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Legislative Council - Fifty-First Parliament, Second Session (51-2)
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WORKERS REHABILITATION AND COMPENSATION (SCHEME REVIEW) AMENDMENT BILL

Committee Stage

In committee.

(Continued from 4 June 2008. Page 3177.)

Clause 44.

The Hon. M. PARNELL: In relation to clause 44, which deals with the imposition of levies, the government's amendment proposes a number of things. One is the change of name from 'exempt' to 'self-insured'. There are also amendments in subclause (2) in relation to a levy being payable in the first instance on the basis of an estimate of aggregate remuneration for a particular financial year in accordance with division 7. Can the minister explain what has led to the proposal in subclause (2)? What problem does that subclause intend to address?

The Hon. P. HOLLOWAY: My advice is that this is all about the shift in the levy system to payment in advance rather than in arrears. Because it is prospective, the remuneration involves an estimate, so that requires reconciliation at the end of the year. That is essentially what the process is about.

The Hon. M. PARNELL: Does the government have any estimate or understanding of how that reconciliation process could work? Is there a percentage range that it is working within in terms of adjustments? What impact, if any, would that have on the unfunded liability?

The Hon. P. HOLLOWAY: My advice is that there is not expected to be any difference in the amount of money collected. It is not about either increasing or decreasing revenue; rather just a change in the method.

The Hon. M. PARNELL: I thank the honourable minister for that answer. I had envisaged that there may be problems in going to a forward estimate of wages on which to base the levy, much the same as we have had in areas of social security where people were required to estimate in advance what their income was going to be, and we have seen a lot of people having to repay social security overpayments. It seems to me that, if incomes can be unpredictable at a household level, they would also be relatively unpredictable at an enterprise level. However, I accept the minister's answer for now. There are two amendments (Nos 36 and 37) in the set Parnell 2 which relate to levies. I move:

Page 46, after line 14—Insert:

(2a) Section 66(7)—delete subsection (7)

(2b) Section 66(9), (10) and (11)–delete subsections (9), (10) and (11)

I move this amendment following on from amendments moved in the other place. When the government introduced this bill it had a provision in it originally that was consistent with the recommendation of the Stanley, Mountford and Clayton reports, and that was to reduce the level of cross-subsidies within the levy scheme. As should be fairly apparent by its endorsement by the last three major reports on WorkCover, the reduction of the level of cross-subsidies in the levy scheme would be in the interests of all stakeholders, with the exception (and this is important) of the very worst-performing employers.

The cap on industry levy rates within the existing legislation, set at 7.5 per cent, means that good employers have to subsidise bad employers. That is clearly the result of not being able to impose a levy greater than the cap, regardless of how bad an employer is. It means that the economic incentives for bad employers to improve their performance are reduced. Higher levels of subsidies from good employers to bad means worse workplace safety outcomes. In other words, by not penalising the worst employers you, in effect, punish the best employers.

The only possible explanation that I can see for the government's backflip, in rejecting the recommendations of all the reports I referred to, is that it has caved in to pressure from the very worst employers, because they are the only ones who have anything to gain by retaining the current level of cross-subsidies within the scheme. I think this is public policy of the very worst kind. I think we are selling the interests of good employers down the river; we are selling the interests of workers down the river, and all of this to pacify the very worst employers in the state, the ones with the worst safety records.

Rather than try to have the government do this backflip, even if that would be the best option in terms of public policy, the next best response is to try and build a bit of honesty back into the legislation. What my amendment (in particular, amendment No. 37) provides for is that the good employers, who are subsidising the bad, get named, because they do deserve to have their good performance recognised. However, very importantly, it will see the bad employers (those imposing additional costs on other businesses) also named—in fact, named and shamed.

I think this sort of transparency will lead to the better-performing employers picking up this issue and demanding an answer from the government. They would, quite reasonably, be asking the government why it backflipped on this issue; why the government pursued a bill so that the bad employers have to meet more of their own costs and then find that the government had backflipped on that. The question is: why should good employers pay for bad?

My understanding, in relation to these levies and how they are approached in other states, is that the other states either have no levy cap at all or they have a substantially higher levy cap than the one that the government is supporting. My plea to members on this amendment is that if they do want to introduce some transparency into the system, if members think that it is important to shine a light on the employers whose bad behaviour is costing other employers money, then they should support this amendment. The flip side of that coin is that if members want to show their support for good employers and recognise publicly their good work, then they should support this amendment, as well.

The Hon. P. HOLLOWAY: As I am sure most members of the committee will understand, there was a recommendation (originally with the Stanley review and also with the Clayton review) in relation to this matter. The government, of course, went through a consultation phase. There was an opinion that we would be no better off going from 7.5 to 15 per cent. There will always be some level of cross-subsidisation within the scheme, whether it be at 7.5 per cent or 15 per cent. As a result of that consultation phase, the government did make adjustments, not just in relation to this clause which dealt with some concerns of employers, but also in relation to step-downs, where they were reduced following representations from unions.

Changes were made to the original proposals as a result of the consultation phase, and this was one of them. Doubling the cap would have had a huge impact on some employers, and high-risk industries are not necessarily the poor performers that deserve such an increase. It is incorrect to say that just because there is a high injury rate that necessarily implies that they are a poor performer. Sometimes the safety record reflects the industry, not necessarily the practices within that industry. While we should always be trying to reduce those injury rates, it is obviously much more difficult with some injuries than with others. That is really the background to the amendment. The government is obviously opposed to it. I am not sure whether the honourable member moved both of his amendments (that is, amendment Nos 36 and 37) because he did speak to both. The government opposes the changes. We came up with a balanced position on the cap as a result of that consultation phase. It is a balance, as these things must always be, and that is why we intend to stick with our position on that.

In relation to the naming of employers, which is covered in the honourable member's amendment No. 37, the government opposes this as it would impose on WorkCover and the employers it covers a process that under any other reporting regime would be considered a severe breach of commercial in-confidence principles. WorkCover is already regular and transparent in its communications of its financial position, reporting on the funding position twice a year. In addition to this, WorkCover already publishes a detailed summary of the actuarial valuations relied upon in adopting the annual accounts and half-yearly results. The latter informs the levy rate setting process.

WorkCover already provides each employer with their claim details, including their cost. WorkCover already publishes a quarterly report on the scheme's health. So, this is an amendment that is not only not required but also a complete breach of the confidentiality between WorkCover and the scheme's registered employers. Obviously, this government will spare no effort in trying to reduce the rate of injury in the workforce wherever that occurs, but there are other factors. Unfortunately, some industries are inherently more risky or dangerous than others, and we have to take that into consideration as well.

The Hon. M. PARNELL: I will respond to two of the points the minister made, the first of which relates to the point he concluded with, and that is to suggest that high risk industries and poor performance do not necessarily go together, and I agree: they do not necessarily go together. However, the problem as I see it is that, having reached a certain threshold of levy, the incentive to do better in an inherently dangerous industry disappears. That is why the 15 per cent would have been far preferable to the 7.5 per cent.

