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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2013-05-02 Daily Xml
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MOTOR VEHICLE ACCIDENTS (LIFETIME SUPPORT SCHEME) BILL

Second Reading

Adjourned debate on the question:

That this bill be now read a second time.

which the Hon. A.M. Bressington has moved to leave out all words after 'That' and insert 'the bill be withdrawn and referred to the Legislative Review Committee for its report and recommendations.'

(Continued from 1 May 2013.)

The Hon. J.A. DARLEY (17:29): I rise to speak on the Motor Vehicle Accidents (Lifetime Support Scheme) Bill. At the outset I must say that I was rather surprised to hear that it was the government's intention to complete all stages of debate for this bill by today, particularly given that the most recent correspondence from the minister's office was only received by my office—and I assume the same can be said for other offices—on 29 April, some four days ago.

I understand that the Hon. Ann Bressington will be moving a motion to have the bill referred to the Legislative Review Committee for inquiry, a move which I support in principle. In addition, I, like other honourable members, will also be moving amendments regarding some of the concerns that have been raised with me over this bill. To that end, I simply make the point that I struggle to see how this bill could possibly be dealt with by the end of today.

The bill, as we know, represents a major shift in the way we deal with the rights of persons injured in motor vehicle accidents. It establishes a no-fault lifetime support scheme for those people who are catastrophically injured in motor vehicle accidents irrespective of who is at fault. To counter that, the bill also proposes an overhaul of the existing fault based CTP insurance scheme, including significant changes to tort law for awards of damages under that scheme. Whilst the introduction of a no-fault lifetime support scheme is welcomed, it is this second element of the bill, which would result in changes to the rights to compensation for less serious injuries, that has caused the most concern, particularly amongst the legal profession.

In his most recent correspondence, the minister advises that after further consultation with the legal profession many of the concerns they raise have now been addressed through additional changes to the bill. Consequently, he states, the Law Society, the Bar Association and the Australian Lawyers Alliance have publicly stated that they do not seek any further changes to the bill. The changes the government has agreed to include:

lowering the threshold for claiming in tort, non-economic loss, voluntary services and loss of consortium from above 15 points on the proposed injury severity value scale to above 10 points;

lowering the threshold for claiming loss of impairment for future earning capacity from above 15 points on the proposed ISV scale to above seven points;

precluding party-party costs for claims under $25,000 except in circumstances involving a minor or a person under legal disability. For claims of between $25,000 and $100,000 party-party costs will be recoverable in accordance with the Magistrates Court scale; and

providing an injured person with the right to appeal to the District Court from a decision of an expert panel review that they are ineligible to participate in the scheme. The expert review panel itself will be able to be constituted of persons other than medical practitioners.

In addition, the government has also agreed to giving a statutory right of review and appeal against a decision to suspend a person's participation in the lifetime support scheme, providing that workers compensation, self-insured employers and the WorkCover Corporation are able to contract the lifetime support authority to supply services to people with catastrophic workplace injuries and requiring the insurer, or nominal defendant, to provide to the claimant, or the claimant's lawyers, copies of any material obtained under the authority the claimant gives in the claim form within 21 days.

It is fair to say that the minister has been very selective in the choice of words used in his most recent letter to describe the support of the legal profession. As I understand it, and I am sure many other honourable members who have spoken to the various stakeholder groups would be of the same understanding, there are still a number of concerns regarding the bill and any suggestions that they do not seek any further changes is, I think, somewhat misleading. Like the Hon. Rob Lucas, I understand that some of those concerns are that a number of the provisions in the most recent draft of the regulations appear to be contrary to the terms of the deal struck between the legal profession and the government. As a result, ongoing negotiations are still taking place.

According to Mr Tony Kerin, Managing Director of Johnston Withers—and I understand he is speaking in his private capacity and not as president of the Australian Lawyers Alliance—he has observed amendments to the ISV chart which make it even more difficult for those injured and particularly those suffering soft tissue injuries to the neck in rear end collisions to recover damages. In addition, Mr Kerin advises that the government has also changed the wording in some of the items which make it very difficult for people to recover damages, and even if they do he fears that they will be so minimal it will not be worth the effort. Overall, Mr Kerin says the clear intention of the legislation is to disenfranchise those who suffer those injuries. Mr Kerin also highlights the fact that the Economic and Finance Committee is yet to consider any submissions on the compulsory third-party insurance inquiry let alone be anywhere near reporting on its outcomes.

In light of these concerns, again, I, like the Hon. Rob Lucas and the Hon. Ann Bressington, am somewhat bemused by the fact that we are being asked to process this bill by the end of today. I would ask the minister to confirm the substance of the discussions that have taken place with the legal profession in recent days and whether any of the representatives have backed away or expressed reservations about the initial agreement entered into over a month ago or any other developments that have arisen since then, including changes to the draft schedules and regulations.

