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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-03-23 Daily Xml
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MOTOR VEHICLES (THIRD PARTY INSURANCE) AMENDMENT BILL

Second Reading

Second reading.

The Hon. B.V. FINNIGAN (Minister for Industrial Relations, Minister for State/Local Government Relations, Minister for Gambling) (18:17): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

The South Australian Motor Accident Commission (MAC) manages the State's Compulsory Third Party Insurance (CTP) scheme.

Some five years ago a series of reforms arising from the Tort reform amendments were made to the CTP scheme. Since that time it has become clear that further improvements are required to improve the equity and social responsiveness of the scheme whilst also contributing to the Government's broader road safety agenda.

As a result, MAC in consultation with its key stakeholders and partners has developed a series of legislative amendments. These amendments are not considered major and do not seek to limit the benefits payable to genuinely injured road users.

The amendments are summarised as follows:

Recovery from hit and run drivers

The Motor Vehicles Act 1959 (MVA) is to be amended to make a 'hit and run' offence under s43 of Road Traffic Act 1961 (RTA) a breach of warranty under the Policy of Insurance and subject to recovery action under s116 (Nominal Defendant) and s124A of the MVA (insured person).

Drivers, who fail to stop and give all possible assistance to an injured person following a crash and who fail to report the accident to Police and submit to a drug or alcohol test could become liable to a recovery to MAC or the Nominal Defendant for claims costs. The amount to be recovered will be what a Court 'thinks just and reasonable in the circumstances'.

Chain of responsibility in heavy road transport

This amendment will potentially make it easier for MAC to recover claims costs from all relevant persons in the chain of responsibility for a breach of driver fatigue-related laws in the heavy transport industry. Currently there is limited opportunity to recover against persons within the chain of responsibility who are not otherwise insured under the CTP Policy. For example, this could extend to an employer or consignor of goods who effectively induces, procures or rewards an employee to breach the driving hours regulations. It is envisaged that the persons who will fall within the chain of responsibility, as specified in the Regulations, will include the employer, prime contractor, operator, scheduler, consignor, consignee, loading manager, loader and unloader. The amendment will include a right to recover from those persons who have aided, abetted, counselled, procured or induced or been knowingly concerned in, or a party to, the commission of an offence against the Road Traffic (Heavy Vehicle Driver) Regulations 2008 (Heavy Vehicle Driving Regs), i.e. driving whilst fatigued and failing to comply with the driving hours.

Excess recoveries

The MVA is to be amended to increase the Excess amount that is to be recovered where the insured is 25 per cent or more at fault, increasing it to a maximum of $460 and this amount to be indexed annually. If the Excess payment received is within one calendar month of the date of notification it will attract a 5 per cent discount. The Excess has not increased since 1993.

Recovery for BAC offences

Currently the alcohol reading threshold for pursuing a recovery for breach of the Policy of Insurance is 0.15 per cent. It is proposed to amend the MVA to reduce the threshold to allow recovery of claim costs where the insured has a proven BAC of 0.1 per cent or more. The legal BAC limit is 0.05 per cent and the recovery level at 0.1 per cent represents a doubling of the limit before a recovery can be pursued under this amendment. The MAC believes this is fair and reasonable and will further contribute as an important deterrent for potential drink drivers.

Sanctions against non-cooperative insureds and Nominal Defendant's powers to compel uninsured drivers to cooperate

The MVA is to be amended to insert the requirement for an owner, person in charge or driver of a motor vehicle involved in an accident to provide additional information to MAC following an accident; specifically the name, date of birth, and address of the driver of the vehicle. In addition, a separate amendment will increase the maximum penalty from $250 to $5,000 against these persons who fail to co-operate with the insurer.

Provision of evidence

The MVA is to be amended to require a claimant to provide sufficient information to the insurer to enable a proper and timely assessment by MAC (and the Nominal Defendant) of the claim to be made, and to require a claimant to comply with any reasonable request for information. The obligation also extends to a claimant verifying any information by statutory declaration, if required.