When I studied labour law at university over 20 years ago, Dr Breen Creighton was the lecturer. He effectively wrote the textbook on occupational health and safety and labour law, and in lesson one on labour law almost his very first comment was, 'All industrial injuries, accidents and illnesses are preventable.' Most of said, 'Well, that can't possibly be true,' but, patently, it can be true.

Certainly, there are some situations where a level of risk does need to be accepted, but I think we are selling workers short if we say, 'The industry is inherently dangerous; you've just got to learn to live with that.' I want to put extra incentives on employers to do better, especially in those high risk, dangerous areas.

The second point I want to raise in relation to commercial in-confidence being a reason members should oppose my provisions in amendment No. 37 in relation to publishing the identities of good performers and bad performers is that I do not accept that that commercial in-confidence principle outweighs the benefits that would come from publishing that information, and the benefit will be both internal and external. The internal benefit will be the pressure that is put on employers to do better. The fact that their details have been published and they have been identified as a poor performer will put internal pressure. It is also going to put external pressure, and that will be pressure from shareholders, and it will be pressure from people that they deal with.

When we think about investors, given that yesterday we passed a bill in this place supporting ethical superannuation, it may even influence investors as to the types of companies that are worth investing in on an ethical basis. One of the considerations that a company might want to take into account in terms of the impact of investment on society (that is one of the tests we put in) is whether an employer is a regular killer and maimer of workers. I would have thought that was a reasonable thing for some people to take into account in relation to whether they invest with that company.

So, I do not accept that commercial in-confidence should stand in the way of these measures, which I say will provide a great incentive to bad employers to do better and will properly reward those employers with good safety records.

The Hon. D.G.E. HOOD: I have a couple of questions for the mover, if I may. First, I am a little confused as to why both amendments are being moved at the same time, as they appear to deal with separate issues, or at least somewhat separate issues. Secondly, I wonder whether the Hon. Mr Parnell will inform the chamber whether there are any other Australian jurisdictions under workers compensation legislation where the 'name and shame', for want of a better term, operates.

The Hon. M. PARNELL: In relation to the first point, it was my attempt to advance the debate. Yes, they are different issues; they just happen to relate to the same clause. I am speaking to them both now but I am happy to move them separately. I will test the will of the committee on both but I will not speak to them twice.

In terms of the honourable member's second question, I am not aware of whether these types of arrangements apply anywhere else but, as I said yesterday, I am always very pleased when this state seeks to be proactive and ahead of the pack when it comes to progressive social policies. I do not know whether it is used elsewhere, and it doesn't bother me whether or not it is because I think it is a good provision. I will move my two amendments separately.

The Hon. P. HOLLOWAY: I point out to the committee that, while there is an industry-wide cap of 7.5 per cent, we should take into consideration that there is a bonus penalty scheme that operates with a maximum penalty of 50 per cent and a maximum bonus of 30 per cent. If a company had the maximum bonus (30 per cent less), it would be 5 per cent up to 11.25 per cent if there were a maximum 50 per cent penalty. So, there is a range already that takes into account performance, if you like, within the industry.

Even that could provide some difficulty, particularly for small employers, because if you just had one worker who might have had an unfortunate set of circumstances rather than necessarily reflecting negligence or bad practice from the employer, it can obviously have a very significant effect on smaller employers. The committee should take into consideration that, through the bonus penalty scheme, there is a range of rates that would apply within a particular industry. As I said, it would be quite a significant range, so there is the bonus deterrent effect within that scheme.

Amendment negatived.

The Hon. M. PARNELL: I move:

Page 46, after line 21—Insert:

(15) The corporation must publish, in accordance with the regulations, any actuarial advice adopted by the corporation in fixing or varying any percentage under this section.

(16) The corporation must publish, on an annual basis, in accordance with the regulations, information that identifies—

(a) each employer whose payments of levies under this section in respect of a particular financial year exceed the costs of claims made under this act in respect of compensable disabilities arising from employment by that employer during that financial year (after applying such assumptions and other principles as the corporation thinks fit); and

(b) each employer whose payments of levies under this section in respect of a particular financial year total an amount that is less than the costs of claims made under this act in respect of compensable disabilities arising from employment by that employer during that financial year (after applying such assumptions and other principles as the corporation thinks fit).

The committee divided on the amendment:

AYES (2)

Kanck, S.M. Parnell, M. (teller)

NOES (17)

Darley, J.A. Dawkins, J.S.L. Evans, A.L.
Finnigan, B.V. Gago, G.E. Holloway, P. (teller)
Hood, D.G.E. Hunter, I.K. Lawson, R.D.
Lensink, J.M.A. Lucas, R.I. Ridgway, D.W.
Schaefer, C.V. Stephens, T.J. Wade, S.G.
Wortley, R.P. Zollo, C.

PAIRS (2)

Bressington, A. Gazzola, J.M.


Majority of 15 for the noes.

Amendment thus negatived.

The CHAIRMAN: The Hon. Mr Parnell has a further amendment to clause 44, amendment No.37.

The Hon. M. PARNELL: I will again test the will of the committee on this amendment, but I will not speak to it further. I move:

Page 46, after line 21—Insert:

(15) The Corporation must publish, in accordance with the regulations, any actuarial advice adopted by the Corporation in fixing or varying any percentage under this section.

(16) The Corporation must publish, on an annual basis, in accordance with the regulations, information that identifies—

(a) each employer whose payments of levies under this section in respect of a particular financial year exceed the costs of claims made under this Act in respect of compensable disabilities arising from employment by that employer during that financial year (after applying such assumptions and other principles as the Corporation thinks fit); and

(b) each employer whose payments of levies under this section in respect of a particular financial year total an amount that is less than the costs of claims made under this Act in respect of compensable disabilities arising from employment by that employer during that financial year (after applying such assumptions and other principles as the Corporation thinks fit).

The committee divided on the amendment:

AYES (2)

Kanck, S.M. Parnell, M. (teller)

NOES (17)

Darley, J.A. Dawkins, J.S.L. Evans, A.L.
Finnigan, B.V. Gago, G.E. Gazzola, J.M.
Holloway, P. (teller) Hood, D.G.E. Hunter, I.K.
Lawson, R.D. Lucas, R.I. Ridgway, D.W.
Schaefer, C.V. Stephens, T.J. Wade, S.G.
Wortley, R.P. Zollo, C.

PAIR (2)

Bressington, A. Lensink, J.M.A.


Majority of 15 for the noes.

Amendment thus negatived; clause passed.

Clause 45.

The Hon. M. PARNELL: This clause amends section 67 in relation to the adjustment of the levy involving individual employers. The clause allows for the adjustment of levies based on practices and procedures in connection with rehabilitation and return-to-work coordinators. Can the minister please list the specific things that an employer might do that would result in an increase in the levy under this clause, and the specific things that an employer might do that would result in a decreased levy under this clause?

