Brace for change and the loss of fair compensation

The ACT Government has recently announced a pilot citizens’ jury will be formed to decide how our system of Compulsory Third Party (CTP) insurance should be changed.  In particular, the ACT Government is asking the pilot citizens’ jury to determine what existing compensation elements should be traded off, supposedly to achieve cheaper CTP premiums.

Why are we concerned?

The ACT Government has made previous unsuccessful attempts to reduce the compensation payable to ordinary Canberrans injured in a motor vehicle accident through no fault of their own.
This seems to be their latest attempt.
Experience has shown that the CTP schemes favoured by governments typically see the erosion of compensation available to innocent victims of motor vehicle accidents.  Last year, for example, the NSW State Government was able to implement substantial legislative change reducing the public’s rights to fair compensation.
If the ACT Government pushes through its preferred scheme, it will mean more injured people will be forced into the social welfare system, rather than getting a level of compensation that would enable them to have flexibility as to how their injuries are treated and to pursue the recovery of the actual loss they have suffered.  This means that drivers, passengers, cyclists, children and pedestrians – Canberrans who have been injured through no fault of their own – will receive less or no compensation for their expenses and losses.

Sign the Petition

Help protect our CTP Scheme by signing this petition to protect our rights and the rights of our families and friends, to receiving the fair compensation they deserve if they’re in an motor vehicle accident.

Join the 837 who have signed the petition

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Policy decisions via a ‘citizens’ jury’

On 22 August 2017, the ACT Government announced the establishment of a pilot ‘citizens’ jury’ to decide on a new ACT CTP scheme.

This process that is alarming to us, as the process of selection, consultation and the provision of information to the jury appears to be uneven and not at all transparent.

Over 2 short weekends in October (14th-15th and 28th-29th) the jury will meet to consider the question, ‘What should the objectives of an improved CTP Scheme be to best balance the interests of all road user?’  The Government has excluded certain aspects of the CTP scheme from the jury’s consideration on the basis that they are ‘complex and technical issues’.  Instead, the jury is being asked to consider a ‘range of issues and trade-offs’ in relation to the compensation payable to injured Canberrans.

Once the jury has determined a list of objectives, a Stakeholder Reference Group (SRG) will develop possible CTP models.

The SRG consists of four Government appointed representatives, two insurer representatives, a local health care consumers group representative, a Sydney based academic rehabilitation centre representative, a representative from the ACT Law Society and a representative from the ACT Bar Association.  There is no direct representation by a person who has experienced injuries and gone through the current CTP scheme.  The voices of injured people will struggle to be heard.

The pilot model being pursued effectively allows the Government appointed facilitators to select the jury members (noting that many who have experience in the area of CTP are excluded from the jury, including people who are currently in the process of having a CTP claim considered and their household members); and with the SRG largely control the information provided to the jury for its consideration.

To protect and preserve your rights, we need to ensure the process is fair and transparent and that the jury is properly informed of how the changes the ACT Government has sought in the past would drastically reduce the rights of road users injured by someone else’s negligence.

This is where you can help.

Important dates to note

The ACT Government has imposed a tight timetable on the pilot citizens’ jury process. Key dates are as follows:

  • September 2017 – Public telephone survey conducted
  • From 7 September 2017 – Australian Post randomly sends out citizens’ jury invitations to the public
  • 13 September 2017 – Briefing of Stakeholder Reference Group (SRG)
  • 17 September 2017 – Citizens’ jury RSVPs due (roughly 10 days after the invitations go out)
  • late September 2017 – Selection of citizens’ jury is determined by the Government
  • 14-15 October 2017 – Jury meeting 1
  • 28-29 October 2017 – Jury meeting 2
  • November 2017 to March 2018 – Stakeholder Reference Group meetings, which meet for 4 x 2 hour meetings.
  • 24-25 March 2018 – Jury meeting 3 to which the citizen’s jury will make a recommendation to Government.

What can I do to help?

1. Urgently voice your concerns with your Member of the Legislative Assembly or directly to Andrew Barr, Chief Minister

This is an important issue that affects everyone. We can’t stress how important it is to voice your concerns with the members of the Legislative Assembly right now.

To help you write your letter, we have pre-written one for you. Download it here.

Alternatively, please use the form below to email your Member of the Legislative Assembly straight away or email Andrew Barr, Chief Minister at barr@act.gov.au

2. Contact your lawyer about sharing your story

In order to help the ACT Government and citizens’ jury understand the true ramifications of losing our rights, we are calling out for your personal stories, your experiences and testimonials.