Exposure of CTP Fund to 'International Forum Shopping'

The MVA is to be amended to limit the liability of the SA CTP scheme in the event of an enforceable foreign judgment being made against a motorist insured by MAC.

It should also be noted that several interstate CTP schemes have similar legislation, for example, Queensland and NSW.

Should the CTP scheme in SA not have similar protection, it could potentially be exposed to substantial risk which will undermine the solvency of the scheme.

Assessment for Non-economic Loss Damages

Section 52(2)(a) of the Civil Liability Act is to be amended to reinforce the proportionality intention of the non-economic loss points scale and to provide an example to serve as a constant guide on the application of the scale.

MAC maintains that reinforcing the intention and the proper application of the non-economic loss scale is critical to the viability of the CTP Scheme.

The meaning of the expression 'caused by or arising out of the use of', a motor vehicle

The MVA is to be amended to maintain the parameters which define the scope of the CTP cover insofar as deciding what injuries or death were 'caused by or arising out of the use of a motor vehicle'. This will exclude bodily injury or death being caused by the displacement of goods while a motor vehicle is being loaded or unloaded; or as a result of the unintended movement of a vehicle whilst being serviced, displayed, restored or equipped.

MAC is of the opinion that various decisions have been handed down by the Courts over the years that are gradually widening the scope of the CTP coverage. The consequence is that the CTP scheme is being further exposed to an increased liability, which must ultimately be borne by the motorists. The proposed amendments seek only to maintain the parameters of the cover.

These amendments are important to the long term viability of the CTP Fund.

They are intended to assist the CTP Scheme's social responsiveness and protect SA motorists from future possible premium increases driven by escalating liabilities caused by driving behaviours and attitudes that are considered socially unacceptable.

In addition, an important amendment relating to the awarding of damages under foreign judgements substantially reduces the very real risk of exposure that our Fund has to large claims in other overseas jurisdictions.

I commend the Bill to the House.

Explanation of Clauses

Part 1—Preliminary

1—Short title

This clause is formal.

2—Commencement

Operation of the measure is to commence on a day to be fixed by proclamation.

3—Amendment provisions

This clause is formal.

Part 2—Amendment of Motor Vehicles Act 1959

4—Amendment of section 99—Interpretation

This clause introduces a number of new definitions into the interpretation provision for Part 4 of the Motor Vehicles Act 1959, which sets out the third party insurance scheme.

A heavy vehicle driver fatigue scheme is a scheme for the management of fatigue in drivers of regulated heavy vehicles. The term regulated heavy vehicle is defined by reference to section 110AA of the Road Traffic Act 1961. A definition of parties in the chain of responsibility is also inserted. A person is a party in the chain of responsibility in relation to a regulated heavy vehicle if the person falls within the chain of responsibility in relation to the vehicle as specified by regulations made for the purposes of the definition. A relevant offence against a heavy vehicle driver fatigue scheme is an offence consisting of driving whilst fatigued or exceeding the allowable work time for a driver or failing to have the required rest time for a driver.

Other amendments are made to section 99 for the purposes of clarification and consistency. Examples are added to subsection (3). That subsection provides that, for the purposes of Part 4 and Schedule 4, death or bodily injury will be regarded as being caused by or as arising out of the use of a motor vehicle only if it is a consequence of the driving of the vehicle, the vehicle running out of control or a person travelling on a road colliding with the vehicle when the vehicle is stationary, or action taken to avoid such a collision. The subsection as amended will include examples of situations that would not be expected to fall within the ambit of subsection (3). Those situations are:

death or bodily injury caused by or arising out of the displacement of goods while a motor vehicle is being loaded or unloaded;

death or bodily injury caused by or arising out of the unintended movement of a motor vehicle while the vehicle is being displayed, serviced, repaired, restored or equipped.

5—Amendment of section 116—Claim against nominal defendant where vehicle uninsured

Section 116 provides for the making of claims against the nominal defendant if a vehicle is uninsured.