The Hon. P. HOLLOWAY: Really, the proposed amendment is a technical one consequential on the insertion of section 28D by clause 9, 'Establishment of the rehabilitation and return to work coordinators'. The clause introduces another matter to be considered by WorkCover when determining whether to adjust to an employer's levy the employer's practices and procedures around the appointment and role of a rehabilitation and return-to-work coordinator, including their compliance with relevant guidelines published by WorkCover. Failure to adhere to this section can result in an additional levy fine imposed on the employer by WorkCover.

The Hon. M. PARNELL: I thank the minister for his answer. My next question is: will there be any appeal rights in relation to decisions made under this clause and, if so, can the minister explain what the process would be in that regard?

The Hon. P. HOLLOWAY: My advice is that, under existing section 72, appeal rights will be the same appeal rights as currently exist for matters to do with the levy.

Clause passed.

Clause 46 passed.

Clause 47.

The Hon. M. PARNELL: I have a few questions in relation to this clause. This clause amends section 68 in relation to a special levy for self-insured employers. My questions specifically relate to clause 47(4), which replaces section 68(3) with the following:

If the corporation is satisfied that there are good reasons for differentiating between different self-insured employers or classes of self-insured employers, the percentage on which the levy for self-insured employers is based may vary from self-insured employer to self-insured employer or from class to class.

Members might not be aware but exempt employers do pay some levy to WorkCover. It seems that this new provision relates to that. My question of the minister is: can he explain how the levies charged to exempt employers are calculated at present, and what factors are taken into account?

The Hon. P. HOLLOWAY: I think the answer to the honourable member's question is that existing section 68(2) in the Workers Rehabilitation and Compensation Act indicates the factors that are taken into account. It states:

(2) The levy payable by an exempt [soon to become self-insured] employer will be a percentage of the levy that would have been payable by the employer if the employer were not registered as an [self-insured] employer and will be fixed by the corporation with a view to raising from exempt [now self-insured] employers—

(a) a fair contribution towards the administrative expenditure of the corporation; and

(b) a fair contribution towards the cost of rehabilitation funding; and

(c) a fair contribution towards the costs of the system of dispute resolution established by this act; and

(d) a fair contribution towards actual and prospective liabilities of the corporation arising from the insolvency of employers.

The Hon. M. PARNELL: I thank the minister for his answer. I had four things that I wanted to ask about. I think a contribution towards the funding of the dispute resolution was mentioned, so that is the tribunal. Regulation of self-employers has been covered. The two remaining issues are: first, is there any financial contribution towards the operation of SafeWork SA; and, secondly, is there any contribution in relation to advertising that is undertaken by WorkCover?

The Hon. P. HOLLOWAY: My advice in relation to SafeWork SA is that under the Occupational Health, Safety and Welfare Act the self-insured employers would pay a levy for that purpose. I understand that it is actually collected by WorkCover but the legislative backing for it is under the Occupational Health, Safety and Welfare Act. Advertising costs would come under '(a) a fair contribution towards the administrative expenditure of the corporation'. So, I think advertising would be regarded as administrative expenditure of the corporation.

The Hon. M. PARNELL: I thank the minister for his answer. My understanding is that as well as those direct fees that are collected for SafeWork SA there is an additional multimillion dollar contribution made by WorkCover itself. So, my question was: in addition to the hypothecated levy, if you like, is there any part of the self-insured employers' levy that does go towards SafeWork SA on top of that additional payment?

The Hon. P. HOLLOWAY: My advice is that WorkCover does pay a sum in the range of $10 million to $12 million to SafeWork SA. We are just trying to find out whether we can get a better handle on how that is considered within the scheme. We will have to get some more information on that, so we will perhaps come back to it. I have some other information for the honourable member which I hope to table after lunch, so perhaps we will see whether we can get it by then.

The Hon. M. PARNELL: I have no further questions on this clause.

Clause passed.

Clause 48.

The Hon. M. PARNELL: I have four amendments, but all of them relate to the issue that we canvassed at some length in relation to regulations, so I will not be moving those consequential amendments.

Clause passed.

Clause 49.

The Hon. M. PARNELL: This clause relates to an amendment to section 70, which refers to an employer's failure to provide information. Can the minister explain what has led the government to pursue this clause, and are there any specific examples of problems that this clause is designed to overcome?

The Hon. P. HOLLOWAY: My advice is that this amendment is consequential to the amendment of section 69 in clause 48 (which we have just passed) that requires employers to estimate remuneration and pay the levy in advance. Because this section will not be based on estimation, penalties for defective returns will be less applicable. The amendment will ensure that employers are obligated to provide any information required under part 5 and that WorkCover will be able to make its own estimates, determinations or assessments if necessary and also impose a fine if an employer does not provide the requested information.

Clause passed.

Clause 50.

The Hon. M. PARNELL: My question on this clause is essentially the same: what is the rationale for this amendment and what, if any, specific problems is it designed to overcome?

The Hon. P. HOLLOWAY: These are technical amendments to bring section 72 into line with the proposed changes to section 69 to require levy payment in advance. Enabling estimation of remuneration to be reviewable and alterable by the board will provide employers with an avenue of appeal if they disagree with the processes and estimations of their remuneration.

Clause passed.

Clause 51.

The Hon. M. PARNELL: This clause relates to the discontinuance fee that is charged by WorkCover to what we now call self-insured employers who seek to leave the scheme. Representations made to me on behalf of the self-insurers make it very clear that they vehemently oppose this clause. As understand it, WorkCover has been in the practice of charging these discontinuance fees for some time, and I also understand that there is some Supreme Court litigation underway about one particular discontinuance fee that has been charged by WorkCover. Can the minister explain what that challenge is, and what are the issues involved that have resulted in this clause (if, in fact, that is the reason this clause has been introduced)?

The Hon. P. HOLLOWAY: The advice I have is that Linfox is challenging the ability of the board to impose the balancing payment, and that is the basis of the legal challenge.

The Hon. M. PARNELL: I have a couple more questions on this clause. Can the minister explain the formula that has been used by WorkCover to determine the fees it currently charges?

The Hon. P. HOLLOWAY: My advice is that the basis for doing that is that it is an incredibly convoluted process to make that determination. However, I am advised that it is subject to a board determination, which is publicly available; it has been gazetted, so I can perhaps provide one later to the honourable member if he wishes.

The Hon. M. PARNELL: On that same line of questioning, the minister talked about gazetting a formula, so my question is: is it intended to change the formula used to calculate the exit fees if this clause is passed? Is that what the minister has said he will provide us: the new formula?

The Hon. P. HOLLOWAY: What we can provide to the honourable member is the current determination that is being gazetted. In the future it will be regulated, but the government will consult on that matter before it happens.

The Hon. R.D. LAWSON: Can the minister assure the committee that the amendments made to these provisions will not have any adverse effect upon the Linfox litigation to which he referred—or any effect at all?

