MOTOR VEHICLES (THIRD PARTY INSURANCE) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 23 March 2011.)

The Hon. R.I. LUCAS (15:28): I rise on behalf of Liberal Party members to support the second reading of the Motor Vehicles (Third Party Insurance) Amendment Bill. In speaking to the bill, I indicate that this bill, as is the case with most of the Motor Accident Commission's bills, is an extraordinarily complex and complicated bill and, essentially, I think that most of the work will need to be done in the committee stage.

Certainly, the Liberal Party's position has been very adequately outlined in another place by our shadow minister, Iain Evans, who spoke at length on the bill during the committee stage. Whilst there has been some change or alteration to some aspects of its original position, by and large, the party's position remains largely the same. Therefore, I do not intend this afternoon to repeat at length during the second reading all of the detailed explanation my colleague has outlined in another place. We may well need to explore some of the issues during the committee stage.

In congratulating my colleague Iain Evans on the work he has done on the bill, I also, on his behalf, publicly acknowledge the considerable work that a number of interest groups have done in looking at the ramifications of the legislation and advising non-government members and parties as to their concerns, and significant concerns in some cases, in relation to provisions of the bill.

In particular, we thank the Law Society, the Australian Lawyers Alliance and the Motor Trade Association for their work. In addition to that, the RAA, the South Australian Road Transport Association and one or two other organisations have been active as well in terms of ensuring that we, as a parliament, are perhaps better informed about the possible implications of the legislation.

One of the worrying issues, from my viewpoint, having been associated with these sorts of bills before, both in government and opposition, is in looking at the submission from the Law Society. It has put its concerns pretty succinctly, and let me quote them:

In the past, the Law Society has been engaged in regular and open dialogue with the South Australian Motor Accident Commission (MAC), particularly prior to any proposed legislative changes to the compulsory third party scheme. On 20 September 2010, the Law Society received a copy of the Motor Vehicles (Third Party Insurance) Amendment Bill and a copy of the second reading explanation from Hansard from the Hon. Iain Evans, state member for Davenport.

I think that is extraordinary. Here is, I think to most governments in the past, a respected organisation. We know that this government thinks ill of the Law Society and, in fact, tends to demonise all lawyers and the Law Society for its own political purposes. The former attorney-general and current Premier led the charge in relation to that comprehensive and outright assault on lawyers and the Law Society generally, which I think is sad.

The Law Society states that in the past it has been actively engaged in open dialogue with the Motor Accident Commission. It goes on to state that the first it heard of the bill was on 20 September. It then had its first meeting of the Accident Compensation Committee of the Law Society on 12 October and a subcommittee was formed to look at this bill and make submissions to the parliament on it. The subcommittee comprised a balance of insurer legal representatives and claimant legal representatives.

To me, that would seem to be a common sense way to go about difficult legislation. As I have said, having been involved with these sorts of bills over many years, in both government and opposition, what you are presented with from the insurer is always plausible. When you read the second reading explanation from the minister and when you read the explanation of clauses, it is always plausible in terms of the reasons for it. To be fair, in many cases, even on closer analysis, it is a plausible and defensible case for the amendments. On occasions, it is not, and that is inevitable, because this is a difficult and complicated area.

It would seem to me to be incomprehensible that this government has got itself into such a position that it is unwilling, for whatever reason, to consult with the Law Society. We now have a situation where the government is introducing very significant changes to the bill in the Legislative Council. Thank goodness for the bicameral system. Thank goodness for the Legislative Council. Thank goodness for the filter and safety net that this chamber provides, because otherwise it would have been rammed through the House of Assembly in a sitting week and that would have been the end of it.

With the Legislative Council, the Law Society at least had the capacity to say, 'Okay, the government didn't want to consult us. We are now happy to be consulted by non-government members and parties.' Whilst I have congratulated the Hon. Iain Evans, I know there are a number of minor party and Independent members who have actively engaged in discussions with a number of those groups to inform themselves of the implications of the legislation.

One of the big differences with this bill from many of the ones I have previously been involved with—and I remember one of the earlier bills I was involved with that was so complicated and complex that it ended up in a conference between the houses to try to resolve it. That bill was etched in my memory because it was my first exposure to the complexity of the third-party scheme. What looked plausible on the surface did not always work out that way; that is why you needed to ask questions and pursue it.

At the very least at that stage—and this was a former Labor government back in the 80s, and it was continued through the period of the 90s when there were Liberal governments—when these sorts of provisions were made, by and large there were estimates given of what the impact would be on the financial viability of the scheme. That is—and I know that from the first bill that I had experience with and many others after it—they indicated that, if this particular provision in the bill was passed, it is estimated that this will have a saving of $5 million or $10 million or $1 million for the scheme.

