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Home | Blog | CTP/Motor Vehicle Accident Changes

Motor Accident Injuries Act 2017

The compensation regime for persons injured in motor vehicle accidents will change significantly for those injured from 1 December 2017.

New process

In place of the former regime which was primarily fault based, though with some provision for compensation for blameless accidents (which is preserved), the new regime will consist of a two-stage process for most injured persons. In the first stage, a range of statutory benefits will be payable for the first six months following a motor vehicle accident without the need to establish fault. In the second stage, that is after the first six months, statutory compensation will only be payable in circumstances where the injured person can establish fault on the part of another person and that they do not have merely a ‘minor injury.’ Injured persons may still bring damages claims subject to certain restrictions.

Payments following an accident

Three forms of statutory benefits are payable for six months following a motor vehicle accident, regardless of fault, including wage payments, treatment and care expenses and funeral expenses. The Act introduces a regime not dissimilar to workers compensation where injured persons are paid wage benefits for total or partial incapacity. This represents a significant change from the previous regime which required the injured person to establish fault and did not provide at all for wage payments.  In this respect, the Act represents an improvement on the old regime and fills a gap left by the Workers Compensation (Legislation Amendment) Act 2012 which has largely restricted journey claims for workers compensation benefits since 2012.

Persons injured travelling to or from work will now have access to statutory entitlements akin to workers compensation benefits.

Entitlements to medical treatments

The new regime introduces more red tape and administrative hurdles in order for injured motorists to access medical treatment. The entitlement to medical treatment (at lest within the first six months following the accident) however, is comparable to the old regime.

An injured person is only entitled to continue receiving statutory benefits beyond six months from the time of the accident if they can establish that another person was at fault in relation to the accident and they have more than a mere ‘minor injury’. A minor injury is defined to include a soft tissue injury or a minor psychological or psychiatric injury. The exclusion means generally that injured persons experiencing whiplash and less serious spinal injuries will be deemed to have a minor injury and therefore not entitled to receive compensation beyond six months. Those persons who develop major depression or post traumatic stress disorder, for example, will not be deemed to have a minor injury, though those suffering from more modest stress disorders may be.

Dispute Resolution Service (DRS)

Injured persons can pursue claims for damages where they can establish another person to be a fault, and so long as they do not have a minor injury. Disputes regarding damages claims are litigated in the DRS.

The Act introduces a new dispute resolution body, that is, the Dispute Resolution Service (“DSR”). The DSR is vested with many of the former functions of the Claims Assistance and Resolution Service (“CARS”) including determining the amount of damages to which an injured person is entitled and deciding a broad range of procedural issues, such as an entitlement of an injured person to bring a late claim. In contrast to CARS, the DRS can determine disputes where liability is in dispute, for example, where the driver-at-fault alleges they are not to blame for an accident. Under the old regime, such cases were exempted from assessment by CARS and usually decided by the District Court. Findings of the DRS concerning liability and contributory negligence are not binding in relation to any subsequent damages claim, which at first blush seems to be inefficient.

Restricted legal costs

Legal costs are restricted in damages claims where the amount of compensation recovered is less than $75,000. Only very limited costs are recoverable for what can be termed collectively as minor or procedural issues and only after a mandatory internal review process is followed.

Overall

The driving force behind the CTP reforms has been to deliver reductions in CTP insurance premiums by reducing the overall cost of the scheme, in terms of compensation paid to injured persons and the administration of claims. It is the writer’s prediction that although the dollar value of compensation being outlaid by the scheme will decline, the costs of administering the new scheme will increase markedly. It seems likely the overall cost of the scheme will decline, however, any savings from reduced compensation benefits will be eaten away by the cost of administering the new scheme. It is a shame that injured persons are required to subsidise the bureaucracy of the new scheme.

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