The Hon. P. HOLLOWAY: My advice is that there will be no retrospective application of the provision.

The Hon. R.D. LAWSON: The Self Insurers Association has advised all members, I imagine, of the circumstances in which this amendment was included in the legislation without any consultation whatsoever or prior advice to the self-insurers of the government's intention to do so. Can the minister confirm that the government did not have prior consultation with the self-insurers or their association? If so, what was the reason for that?

The Hon. P. HOLLOWAY: My advice is that there was no consultation but that what this clause seeks to do is to regulate existing practice.

The Hon. M. PARNELL: I understand that the federal government's ComCare system is under review. Did WorkCover or the federal government make a submission to the review in relation to these fees? I understand that many of the self-insureds end up with ComCare.

The Hon. P. HOLLOWAY: My advice is that the state government did make a submission to the review.

The Hon. M. PARNELL: Can the minister explain to the committee the submission in relation to exit fees?

The Hon. P. HOLLOWAY: My advice is that the submission had many aspects, including OH&S. It was prepared by SafeWork SA on behalf of the government. I cannot provide more information here; we do not have access to that.

The Hon. J.A. DARLEY: I will be opposing this clause. Clause 51 of the bill relates to discontinuance fees. The effect of this provision is to impose a discontinuance fee on exempt employers, including self-insured employers, and to effectively legislate or enshrine the concept of exit fees. There is no justification for that impost upon registered employers seeking to exit the scheme, particularly since more than 40 per cent of the total scheme is self-insured and has no unfunded liability, which is quite remarkable when you consider that they operate within exactly the same legislative framework and have the same workers' entitlements as the WorkCover Corporation.

If WorkCover was responsible for maintaining the existing claims of exempt employers, it could be argued that an exit fee is necessary in order to fund these claims. However, this is quite clearly not the case as self-insurers accept the responsibility for any existing claims and liabilities from the moment they become self-insured and WorkCover is also well protected against the risk of self-insurers becoming insolvent. It seems to me that these exit fees, which are especially unfair to small businesses, are nothing more than WorkCover implementing a grab for money as a punishment for employers who choose to leave its mismanaged scheme. I oppose this clause.

The Hon. D.G.E. HOOD: Family First also opposes this clause. Whilst the focus of this bill is obviously the defence of workers rights—and we certainly will maintain that line—this particular clause is an unfair impost on business. It is an exit fee that really should be levied at WorkCover if anyone, certainly not on business, and especially not on small business. We will join the Hon. Mr Darley in opposing this clause.

The Hon. P. HOLLOWAY: I will provide some more explanation. I first make the point that the exit fee applies only to employers with a base levy greater than $100,000; so there is some protection for smaller employers. I would like to provide some comments that the chairman of WorkCover gave to the Statutory Authorities Review Committee that I think are worth including:

The Board determination around balancing payments—sometimes referred to as exit fees—is about ensuring that the scheme and the remaining employers are not disadvantaged by employers choosing to leave the State scheme while it is in an unfunded financial position. We know that over time the scheme average levy rate has been insufficient to cover the costs of claims—that is why we have an unfunded liability. The current levy rate has a component built in to 'clawback' the unfunded liability over time. All registered employers contribute to this clawback.

When an employer moves from being a registered employer to a self-insured employer, they take over the management and liability of existing claims. WorkCover makes a payment to the employer to take on that liability. By leaving the registered scheme, that employer is no longer contributing to the funding shortfall clawback through their levy. That is, they exit the scheme before they have made an appropriate and fair contribution, meeting their proportion of the unfunded liability.

What the balancing payment seeks to do is to recover the appropriate contribution to the funding shortfall at the time the employer elects to leave the registered scheme. In simple terms, the money an employer owes WorkCover through the balancing payment is offset against the amount that WorkCover pays to the new self-insurer to take on the liability of existing claims. Similar principles apply in the case of an employer leaving the State Scheme entirely and moving to ComCare, though in this case the claims stay with WorkCover, no money is paid to the employer and therefore no set off is applicable.

The Government's proposed legislative changes seek to achieve through legislation and regulation what is already in place.

And, as I mentioned:

There is a current matter before the Supreme Court which seeks to challenge the validity of the Board determination.

Clause passed.

Clauses 52 to 56 passed.

New clause 56A.

The Hon. SANDRA KANCK: I move the amendment standing in the name of the Hon. Ann Bressington:

Page 52, after line10—Insert:

56A—Amendment of section 84—Evidence

Section 84—after its present contents (now to be designated as subsection (1)) insert:

(2) However, the Tribunal must not—

(a) receive any evidence in the form of, or attained through the use of, any photographs, films or video or audio recordings, unless the evidence was obtained under an authorisation issued in accordance with a scheme established by the regulations; or

(b) receive any other form of evidence that appears to have been unfairly obtained.

(3) The Tribunal must, for the purposes of its proceedings—

(a) take steps to ensure that it receives all relevant evidence from any relevant source, including through exercising, as necessary, its powers on an inquisitional basis and by obtaining any form of evidence it thinks fit; and

(b) in the case of a dispute under Part 6A—test the veracity and merit of the relevant compensating authority's decision that has given rise to the matter in dispute.

(4) Without limiting subsection (3), if it appears in any proceedings before the Tribunal that a person may have acted in contravention of this Act, the Tribunal may investigate the matter.

(5) For the purposes of an investigation under subsection (4) (and without limiting any other power of the Tribunal), a member of the Tribunal, or a person authorised by the Tribunal, may exercise the powers of an authorised officer under section 110.

(6) A person is not excused from providing information to the Tribunal, or to a person acting under subsection (5), on the ground of legal professional privilege.

This amendment is extremely important to the Hon. Ann Bressington, and I suspect that most MPs who have been here for any length of time would have had complaints from individuals about the way they had been treated by WorkCover in terms of investigations, evidence and so on. This amendment addresses that.

It reins in the abuse of surveillance services by rogue operators, licensed or unlicensed, or by WorkCover officers who have access to unlimited resources for engaging surveillance operators to intimidate and harass injured workers. Commonly, such surveillance is carried out without any chain of command that will ensure upward accountability where there have been breaches of proper authorisation processes as currently required.

It also seeks to remedy many of the gross injustices perpetrated within the courtrooms of this state via the operations of the scheme critical list. Many cases affected by the scheme critical list show that judicial and quasi-judicial officers have ignored or run roughshod over vital corroborative evidence that might have substantiated legitimate workers rehabilitation and compensation claims. In too many cases, injured workers have been denied the opportunity to present corroborative evidence in support of their claims, and it has become common and accepted practice to deny injured workers the right to call witnesses, amongst other things.

