20-Jun-2013

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Radical Restructuring of the Motor Accident Scheme

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COMMENCEMENT

• From date of proclamation. [s.2 of Bill and s.68 and 65C]

STATUTORY NO FAULT BENEFIT

• Payable for any “motor accident” irrespective of fault. [s.65A]
• First party insurer to handle claim, otherwise MAA to nominate insurer to handle. [Clause 68 s.65B]
  The insurer handling the statutory benefits claim will act as agent for any third party insurer if a damages claim is pursued.
• Still scope for “characterisation” disputes and “causation” disputes.
• Funeral expenses up to $9,000. (s.65E)

WEEKLY BENEFITS

• Payment of weekly benefits:
  • First 13 weeks (3 months) at 95% of lost earnings.
  • Next 65 weeks (15 months) at 80% of lost earnings.
  • After 18 months, 80% of lost earnings (up to 5 years).
• Benefits during period (a) and (b) are only paid to an “earner” (s.65K). Someone who had:
  • Worked for 8 weeks pre-accident
  • Worked for 26 weeks in 2 years pre-accident
  • Was about to start a job
• Benefits during period (c) are paid to those who were not “earners” (presumably still subject to proving the loss).
• All weekly benefits cut at 260 weeks (5 years) unless injuries exceed 20% WPI. (s.68J)
• If pre-accident earning capacity cannot be determined, then use AWE.
• No loss of superannuation is payable. (s.65L(3)(c))
• Calculation of pre-accident earnings – average of 12 months pre-accident (with exceptions). (s.65M)
  • Students (s.65N)
  • Apprentices (s.65O)
• Deduct residual earning capacity, in pre-accident employment for periods (a) and (b) and for any capacity for “employment reasonably available” thereafter. (s.65P)
• Maximum weekly amount capped in accordance with s.34 of the Workers Compensation Act. (s.65Q)
• Payments are indexed with CPI. (s.65ZA)
• Weekly payments end at retirement age (or after 12 months if injured person already past retirement age). (s.65R)
• Failure to provide a medical certificate within 7 days suspends and forfeits benefits. (s.65S)
• Insurers may make an “earnings decision” about pre-accident and post-accident earnings capacity. (s.65U)
• Weekly payments are made fortnightly. (s.65.2(c))

TREATMENT AND CARE

• Reasonable costs of treatment, care, travel to treatment. (s.65ZD)
• No gratuitous attendant care. (s.65ZE)
• Sullivan v Gordon (paid attendant care for others) preserved on restricted terms. (s.65ZF)
• No treatment after 5 years unless injuries exceeding 10% WPI. (s.65ZI)

LUMP SUMS

• Payable for exceeding 10% WPI. Graded scale. (s.65ZL)
  • 11% to 15% WPI – $ 18,700
  • 16% to 20% WPI – $ 26,950
  • 76% and greater – $220,000
• Can only be paid for physical or psychiatric injury, even if both are over 10% WPI. (s65ZM)

REDEMPTIONS

• Must redeem all entitlements to pay statutory benefits at the one time. (s.65ZN)
• Redeemed by agreement between the parties or with approval of an assessor when required by guidelines – redemption must be “appropriate” and “adequate”.
• Assessor may vary an agreement up or down (s.65ZP)

STATUTORY BENEFIT DISPUTE RESOLUTION

• Can request internal review by insurer within 30 days of any decision. (s.65ZU)
• Internal review a pre-requisite to determination by a claims assessor. (s.65ZV)
• Can only seek claim assessor review within 30 days of internal review decision.
• Claims assessor determination binding except for questions of law.
• Decisions about pre-accident earning capacity and post-accident earning capacity can be reviewed by an Independent Review Officer (IRO) (s.65ZX), but it is only a review of procedure, not judgment or discretion.
• IRO review only after claims assessor review and within 30 days. (s.65ZX5(a))