Occasionally they would say, 'Look, we do not know. It is going to be minor, but we think it might be an area where there will be growth in the future.' There were a range of estimates from the honest 'we don't know but we think it's minor' sometimes to 'we don't know but it is not going to be super significant', but more often than not they provided the parliament with an estimate of the financial impact on the scheme.

That should not be the only determinant of a parliament's views but it ought to be part of the range of information that parliaments have in determining it. I know in the past there have been oppositions, when we were in opposition and Labor oppositions as well, that in the end might have had some doubts about provisions but because the estimates were that it would have a significant impact on reducing the costs of the scheme, and therefore reducing the extent of increases for CTP for drivers, that the oppositions of the day have said, 'On balance, we are prepared to go with the advice and accept it.'

I know Iain Evans started off with that position; I certainly started off with that position. When I looked at the bill, after he had looked at it, I said, 'The first thing we need to do is get from the government and from MAC some estimate of what the impact for this is going to be.' If you are arguing about $100,000 here and there or $200,000, or whatever it might happen to be, in a scheme the size of the compulsory third-party scheme, if there are important issues of principle here, are they worth sacrificing for potentially a saving of $200,000 on the scheme? That is, there might only be less than a handful of cases and, even if there were, the impact on the scheme might not be significant.

I think in those circumstances people will be less prepared to support such a change which might disadvantage a small number of people with a smallish impact on the scheme. At the other end, there may well be a particular amendment which might lead to very significant savings. There still might be impact on a number of people, and then it is up to members and parties to make judgements as to how they balance off, 'Okay, we are trying to keep down the costs for all drivers throughout the state (or at least for those who are paying CTP), we are trying to keep down the cost of the scheme, but at the same time trying to be as fair as possible to the scheme.'

The other thing, too—one of the amendments traverses this area—is that there is the potential for the scope of the scheme to continue to grow. That is, there may well be very worthwhile and meritorious cases where costs are incurred by a particular individual, but in the end is it the responsibility of the compulsory third-party insurance scheme or should it be covered in some other way? The compulsory third-party insurance scheme essentially—and the second reading explanation is there—arises out of the use of a motor vehicle, and there are some amendments in relation to this, and that is what it has been constructed for.

It is not a comprehensive 24-hour insurance scheme, and if you just happen to be within spitting distance of a motor vehicle you can claim insurance cover under the CTP scheme. If you do, you increase the costs, and if you increase the costs it means everybody else has to pay higher CTP insurance costs. So, that is the concern with this particular provision—that there is nothing.

All we saw in the second reading explanation of the departed minister, the Hon. Bernard Finnigan, in his second reading explanation was that 'these amendments are important to the long-term viability of the CTP fund'. There is no detail of the individual impacts and no attempt at an overall aggregate impact on the viability of the scheme—just that broad sweeping statement. Whilst the questions were asked, precious little detail was further provided by the government in defence of its scheme.

That then creates a set of circumstances where non-government members and parties are wary about what is in the bill, and non-government members and parties are therefore less inclined to be supportive of the provisions in the bill and the government has a higher threshold, from our viewpoint, that it needs to meet to convince us to support the legislation. That is the position the member for Davenport essentially put down in another place.

One of the reasons for my not going over all the arguments against the government's original bill is, as I said, that the government is seeking to amend significantly a number of the provisions within the legislation. The government recently tabled its amendments, and for members' interest I think earlier today amendments in my name were filed, amendments which the member for Davenport on behalf of the Liberal Party has worked on with various interest groups and had approved by the Liberal Party room late yesterday afternoon.

My understanding is that, whilst there will be second reading debate this afternoon, the committee stages will be delayed until, at the earliest, tomorrow and possibly Thursday of this week, which will give members the opportunity to consult with the member for Davenport if they wish. I know he has given an undertaking to consult with independent and minor party members if they need explanation of the amendments.

In my time this afternoon I propose to briefly go through the Liberal Party's position now to seek to clarify, in at least a summarised version, and foreshadow where we intend to head in the committee stages of the debate and that may well assist other members as they contemplate what they are going to do during the committee stages as well.

We have amendments Nos 1 through 7 from the government. In relation to amendments 1, 2 and 4, I am advised that these essentially now indicate that the government has removed the chain of responsibility provisions of the heavy vehicle fatigue scheme from this bill. This means now that the driver will be exposed if they commit offences relating to driving while fatigued, exceeding the allowable work time for a driver and failing to have the required rest time.