Information supplied by an ex-employee of WorkCover has advised the office of the Hon. Ann Bressington that the scheme critical list was developed by WorkCover in the early 1990s. Because of the political backlash in the early 21st century arising from the airing of an SBS Insight program, its title was changed to the significant cases list. I assume that this was done so that it did not have to be produced publicly via the Workers Compensation Tribunal noticeboard, supplied to the unions or workers' legal teams, even though the corporation has stated that the scheme critical list had not deliberately been kept secret and that it would be made publicly available in the future. So, by changing the name, it seems that WorkCover got out of it.

Despite that undertaking by WorkCover, a copy of the scheme critical list has never been placed on the Workers Compensation Tribunal noticeboard since the SBS program was aired. The Hon. Ann Bressington has brought up this matter in parliament a number of times in the last few months. The information that has now been provided to her is that the list has gone even further underground within WorkCover in the last few weeks and has yet again been renamed. Along with that, a list has been prepared of the restricted few who will have access to it. This is a significant part of the reason for this amendment.

The information provided to me by the Hon. Ann Bressington's office in regard to subclause (5) of the amendment is that it would provide the tribunal with full access to investigative powers as would be afforded to officers of the corporation to investigate the decision-making and professional conduct of officers of the corporation, which cannot be done under the present situation.

Subclause (6) affirms an earlier precedent set by the Full Bench of the Supreme Court in which it was ruled that the corporation was not entitled to protect its own interests but was required to make decisions according to truth and merit. It is a concept that has been corrupted throughout countless immoral judgments that have allowed officers of the corporation to get away with concealing evidence and thereby advance its own interests. Typically, legal professional privilege is claimed. The Full Supreme Court unanimously ruled that the corporation is not entitled to do so.

The Hon. P. HOLLOWAY: Mr Acting Chairman, I am sure that you will recall the case of the scheme critical list because, when the Hon. Ms Bressington moved a motion in this chamber, you very effectively refuted the arguments. Essentially, this Scheme Critical List was an internal document within WorkCover that identified some cases that tested the 1995 act.

The Hon. Ms Bressington's amendment deals with the extent to which the tribunal is bound by traditional evidentiary rules of formal courts. Section 84 of the Workers Rehabilitation and Compensation Act states that the tribunal is not bound by the Rules of Evidence but may inform itself in any way it considers appropriate. The bill does not propose to change section 84.

The Hon. Ms Bressington's amendment would significantly expand section 84 of the act to place a number of important restrictions on the way the tribunal can gather evidence. The amendment would mean the tribunal could: not receive audiovisual evidence, except where authorised; not receive any evidence unfairly obtained; try to ensure that it receives all relevant evidence from any relevant source; investigate any breach of the Workers Rehabilitation and Compensation Act that it becomes aware of; and exercise the powers of entry and inspection set out in section 110.

The amendment would also prevent persons from withholding evidence to the tribunal on the grounds of legal professional privilege. The aim of that amendment is to inject a significantly greater degree of rigor and formality into the evidence-gathering processes under the act. The government strongly opposes the amendment as internally conflicting and inconsistent with the objectives of the act, unclear in parts and also unnecessary.

Informality is a key hallmark of the current dispute-resolution system. It is crucial that the system remains simple and accessible to claimants and not emulate the more elaborate and formal procedures of the courts. As such, the tribunal's rules regarding things like evidence gathering ought to remain as flexible as possible, within reason. This amendment would largely destroy this informality and, in some respects, tie the hands of the tribunal. This can only be counterproductive.

The committee divided on the new clause:

AYES (2)

Kanck, S.M. (teller) Parnell, M.

NOES (17)

Darley, J.A. Dawkins, J.S.L. Evans, A.L.
Finnigan, B.V. Gago, G.E. Gazzola, J.M.
Holloway, P. (teller) Hood, D.G.E. Lawson, R.D.
Lensink, J.M.A. Lucas, R.I. Ridgway, D.W.
Schaefer, C.V. Stephens, T.J. Wade, S.G.
Wortley, R.P. Zollo, C.

PAIRS (2)

Bressington, A. Hunter, I.K.


Majority of 15 for the noes.

New clause thus negatived.

The Hon. P. HOLLOWAY: Mr Chairman, before you put the next clause, I want to clarify something in relation to the scheme critical list. I said it was an internal document (which I was advised that it was) but I should also point out that it was provided to the tribunal for information.

Clause 57 passed.

Clause 58.

The Hon. M. PARNELL: I have a question before I move my amendment. This clause amends section 86A and relates to a reference of a question of law and final appeal to the Supreme Court. I find some of the words in proposed new subclause (2a) to be curious. It provides:

An appeal cannot be commenced under subsection (1a) except with the permission of a judge of the Supreme Court.

It seems to me that the tried and true form of words is that people are required to obtain the leave of the court. Can the minister provide any assistance in relation to the difference between the two concepts of permission or leave, and is there any case law about the meaning of the words 'the permission of a judge'?

The Hon. P. HOLLOWAY: My advice through parliamentary counsel is that, as a result of consultation with the Supreme Court, amendments were made to a whole range of language that was used in legislation, and this is the language that is now used by the courts. It reflects consultation with the Supreme Court.

The Hon. M. PARNELL: I thank the minister for his answer. I was not aware of that, but that sounds very sensible; permission is a much more logical word to use in these circumstances. I accept the thrust of the minister's answer but, effectively, it is the same theme, just renamed. I move:

Page 52, after line 23—Insert:

(4) Section 86A—after subsection (3) insert:

(4) No fees may be imposed with respect to a party (other than the relevant compensating authority) commencing proceedings by way of an appeal or a reference of a question of law to a full bench of the tribunal or the Supreme Court if the subject matter of the appeal or the reference relates to an opinion from a medical panel under part 6C.

This amendment seeks to insert a new subsection (4) in section 86A. We will get to medical panels later, but the purpose of this amendment is to say that, if it is a worker rather than the compensating authority who wants to have something tested, they should not have to pay the fees that are normally charged. In relation to Supreme Court proceedings, my understanding that it is over $1,000 to just get your foot into the door of the court. Given the importance of the ability of injured workers to judicially review decisions that have made by medical panels, not putting a barrier of a $1,000-plus fee in their way is the way to go.

The Hon. P. HOLLOWAY: The government opposes this amendment, as it would undermine the role and powers of medical panels as intended in the bill. I think we will be considering some 37 amendments to clause 70 when we get to it shortly—but who is counting? The role of the medical panels to make final and binding decisions on a wide range of medical questions is one of the core elements of the bill.

The Hon. Mr Parnell's amendment appears to presume the broad ability of parties to appeal and obtain references on questions of law from tribunal decisions where the subject matter of that decision relates to a medical panel opinion. This is a very broad scope to appeal or obtain a reference, and such broad scope is not intended by the bill. A key provision of the bill states that medical panel decisions are to be final and conclusive. Therefore, by nature, these issues of medical fact are meant to be considered, resolved and not subject to subsequent appeals or reviews.