Any degree of sharing is welcome – from an anonymous social media post right up to being interviewed on radio or TV.

Your help is truly needed.

3. Sign the Petition

Help protect our CTP Scheme by signing this petition to protect our rights and the rights of our families and friends, to receiving the fair compensation they deserve if they’re in an motor vehicle accident.

  • This field is for validation purposes and should be left unchanged.

What the ACT Government is NOT telling you…

The ACT Government says… ‘Right now our CTP scheme does not cover everyone injured in a motor vehicle accident’

In fact… CTP insurance is intended to compensate those people injured in a motor vehicle accident in the ACT through no fault of their own.  The underlying rationale for CTP insurance is (to the extent possible) make good an injury caused by the fault of another.

The scheme was not established to compensate negligent or careless drivers (such as drunk drivers, drug affected drivers, drivers using their mobile devices, etc).

That said, there are an increasing number of mechanisms becoming available to at fault drivers.

Three of the four CTP insurers currently licensed to operate in the ACT provide at-fault driver coverage at no additional cost.  The three insurers in question (namely, the NRMA, GIO and APIA) hold over 91% market share in the ACT.[1]

If an at-fault driver is catastrophically injured, they will be eligible to receive lifetime payments (for treatment, rehabilitation and care) through the Lifetime Care and Support scheme.

In addition, any person injured in a motor vehicle accident in the ACT may receive up to $5,000 from a CTP insurer for early medical expenses.

[1]  2015-16 Annual Report, Chief Minister, Treasury and Economic Development Directorate, page 228

The ACT Government says… ‘Some other states, like NSW, also have common law schemes but they are different from the ACT scheme because they define or have limits on the benefits that are payable for different types of injury, which can make premiums cheaper. The reason ACT residents pay different premiums from other jurisdictions is largely because of the benefits structure, and court-based model of resolving claims.’

The reality is… NSW CTP premiums are currently the highest in Australia.

A range of factors influence the premium levels:

  • unlike other Australian States and Territories, CTP premiums in the ACT are not differentiated on the basis of risk factors such as geographic location, age, driving record or claims history. In the ACT, the premium for a class 1 passenger vehicle is the same, regardless of these factors;
  • in the ACT, injured people are entitled to compensation for loss of income. The 2016 census data showed that Canberrans earn approximately $300 per week more than Australians nationally and that the ACT median outcome is the highest in Australia.[1]  The higher average weekly earnings in the ACT inevitably increases payments for loss of income;
  • some CTP schemes in other jurisdictions arbitrarily cap benefits and/or strictly define benefits. It is acknowledged that the imposition of such limitations mean that some injured people are not fully compensated for their injuries.  The shortfall in compensation paid also means that injured people are forced to rely on savings, extended family, social security and the public health system for their ongoing care and support.

Affordability, measured as a proportion of average weekly earnings in the ACT, has consistently improved since 2013-14.[2]

[1]  http://www.canberratimes.com.au/act-news/census-2016-act-household-income-300-a-week-above-national-median-pay-20170627-gwzgpk.html

[2]  2015-16 Annual Report, Chief Minister, Treasury and Economic Development Directorate, page 229

The ACT Government says… ‘The single largest component of CTP premium dollars payments is paid for non-economic loss, commonly known as ‘pain and suffering’ damages. These payments don’t cover bills, but rather provide compensation for intangible losses like the experience of pain over time, or lost enjoyment of a person’s time.’

But the fact of the matter is… the point of CTP insurance is to place the innocent injured victim in the same position they were injured through the fault of another. This includes compensating the injured party for their pain and suffering.

This element compensates the victim for:

  • no longer living pain free;
  • no longer being able to enjoy the same activities as they could prior to their injury;
  • physiological distress including shock, depression, anxiety and post traumatic stress disorder;
  • grief at the loss of their old life;
  • distress at the harm the accident has indirectly caused their loved ones;
  • physical pain and restricted physical capacity arising from the accident itself and any subsequent treatment, including surgeries and rehabilitation; and

embarrassment at the loss of dignity and independence that can arise as a result of injuries sustained in a motor vehicle accident.

The ACT Government says… ‘The ACT’s scheme relies on negotiation between insurers and injured parties. If an agreement cannot be reached, it is often necessary to go to court to have the claim resolved. A full payout of benefits is not made until a claim is finalised. On average, large claims take around 48 months and small claims take 18 months to finalise.’

In fact… all insurers require injury or damage to be clearly demonstrated before they will pay out on any insurance policy.

