GAS CRISIS - TO THE LAW
WE GO
October 1998 |
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What happened
On Friday September 25th there was a massive explosion at Esso's Longford
gas plant in rural Victoria, sending rumblings through the normally peaceful Sale
countryside and the threat of dire consequences to the Australian economy.
In the aftermath of the explosion two men were dead, eight injured, and serious
questions were being asked by Premier Jeff Kennett. Within days Victoria's entire gas
supply was shut down by the Victorian Energy Network Corporation, the State's gas
operator, tens of thousand of workers were left without pay or obliged to take annual
leave, and residents were forced to replace once essential hot showers with buckets of
warm water and a pioneer spirit.
All is clearly not well in the Garden State. But what legal recourse is available for
those Australians who have suffered as a result of the explosion?
Lawyers to the left of us…
If you can believe the early press releases, the writs will be flying thick and fast
before the last ashes have fallen on the once thriving Esso plant. Premier Kennett jumped
on the speculation of legal claims as fast as they were issued, accusing some law firms of
"bad taste" and acting in a "totally inappropriate" manner.
Nevertheless, at this stage the main claimants would seem to be businesses who have
suffered loss as a result of the explosion, though there was also plenty of talk about
consumer rights to compensation and future credits against gas bills. And one law firm
signalled action on behalf of unions representing workers who have been stood down as a
result of the explosion. This is the leading edge of the crisis, given Victoria's crucial
position as Australia's primary manufacturing State, immediately reflected in the stand
down of workers from major vehicle manufacture plants.
The legal possibilities
Let's indulge in a little speculation.
It is too early to anticipate the range or type of legal claims that will be made, or
even whom they will be aimed at. And since the Premier has announced a formal inquiry, it
is far too soon to hypothesise on the causes of the explosion.
But in general, what does the law have to say about these types of situations? We'll
look at three areas of law where consumers and businesses might look for claims - but we
emphasis that this discussion is more an attempt to help you fathom the legal jargon being
mined by journalists and not specific to any potential claims resulting from the
explosion. You can expect to see each of the following headings in the newspapers sooner
than later.
Class actions
A class action, often also called a "representative action", is a legal
procedure that allows a legal claim to be made by many people at the same time, as long as
they have sustained a similar type of harm as a result of a similar type of circumstance.
So, in the case of businesses that have suffered a loss because of an interruption of gas
supply, it would seem that this type of legal action is at least a possibility. But
despite the fact that class actions are often used in the United States, in Australia they
remain a fairly unusual practice, having really only been introduced into the Federal
Court in 1992.
Other Australian jurisdictions also have rules that allow these types of actions, and
the High Court has made it clear that these cases can now proceed even where "members
of the class" have separate contracts with the defendants. All that is required is
that they have the "same interest". However, it should not be considered that
this type of legal action is easy to get up, and expert legal advice has to be sought by
the "class".
Negligence
This is where most lawyers immediately turn their attention in cases where loss is
suffered as a result of an action of a business or corporation. For instance, let's say
you own a lawnmowing business and you fail to maintain your lawnmower. If, as a result of
this, the blade flies off the lawnmower and injures another person, you may have been
negligent.
Why? Because the law says you have a legal obligation to avoid causing harm in
situations where that harm is "foreseeable". It is foreseeable in this situation
because it is likely a loose mower blade could be dangerous, and a reasonable person would
have avoided that risk by properly maintaining the equipment. The compensation awarded by
courts is called "damages", which is the money which attempts to place the
injured person (or the person who has suffered a loss) in the same position they would
have been had the negligent act not taken place.
In the case of a public utility, the question of negligence would be decided under the
same principles, and any economic loss arising from alleged negligence might result in a
claim for damages as compensation.
Trade Practices Act
The Trade Practices Act ("TPA") is a Commonwealth law that applies to
contracts for the sale of goods or the supply of services. Amongst other things, the TPA
gives protection to consumers who purchase products from a manufacturer. However, in
practice the legislation has long surpassed a primary intention to protect consumers and
is often used as the vehicle for commercial claims in the Federal Court.
A person who suffers loss or damage as a result of conduct that contravenes the TPA may
recover damages from that person or anyone else involved in the contravention. As with
negligence, the damages attempt to place the person in the same situation they were in
before the breach.
Where to now?
This is not the time to ascribe blame or suggest specific legal remedies. No doubt
these issues will be dealt with by a formal inquiry and by lawyers acting on behalf of
those who have suffered a loss.
Despite the fact that the Premier has condemned the legal profession's apparent
willingness to solicit subscribers to class actions, it is certain that unions, businesses
and consumers will take legal action in whatever form is most appropriate. The claim,
launched by Melbourne firm Maurice Blackburn in the Federal Court, was reported in the
media as being brought to seek a determination as to whether the gas stoppage was caused
by "any negligent act or omission of the respondents or any of them including a
negligent failure properly to maintain, provide or ensure a safe and reliable supply of
gas". On behalf of our readers Lawspot will keep a legal eagle eye on the situation
as it unfolds.
Read this: The legal information contained above is
intended to be general information about the law. It is not a substitute for legal and
other professional advice. Lawscape Communications P/L does not accept responsibility for
loss to any person, who either acts or does not act because of this information.
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