A NATIONAL personal injury lawyers’ organisation has spoken out against NSW Premier Bob Carr’s proposed no-fault compensation scheme, which it says literally adds insult to injury for accident victims.
Australian Lawyers Alliance chief executive Eva Sheerlinck said last week that she has grave concerns about the potential impact of such a scheme on people who have been seriously injured. It could see people with “catastrophic injuries” end up on pensions in nursing homes for the rest of their lives, she said.
The Law Council of Australia (LCA) said it would consider a no-fault compensation scheme for the catastrophically injured, but added that Carr’s proposal is no answer to the damage already done to the NSW compensation system through tort reform.
But there is fault in the proposed scheme, said LCA president John North. “The common law system provides proper compensation to people injured as a result of negligence by someone else. No-fault compensation schemes, whether workers’ compensation or social security, never provide full compensation for an injured person’s loss,” said North.
The Australian Lawyers Alliance also praised the current system. “Current compensation for loss of income and medical expenses allows people in these tragic circumstances to maintain some level of dignity by managing their own care in their own homes with their families,” Sheerlinck said. But the standard of care in the Premier’s proposed model will likely be based on a welfare model, she said, “providing the lowest possible standard of care”.
The LCA posed similar arguments, and said that caring for the catastrophically injured at home is expensive, “which explains the size of most large common law payouts”, said North. “Those payouts give people independence rather than leave them relying on the compo drip from State Government.”
Sheerlinck referred to a system that has been operating in New Zealand that sees taxpayers carry the bill and the injured experiencing declining standards of care. As well, this lets insurers off the hook, she said.
“These schemes are extremely expensive to run as it’s impossible to predict how big the liability will be,” said Sheerlinck.
State governments have already wound back injured people’s rights by making it hard for them to take cases to court, according to the Australian Lawyers Alliance. States have also capped payouts and limited compensation for care provided by families, Sheerlinck said.
The insurance industry, consequently, has benefited from the arrangement, posting record profits without reducing premiums. “I am concerned the Carr Government now wants to give insurers another free kick by making taxpayers pick up the bill for accident victims’ medical costs,” Sheerlinck said.