Many injured persons will elect to engage a legal practitioner to assist them to pursue their claim against the insurer.  The alternative is that the injured person (or their family members) will be forced to deal with large corporate insurance companies by themselves.

Most claims reach a negotiated settlement between the parties and are not determined by the Courts.

While claims can take some time to settle, this is due to a range of factors, including:

  • the need to allow sufficient time for the injury to settle;
  • the need to allow sufficient time for the extent of the injury to become known;
  • the stringent requirements of the insurance companies for proof of the extent of the injuries, that require the injured person to obtain numerous reports addressing specialist medical opinion, economic loss, occupational therapy needs, psychological treatment requirements, labour market research, pharmacological requirements, etc;
  • the stringent requirements of the insurance companies for proof of causation where people have pre-existing injuries;
  • the stringent requirements of the insurance companies for proof of liability where the circumstances of the motor vehicle accident are in dispute, including expert reports;
  • the requirement for some injured people to undergo multiple surgeries; and

adequate time for injured people to progressively return to the workplace and to their pre-injury activities.

The ACT Government says… ‘A no-fault scheme provides some benefits regardless of who was at fault for the accident, without the need to sue and go to court.’

But the fact is… legal practitioners have no in principle objection to the extension of the scheme to include at-fault drivers, but we strongly oppose achieving the extended coverage at the expense of innocent motor vehicle accident victims.

Given the Government has specified premiums are not to increase as a result of the citizens’ jury process, if coverage is extended, benefits must decrease.

It is important to acknowledge the deeply adverse impact of cuts to compensation on injured people:

  • a reduced payment for economic loss (because the injured person has lost their job, or can no longer do overtime or has lost a promotional opportunity) could lead to the loss of the family home when the usual wage payments are no longer available to meet mortgage repayments;
  • if compensation is removed before the injured person has recovered or before they are able to return to work, they will be forced to recruit their families as carers, rely on social security benefits and increase pressure on the public health system;
  • if compensation benefits are inadequate, in order to properly protect themselves, people will be forced to take out expensive supplementary insurance such as income protection insurance. As the Government would be aware, many people are not eligible for income protection insurance and eligibility criteria for such insurance discriminates against women and people with mental health problems in particular;
  • if benefits for future loss of earnings are reduced then people out of the workforce, such as children, students, parents and carers, who cannot obtain income protection insurance, will also suffer.

As noted above, there are an increasing number of mechanisms becoming available to at-fault drivers.

The ACT Government says… ‘In 2016-17, 27 per cent of finalised scheme payments went to treatment and care costs, with almost the same share going to legal and investigation costs.  In 2014‑15 and 2015-16, legal and investigation costs for finalised claims amounted to more than treatment and care costs.’

Many of the costs categorised as legal costs are not legal fees, but appear to have been included in the legal costs category to bolster the Government’s argument about excessive legal costs.

Legal costs appear to include:

  • investigative reports, including surveillance;
  • the cost of obtaining medical records from health service providers;
  • expert medical reports;
  • reports from occupational physicians;
  • labour market research reports;
  • expert liability reports;
  • court fees;
  • mediator’s fees;
  • barrister’s fees;
  • witness expenses; and
  • legal fees.

Allegations of contributory negligence, refusal to fund reasonable medical treatment and unrealistically early and low opening offers to settle claims are all reasons why innocent injured victims seek the assistance of a lawyer in making a claim for compensation.  The alternative is that injured people and their families argue their case for compensation unassisted against large insurance companies.

Twitter Feed

  • RT  @wch_walpe : Ok there it is, it’s asleep #CBR https://t.co/a51Lk8gdsL 3 weeks ago
  • ACT residents take note! It could happen here too! Tell your ACT politicians to leave the CTP scheme as is.… https://t.co/NZeHLTe356 3 weeks ago
  • TODAY:  @2CC  radio at 3:10pm. Sarah Avery President of the  @ACTLawSociety  will be talking about what the community c… https://t.co/CbbjHqWgVs 1 month ago
  • Early treatment jury's priority for new #CTP insurance scheme But less compensation & higher premiums #ACTCTP #CTP… https://t.co/0D5cOgaSVi 1 month ago
  • Is this fair for people innocently injured in a road accident? #ACTCTP #Canberrans https://t.co/MH0a4gjJEj 1 month ago
  • The #CTP pilot #citizensjury deliberations have been released in an official report. Read full document here https://t.co/Uu5UuguuZD 2 months ago