HEAVY CRITICISM has come from both the Insurance Council of Australia (ICA) and Australian Business Limited (ABL) over a new legal campaign for personal injury reform.
The campaign, aimed at returning fairness to New South Wales’ personal injury laws, was launched by some of the top law associations in the country last week at the Sydney Eye Hospital.
A joint initiative of the Law Society of NSW, the NSW Bar Association, Law Council of Australia and the Australian Lawyers’ Alliance, the campaign entitled ‘A Fair Go For Injured People’ seeks to draw the public eye to the impact of recent personal injury laws in NSW in the lead-up to the State election in March, president of the NSW Bar Association, Michael Slattery, said.
Yet it was comments made during the campaign’s launch in regard to the profits insurers have been making under the new laws that attracted aggressive responses from both ICA and ABL State Chamber.
“The Motor Accident Authority’s (MAA) 2005 annual report shows that of $8 billion paid in premiums only $1.8 billion has been returned in compensation to injured people,” Slattery said, explaining that those at the campaign have always publicly acknowledged that “some of [that money] goes to reserves for future claims and administrative costs”.
The chief executive of ICA, Kerrie Kelly, countered by saying that “the false and misleading claim by the NSW Bar Association … that insurers had pocketed $6 billion in profit is debunked by [the MAA] report”.
Kelly said that the Law & Justice Committee had determined that “the primary cause of increased profits was an unexpected fall in the claim frequency in NSW”.
“The MAA has estimated that profit estimates over the life of the CTP scheme for insurers (since 1999) at around $1.4 billion,” Kelly added.
CEO of ABL State Chamber, Kevin MacDonald told the campaigners to “back off on law reforms”.
Speaking of the personal injury reforms between 1999 and 2005, MacDonald said that these “historic reforms … have stabilised the insurance market, reduced costs and saved many community groups and small businesses. There is no question the other side of the coin is that lawyers’ cash flow has been hit and that it is not as attractive to go ambulance chasing”.
“Overturning these reforms will drive up premiums, cost jobs and punish community groups and small businesses. The only winners will be lawyers,” MacDonald said.
Yet a spokesperson for the campaign said that businesses in NSW have nothing to fear, a sentiment echoed by Slattery when he said he was “quite happy to meet with members of Australian Business Limited to allay their concerns”.
“The Civil Liability Act reforms introduced in 2003 are actually a reasonably fair standard and the motor accident and workers’ compensation schemes should be brought in line with that,” Slattery said.
“That’s exactly what a bipartisan report of the Legislative Council said in December last year. Members from both parties voted for consistency across all personal injury compensation laws in NSW and these anomalies should be removed,” he said.
Kelly joined with the ABL State Chamber in its criticism of lawyers for being mindful only of their own pockets.
“The Insurance Council stands by its call that the NSW Bar Association cease their misinformation campaign. It is a campaign which has nothing to do with the CTP (Compulsory Third Party) scheme but everything to do with the legal fraternity wanting to increase their incomes,” she said.
However, the ICA revealed to Lawyers Weekly that it was not against participating in talks aimed to bring worker’s compensation and motor accident schemes in line with the Civil Liability Act.
“The Insurance Council is happy to involve itself in any discussion regarding the harmonisation of the workers compensation and motor accidents schemes,” an ICA spokesman said.
The campaigners called on the NSW Government to intervene and redress the inequalities they believe are apparent in the law.
“Both the Government and Opposition continue to turn a blind eye to the devastating impact these changes have had on the lives of many residents … who were injured through no fault of their own,” Slattery said.
The President of the NSW branch of Australian Lawyers’ Alliance, Richard Royle said that “as the campaign spreads across NSW, the Government must hear these voices and amend laws to bring fairness back to the system”.
Yet McDonald cautioned that “to overturn these reforms would be an act of recklessness that would put the State’s small businesses at significant risk”.
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