When was compulsory third-party insurance introduced and why?
The Motor Vehicle (Third-Party) Insurance Act became law in 1942. As the use of motor vehicles became common, so did accidents in which people were injured. However some motor vehicles were not insured against damages claims by accident victims. So this law was introduced to require every vehicle to be insured.
What is the origin of injured people being able to sue to recover damages?
In the United Kingdom, a lot of the laws were developed by the courts on the basis of what was fair and those laws became part of Australian law. This is what is known as the common law. In 1932, in the celebrated case of Donoghue v Stevenson, the English House of Lords determined that Mrs Donoghue, who suffered injury when she drank a bottle of ginger beer containing a snail, was entitled to recover damages from Mr Stevenson who manufactured the ginger beer. The court held that the manufacturer owed a duty of care to her which was breached because it was foreseeable that failure to ensure the products safety would lead to harm of consumers. This principle was quickly extended to cover motor accident victims and work accident victims. It is known as the law of negligence.
Has the right of injured road users to claim damages for negligence existed ever since 1942?
Yes except for a period of about 18 months in 1987/1988 when Transcover was introduced.
What was Transcover?
This law passed by the Unsworth government abolished the right of injured road users to claim damages for negligence. Instead they were given statutory rights to certain defined benefits. Those statutory rights included the right to a weekly payment for loss of earnings throughout the persons working life.
What happened to Transcover?
In 1988 the Greiner government set up the Transcover Review Committee. The Committee recommended the abolition of Transcover and the restoration of the right to claim damages. That right was modified to exclude minor claims for pain and suffering. This became known as the Motor Accidents Act.
What has happened since then?
The right of injured road users to claim damages the negligence has remained since that time, although it has been modified from time to time. This happened most notably in 1999 when the Motor Accidents Compensation Act became law. After that time 90% of road users lost their right to claim damages for pain and suffering, although they still retained their right to recover all of their lost earnings, medical expenses and the cost of care. The change was made by providing that damages for pain and suffering were only payable if the injured road user was assessed as having more than 10% whole person impairment under a table of maims. Although 10% sounds low, the medical tables mean that it is in fact a high threshold and 90% of injured road users don't reach this threshold.