What Does Gross Negligence Mean? (Australia)

Many legal factors surround how to conduct business and offer services in Australia. One aspect that might affect business owners is negligence and gross negligence clauses and charges. But what does gross negligence mean in Australia?

Gross negligence has no defined meaning in Australian common law. Its application is determined on a case-by-case basis. Ordinary negligence typically applies when a pre-established duty of care has been breached resulting in loss, damage or injury. While ordinary negligence could have been caused through carelessness, gross negligence has been described as a serious disregard for an obvious risk.

Dealing with gross and ordinary negligence terms can be confusing as the intended definitions and remedies for breaches may differ greatly from case to case. It’s highly recommended to consult an expert lawyer for professional legal advice when drafting negligence and gross negligence clauses or dealing with negligence charges. Keep reading to learn more about gross negligence in Australia.

What Is Negligence?

To fully understand gross negligence, it’s important to start by understanding what negligence means. Ordinary negligence may simply mean an act of carelessness. In the legal world, negligence is when a party fails to fulfil the duty of care it owes to the other party as required by the law.

When determining whether a particular action is a form of negligence, the following factors must be considered:

  • Proof that a duty of care exists between the “negligent party” and the affected party
  • The involved party breaches/ fails to fulfil the duty of care
  • The negligence resulted in the affected party suffering loss, damage, or injury

When claiming negligence, you must prove that the above three elements are satisfied.

What Does Gross Negligence Mean In Australian Law

Gross negligence has no definitive meaning in Australian common law. It can be used in commercial contracts, but the involved parties must clearly define what “gross negligence” means in the specific contract.

To better understand what gross negligence means in Australia, let’s look at the definition of Mance J in The Hellespont Ardent. Here’s Mance’s definition of “gross negligence” in exclusion and indemnity clauses.

According to Mance J, “Gross negligence is clearly intended to represent something more fundamental than failure to exercise proper skill and/or care constituting negligence. But, as a matter of ordinary language and general impression, the concept of gross negligence seems to me to be capable of embracing not only conduct undertaken with actual appreciation of the risks involved, but also serious disregard of or an indifference to an obvious risk.”

What’s The Difference Between Negligence and Gross Negligence?

You might come across negligence or gross negligence clauses as a business owner dealing with various contracts. What’s the difference between these two closely related terms?

For starters, ordinary negligence is a tort recognised by the law in Australia. According to the Australian Law Reform Commission, a tort is a legal wrongdoing committed by one party to another, whose usual remedy is payment for damages. Negligence is a form of tort where one’s action leads to loss or damages, and the affected party can sue for compensation.

On the other hand, gross negligence isn’t clearly defined or recognised as a tort by the Australian common law. The court determines what gross negligence means, depending on the case.

The meaning of gross negligence is more complex than simply failing to act with proper care. Its difference from ordinary negligence is a matter of degree and can only be determined by the context in which the term is used.

Navigating Gross Negligence In Business

Gross negligence can carry different meanings and liabilities in commercial contracts. Whether you’re a business owner providing products/services or getting services from other parties, drafting the contract terms carefully is essential.

If you include the term “gross negligence” in a commercial contract, you must clearly define what it means. It’s also important to note that carve-outs for gross negligence in a liability clause might limit or render it ineffective. To avoid such complications, it’s advisable to use negligence and not “gross negligence” in contracts.

However, the most effective way of dealing with ordinary and gross negligence in business is consulting with an experienced contract lawyer. The legal expert will help you draft contracts that work best for you and your business. Additionally, they can draft a code of conduct that outlines the risks your product/service might cause and how customers can avoid them.

How Aditum Lawyers Can Help

Running a successful business takes more than simply providing services/goods and collecting payments. You must also consider the commercial legal aspects, like gross negligence terms, to ensure you’re on the safe side of the law.

As negligence and gross negligence clauses and breaches can have severe ramifications for your business, it is important to enlist the help of legal professionals to ensure your business is protected. Whether it’s drafting comprehensive contracts or advising on gross negligence charges, Aditum Lawyers are here to help! Our team of commercial legal experts help business owners like you deal with all business legal issues. Contact us via 1300 234 886 or book a free consultation to speak to one of our lawyers.

Resources & Further Reading

  1. https://www.honan.com.au/news/allegations-of-negligence-a-guide-for-business-owners#:~:text=Negligence%20is%20the%20most%20significant,unreasonable%20risk%20of%20foreseeable%20injury.
  2. https://jade.io/article/683357?at.hl=GR+Engineering+Services+Ltd+v+Investment+Ltd+%5B2019%5D+WASC+439
  3. https://www.alrc.gov.au/publication/traditional-rights-and-freedoms-encroachments-by-commonwealth-laws-alrc-interim-report-127/17-immunity-from-civil-liability/what-is-a-tort/

Disclaimer: The information provided in this article is for general informational purposes only and should not be construed as legal advice. Consult with a qualified commercial lawyer for personalised advice regarding your specific situation.