Subsection (7) of section 116 currently provides that if a sum is properly paid by the nominal defendant in respect of death or bodily injury for which the driver of an uninsured vehicle was wholly or partly liable, the nominal defendant may, if the driver drove the vehicle while there was present in his or her blood a concentration of .15 grams or more of alcohol in 100 millilitres of blood, recover from the driver the sum paid by the nominal defendant together with costs. Under subsection (7) as amended by this clause, the nominal defendant will be entitled to recover that sum, in addition to costs, if the concentration of alcohol present in the driver's blood was .1 grams or more in 100 millilitres of blood.

Proposed section 116(7aa) provides for the recovery from an uninsured driver of a sum properly paid by the nominal defendant if the driver was wholly or partly liable for the death or bodily injury in relation to which the sum was paid and he or she—

committed an offence against section 43 of the Road Traffic Act 1961; or

if the uninsured vehicle was a regulated heavy vehicle—committed a relevant offence against a heavy vehicle driver fatigue scheme.

In this case, the nominal defendant is entitled to recover the sum paid by the nominal defendant, or such part of that sum as the court thinks just and reasonable in the circumstances, together with costs. A person will be taken to have committed an offence against section 43 of the Road Traffic Act 1961 or a relevant offence against a heavy vehicle driver fatigue scheme only if the person has been found guilty of the offence.

Under subsection (7a) as amended by this clause, a finding of a court in proceedings for an offence as to whether the driver of an uninsured vehicle is guilty of an offence against section 43 of the Road Traffic Act 1961 or a relevant offence against a heavy vehicle driver fatigue scheme will be treated as determinative of the issue in an action by the nominal defendant under section 116.

Proposed new subsection (7ac) will provide for recovery by the nominal defendant from a party in the chain of responsibility in respect of an uninsured regulated heavy vehicle if the party aided, abetted, counselled, procured or induced, or was knowingly concerned in, or a party to, the commission of a relevant offence by the driver of the vehicle. The nominal defendant will be entitled to recover from the party so much of the sum paid or costs incurred as the court thinks just and reasonable in the circumstances. The question of whether a person has aided, abetted, counselled, procured or induced, or been knowingly concerned in, or a party to, the commission of a relevant offence is to be determined on the balance of probabilities.

Under proposed subsection (7ae), if an accident caused by, or arising out of the use of, an uninsured regulated heavy vehicle results in the death of, or bodily injury to, a person, a party in the chain of responsibility in relation to the vehicle must not persuade or attempt to persuade the driver of the vehicle to contravene or fail to comply with an obligation owed by the driver to the nominal defendant. A maximum penalty of $10,000 is fixed. (A similar offence is to be inserted into section 124A.)

Proposed subsection (7e) provides that a court before which an action is brought for recovery from a person of a sum paid by the nominal defendant must, if the court is to determine the amount that it is just and reasonable in the circumstances for the nominal defendant to recover from the person, take into account the extent to which the person contributed to or is otherwise responsible for the liability to which the claim or judgment relates. The court is also to take into account any other matter considered relevant by the court.

6—Amendment of section 118B—Interpretation of certain provisions where claim made or action brought against nominal defendant

Section 118B provides for certain prescribed provisions of the Motor Vehicles Act 1959 to be taken to apply where a claim is made or an action is brought against the nominal defendant. This clause expands the list of prescribed provisions to include new sections 124AA, which relates to limitation of liability in respect of foreign awards, and 127AB, which imposes certain obligations on claimants.

7—Amendment of section 124—Duty to cooperate with insurer

Under section 124, there is a requirement for written notice of various listed matters to be given to the insurer if a motor vehicle accident results in death or bodily injury. This clause amends section 124 by expanding the list of matters to include the name, date of birth and address of the driver of the motor vehicle at the time of the accident.

Section 124(3a) provides that a person who at the time of a motor vehicle accident that results in death or bodily injury to another was the owner, the person in charge, or the driver, of the motor vehicle must cooperate fully with the insurer in respect of a claim made in respect of the accident. The maximum penalty for a failure to comply with the section is currently $250. This clause increases the maximum to $5,000.