COSTS

• Claimant can recover costs and expenses (which does not include legal costs). (s.65ZZ)
• Regulations can proscribe for recovery of legal costs associated with statutory claim. (s.65.ZZA)
• Claims assessor can award legal costs (s.65ZZA(3)
  • To a claimant under a legal disability
  • In exceptional circumstances (to be defined in regulations)

RESTRICTIONS ON STATUTORY BENEFITS

• Death. (s.65ZZB)
• If receiving workers compensation benefits. (s.65ZZC)
• No benefit for “serious driving offence” (until acquitted). (s.65ZZF)
  • Charged or convicted
  • Only if conduct “contributed materially”
  • Includes mid-range/high-range PCA, but not low range
  • Includes negligent driving causing grievous bodily harm, but not negligent driving with no grievous bodily harm
• No benefit for self-inflicted injury. (s.65ZZG)
• Statutory benefits for wages and lump sums refundable from damages claim, but not payments or redemptions for treatment. (s.65ZZH)

MAS

• New objects clause. (s.57B)
• Full power to determine causation. (s.58(1)(c))
• Determines the degree of permanent impairment. (s.85(1)(d))
• Revised s.60 WPI disputes can only be referred by parties
  • Other disputes (treatment) can only be referred by a claims assessor.
• Before a WPI dispute will be referred, the parties can be required to provide evidence of degree of permanent impairment asserted (i.e. medico-legals before MAS). (s.60(3))
• If condition not stabilised, can make an interim assessment.
• No further medical assessments unless ordered by court or claims assessor. (s.62)
• Review panels cut from 3 to 2. (s.63)
• Claims assessors can refer for non-binding assessments. (s.63A)
• Insurers to pay for costs of medical reports for MAS assessment. (s.64)

JURISDICTION OF CARS

• Exclusive jurisdiction of CARS assessors. Decisions final and binding. (s.65ZZI)
• Appeal to Supreme Court on question of law. (s.65ZZL). This would include all “characterisation” disputes.
  • Must be dispute in excess of $20,000
  • No indication of costs regime to apply

CLAIMS PROCEDURES

• Claimant can have payments suspended for not following direction of claims assessor. (s.69C(3))
• Must report accident to police or no weekly benefits until it is reported. (s.70A1)
• No payment of statutory benefits until provisional notice of claim. (s.70C)
• No back payment of weekly benefits prior to notice of claim if notice of claim not lodged within 28 days.
• S.72 amended to provide 12 months for notice of claim.
• Can only make claim after 3 years if over 10% WPI.
• S.81 amended to distinguish between “fault” and “liability”, but insurers must determine “liability”.
• Costs penalty of up to 25% for unreasonable denial of liability. (s.81A)
• Damages claim cannot be settled without legal representation or claims assessor approval. (s.82A(1))
• Statutory benefits claim to be referred by insurer to a claims assessor after 2 years if unresolved and unredeemed. Assessor to give directions for progress of matter. (s.84B)

CARS

• New objects clause. (s.87A)
• Assessors need not be lawyers. (s.87B)
• Power to examine on oath, cross-examine, compel answers. (s.87F)
• S.91 – Claim must be referred for assessment within 3 years or full and satisfactory explanation required.
• S.92 – No change to exemption regime, but that does not preclude change to guidelines.
• S.95 – Existing problem not fixed – if insurers do not admit “liability” then they have a right of re-hearing.

COURT PROCEEDINGS

• S.123A
  • Only damages for economic loss and non-economic loss.
  • Unclear where this leaves funds management.
  • Presumably abolishes claiming for capital cost of acquisition of suitable house/vehicle, additional costs of holidays.
• S.124 – Can claim for “loss of earnings”:
  • Abolish loss of super?
  • How are “earnings” defined?
• Power to fix percentages for contributory negligence by regulation. (s.138)

COSTS IN DAMAGES CLAIMS

• S.149 – “May fix maximum amount recoverable for costs by regulation”.
• S.152 – Regulations can compel disclosure of solicitor/client costs to another party (i.e. the insurer, not the MAA).
• Contracting out for CARS removed.

ANDREW STONE
Sir James Martin Chambers

23 May 2013