CTP reform gives all power to insurers
29th Jun 2016
The NSW Government has announced the intention to radically reform the NSW Green Slip scheme to limit benefits, ignore those with moderate-severity injuries, and exclude lawyers from representing 90% of the injured.
Australian Lawyers Alliance (ALA) spokesperson Dr Andrew Morrison SC said the proposed reforms go way too far, with reforms meaning that, amongst other things, 90% of claimants will not be permitted to engage a lawyer to assist them access benefits.
“The Australian Lawyers Alliance (whose members represent injured accident victims) is deeply concerned about the direction the reforms are taking,” Dr Morrison said.
“It appears as if New South Wales will shortly have a no fault, low benefits, workers compensation-style scheme for motor accident victims”.
“It is acknowledged that the current scheme has problems, with a blow-out in the number of small claims and too many disputes. However, the proposed reforms go way too far,” Dr Morrison said.
“Ninety percent of motor accident victims will now have to battle alone against a powerful insurance company in order to recover modest benefits.”
“The vast majority of those with long-term loss of earnings and long-term medical needs will be pushed into reliance on Centrelink payments or public hospitals and Medicare. All of the disasters of the current NSW Workers Compensation Scheme are now being visited on motor accident victims,” Dr Morrison said.
The ‘reforms’ are partially based on the Victorian Transport Accident Commission (TAC) system. In Victoria, the single government insurer deals with all claims and pays statutory benefits for a confined period. Thereafter, only about 10% of accident victims receive any ongoing benefits.
“One of the critical differences between the Victorian model and what is proposed for NSW is private underwriting,” Dr Morrison said.
“At least in Victoria, when it comes to collecting the statutory benefits, there is a government agency dispensing the benefits which must treat accident victims fairly. What will happen in NSW is that five powerful private insurers, seeking to maximise their profits and return to shareholders, will be determining what benefits are paid and to whom.”
“Any dispute as to an entitlement to lost wages, what constitutes reasonable and necessary treatment and any future medical needs will be determined by the insurer, with the first level of appeal being back to the same insurer that just denied the benefit. This is not fair,” Dr Morrison said.
“The ALA is deeply concerned that there will not be independent paths of review of decision making and that 90% of claimants will not be permitted to engage a lawyer to assist them to access the benefits they are entitled to when the insurer denies the claim,” Dr Morrison said.
“The insurer might have in-house lawyers with thirty years’ experience running the claim, but accident victims are expected to battle through the system on their own without anyone qualified to help or support them.”
“What will happen in CTP is exactly what has been seen so far in the NSW Workers Compensation system where similar rules apply – accident victims are denied their rights and massive profits flow to the insurer,” Dr Morrison said.
At present, innocent motor accident victims in NSW are compensated for all of their future earnings losses and treatment needs. Under the proposed changes, 90% of victims will go uncompensated for any wage loss or treatment needs beyond a defined period.
Dr Morrison said the unfairness of the proposed reforms could easily be demonstrated:
- A 24 year old pedestrian run down by a negligent motorist has a knee replacement. The prosthetic knee will last ten, maybe fifteen years. This person will likely require two future knee replacements over the balance of their life. The cost of the operation might be upwards of $15,000 each time. No longer will there be any funding out of the CTP scheme to pay for that future surgery.
- A passenger suffers physical injury in an accident and also watches a fellow passenger die. They have ongoing medication needs, including anti-depressants and pain medication. The government proposal cuts off treatment expenses after five years for these moderate-severity injuries.
Dr Morrison said that in order to make the NSW scheme more ‘efficient’ the Government is imposing arbitrary cut-offs on benefits and abandoning accident victims to the clutches of insurance companies.
At the same time, the Government is spreading the existing funds much more thinly and is now giving compensation to drivers who cause accidents. Dr Morrison said these priorities are all wrong.
“In an implicit concession that the proposals are not fair, the Government is giving two trusted advisors a month to improve the “fairness” of the proposal before it goes back to Cabinet,” Dr Morrison said.
“How far these two are prepared to speak out to protect the rights of innocent motor accident victims with moderate-severity injuries to both proper compensation and to legal representation when needed remains to be seen.”