The insurance industry in Queensland is running another of its scaremongering campaigns, aimed at reducing payouts to motor vehicle injury victims – and blaming lawyers for a spike in compulsory third-party insurance claims, writes Mark O'Connor.
As a lawyer who has been representing injured Queensland drivers and bike riders for more than 30 years, there is nothing new in the latest complaints by the insurance industry. The insurers trot them out every few years.
What is concerning is that elements of the Queensland media are publishing the insurers’ propaganda without question or testing, while pointedly ignoring any rebuttals.
The latest salvo from the insurers came with an unchallenged opinion piece recently in Brisbane’s The Courier-Mail from Anthony Day, CEO of Suncorp Insurance.
He wrote of an alleged minor bump at a Brisbane intersection, no visible damage, but the driver of the front vehicle makes a CTP claim for a whiplash injury and claims $455,000 in damages for injuries sustained in the accident. This includes $18,000 for a physiotherapist appointment every five weeks for the next 51 years.
Sadly, the media did not question this supposed claim and we have only Suncorp’s word that it is true.
Mr Day did not disclose what compensation was paid by Suncorp to satisfy this alleged claim. But Suncorp will not pay on a claim without independent medical evidence to support the extent of an injury.
What Suncorp and other insurers want is to scrap the state’s CTP payouts scheme and replace it with so-called “guaranteed defined benefits” – in other words, caps on payouts.
Mr Day argued: “This solution has been tested in other states, most recently in NSW that was previously a hotbed of fraudulent activity. With the ACT government now planning to introduce similar reforms, Queensland will be one of only two states to retain an antiquated system that allows lawyers to argue for inflated payouts, and then legally taking half of it from injured people.”
The insurers – not for the first time – have branded the legal profession as villains in this exercise to generate fear and loathing, and pressure the state government to reduce insurance payouts.
The tactic is simple: create fear, make claims citing ‘significant’ payouts without disclosing information which could test the truth of them, blame lawyers, then play it through a compliant media.
The end game is simple: force changes to ensure the minimum payout to legitimate CTP claims while not endangering the income or profits of the insurance industry from CTP premiums.
The irony is that an independent review of the Queensland compulsory third-party insurance scheme delivered to the Motor Accident Insurance Commission in December 2016 expressed concerns over the high-level of profits consistently being made by the Queensland CTP insurers.
Despite the high level of profits referred to in this report, the CTP insurers want to reduce the ability of injured Queenslanders to bring legitimate claims for compensation so their profits can soar even higher.
Queensland lawyers argue that sources in the insurance industry, coupled with opportunistic NSW law firms not subject to Queensland legal practice rules, are to blame for a spike in Queensland CTP insurance claims.
Reports of interstate law firms convincing motorists involved in minor bingles to chase payouts through the courts are behind the surge in CTP claims. NSW law firms are not bound by caps on the sums Queensland lawyers can charge for fees to pursue smaller claims.
Queensland firms cannot, by law, charge more than 50 per cent of a net settlement for their total fees, which makes it uneconomic to pursue small claims through the courts. Interstate law firms are not subject to Queensland’s fees cap.
It is understood ‘claims farmers’ – people with access to insurance industry claims data – are selling information about small claims to New South Wales law firms, which in turn encourage people involved in accidents to bring CTP damages claims blowing out claim numbers.
The irony is these claims farmers seem to have a link into the insurance industry but are selling files to NSW lawyers who then sue insurers, and Queensland lawyers are unfairly copping the flak.
The Australian Lawyers Alliance (ALA) has strongly criticised calls from Suncorp and the Royal Automobile Club of Queensland (RACQ) for changes to Queensland’s compulsory third-party insurance scheme.
ALA Queensland director, Rod Hodgson, said the insurer’s defined benefits proposal is driven by a desire for greater profits and fails to recognise that Queensland’s CTP scheme is the best run and best structured CTP scheme in Australia.
Premiums in Queensland are the second lowest in the country and the Queensland CTP scheme provides good access to benefits for those who are injured.
Media reports state CTP claims have spiked in Queensland by up to 30 per cent over the past two years, while the number of car crashes has plateaued. It’s attributed to interstate law firms convincing motorists involved in minor bingles to chase big payouts through the courts.
Historically, insurers swayed the Queensland government in the early 2000s to change compensation laws and there has been regular pressure from them to now water down the state’s compulsory third-party provisions.
The current spike in claims is solely driven by law firms outside Queensland working with claims farmers selling them files that would not be viable to pursue for local firms, but interstate firms can charge what they like, even if the claimant ends up with peanuts.
The practice of claims farming should be stopped and the state government should appreciate the fact that the CTP claim spike is not a Queensland-created problem.
As an accredited specialist in personal injury law with many years of experience, I reject Suncorp Insurance chief Anthony Day’s claims that someone who is nudged from behind at the traffic lights can claim they now have a sore neck and score tens of thousands of dollars in payouts.
In Queensland, this is simply not true. Payouts are conservative and there is no way someone “with a sore neck” would receive tens of thousands of dollars for the injury.
Take an example of a spinal injury from a motor vehicle accident where the victim is assessed at 7 per cent loss of bodily function.
That means daily pain, discomfort, annoyance, and limitations on what activities you can do. The pain and suffering payout for that in Queensland is between $7,500 and $15,000. By comparison, a person suffering the same injury with the same impairment in 1990s could receive between $30,000 to $35,000.
So don’t tell me our system is overpaying now because it’s quite the opposite. People actually get significantly less now than they did 20 years ago.
If Suncorp’s wish for the CTP laws in Queensland to mirror the New South Wales system, the system would only provide for people suffering at least a 10 per cent bodily impairment injury, denying a pain and suffering payout to about 80 per cent of injured claimants in Queensland.
The insurance industry is happy to take Queenslanders’ CTP premiums but fights claims. They make people jump through hoops for motor vehicle injury claims.
As a rule, before Suncorp will seriously entertain an injury damages claim, it will want to be provided with expensive medical expert reports that will in the end be paid for by the accident victim.
The point to remember right now is that insurance companies do not roll over with injury claims. Everything is a fight.
Mark O’Connor is a director with Brisbane firm Bennett & Philp Lawyers and is an accredited specialist in injury compensation law.