The only appeals available from the decisions of a medical panel are to the Supreme Court on procedural fairness grounds (in other words, natural justice), and these appeals will not revisit the medical questions. The government rejects the presumption that final decisions of medical fact will often yield a number of unresolved questions of law. Since the premise of Mr Parnell's subsection (4) is flawed, the government believes there is no need for this subsection.

The Hon. M. PARNELL: I thank the minister for his answer, and I indicate that I will not be dividing on this clause.

Amendment negatived; clause passed.

Clauses 59 to 61 passed.

New clause 61A.

The Hon. M. PARNELL: I move:

Page 52, after line 29—Insert:

61A—Amendment of section 88G—Recovery of costs of representation

(1) Section 88G(1)—delete 'A' and substitute 'Subject to subsection (2), a'

(2) Section 88G(1)—delete 'by regulation' and substitute 'by rules of the tribunal'

(3) Section 88G(2)—delete subsection (2) and substitute:

(2) The tribunal may allow a representative to exceed a limit applying under subsection (1) if the tribunal determines that exceptional circumstances exist.

(3) the scale that applies under subsection (1) must be as close as is reasonably practicable to the scale that applies in relation to civil proceedings in the Supreme Court.

This amendment is about the costs charged for representation and is in response to proposals advanced by WorkCover and, in large part, adopted by the Clayton report in that regard.

Consistent with its approach to this bill and the way in which it administers the legislation, WorkCover took a very one-sided approach in relation to legal costs. As I understand it, according to the comparative performance monitoring data about workers compensation and workplace safety that is prepared for the Workplace Relations Ministerial Council, South Australia has amongst the lowest, if not the lowest, spending on legal costs of any Australian jurisdiction.

Whilst there are fundamental differences between the present cost arrangements at the conciliation and arbitration stage compared with the judicial determination stage, there seems to be consensus that some changes are required at the conciliation and arbitration stage, and there does not seem to be any case made for the sorts of changes that have been proposed at the judicial determination stage. There is very little in the way of a credible rationale to support WorkCover's proposal for fixed costs at the judicial determination stage, and there are some very straightforward arguments against it.

WorkCover's proposal was that there be a fixed amount of costs for matters at the judicial determination stage that settle (I think it was $11,000) and a fixed amount for matters that ultimately go to trial which I think was $15,000. I understand from a survey of recent cases decided by the Workers Compensation Tribunal that the number of days taken for a trial to be completed varied between one and 40. If members think that the 40-day trial was some vain attempt by a worker to win the unwinnable, I point out that the worker won that case, and it was the state government as an exempt employer (a self-insured employer) that had rejected the claim and put everyone through a 40-day trial. It was the government that cost the time and the money.

With that background, combined with the fact that WorkCover wanted to ban lawyers charging more than fixed fees, I think that members should begin to appreciate the nonsense of the WorkCover position. For a one-day trial, $15,000 is a very tidy sum but for a 40-day trial it is obviously hopelessly inadequate. The current system is that workers and employers are entitled to 85 per cent of their reasonable costs which are calculated in accordance with the Supreme Court scale. So, the appropriate costs are paid in each case—not WorkCover's proposal of a one size fits all proposal that suits no-one except the bureaucrats.

As I understand it, WorkCover's proposal would not have limited what employers can receive and pay in terms of costs, so if employers want to get someone famous—perhaps Tom Hughes QC from Sydney—then, all well and good but, if a worker wants to get the best representation to match what the employer is doing, they are banned from doing that. That is just not fair in an adversarial system.

There seems to be some claim from WorkCover that its proposal would protect workers from overcharging by an unscrupulous minority of lawyers, and that is a proper aim, but the way that WorkCover has proposed to address it is highly counterproductive. My simple amendment provides that, if a worker wants to engage representation at higher than usual rates and the tribunal feels that there are exceptional circumstances that justify it, that should be allowed. I commend the amendment to members.

The Hon. P. HOLLOWAY: This clause seeks to amend section 88G of the Workers Rehabilitation and Compensation Act by requiring a scale of charges for representation costs to be fixed by rules of the tribunal rather than by regulation. The government opposes the amendment. The government intends to make a regulation to cap the amount that a lawyer or advocate can charge or seek to recover from a worker, and this will be capped at the amount that is fixed by regulation. This will be done at the same time that the scale of charges is increased to better compensate representatives at the early stages of a dispute. The scale of charges, to be fixed by regulation, will be finally determined after consultation with the legal community; however, it is certain that the Supreme Court rate will be referred to and considered in those deliberations. The government opposes the amendment as we believe that such a step ought to be established through regulation with direct government control and the scrutiny of the parliament, as opposed to doing it through rules made by the tribunal.

New clause negatived.

Clauses 62 and 63 passed.

New clause 63A.

The Hon. M. PARNELL: I move:

Page 53, after line 4—

Insert:

63A—Amendment of section 89A—Reviewable decisions

Section 89A(1)—after paragraph (b) insert:

(ba) without limiting paragraph (b)—a decision on a request for assistance with rehabilitation made by a worker;

The purpose of this amendment is to make sure that, when bad decisions are made about rehabilitation, injured workers have access to justice. The current section 89A(1)(b) provides some access to justice but I am concerned that, in only referring to rehabilitation services, it unduly narrows its operation. For example, the provision of text books for participation in a course of study is not a service, and this amendment is designed to ensure that injured workers have access to justice for items like that when they are denied inappropriately. I do not think it is entirely consequential, but I would like to hear the minister's response. I do not propose to divide on it.

The Hon. P. HOLLOWAY: This is consequential to an earlier amendment that we defeated. The Hon. Mr Parnell's earlier amendment to clause 9 sought to introduce a new section  28E. The government opposed that amendment and opposes this amendment for the same reasons.

The Hon. D.G.E. HOOD: I understand that we are not dividing on this clause but, just for the record, Family First supports this amendment. We certainly believe that what is currently in the bill may be restrictive in that it does not specifically mention non-services, so we support the amendment.

New clause negatived.

New clauses 63A and 63B.

The Hon. M. PARNELL: I move:

Page 53, after line 4—Insert:

63A—Substitution of Part 6A Division 3

Part 6A Division 3—delete Division 3 and substitute:

Division 3—Reference of dispute

91—Reference of dispute

The Registrar must refer dispute for conciliation (unless the dispute is brought to an end before this step is taken by the Registrar).

63B—Amendment of section 92C—Procedure in conciliation proceedings

Section 92C—after subsection (7) insert:

(8) No more than 2 conciliation conferences may be held in particular proceedings without the agreement of the parties (and, subject to obtaining that agreement at the end of a second or subsequent conference, or within a reasonable time thereafter, and subject to any other determination of the conciliator, if the matter remains unresolved after the conclusion of the conciliation conferences then it will be taken that the conciliation proceedings have not resulted in an agreed settlement of the dispute).

This amendment seeks to insert a different clause 63A to the one that we were just talking about, but this is just a matter of numbering, and also to insert a new clause 63B. This clause relates to conciliation proceedings and my amendment is designed to stop an unfair practice that is sometimes used by WorkCover and some exempt employers to try to grind workers into submission by dragging out disputes and doing it in a way that imposes more costs on injured workers.

