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Issue #1586      March 20, 2013

Motor accident compo scheme to be binned

The NSW government has recently proposed changes to the motor accidents compensation scheme which will cut compensation accident victims can receive.

The government, without any consultation with the legal profession or any other stakeholder in the system except insurance companies, has decided that the current system is to be thrown in the bin, despite the fact that overall it works well.

The recent changes to the workers’ compensation scheme removed an injured worker’s right to claim compensation for journey claims, that is, claims for accidents which occur on the way to and from the workplace. In cases where the accident was a motor accident, injured people had rights under the motor accident scheme. Now those rights are to be severely restricted.

Since 1942 New South Wales has enjoyed a compulsory public motor vehicle insurance system. In return for a quite modest premium, accident victims who are injured by the fault of another are entitled to receive compensation for the result of their injuries.

Even after 70 years of adjustments to the system it remains one of substantial benefits.

In serious cases significant monetary damages for pain and suffering are awarded. Reasonable out-of-pocket expenses both for the past and for the probable future are paid.

Loss of earnings for all but extremely high earners are awarded in full, both those incurred in the past and those which are likely to be incurred in the future, and if necessary, for the injured person’s lifetime.

In cases where family members or paid carers are required to provide personal care services or domestic care services for an injured person or even a dependent of such injured person (for example a child) money is awarded for that need.

To see that justice is done, the court system oversees the process so as to flush out the occasional malingerer or fraudster but more importantly to compel uncooperative insurance companies to pay just compensation.

The announced changes are far reaching and will leave the blameless injured in an extremely vulnerable position when they are going through the worst period of their lives from a physical, mental and financial point of view.

Many of their present entitlements will be removed and given to the guilty party who injured them in the first place.

Their present entitlement to damages for care appears to be going to be removed entirely.

Their damages for wage loss are to be replaced by a short-term system intended to rapidly dump them on the federal social security system and consequently the tax payer rather than enforce those losses against the insurer which pocketed the premium in the first place.

For the justice system to operate fairly for all concerned, lawyers are necessary. But now apparently the justice system is to be removed from the whole equation. As usual, this starts with lawyer bashing.

Various politicians including the NSW Premier have given examples of cases which are expensive to run.

There are however two sides to any case. In a costly case, there is usually an unwilling and uncooperative insurer dragged to justice by the courts in an environment where unlimited financial resources are at the insurer’s disposal.

The proposed new system is intended to force the accident victim to negotiate himself or herself with the insurer when such victim is in no fit state to do so.

All that will happen is that insurers will use their muscle to achieve settlements at extremely low values resulting in the financial ruin of the victim.

The system is not broken. Why then the attempt to “fix” it when the only people to benefit are the shareholders of large insurance companies already making profits of approximately double those which were originally intended.  

Next article – Creative Australia: “We should all be singing from the same song sheet”

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