Injured to suffer if ACT's 2011 CTP Bill is passed - ALA
20th Aug 2012
The Australian Lawyers Alliance is expressing concern that the ACT Government’s 2011 CTP Amendment Bill, due for parliamentary debate on Wednesday, will leave many traffic accident victims with an inability to financially sustain themselves throughout their lives.
“The real winners with the proposed bill will be insurance companies, particularly as the most significant changes to the legislation include a non-economic loss threshold and reductions to lump sum payments,” Australian Lawyers Alliance ACT president, Angus Bucknell, said.
Mr Bucknell said the Bill created a limitation threshold on the right to be compensated for non-economic loss — including pain, disfigurement, emotional trauma, extended physical discomfort and loss of normal life-enhancing capacities.
“Careful reading of the Bill shows non-economic loss only compensates those with more than 15% Whole Person Impairment – which excludes complete loss of taste or smell, loss of both breasts, a prolapsed spinal disc, and an ankle fusion,” Mr Bucknell said.
He said NSW’s 1999 imposition of a 10% threshold — lower than the 15% ACT proposal — resulted in a reduction in injury claims of more than 80 percent and a significant increase in insurer claims for handling expenses.
“And although NSW CTP ‘Greenslip’ premiums fell by about $100 a year, they have now risen again close to 1999 levels with the most up-to-date figures between 1999 and 2004, showing an overall insurer profit of 30%,” Mr Bucknell said.
“By cutting out 80 per cent of claims no matter how legitimate the claim, it is not hard to see how insurance companies can profit handsomely.
"NSW consumers paying CTP insurance have transferred $1.5 billion dollars during the past decade to insurance companies’ profits. Why? Because the NSW government of the day felt it would be a good idea to introduce thresholds. The promise was to bring premiums down, it didn’t. It amounted to a very costly experiment for the CTP NSW consumers,” he said.
Mr Bucknell said injured people’s uncertainty to meet future medical needs had also come from a 5% discount replacing the previous 3% rate for future loss of earnings.
“Who will pay for their care and treatment when the money runs out? Hospital bills will need to be paid by ACT taxpayers. Doctors’ bills will be paid by taxpayers via Medicare, and physical care will be provided by family members, because the injured will be unable to pay or be forced into taxpayer-subsidised nursing homes,” he said.
“In the ACT, more than 400 people each year are hospitalised as a result of motor vehicle accidents and about 1,100 CTP claims are made. It seems logical to have a $2 per week increase in premiums for the piece of mind that comes with knowing injured people will be properly taken care of,” Mr Bucknell said.
“And this goes before even considering rightful compensation for their loss of earnings at the fault of another,” he said.