The Australian Lawyers Alliance (ALA) has called for the immediate implementation of the inquiry’s proposals that would ensure those “injured through the negligence of others” received “fair and just compensation”.

Insurers say to do so would undermine the purpose of the reforms and in fact lead to lower pay outs to seriously injured claimants.

ALA NSW president Richard Royle said the findings of NSW Upper House General Purpose Standing Committee No.1 had highlighted the “erosion of victims’ rights in NSW public liability, workers’ compensation and motor accident laws”.

A spokesperson for the ALA said among the key changes that should be made was the proposal to discontinue the use of the medical assessment guidelines under the Motor Accidents Compensation Act 1999, the Workers Compensation Act 1987, the Workplace Injury Management Act and Workers Compensation Act 1998.

Others included the extension of the 15 per cent “most extreme case” threshold for non-economic loss damages in the Civil Liability Act 2002 to the Workers Compensation Act and the Motor Accidents Compensation Act.

The ALA said if these and other changes recommended had been in place, it would mean Susan Harris — who lost her unborn seven-month-old son in a car accident caused by another driver in January — could have received up to $80,000 in compensation, instead of nothing.

However, the Insurance Council of Australia (ICA) said the recommendations would seriously undermine the intent of the personal injury reforms, leading to a hike in premiums as well as lower compensation for those with “catastrophic and serious injuries”.

The ICA said recommendation 17, which called for the Government to reduce the cap on non-economic loss damages under the Civil Liability Act and the Motor Accidents Compensation Act to $300,000 would “substantially reduce the maximum non-economic loss damages available for catastrophically injured people”.

“The Committee’s recommendations would reduce compensation for those people who need it most,” said Alan Mason, ICA executive director.

An ICA spokesperson said the tort reforms had created “a balance in the system … where the focus is on rehabilitation of the injured”.

“What the recommendations effectively do is wind back the tort reforms … to the 1990s when there were ridiculous amounts of compensation awarded to people who were suffering minor injuries.”

The ICA also pointed out that the committee did not support lawyers’ claims that the insurance industry was profiteering from the reforms.

The Committee states: “Given the range of factors that have contributed to the current profitability of the insurance industry, the Committee does not believe that the industry has been systematically profiteering as a result of the Government’s reforms to personal injury compensation law in NSW.”

Both the ICA and the ALA, however, were opposed to the inquiry’s proposal that the Government create a personal injury compensation tribunal based on the Dust Diseases Tribunal (DDT) to hear all statutory and common law compensation claims, as opposed to the courts.

The ICA said this ignored the fact that the DDT had been subject to major review and reform because of its inefficient and expensive processes. “We believe that the District Courts are the most efficient [to deal with compensation claims].”

The ALA agreed: “The Alliance believes that the most efficient and fairest way to resolve personal injury claims is through the court system,” Royle said.

See Top 10 issues of 2005 on p19 for background on this story