The legal profession is examining ways to ensure people’s personal injury claims are not shunned by recent tort reforms in New South Wales. The move follows a call by NSW’s most senior judge that the State’s personal injury laws may have gone too far.
The Chief Justice of the NSW Supreme Court, James Spigelman, told a conference in Sydney recently that insurers had convinced the Carr Government there should be mechanisms in place to dismiss people who need compensation.
Spigelman said the requirement that a person be subject to 15 per cent of a whole-body impairment before they are able to claim general damages had been controversial and could be seen as “too restrictive”.
“It does mean that some people who are quite seriously injured are not able to sue at all,” he said.
Following these claims, the Law Council of Australia (LCA) has launched a national campaign to try and wind back controversial law reforms and increase the amount of personal injury litigation.
The LCA has released a lobbying kit to every state law society and bar association in an effort to make the reportedly over restrictive tort reforms a primary issue facing NSW Premier Bob Carr.
The LCA’s campaign looks at the main elements of the reforms.
Tort reforms in NSW came as Carr tried to stamp out “the culture of blame and claim”, while easing the pressure on insurance companies in order to encourage them to reduce premiums, reported The Australian Financial Review.
Insurance Council of Australia (ICA) executive director Alan Mason said late last week that these reforms were hailed as “a victory for common sense” when they were introduced (see story below for the ICA’s stance).
Spigelman said the abolition of what insurance companies called small claims — even though he said they are not necessarily small for the injured person — is expected to have a considerable effect on premiums.
“Insurers convinced the governments that this was an important aspect of the changes required. My own suspicion is that insurers simply find it easier to compute the effect for such a change than of changes in applicable legal principle,” he said.
According to unpublished research for the insurance industry, also reported in The Australian Financial Review, the insurance crisis was not caused by excesses of the Australian legal system and governments had leapt to the conclusion the crisis had been caused by the law of negligence.
This is a sentiment shared by the president of the Law Society of the ACT. In an interview with Lawyers Weekly, president Bill Redpath last week claimed that when the tort debate started, the Territory was lucky to have a Labor government “that looked at the facts before it jumped into action”.
“But Carr [in NSW] did make those changes, on top of what he had already done for accidents at work and motor vehicle accidents,” Redpath said.
The “rush” by the Carr Government “had a lot to do with the connections between the finance industry and the Government, and the philosophy of the Premier”, Redpath said.
“If you are looking at ways to make the system better, you don’t have to cut people’s benefits, you can balance the way the scheme runs.”
The ACT made changes to the court process “instead of taking away people’s rights”, Redpath said. “We encouraged early disclosure and resolution.” Last year in the ACT, third party premiums went down, he said.
If you examine what Queensland did, as well, “you can see that you don’t need to cut people’s benefits to lower premiums”, according to Redpath. “And Queensland is very proud of the fact that they have the lowest premiums in Australia.”
Redpath said NSW should be looking at adopting similar methods to either Queensland or the ACT to ensure people receive adequate compensation for legitimate claims.
Now people from over the NSW border are unable to receive the compensation that those on the ACT side can, Redpath said.
“I often say to the victims that it is a pity the accident did not happen in the ACT as then they would be entitled to compensation that they currently are unlikely to receive,” he said.