Motor Vehicle Accident Compensation Law Intended Changes

In February 2013, the NSW government announced that it intends to make amendments to motor vehicle accident compensation law. Like the 2012 workers compensation reforms, the motor accident amendments will be significant and is reportedly intended to reduce the cost of car CTP insurance premiums.

It seems that the government intends to make the system a no-fault system (because disputes on liability delay cases’ resolution and blow out costs it said). However, it is estimated that there will be an extra 7000 claims per annum therefore, and it seems benefits will have to be reduced to achieve significant premium reductions.

Payments for lost wages will be made to injured motorists in a periodic way, but they will be capped at rates similar to workers compensation wages benefits, potentially which are potentially lower than actual pre-injury earnings and not necessarily a true measure of an injured motorist’s economic loss.

The government said that such earners could have obtained their own income protection insurance and can rely on that insurance to make up any shortfall. It is unclear at this stage whether wages compensation will continue until retirement age, or be terminated after a number of years like the new workers compensation payments provisions.

It seems that common law rights will be preserved, but only for those injured motorists who have a whole person impairment in excess of 10%. That is a high threshold to meet. Even then, we understand that compensation for the value of domestic care provided to injured motorists on a voluntary basis by friends or relatives following the injury because the injured claimant can no longer perform those domestic activities will be abolished.

This type of claim has been available to claimants for almost 40 years, having been established by the High Court in 1977, but will no longer apply if the government’s proposals are implemented without change. The Motor Accidents Compensation Act already has thresholds that limit when such compensation can be claimed.

These amendments have NOT been implemented yet. Concerned citizens should contact their local member of parliament. The Law Society, Bar Association and Australian Lawyers Alliance have presented a joint submission to the government to make alternative arrangements that are much fairer for people injured in motor vehicle accidents and can also reduce premiums. AM Legal will continue to provide updates on this proposed reform.