I remind honourable members that it is not just the legal profession who has expressed concerns over the bill. All of us would have received a written submission from SACOSS outlining very similar concerns. These include concerns over where threshold lines will be drawn; the fact that the ISV scale will be used to determine an individual's right to compensation and that changes may take away a person's right to sue; the uncertainty around the how the scale value will be calculated in respect of an individual suffering multiple injuries and the injustices that may arise as a result of applying the thresholds for economic and noneconomic loss too rigidly; and the lack of any exceptions to the rules.

I am pleased to see that the Hon. Tammy Franks has filed amendments dealing with these issues, and I foreshadow that I will also be moving an amendment regarding the court's ability to exercise discretion in certain circumstances. As I said at the outset, I am supportive of a no-fault lifetime support scheme for those people who have the terrible misfortune of sustaining catastrophic injuries. The fact that our current laws require a person to prove that somebody else is at fault for their injuries is nonsense. In fact, ideally I think the bill should be broader in terms of its definitions with respect to catastrophic injuries so as to capture more people who are unable to claim compensation under the at fault scheme. I appreciate that this may not be possible right now, but I certainly hope it will be considered in the future following any review of the legislation.

What I do not support, however, is implementing this scheme at the expense of others, in effect, robbing Peter to pay Paul and the diminution of a person's ability to seek appropriate compensation for at-fault accidents. To that end, I urge the government to give serious consideration to all of the amendments that are being proposed. I would just like to clarify again for the record issues regarding savings in registration fees or premiums. The government is intent on selling this bill on the basis that it will result in a $100 reduction in CTP premiums for South Australian motorists. This saving is a good thing, and I agree wholeheartedly with any reasonable measure aimed at alleviating the cost of living pressures. However, what the government is not so vocal about is the fact that the full benefit of the reduction will apply for only one year.

In the first year, when the new thresholds take effect, claims for compensation under tort law will decrease due to the revised and restrictive nature of the legislation. This will result in a reduction in premiums which has nothing to do with the lifetime support scheme. Like many others, I suspect, though, that it will also result in many people who have sustained injuries, which would have been compensable in the past, finding themselves unable to pursue a claim for compensation in the future.

In the following year, when the lifetime support scheme is up and running, a catastrophic injury levy equivalent to the savings realised in the first year will apply, therefore negating any savings realised in the first year. However, there will be a further saving of $40-odd as the catastrophic component of the CTP premium, which relates to the catastrophic at-fault injuries under tort law, no longer applies, having been replaced by the lifetime support scheme and the associated $105 levy.

The net benefit for motorists after the implementation of the lifetime support scheme will be a conservative $40 saving per annum and not $100. Of course, this is also assuming that there are no cost blowouts and, as other members have alluded to, we know all too well that this is a very real possibility. We need only to look as far as the WorkCover Corporation as a perfect example. The success of the scheme will rely heavily on the quality and expertise of the management implementing it. We can only hope that the government has learnt from its past experience with the WorkCover Corporation.

I would also like to comment very briefly on the lawyer fest or lawyers' picnic upon which the government lays so much of the blame for the increasing legal costs. I remind all honourable members, and the government in particular, that it takes two to tango. MAC is not the innocent victim in all of this, particularly in terms of increasing legal costs. In fact, I think it is now well accepted that it is common practice for Allianz either to pay out small claims so that they can in effect go away or drag matters out for unreasonable lengths of time and offer to settle just before they are listed for trial, thereby increasing legal fees.

It costs money to prepare for trial; everybody knows that. If Allianz is not willing to settle, plaintiff lawyers are left with little other choice. There is no doubt that many of the matters that are being dragged out for lengthy periods or listed for trial ought to be settled well before they reach that stage. This is not the plaintiff lawyers' fault. They are retained to get the best outcome for their client.

I agree entirely with the Hon. Ann Bressington that there seems to be a growing push towards excluding legal practitioners from these matters and blaming them for the scheme's cost blowouts. This is not the answer. People are entitled to be appropriately represented. This decision is not one for the government to make: it is one for the individual who has suffered injury. We should not be legislating for the removal of that entitlement.

In closing, in an ideal world, we would expect the government to implement a no-fault lifetime support scheme without impacting on the entitlements of other persons. I think we all accept that we are not living in an ideal world. At the very least, however, we should be aiming to make the system fair for all those people who have sustained sometimes debilitating and life-changing injuries. Of course, if it is the will of the parliament that the bill proceed in some half-baked manner and without proper scrutiny and thorough debate, then so be it. I simply want to make it clear for the record that this approach is fraught with danger and not one that I am supportive of. With that, I support the second reading of the bill.

Debate adjourned on motion of Hon. K.J. Maher.

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