REFORMS TO personal injury compensation legislation had not had the desired effect of reducing premiums and disadvantaged many individuals and community organisations, a public hearing was told this week.
The hearing at NSW Parliament House was part of the General Purpose Standing Committee No 1 of the Legislative Council’s inquiry into tort law reforms introduced by the NSW Government since 1999. The Committee is investigating the impact of the changes on insurance premiums, community events and employment in rural and regional communities.
A number of organisations expressed their concerns at the hearing, including the NSW Bar Association, the Construction, Forestry, Mining and Energy Union, the Community Care Underwriting Agency, the United Medical Protection Group of Companies, the Society of St Vincent de Paul and the Council of Social Services of NSW.
A statement from the NSW Law Society said the hearing was a chance to “expose the hoax behind changes to personal injury compensation laws in NSW and correct the injustice of the current system”.
President of the NSW Law Society, John McIntyre, said the inquiry was a welcome development following “sweeping changes” to workers compensation, motor accidents and civil liability legislation. He said the reforms had been “driven by panic over rising insurance premiums and unavailability of insurance”.
“The subsequent rebound in the insurance industry demonstrates that this was a cyclical problem, exacerbated by the HIH collapse and the September 11 2001 terrorist attacks, and not caused by excessive litigation.”
He said the St Vincent de Paul Society provided a “dramatic example” of the reforms’ impact in its submission. “It’s public liability insurance premium increased by 200 per cent from $200,000 to $600,000 in the year 2000 and has not been reduced at all,” McIntyre said.
This was supported by the submission to the Committee from the Country Women’s Association of NSW, which stated that the heightened cost of public liability insurance had become “prohibitive” and had a “profound” effect on community groups. Events such as Carols by Candlelight had been cancelled, or run without candles, and others “such as the annual billycart championships in country towns have died”, the submission stated.
Organisations that could not afford the increased insurance premiums had been forced to pass the cost onto members, which had resulted in reduced membership and viability, the submission continued.
McIntyre said that since the legislative changes, insurance companies had made massive profits of $5 billion in 2004 (up by 50 per cent) and there had been “little or no” reduction in premiums. Also, people injured due to “the carelessness of others” had suffered drastic reductions in compensation as a result, he added.