8—Insertion of section 124AA

This clause inserts a new section relating to limitation of liability where damages are awarded by a foreign court. The section will only apply to actions brought in foreign courts. For actions brought in courts of another state or territory of Australia, the general law and rules should continue to apply.

124AA—Limitation of liability in respect of foreign awards

Proposed section 124AA(2) provides that any limitation on liability for damages for death or bodily injury arising out of the use of a motor vehicle that is relevant to the operation of Part 4 (which sets out the third party insurance scheme) and the degree of liability under the policy of insurance under Schedule 4 is a substantive law of South Australia. It is made clear in the section that this includes, but is not limited to, the Civil Liability Act 1936. The limitation is intended to apply in relation to any action that arises out of the occurrence of the death or bodily injury. This is the case irrespective of where the death or bodily injury occurred and despite the fact that the court before which the action is brought would not ordinarily apply or take into account South Australian law.

The section further provides that if a court other than a South Australian court awards an amount of damages to a person in excess of an amount that would have been awarded before a court of South Australia, and the insurer is liable to pay the amount awarded, the insurer is entitled to recover the excess from the person to whom the amount is awarded. The section also provides that the insurer may set off the excess against any payment to be made to that person.

As mentioned above, the section only applies in relation to actions brought before courts of another country or state, other than a state or territory of Australia.

9—Amendment of section 124A—Recovery by insurer

Section 124A provides for the recovery of sums paid by an insurer from the insured if the insured has contravened or failed to comply with certain terms of the policy of insurance. Currently, as is the case for the nominal defendant under section 116, the insurer can recover from a driver who drives a motor vehicle while there is present in his or her blood a concentration of .15 grams or more of alcohol in 100 millilitres of blood. This clause lowers the relevant concentration from .15 grams or more of alcohol to .1 grams of alcohol.

As a consequence of an amendment made to section 124A(2), the insurer will be able to recover so much of the money paid or costs incurred in respect of a liability as a court thinks just and reasonable if the insured person contravened or failed to comply with a term of the policy of insurance by committing an offence against section 43 of the Road Traffic Act 1961 or a relevant offence against a heavy vehicle driver fatigue scheme.

A finding by a court as to whether or not a person is guilty of an offence against section 43 of the Road Traffic Act 1961 or a relevant offence against a heavy vehicle driver fatigue scheme will be treated as determinative of the issue in an action by the insurer under section 124A. A person will be taken to have committed an offence against section 43 of the Road Traffic Act 1961 or a relevant offence against a heavy vehicle driver fatigue scheme only if the person has been found guilty of the offence.

The section as amended will also provide for recovery from a party in the chain of responsibility in relation to a regulated heavy vehicle if the party aided, abetted, counselled, procured or induced, or was knowingly concerned in, or a party to, the commission of a relevant offence against a heavy vehicle driver fatigue scheme by an insured person to the prejudice of the insured.

This clause also inserts a new offence. Under proposed subsection (6), if an accident caused by, or arising out of the use of, an insured regulated heavy vehicle results in the death of, or bodily injury to, a person, a party in the chain of responsibility in relation to the vehicle must not persuade or attempt to persuade the driver of the vehicle to contravene or fail to comply with an obligation owed by the driver to the insurer. A maximum penalty of $10,000 is fixed. A similar offence is to be inserted into section 116.

Proposed subsection (7) provides that a court before which an action is brought for recovery from a person of a sum paid by an insurer must, if the court is to determine the amount that it is just and reasonable in the circumstances for the insurer to recover from the person, take into account the extent to which the person contributed to or is otherwise responsible for the liability incurred. The court is also to take into account any other matter considered relevant by the court.

