Insurance companies gamble, but you lose
by Marcus Browning The proposed changes to the legal system by the Federal Government would initially prevent people from suing doctors for negligence. Soon thereafter other professionals, such as engineers and auditors, would also be protected from being sued just because, as NSW Premier Bob Carr puts it, "they have deep pockets". Under this plan everyone is to be attacked, accused of greed, scrutinised under a magnifying glass — everyone except the insurance companies. Carr is leading the charge to take away people's right to common law, laying out much of the blueprint that has been taken up in a report by a Federal Government committee. Carr has had plenty of practice at taking away people's access to common law: he screwed the State's workers by taking away their common law rights under workers' compensation. Doctors would not be liable for negligence "if the treatment was in accord with an opinion widely held by respected practitioners in the field". People killed or injured when taking part "in a recreational activity which involves an obvious risk" will be prevented from taking any action whatever. The Government report calls for changes to the Trades Practices Act that are aimed at undermining the role of the Australian Competition and Consumer Commission by taking away its power to bring representative actions. (The Commission has implemented its brief of consumer protection with a dash too much enthusiasm for the Government's liking and so is headed for the scrap heap or major "reform".) A damages action must be lodged inside three years after an incident, accident or death, this to protect medical indemnity insurers. There is also to be a "long stop" time limit of 12 years, which in quite a number of cases where the outcome of negligence may not make an appearance for 20 or 30 years — asbestos for one — is not long at all. Furthermore, as the intent is to severely restrict access to the legal system, the barriers to gaining even the 12 years will be insurmountable for many. The report calls for mirror legislation to be put in place in all States and Territories. The root of the problem is not the number of claims being made, which is the premise of the arguments being touted by Carr and company. Most of the millions of individuals and organisations that have insurance cover have been paying their premiums, year in and year out, never making a claim. What the insurance companies did in the 1990s was take those billions of dollars and play the markets — the big casino of futures, short-term money markets, etc. Thus when in 2000 the world sharemarkets began their long decent into crisis and depression, the insurance companies were dragged down as well. In Australia the biggest insurer, HIH, fell over in March 2001 with $5.3 billion of debt. So we have this big bail out of insurance companies, which got into full swing earlier this year with a Bob Carr plan based on a bombastic attack on lawyers that included the ludicrous call for them to be made to pay defendants' costs. As the goal is to protect insurance company profits, Assistant Federal Treasurer Helen Coonan's statement that she is "pretty sure" that insurance companies would "pass on the benefits of the reforms to consumers" is so lame as to be laughable.