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NSW politics must address ‘manifestly inadequate’ CTP scheme

The compulsory third party system in NSW requires an urgent review, and political parties must address this flawed scheme before next week’s state election, according to the NSW Bar Association.

user iconJerome Doraisamy 20 March 2019 The Bar
Tim Game
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Speaking earlier this week, NSW Bar Association president Tim Game said that the government’s aim for this scheme was to “protect those with genuine injuries and ensure the bulk of premiums go towards injured motorists rather than legal fees and administrative costs”.

“While these are laudable aims and the government is committed to review the scheme after two years, that review must be brought forward,” Mr Game surmised.

“It has now been shown that many of the assumptions the government was provided with and which underpin the scheme are wrong. The application of the scheme can result in seriously injured people receiving no compensation.”


Under the 2017 scheme, payments to those injured are “far lower than predicted”, according to government estimates, Mr Game mused.

The level of benefits paid out as at late last year was less than 39 per cent of the amount forecast by the State Insurance Regulatory Authority, he continued, and went on to note that claims levels under the new scheme as at November last year were almost 40 per cent lower than those estimated.

“Under the scheme, the vast majority of injured claimants are left to battle the might of well-resourced insurance companies without legal representation,” he said.

“While the aim of reducing legal fees has been achieved, that has been achieved by diminishing people’s legal rights. In addition, insurance companies are making large profits from the scheme. Victims suffering ‘minor injuries’ receive no more than 26 weeks of benefits under the scheme. Yet the definition of ‘minor injury’ is so expansive, it can capture injured people who may never return to work.”

“Importantly, the determination of whether or not a person’s injury is ‘minor’ is made by insurers themselves, and that determination is binding, subject to limited review. In circumstances where, to date, 60 per cent of assessed claims have been classified as involving minor injuries, this should be a red flag to the government and the opposition,” Mr Game said.

All of this indicates, he deduced, that there are “significant flaws” in the assumptions underpinning the scheme, and that the scheme can result in badly injured people not being paid compensation in circumstances where ample funds are being collected that could be used to compensate them properly.

The Bar Association thus called on both the Berejiklian government and Labor Opposition to commit to an immediate review of the current restrictive CTP scheme so that, whoever wins the upcoming election, fairness and equity can be restored to motor accident victims as soon as possible.

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