It is widely accepted that the costs provisions at conciliation for workers are woefully inadequate, and that means that the longer the conciliation process is dragged out, the more it will cost the worker. As a result, relatively often, WorkCover and some but not all exempt employers and self-insured employers, as a matter of course, drag out the conciliation stage to try to exhaust the injured workers' financial and emotional resources. In other areas, that sort of practice in the law is known as deep-pocketing.

I am aware of a number of recent cases where an exempt employer has sought more and more conciliation hearings and turns up with nothing new to say, not having done what the Workers Compensation Tribunal has ordered them to do, and when the matter is finally referred to a judge, the employer simply concedes at that point, having put the worker to great trouble and expense in the meantime.

If the parties want to have more conciliations, that is all well and good, but, if they do not, then this amendment puts a limit of two conciliations on the process before it is moved on to the next stage of the dispute resolution process. Basically, my amendment proposes that no more than two conferences may be held without the agreement of the parties.

If the parties are getting somewhere and they want to have more conciliation conferences, that is well and good, but let us remove this ability for WorkCover to drag injured workers through endless conciliation proceedings not for the purpose of genuinely trying to reach a conclusion but simply for the purpose of wearing them down. This is an important amendment for me.

The Hon. P. HOLLOWAY: This amendment is to delete division 3 of the Workers Rehabilitation and Compensation Act (that is, section 91 which deals with initial reconsideration and section 91A which deals with reference of disputes to conciliation) and substitute a new division 3 entitled 'Reference of dispute' wherein the registrar must refer the dispute for conciliation unless the dispute has already been brought to an end before this step.

The clause also seeks to amend the existing section 92C 'Procedure in conciliation proceedings' by inserting a new subsection that stipulates that no more than two conciliation conferences may be held without the permission of the parties involved. The government opposes this amendment which seeks to remove a provision that can actually avoid disputes.

The honourable member's amendment seeks to remove the provision for internal reconsideration which currently allows the compensating authority to have a person other than the original decision-maker review the decision in the light of the matters raised in the notice of dispute and either confirm or alter the decision. I have no doubt that there would be some examples where reconsideration has been under utilised; however, there is simply no justification for removing this stage which can prevent unnecessary disputes from progressing.

The Hon. SANDRA KANCK: I agree with the Hon. Mark Parnell that this is an important amendment. I find the government's rationale somewhat strange because this allows such conciliation to continue if WorkCover, the employer and the worker concerned are in agreement that this is the way to go forward. There is a huge power imbalance that works against the injured worker in these situations. This is a small move that I think can go some way towards redressing that imbalance. I think it is an amendment that is very worthwhile supporting if people think that an individual worker does not have the same sort of power that a big corporation has. I cannot think of any examples where it would be otherwise.

The CHAIRMAN: The Hon. Mr Parnell's amendment is in two parts. The first question is that new clause 63A be inserted.

The committee divided on the question:

AYES (5)

Darley, J.A. Evans, A.L. Hood, D.G.E.
Kanck, S.M. Parnell, M. (teller)

NOES (14)

Dawkins, J.S.L. Finnigan, B.V. Gago, G.E.
Gazzola, J.M. Holloway, P. (teller) Hunter, I.K.
Lawson, R.D. Lensink, J.M.A. Lucas, R.I.
Ridgway, D.W. Stephens, T.J. Wade, S.G.
Wortley, R.P. Zollo, C.

PAIRS (2)

Bressington, A. Schaefer, C.V.


Majority of 9 for the noes.

Question thus negatived.

The CHAIRMAN: I believe the honourable member has moved and spoken to new clause 63B.

The Hon. M. PARNELL: It has been moved, so it is on the record, but I do not propose to speak to it further or divide on it.

The CHAIRMAN: The question is that new clause 63B, as proposed to be inserted by the Hon. Mr Parnell, be so inserted.

Question negatived.

Clauses 64 to 67 passed.

New clause 67A.

The Hon. M. PARNELL: I move:

New clause, page 53, after line 22—Insert:

67A—Amendment of section 95—Costs

(1) Section 95(1)—Delete subsection (1) and substitute:

(1) A party (other than the relevant compensating authority) is entitled, subject to this part and to limits prescribed by regulation, to an award against the relevant compensating authority for the party's reasonable costs of proceedings for resolution of the dispute under this part (including proceedings by way of an appeal or a reference of a question of law to a Full Bench of the Tribunal or the Supreme Court).

(2) Section 95(5)—Delete subsection (5) and substitute:

(5) An award of legal costs cannot exceed—

(a) unless paragraph (b) applies—85 per cent of the designated amount;

(b) in the case of proceedings before the Full Bench of the Tribunal or before the Supreme Court—the designated amount.

(6) For the purposes of subsection (5), the 'designated amount' is—

(a) in the case of proceedings before the Tribunal—the amount that would be allowable under the relevant Supreme Court scale if the proceedings were in the Supreme Court;

(b) in the case of proceedings before the Supreme Court—the amount allowable under the relevant Supreme Court scale.

This amendment relates to the question of costs. I spoke earlier about what I believe is the wrong approach proposed by WorkCover in relation to costs—and, in particular, in relation to fixed costs.

Rather than leave it to regulations (which are certainly better than just a plain, old, unrenewable gazettal, as we have discussed before), which may be accepted or rejected by parliament, this amendment proposes enshrining the appropriate costs arrangements into the legislation. In essence, my amendment proposes that at conciliation and at judicial determination workers and employers are entitled to 85 per cent of the Supreme Court scale in terms of costs, and on appeal to the Full Tribunal or the Supreme Court 100 per cent of that scale.

The Hon. P. HOLLOWAY: The government opposes this amendment, which seeks to remove the allocation of costs against a worker for proceedings by way of an appeal or a reference to a question of law to the Full Bench of the Workers Compensation Tribunal or the Supreme Court by a worker against an opinion from a medical panel under part 6C. Subject to it being a properly made referral of a medical question, there would be no avenue for appealing that matter to the Full Bench of the tribunal. The decision of the medical panel is final and conclusive, and there is therefore no need to have specific costs arrangements in place to deal with those matters.

In any event, steps to provide absolute protection against costs and move away from the circumstances of the costs following the event is contrary to the objectives of the reform package in reducing incentives to unnecessarily delay dispute resolution, and to pursue matters beyond the early stages of a dispute. This can only result in frustrating delays in workers' claims, increased costs for the scheme, and poor return-to-work outcomes for the worker.

The Hon. M. PARNELL: For the benefit of the committee, whilst this is different from the other cost issue that I raised before regarding fixed costs, it is close enough that I think I know the will of the committee. I will not divide on this amendment.

New clause negatived.

New clause 67A.