The chain of responsibility provisions were a very significant part of the debate in another place. There has been very significant opposition to the chain of responsibility provisions, and the government, in part, has responded to that. The Liberal Party's position is that, whilst we will support the government's amendments 1, 2 and 4, we will however move to defeat the amended clause—that is, we will not be supporting the amended clause. The Liberal Party, as the member for Davenport has outlined, has accepted the position from the Law Society and others that, even with the amended clause, a driver faces a potential double penalty as a result of what would still be left in the bill.

In relation to the government's amendment 3, the Liberal Party position is that we will be supporting the amendment but, again, we will remain opposed to the clause. In relation to the government's amendment 5, which deletes the ability of the insurer/MAC to demand a statutory declaration, again, the Liberal Party's position will be to support the amendment from government, but we will still oppose the amended clause.

In relation to government amendment 6, which clarifies that defendants do not have to disclose information that is subject to legal professional privilege, again, we will support the government's amendment but will remain opposed to the amended clause. In relation to government amendment 7, which is clarifying that the bill has no retrospective effect on damage claims made before the bill, we will be supporting this amendment, but we will be moving, as members will see, an additional amendment in relation to retrospectivity which we believe tightens even further and confirms that there will be no retrospective impact of the government bill, if it passes the council.

I know that a number of members have been strongly lobbied by the Motor Trade Association on this particular issue of the two examples that are outlined in clause 6 relating to section 99, and we will be moving to delete those two examples. If those two examples are not deleted, then we will vote against the clause. If the amendments are accepted, then we will support that provision.

The next issue is in relation to the reduction of blood alcohol reading from .15 to .1, and this has been a complex issue for the party. The party's position is that we will support a lowering of the blood alcohol content to .1, on the proviso that what is referred to by the member for Davenport as a 'cause and effect' amendment which is filed in my name is passed by this chamber. That is, in essence, where it can be shown in some way that an individual's .1 or above blood alcohol reading had some cause and effect in relation to an accident.

I will have more detail when we get into the committee stage, but my recollection is that the advice to the member for Davenport related to an example where a driver with a blood alcohol reading of .1 was sitting behind the wheel in a parked car and someone smashed into that parked car—that is, there was no fault or cause and effect of the accident from the driver, albeit with a blood-alcohol of above .1, sitting in a parked car.

The advice was that, in this particular example, that person will probably find themselves covered by the government's legislation. If the government's position or argument is that it disagrees with that legal view provided to the opposition, we would certainly be pleased to hear the government's legal advice and argument. It may well be that the government accepts that that is the case and that is what is intended.

One of the areas that the Law Society and others have strongly opposed is the area of the provision of evidence, and I briefly referred to that earlier. This is the only area where I thought I would read at length from the Law Society's submission to the Liberal Party because it is a critical issue for them. I will place on record their arguments as to why it believes the current arrangements, even with amendments, are unsatisfactory and seeks a government response. The Law Society's submission, under the heading 'Provision of Evidence', reads as follows:

The proposed amendments, in their current form, are strongly opposed by the Sub-Committee. It is understood the intention is to have early access to information which allows better decision-making in relation to liability and quantum.

The strong concern of the Sub-Committee is that it has the potential to create firstly an uneven playing field, in that a claimant is required to give information regarding, in particular, liability without an equal requirement on the part of Allianz to share relevant non-privileged information concerning the same.

The view of the Sub-Committee is that wording such as 'to cooperate fully with the insurer' is too wide and requires refinement as to what information can and cannot be relevantly and reasonably sought by the insurer and when such information is to be sought.

Under the heading 'Liability—Section 127AB(1)(b)', the submission states:

MAC/Allianz has access to SA Police Vehicle Collision Reports which, in the normal course, are documents produced to Allianz and MAC, but in practice are not released by them to claimants. In relation to liability early provision of such information to claimants and Allianz can assist in determining the parameters of any potential dispute as to the version of events.

If the aim of the amendments is for information to be available so that early resolution can be achieved, then this will be best achieved where there is equal access to information. The Sub-Committee considers that if a claimant must 'cooperate fully with any request', then there should be reciprocal rights for the claimant to access all relevant information as to the defendant's/insured's version of the events.

Under the heading, 'Damages—Section 127AB(2)', the submission goes on to state:

The scope of Section 127AB(2) is uncertain, in that it is limited to the concept of a 'reasonable request' by Allianz. In accordance with the usual principles of litigation, the Sub-Committee strongly believes that the section should reflect access only to reasonable and relevant information.

