Contents
The application by the High Court of a ‘per victim’ approach in 'Ocean Fisheries Limited v Maritime New Zealand'1 may expose insurers to larger emotional harm awards. We look at the decision, and its possible implications.
Context
Ocean Fisheries appealed a District Court award of $505,000 of emotional harm reparation to nineteen immediate family members of three crew members who died when a fishing trawler they were working on sank.
The award comprised payments of:
- $40,000 to each of the 11 partners and children
- $10,000 to each of the three surviving parents, and two siblings who made victim impact statements, and
- $5,000 to the three siblings who did not make a victim impact statement.
The relevant grounds of the appeal were that:
- the Judge should have followed established practice and calculated the reparation to be awarded to each family and then apportioned the money among the family members – which would have produced a total of $270,000 to $300,000 (compared to the $505,000 which was awarded), and
- a deduction should have been made for the $60,000 Ocean Fisheries had already paid the families.
High Court decision
The High Court dismissed the appeal. The key findings were that:
- the particular circumstances of a case may require that the reparation be calculated on an individual rather than a ‘per family’ basis, and that this will remain appropriate even if it results in a total award which is in excess of the awards handed down in comparable cases, and
- the failure to deduct the $60,000 already paid, while not “normal”, was not an error. The District Court had regarded these payments as being for the purpose of financial assistance, which meant they could have been offset against the consequential loss award. But, while it had not done this, it had taken them into account through a 15% discount to the fine for reparation paid and remorse; meaning the overall penalty was not “manifestly excessive”.
Implications for insurers
Our assessment is that the High Court’s decision has the potential to lead to a significant increase in reparation awards. For example, a family with a surviving spouse and four children could receive $200,000 before parents and any siblings are factored in.
Also, the purpose of any early payment (amends for emotional harm or consequential loss) and careful identification of the actual recipient is required.
In our view, the High Court’s conclusion that the $60,000 paid in advance was allowed for in the 15% discount from fine does not reflect other High Court guidance (such as Stumpmaster) which emphasises the importance of timely payments to surviving family members. While this was acknowledged as not “normal”, and we consider this level of discount would have been allowed anyway, clarity around payments is clearly important to avoid this type of outcome.
It is concerning that the existence of insurance appears to be seen as permitting or encouraging increasingly high levels of reparation. The growing gap between health and safety sentencing and other criminal sentencing, including ever-more generous emotional harm reparation awards, is a trend which will likely continue. There has been significant growth in this area over recent times and it may continue to gather speed. It is an aspect of the law which, in our opinion, requires particular attention from insurers and their representatives
1 Ocean Fisheries Limited v Maritime New Zealand [2021] NZHC 2083, released 13 August 2021
