutory “pool” of funds or regulated system of coverage in place to respond to a cyclist’s negligence. The same common law legal system applies equally to motorists and cyclists. However, the carnage caused by vehicle accidents and its frequency dramatically outweighs the accidents caused by cyclists. Consequently statutory authorities have not seen the financial need to put in place a voluntary or compulsory form of cover for cyclists. In this litigious era, a cyclist could be sued by third parties in respect of injuries or other damage even if the cyclist is not directly negligent or responsible for the accident. Parties joined in litigation could be participants, organisers, or sponsors of an event; dragged into expensive litigation even without direct involvement in the immediate cause of the accident. Responsibility for obligations and costs in (i) and (ii) above may not be limited to the negligent cyclist. 3. Insurance companies provide products that may be relied upon by cyclists to alleviate this exposure Some private Home Contents covers provide some Public Liability extension – typically for $10mil or more – to cover the residents of the insured property for public liability exposures that they may face both at the residence and whilst away from the insured property. However, cyclists which hold such home insurance need to read and understand those domestic covers very carefully because they would be subject to the vagaries of the exclusions and limitations within those policies – which could easily exclude liabilities in respect or certain sporting events, racing of any type, dangerous activities etc. 4. Bicycle NSW membership includes insurance coverage A more reliable form of dedicated coverage is available via membership of Bicycle NSW, Bicycle Victoria etc. which offers $20m circa cumulative public liability, as well as personal accident insurance which, in the case of Bicycle NSW, will materially support a member for up to 104 weeks if the member is injured whilst cycling and has no other form of income or remuneration. If all regular cyclists held explicit third party cover then all Bicycle User Group cyclists could ride comfortably in the knowledge that should an injury occur then Bicycle User Group cyclists would not be exposed to material financial loss. 5. In 2002 the Civil Liability Act was enacted which, amongst other things, aligned responsibility onto the 'Invitee(s)' who engages in a Recreational Activity, provided the Inviter had warned the Invitee of the Three Types Of RisksClause 5M(1) “No duty of care for Recreational Activity where Risk Warning” of the Civil Liability Amendment (Personal Responsibility) Act 2002 No 92 stipulates that a person (Ride Organiser) does not owe a duty of care to another person (injured Participant), who engages in a Recreational Activity, to take care in respect of a risk of the activity if the risk was the subject of a Risk Warning to those persons. Contrasting, Clause 5L “No liability for harm suffered from Obvious Risks of Dangerous Recreational Activities” stipulates that a person (Ride Organiser) is not liable in negligence for harm suffered by another person (injured Participant) as a result of the materialisation of an obvious risk of a Dangerous Recreational Activity engaged in by the plaintiff. Aforementioned Clause 5M requires an organiser of a Recreational Activity to warn members of the public whom the organiser invites to participate “in respect of a risk of the activity”. Whereas, Clause 5L does not require an organiser of a Dangerous Recreational Activity to warn members of the public whom the organiser invites to participate “in respect of a risk of the activity”. If an “injured Participant” contended that he/she did not believe the bicycle ride that he/she was invited to participate in to be a Dangerous Recreational Activity, scope seems to exist for the said “injured Participant” to rely upon aforementioned Clause 5M to pass on liability to the Ride Organiser, or the associated Bicycle User Group or Bicycle NSW. 6. Obligation on Ride Leaders and Bicycle User Groups to warn cyclists that they invite on bicycle rides of the potential high cost of litigation and merit of holding third party insurance Accordingly, Ride Leaders and Bicycle User Groups in NSW seem required under the above legislation to provide overt Risk Warnings of any “risk of the activity” to members and non-members whom they invite, hereinafter called “Ride Participants”, who participate in their Bicycle User Group’s rides. Similar legislation seems to apply since 2002 in other states. A Ride Participant being ordered to pay material damages if that Ride Participant is negligent and such negligence causes a third party to be seriously injured appears to be “a risk of the activity” which is an Obvious Risk. The executive of each Bicycle User Group seems obliged under the above legislation to overtly inform its Ride Participants of the possibly material financial impost if – (a) their Ride Participants cycle on public roads with other cyclists and motorists; (b) a Ride Participant is negligent and seriously injures a third party; and (c) that negligent Ride Participant does not have public liability cover. Failure to warn Ride Participants could evidence a negligent Ride Participant seek a right of contribution between tortfeasors from the Ride Leader or Bicycle User Group by the negligent cyclist arguing that he/she was not informed of the financial risk of not holding third party insurance. Persons who invite members of the public to participate in a Recreational Activity which involves dangers appear to have to provide explicit evidence through a Risk Warning in order to discharge their duty of care, pursuant to Clause 5M(1) {for NSW}, because a Ride Participant might successfully argue to a court that he/she did not know that her CTP Green slip coverage did not cover whilst riding a bicycle vehicle and that he/she required explicit third party cover for activities which include cycling. Some references: http://info.lawaccess.nsw.gov.au/lawaccess/lawaccess.nsf/pages/guide_accidents http://www.deacons.com.au/UploadedContent/NewsPDFs/News473.pdf http://www.oic.qld.gov.au/indexed/decisions/html/%5B1997_L0020%5D_%5BHobden%5D_%5B25_06_1998%5D.htm http://www.aph.gov.au/Senate/committee/rrat_ctte/oil_supply/submissions/sub136.pdf |
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