There is also concern as to what is intended by the concept of reasonable. In particular, the limits of information that may be requested under the context of being reasonable. There is significant concern that whilst the stated purpose is to assist with the early resolution of disputes, the wording is so broad as to invite legal disputation, costs, uncertainty and a general level of distrust which will not be conducive to the stated goal of resolution.

The Sub-Committee strongly believes that a more targeted approach to the information that is being sought is appropriate. In Queensland the Personal Injuries Proceedings Act 2002, by its Regulations, stipulates the information that an intending claimant must submit to the insurer before commencing a claim. It identifies the classes of documents such as income tax records and other such information.

In South Australia, a like concept is expressed in the Supreme and District Court Rules 2006 where specific information is required to be given in the Statement of Loss and in the Magistrates Court by Form 22 Particulars.

The Sub-Committee would support amendment which would enumerate the information that is sought both in relation to liability and in relation to the quantification of the claim. For ease of reference, the Sub-Committee attaches, by way of example only, an extract from the Personal Injuries Proceedings Regulation 2002 in Queensland at Part 2, which sets out in detail information that claimants can be required to provide. There would need to be further consultation as to what information should be required to be provided in this State to achieve the intended goal of timely information and the potential for early resolution.

It must be noted that whilst a claimant is required to provide such information in Queensland, there is a reciprocal requirement that respondents, which would include Allianz, should also provide access to relevant material. Again by way of example, section 27 of the Personal Injuries Proceedings Act 2002 Queensland provides that a respondent to a claim must provide information 'directly relevant' to a claim as follows:

1. Reports and other documentary material about the incident alleged to have given rise to the personal injury to which the claim relates.

2. Reports about the claimant's medical condition or prospects of rehabilitation.

3. Reports about the claimant's cognitive, functional or vocational capacity.

4. Information that is in the respondent's possession about the circumstances of or the reasons for the incident.

5. If the respondent is an insurer of a person for the claim, information that can be found out from the insured person for the claim about the circumstances of or the reasons for the incident.

Section 127AB(3)

It is the subcommittee's submission that if a claimant is required to give information verified by Statutory Declaration, then the same should be a requirement of any respondent providing information. It is imperative that any requested information should be both reasonable and based upon matters which are directly relevant to the claim.

Section 127AB(4)

Should there be a failure to comply with section 127AB(3) this will statute bar and preclude a claimant from issuing proceedings. This does not accord with section 36 of the Civil Liability Act 1936 and if section 127AB were to be put in practice would cause frustration and costs in the court system in relation to application for the extension of any expired limitation period.

Pursuant to case flow management principles, the insured's ability to request information and documents should be limited to the pre-action stage as the court has processes and procedures with respect to matters once actions are issued.

Finally:

Fraud—section 127AB(5)

The subcommittee has concerns with respect to this amendment. If it is to be enacted, the subcommittee recommends wording which deletes 'misleading' so that the focus is on the provision on false information. An alternative is to rephrase the provision as follows:

'A claimant must not furnish information or produce a document or record under this section that is to his or her knowledge misleading in a material particular or is to his or her knowledge, false in a material particular.'

Further, the principal of Privilege against Self-incrimination should remain intact.

I put those views from the Law Society submission on the original government bill on the record because this is one of the areas that is being most trenchantly opposed by the Law Society, as well as other interested parties, and I seek from the government, when we get to clause 1 of the committee stage, a response to the concerns that the Law Society and others have expressed.

Finally, I would like to outline the proposed position of the Liberal Party on this bill. That is, the Liberal Party will move the amendments we have on file and will, by and large, support a number of the amendments—in fact, I think all the amendments—that the government will move. Nevertheless, the Liberal Party will strongly oppose a number of the significant clauses in the bill.

There are three broad things which will need to occur for the Liberal Party to support the bill at the third reading: first, the deletion of the examples as requested by the Motor Trade Association; secondly, the defeat of the evidence provision in the bill (that is, all the government amendments to section 127); and third, the defeat of the clause in the bill amending the Civil Liability Act.

The member for Davenport has outlined the Liberal Party's viewpoint, and I outline it to this house: that, unless the three circumstances I have just outlined occur, the Liberal Party will vote against the third reading of the bill. If those changes are made, then the Liberal Party is highly likely to support the third reading.

The Hon. G.E. GAGO (Minister for Regional Development, Minister for Public Sector Management, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister for Gambling) (15:59): I understand that there are no further speakers, so in light of that I would like to thank the Hon. Rob Lucas for his second reading contribution, and I look forward to the committee stage. He has put us on notice that a number of issues will need to be dealt with in detail through the committee stage, so I look forward to that. With those few words, I commend the bill to the house.

Bill read a second time.