10—Amendment of section 124AB—Recovery of excess in certain cases

Section 124AB provides for the recovery of an excess from an insured person if the insured's liability arises out of an accident that was to the extent of more than 25 per cent the fault of the insured. Currently, if the money paid and costs incurred by the insurer do not exceed $300, the insurer can recover the amount of the money paid and costs incurred. If the money paid and costs incurred exceed $300, the insurer can recover $300. The section is to be amended by replacing $300 with a prescribed amount of $460, which is to be indexed. A person who pays the excess within 1 month of a first request for payment will be required to pay 95 per cent of the prescribed amount (or, if the total amount paid is less than the prescribed amount, 95 per cent of that lesser amount).

11—Amendment of section 127—Medical examination of claimants

This clause amends section 127(5)(c) for consistency with new section 127AB. If a claimant fails to submit himself or herself to a medical examination by a legally qualified medical practitioner nominated by the insurer, he or she is not entitled to damages or compensation for any period during which the failure continues. This clause amends the relevant provision so that the claimant will not be entitled to damages, compensation, interests or costs while the failure continues.

12—Insertion of section 127AB

This clause inserts a new section.

127AB—Certain requirements in respect of claims

Section 127AB will require a claimant to cooperate fully in respect of his or her claim with the insurer. The claimant will be required to comply with any reasonable request by the insurer for information or to produce specified documents or records. The insurer may require a claimant to verify any information, document or record furnished or produced to the insurer by statutory declaration. Furnishing information, or a document or record, that the claimant knows is false or misleading in a material particular is an offence with a penalty of $50,000 or imprisonment for one year. Also, if a claimant fails to comply with section 127AB, he or she is not entitled, until he or she complies with the section, to commence proceedings or to continue proceedings that have already commenced in respect of the death or injury. He or she will not be entitled to damages, compensation, interest or costs for any period during which the failure to comply continues.

13—Amendment of Schedule 4—Policy of insurance

Schedule 4 sets out the terms of a policy of insurance for the purposes of Part 4 of the Act. Clause 2 of Schedule 4 lists certain things that an insured person warrants that he or she will not do. Under paragraph (c), a person currently warrants that he or she will not drive the vehicle while there is present in his or her blood a concentration of .15 grams or more of alcohol in 100 millilitres of blood. This clause amends paragraph (c) by substituting '.1 grams' for '.15 grams'. As a consequence of further amendments to clause 2, an insured person will warrant that he or she will not, if he or she is the driver of an insured vehicle when it is involved in an accident in which a person is killed or injured, commit an offence against section 43 of the Road Traffic Act 1961 (Duty to stop, give assistance and present to police where person killed or injured). An insured person will also warrant that he or she will not, if the vehicle is a regulated heavy vehicle, commit a relevant offence against a heavy vehicle driver fatigue scheme.

Schedule 1—Related amendments and transitional provisions

Part 1—Amendment of Civil Liability Act 1936

1—Amendment of section 52—Damages for non-economic loss

This clause amends section 52 of the Civil Liability Act 1936, which sets out rules relating to the awarding of damages for non-economic loss. Section 52(2)(a) provides that, if damages are to be awarded to an injured person for non-economic loss, the injured person's total non-economic loss is to be assigned a numerical value on a scale running from 0 to 60. The first amendment made to the section makes it clear that the scale is to reflect 60 equal gradations that are to be strictly applied according to the severity of non-economic loss. It is further made clear that assignment of a number on the scale is to provide, insofar as reasonably practicable, strict proportionality against the standard between injured persons according to the extent of non-economic loss that has been suffered.

An example is also to be added to paragraph (a).

Part 2—Transitional provisions

2—Transitional provisions

The transitional provisions provide that the amendments made to the Motor Vehicles Act 1959 do not affect a cause of action, right or liability that arose before the commencement of the amendment. However, new section 124AA(2), which relates to limitation of liability in respect of foreign awards, will apply in relation to any action commenced after the day on which the Motor Vehicles (Third Party Insurance) Amendment Bill 2010 was introduced.

Debate adjourned on motion of Hon. D.W. Ridgway.


At 18:17 the council adjourned until Thursday 24 March 2011 at 14:15.


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