The Hon. M. PARNELL: I move:

Page 53, after line 22—

Insert:

67A—Amendment of section 95—Costs

Section 95—after subsection (5) insert:

(6) Costs cannot be awarded against a party (other than the relevant compensating authority) in proceedings by way of an appeal or a reference of a question of law to a Full Bench of the Tribunal or the Supreme Court if the subject matter of the appeal or the question relates to an opinion from a medical panel under part 6C.

This is an alternative 67A to the one we have just dealt with, and it relates again to the question of costs, but it is significantly different from the previous one. This amendment relates to costs in matters arising out of medical panel decisions. The experience of medical panels interstate, in particular in Victoria, is that they commonly make bad decisions. They fail to provide procedural fairness, or they fail to apply the law properly. Given that track record and given the cloak of secrecy that is thrown around medical panels, which makes it very difficult to properly evaluate the correctness of what they have done, I think it is simply inappropriate that injured workers and employers get punished if they take issue with a medical panel decision and are not successful.

If the government was prepared to provide some basic transparency and include some basic natural justice and representation rights before medical panels, this amendment might not be necessary. But, if experience of this debate so far is any guide, I have some doubts about whether the government will accept my amendments in relation to medical panels and, as such, I strongly urge members to support this new clause.

The Hon. P. HOLLOWAY: The comments I made in relation to the previous clause were actually meant to apply to this one, because we had two new clauses 67A and two different amendments. The comments I made earlier were meant to apply to this clause, but they are close enough for the amendments to apply. The steps to provide absolute protection against costs and move away from the circumstances of costs following the event is contrary to the objectives of the reform package, and that is why we oppose it.

New clause negatived.

Clause 68.

The Hon. M. PARNELL: I have a few questions for the minister in relation to this clause, which inserts a new section 95A. Can the minister inform the committee of particular problems that are sought to be overcome by this provision?

The Hon. P. HOLLOWAY: Section 95A is a new section. There is no provision in the current Workers Rehabilitation and Compensation Act for recovery of costs against a worker's solicitor where they have personally caused unnecessary costs. Most other workers compensation jurisdictions in Australia already allow for a personal order of costs to be made against solicitors.

Currently, if a solicitor increases legal costs through negligence, default or misconduct, the parties to the dispute have to bear the costs. The current structure of the legal costs system is such that there is insufficient incentive for workers and their solicitors to seek an early resolution of a dispute. Costs available at the early stages, conciliation and arbitration, are limited, while those available for judicial determination are more generous and less restricted. This does not provide much incentive for a worker to instruct his or her solicitors to obtain all relevant information for the purpose of conciliation, as the worker recovers only a small contribution to their legal costs from WorkCover, but must pay the balance personally.

The clause inserts a new section authorising the tribunal to make various orders if a party's professional representative has caused costs to be 'incurred improperly or without reasonable causes or has caused cost to be wasted by undue delay or negligence or by any other misconduct or default'.

The tribunal can order that all of the costs between a professional representative and a client be disallowed, or that they repay the cost to their client; that they pay their client all costs that the client has been ordered to pay to another party, or that they pay all or any of the costs of another party. I have also been advised that there was a particular case before the tribunal in which the presidential member said he would have awarded costs against the solicitor, if he were able to so do.

The Hon. M. PARNELL: Given that compensating authorities have to make some contribution to workers' and employers' costs in the ordinary case, has the government given consideration to providing for indemnity costs orders against compensating authorities when those authorities breach relevant requirements, as many workers tell me they do on a regular basis?

The Hon. P. HOLLOWAY: My advice is no.

The Hon. M. PARNELL: I understand that a regular cause of delay is the failure of WorkCover and some exempt employers to provide on time the books of documents required by the Workers Compensation Tribunal. What action is the government taking to address these delays?

The Hon. P. HOLLOWAY: My advice is that this provision would apply equally to both.

The Hon. M. PARNELL: Just so that I understand the minister's response: if there is a delay which is, in fact, due to some action by an employer or an injured worker (the representative's client) but the client instructs the representative that they do not have permission to disclose their responsibility for the delay, in terms of legal professional privilege, how would that situation be dealt with?

The Hon. P. HOLLOWAY: My advice is that that would really be entirely a matter for the tribunal and that it would make a decision based on the facts before it.

The Hon. M. PARNELL: I move:

Page 54, after line 21—Insert:

(4a) However, the act or omission of the professional representative must be the sole or predominant cause of the default under subsection (2).

This amendment seeks to make this clause consistent with what Mr Clayton recommended. Mr Clayton stated:

The proposal to allow for an order for costs to be made personally against a solicitor, where costs are incurred solely as a result of the fault of the solicitor, is again one to which the review gives guarded support. The key element that underpins such support is that such a cost order would only apply where the additional costs result solely from the solicitor's action or inaction.

That was the Clayton recommendation. It is not clear to me why the government has disregarded Mr Clayton's advice on this point—but it has disregarded that advice. I am suggesting that, on this occasion, his advice be followed. The words in my amendment provide that the act or omission of the professional representative must be the sole or predominant cause of the default under subsection (2) in order to trigger that costs provision.

The Hon. P. HOLLOWAY: This amendment seeks to alter clause 28 by inserting a new subsection that clarifies when a professional representative is in default for costs—that is, if they fail to attend meetings, file documents, lodge or deliver documents, be prepared with any proper evidence or account, or any other proceedings which prevent the dispute from progressing. The amendment specifies that the representative is at fault only if an act or omission of the professional representative is the sole or predominant cause of the default.

The government opposes this amendment on the grounds that the original amendment is sufficiently clear in its intent. The clause makes it clear that an order against a professional representative cannot be made by the tribunal unless the representative is informed and is provided with a reasonable opportunity to make representations and call evidence. The government is not swayed by this amendment and sees no good reason to water down a provision that seeks to make professional representatives personally accountable for incurring costs improperly or unreasonably.

The Hon. M. PARNELL: I thank the minister for his answer, but I do disagree because I think the right of a professional representative to respond is very different from the threshold question that establishes their liability for costs, and that is what my amendment seeks to deal with. If the act or omission of the professional representative is not the sole or predominant cause of the default, I do not think they should even be put to that task of having to explain themselves. So, it is a threshold issue.

The committee divided on the amendment:

AYES (5)

Darley, J.A. Evans, A.L. Hood, D.G.E.
Kanck, S.M. Parnell, M. (teller)

NOES (14)

Dawkins, J.S.L. Gago, G.E. Gazzola, J.M.
Holloway, P. (teller) Hunter, I.K. Lawson, R.D.
Lensink, J.M.A. Lucas, R.I. Ridgway, D.W.
Schaefer, C.V. Stephens, T.J. Wade, S.G.
Wortley, R.P. Zollo, C.

PAIRS (2)

Bressington, A. Finnigan, B.V.


Majority of 9 for the noes.

Amendment thus negatived; clause passed.

Progress reported; committee to sit again.


[Sitting suspended from 13:01 to 14:18]


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