Negligent no longer to be liable under new compensation scheme

26th Sep 2014

The rights of people catastrophically injured as the direct result of negligence are under threat if the Commonwealth succeeds in introducing a National Injury Insurance Scheme (NIIS), the Australian Lawyers Alliance (ALA) said today.

The NIIS was proposed in 2011 by the Productivity Commission to sit alongside the National Disability Insurance Scheme (NDIS) and provide no-fault lifetime care and support to people who suffer a catastrophic injury[i].  

However, the scheme requires the states to adjust their existing at-fault compensation schemes to meet national benchmarks for motor vehicle, workplace, medical, or general accidents, meaning that injuries sustained even as the result of gross negligence would be treated as ‘no fault’.

“The NIIS has never received the level of public debate merited by such a wide-scale reform,” ALA National President Andrew Stone said.

“It has simply slipped in alongside the NDIS, without any discussion about what it will mean for injured people in Australia.”

“It is unclear as to how the funding will work, and if it will lead to increased rates for council to pay; increased medical costs; increased motor vehicle premiums. Already, the NIIS has driven up motor vehicle premiums,” Mr Stone said.

“When a no fault catastrophic injury motor vehicle scheme was introduced in South Australia, benefits to most innocent accident victims had to be slashed to fund the claims of those who caused their own catastrophic injury.

“Most accident victims prefer to receive a lump sum.  It gets the insurance company out of their lives.  It allows them to move on.”

“The NIIS support would be provided in a drip-feed style, which denies individuals and their families the freedom to manage their own lives,” Mr Stone said.

“For those at fault, it is reasonable that they be covered by the NDIS. This has been the case throughout the launch of the NDIS, and ought to continue,” Mr Stone said.

Mr Stone said that governments may exploit the introduction of an NIIS to slash the ability of other victims who suffer less severe injuries to claim compensation, justifying such cuts as necessary to fund the more expensive claims.

Mr Stone said that South Australia was the first state to implement NIIS-inspired changes to its motor vehicle accident scheme in July 2013, in the form of savage cuts to its comprehensive third-party insurance scheme. Experts have estimated that more than 2,000 claims have since been denied from being able to claim any entitlement.

“South Australia is the microcosm of what Australians can expect if the NIIS is rolled out nationwide,” Mr Stone said.

“This will include claims of lesser (but still significant) injury being denied, reduced access to income support, and no justice for people who fall victim, through no fault of their own, to negligence that has caused catastrophic injury in the workplace, hospitals and in the community.”

“Australians should not be paying premiums in order to receive sub-standard justice if they suffer injury.” 

Mr Stone said that the solution is to allow people to retain the right to pursue all forms of compensation as a result of suffering catastrophic injury, and that people who fall through the gaps should be covered by the NDIS.

[i] Catastrophic injury includes people who have suffered brain injury, spinal cord injury and burns to more than 40 per cent of their body

Tags: Compensation NIIS Lifetime Care and Support Scheme