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Injured NSW road users to suffer under new CTP scheme

Injured NSW road users to suffer under new CTP scheme

A cost-benefit analysis of the NSW government’s reforms to the CTP Motor Accident Insurance Scheme does not add up, according to one lawyer.

The looming negative impact of CTP reform in NSW has been underscored by Carroll & O’Dea partner Diana Farah. The lawyer is concerned that changes to the CTP Motor Accident Insurance Scheme, slated for 2017, will have drastic consequences for people injured on the state’s roads.

In Ms Farah’s view, the changes to CTP may mean crippling medical costs and a drastic limitation of the right to pursue damages.

“Any person injured in a motor vehicle accident in NSW after these changes come into effect will face new strict controls, even if they are seriously injured and perhaps impaired for life.

“The implications of these proposed changes are out of all context with the relatively small reduction in costs of CTP insurance that may or may not be delivered by the reforms,” Ms Farah said.

An overhaul of the compulsory third-party (CTP) insurance scheme in NSW copped backlash from legal groups when it was announced by Minister for Innovation and Better Regulation Victor Dominello in June.

While lump sum compensation entitlement for the most seriously injured road users is preserved under the proposals, those with low-severity injuries will be entitled to “defined benefits”, a statement released by the government said.

“Defined benefits” will be codified in NSW legislation and available to injured parties without the need to prove which party was at fault.

According to Ms Farah, government claims that the proposed CTP reforms will lead to cost savings are flawed. She said the true effect of such changes would be an additional financial burden on families and friends, and the public purse.  

“Those who incur lifelong injuries requiring ongoing medical treatment will only receive payment of expenses for a maximum of five years from 2017.

“It is clear that when these payments dry up those requiring ongoing medical treatment will turn to public health providers as well as Medicare, resulting in a shift of cost to the taxpayer,” Ms Farah said.

Earlier this year the minister supported the reforms, citing “significant pressure on green slip premiums” as a result of the surge in low-severity claimants. Without moves to cut the cost of the scheme, premiums could rise by as much as 20 per cent in the coming years, he suggested.

“As a result of reduced scheme costs, we will see a much higher proportion of the premium dollar going to injured road users. The majority of NSW motorists can also expect to see a substantial reduction in their green slip premiums,” Mr Dominello said.

Following recommendations from an expert reference panel, reforms to the NSW CTP scheme could come into effect from July 2017. Ms Farah urged motor accident victims to seek legal advice before the new changes were brought in.

“Anyone who has already been injured in a motor vehicle accident [should] seek legal advice sooner rather than later to ensure their rights are protected and that they secure adequate compensation,” Ms Farah said.

“Those classified as having minor or moderate injuries will face an unsatisfactory system of very limited benefits and limited legal representation as presently exists in the NSW workers’ compensation system,” she said.

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