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Unformatted text preview: legal practitioners believe they cannot confidently advise what the law is or how
i applies to the diverse situations of everyday life or when the courts of justice are made
effectively inaccessible by the cost of litigation. W h e n legal practitioners are unable to predict the
outcome of cases with a high degree of probability, the choice for litigants is to abandon or
compromise their claims or defences or to expose themselves to the great expense and
unpredictablerisksof litigation.41 The perceived need for curial predictability is reflected in the judicial preference for
tangible evidence and predictable outcomes, and abhorrence of speculation. In Murphy v
Houghton & Byrne42 (1964) the court refused to allow evidence with respect to the future
decline in the value of money, although it was related to the court's assessment of the
plaintiffs loss of future earning capacity. In light of the compensatory goal of damages
awards, the refusal to receive evidence pertinent to an integral part of the plaintiffs claimed losses reveals a conflict between the public policy that law should be predictabl 39 Mayanja, J. 2 002, "No-shop, No-talk and Break-up Fee Agreements in Merger and Takeover
Transactions: the Case for a Fresh Regulatory Approach" 14 Australian Journal of Corporate Law; A J C L
Lexis 1 (corporate law). Baron, A. 2 000, " The "Mystery" of Negligence and Economic Loss: W h e n is a
Duty of Care O w e d ? " Australian Bar Review vol. 19, 14 February, 2 000; 2 000 A B R Lexis 4 (tort and
economic losses), Crimmins v Stevedoring Industry Finance Committee  H C A 59 (unreported) per
M c H u g h J. at pp. 15-16. M c H u g h J. tacitly argues that the entire process of argument by analogy underpins
the policy of predictability in c o m m o n law and that cases should proceed on the sound basis of "principle
 H C A 36, (unreported) High Court of Australia (12 August 1999).
 H C A 36, (12 August 1999) per M c H u g h J.
 Q. L. Rep. 14;  Q W N 6. 282 and restitutio in integrum. In that case, Gibbs J. (as he then was) manifested a clear
slippery slope fallacy: If evidence is admissible as to the possibility of the continuance of inflation, why is it not also
admissible to show, by expert evidence, whether or not, during the years when the plaintiff might
have earned, his prospects of employment might have been affected by economic depressions,
political upheavals, strikes or wars? If evidence of this kind is admissible, a simple action for damages for tort will soon have all the complications of a proceeding before an industrial tribunal
for a determination of the basic wage; but the evidence is, in my view, too remote from the
question the jury has to consider, and i is inadmissible.43 Contrary to G ibbs J's position, courts have indeed allowed evidence o f the detrimental
contingent future events, incorporating this into damages awards through the inclusion of
a reduction factor for the "vicissitudes of life".44 It does not follow that the extremely
draconian judicial burdens which Gibbs J. feared will result simply because evidence is
allowed on a matter, the purpose of which is to fully compensate a plaintiff for losses
incurred as a result of the defendant's actions. In the USA, where economic evidence was
introduced long before such evidence was allowed in Australian courts,45 there is no
basis upon which to substantiate such a resistant attitude. Judges have been shown to have other reasons to justify their negative stance towards the
legitimacy of economic evidence. In 1967, in Parente v Bell,46 the plaintiff introduced evidence of loss of future earnings which included evidence of inflation to justify a low 43  Q. L. Rep. 14 at 16.
Skelton v Collins (1966) 115 C.L.R. 9 4; Sharman v Evans (1977) 138 C.L.R. 563; Dait v Commonwealth
ofAustralia 1989 N S W L E X I S 10994 (unreported) N e w South Wales Supreme Court, N e w m a n J. Indeed,
in the very year that Murphy v Houghton & Byrne w as handed d own, the High Court of Australia examined
the doctrine of "vicissitudes of life" and approved i in G.M.-Holderis Pty. Ltd. v Moularas (1964) 111
C.L.R. 2 34 at 241-2 per Barwick CJ, at 245 per Taylor J, and 248 per Menzies J. A s early as 1879 in
Phillip's Case (1879) c. C P D 280, the doctrine was recognised. (1879) C C P D 280 at 2 87 per Bramwell LJ,
at 291-2 per Brett LJ, at 293 per Cotton LJ. Phillip's Case w as cited with approval and provides authority
for its entry into the c o m m o n law of Australia in McDade v Hoskins (1892) 18 V.L.R. 417, and Richie v
Victorian Railways Commission (1899) 2 5 V.L.R. 272.
M alone 1979.
(1967) 116 C.L.R. 528.
44 283 discount rate. W indeyer J. rejected the evidence for two reasons:firstlythe actuary was
not an expert in economic prophecy, and secondly, the evidence would still not be
admissible, though given by an expert economist, because the loss was not a loss of the exact weekly sums, but a loss of earning capacity such that the plaintiff was...
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