Adversarialism and the binary nature of the legal system

We have to thank parliament for the rich opportunities to litigate and appeal ... The fostering of disputation is a political mission ... The fertile pastures of taxation, sentencing and injury compo ... GST issues surrounding an Italian mini ciabatta ... Digressions from Barry Lane 

Most of us know that the legal system is nothing if not binary.

Plaintiff/defendant, prosecutor/accused, dominant tenement/servient tenement, winner/loser, etc. 

Apart from the adversarial nature of legal proceedings, why is it so? as Professor Julius Sumner Miller might have asked. 

The answer lies in the very nature of parliamentary made law.

Federal Court judge, Richard Edmonds, identified the problem when he addressed a conference of the Tax Institute last month.

It was reported in The Age that HH said the GST needed a decoke and rebore, because after 11 years in operation the tax "failed to meet the generally accepted hallmarks of tax reform" and in many ways had made things worse. 

Edmonds said that it cost the Tax Office $1.36 to collect each $100 of GST whereas it cost an average of 94 cents to collect other taxes.

HH was also peeved that disputation over the GST was taking-up too much of the High Court's time.

Tax law, though, is no different from loads of other statutes where parliaments create classes of winners and losers.  As we know, if one has the choice of being a winner or a loser the result is a foregone conclusion.

Take, for the purposes of discussion, substantial areas of statute law like taxation, superannuation and injury compensation.

Edmonds: GST fails to meet hallmarks of tax reformDick Edmonds identified a couple of the multitudinous areas of dispute in one minor part of the tax law landscape, viz whether an Italian mini ciabatta is a biscuit, thus attracting GST, or bread, thus ducking it?

GST on ciabatta pales into insignificance when one considers the current stouche between the Tax Office and private equity players over CGT, but that's another story.

Doctors, lawyers and other worthy types who once sought relief for their "tax problems" by farming exemptions, deductions and subsidies that the tax law originally intended for primary producers, now harvest benefits and deductions provided by superannuation law.

According to Mike Steketee in The Oz: 

"The government spent an estimated $28 billion on tax concessions for superannuation last financial year.  Treasury projects that to rise to $42.4bn by 2014-15, an increase of more than 50 per cent in four years.  By then it will be spending more each year on tax breaks for super than on the age pension, even though the cost of the pension is rising as well." 

And ... 

"Self-managed funds have become the preferred vehicle for the well-off, accumulating sums of up to $100 million each. More than 200,000 hold assets of more than $1 million and 75,000 have between $2 million and $10 million. One reason for their expansion is that they provide additional benefits to the already generous tax concessions that apply to super. These include so-called capital gains tax evaporation, under which, once a person retires, no tax is payable on the capital gains accrued on investments, perhaps across a lifetime." 

That's one hell of a taxpayer funded boondoggle for the already rich among us.

The same ducking and weaving is also dominating the criminal law, particularly in sentencing.

Vincent: elephant ignoredFormer Court of Appeal Justice Frank Vincent was attempting to defend the "system" in an opinion piece in The Age last month.  

Without mentioning the elephant in the room, namely the Sentencing Act 1991, he coyly referred to the many matters a judge is "required by law" to take into account when determining a sentence.

Vincent then went on to identify some of those factors, but didn't mention that a judge is required by statute not to impose a more severe sentence on an offender than his or her circumstances, having regard to the raft of relevant statutory criteria, would allow - see s.5(3) of the Sentencing Act 1991. 

For my part, before I'd allow any idiot responding to a sentencing survey by a tabloid media organisation to proffer an opinion on a hypothetical sentencing case, I'd require that idiot to at least familiarise themselves with the provisions of the Sentencing Act and the last five years' Court of Appeal decisions on sentencing. 

I digress.

The point I wanted to make about sentencing statutes is that they provide endless opportunities for those convicted of offences to plead, particularly on appeal, that they should get a lesser sentence than the one imposed on them simply because they can and have a vested interest in doing so.

If you could get one day off a prison sentence at no cost, why wouldn't you?

Statutory injury compensation schemes also present endless opportunities for disputation between those applying for compensation and those resisting their claims.

Take the "no-fault" entitlements contained in the "table of maims" in the Accident Compensation Act 1985 - see s.98 and 98A. 

The table identifies various body parts and then provides a maximum sum for the complete loss of that body part. 

A claimant can also claim for a partial loss of a body part and receive a proportional share of the maximum allowed. Fairly straightforward you might think!

The Act also permits injured workers to claim for "pain and suffering" arising from the table claim if they have succeeded in convincing a judge that they are entitled to compensation for a table injury in excess of a minimum threshold.

In Dunstan v Amcor Ltd the injured worker suffered a crush injury to her foot for which she was awarded compensation of 20 percent of the maximum of $66,500 allowed by the table - namely $13,319. 

As this was in excess of the statutory minimum of $11,000, the worker also became entitled to pain and suffering benefits up to a maximum of $53,880.  A claimant is only entitled to the max in "the most extreme case".

At trial, the claimant's representatives sought 40 to 50 percent of the max but the County Court judge who determined the case allowed the claimant only $5,000.  She thought that a little mean and appealed.

The Court of Appeal found no appealable error in the judge's determination and the appeal was dismissed.

The various statutes identified, particularly when they are regularly amended by parliaments for ideological reasons, create endless opportunities for disputation between a person who has the benefit of a provision and endeavours to obtain it while the counterparty, who has the burden of the same provision, seeks to resist it.

Perhaps the message for Dick Edmonds is: don't hold your breath waiting for a reduction in tax or other disputes while parliaments continue to churn out statutes like paper cups.