New South Wales motorists rely on the compulsory third party insurance or “green slip” scheme, to ensure that they are able to recoup losses associated with injuries and fatalities resulting from road accidents. However, there are fears that proposed reforms to this scheme could jeopardise an injured party’s right to access adequate compensation.
Mounting concern over skyrocketing CTP premiums has prompted the State Insurance Regulatory Authority to re-examine how the current scheme is availing compensation to road accident victims.
The steady rise in premiums over recent years has been attributed to a corresponding rise in fraudulent and exaggerated claims and it is not difficult to see why. Statistics reveal that between 2008 and 2013 a 12 per cent decrease in road casualties coincided with a 40 per cent increase in CTP claims.
But while motorists may be happy to see a reduction in premiums, what will be the cost?
Impacts Of The Proposed Reforms
Less Compensation For Claimants With Minor To Moderate Injuries
The group most affected by the reforms are those with injuries causing less than 10 per cent whole body impairment (WPI) which is estimated to comprise up to 95 per cent of all injured motorists. This category of claimant would only be entitled to statutory compensation for their medical expenses and lost wages for a maximum 5 year period and lump sum claims for future medical expenses and future income loss would no longer be available. The concern is that many significant injuries (even those requiring surgery) may be assessed below 10 per cent WPI yet may cause ongoing losses beyond 5 years.
Faster Claims Process For Minor Injuries
The flip side of the switch to statutory compensation for claimants with less than 10 per cent WPI will mean that the money will be in their hands faster, and the claims process is less complex and protracted. The scheme will aim to pay 55 per cent of statutory benefits within 24 months of the accident.
Restrictions On Legal Representation
Only a limited number of claimants would have the right to engage a solicitor to run their claim. This is concerning because unrepresented claimants face significant prejudice to their ability to enforce their legal rights when up against insurers who employ entire legal teams to protect their legal interests.
Severely Injured People Who Are Not at Fault Will Retain Their Right to Common Law Benefits
Motorists who have suffered severe and catastrophic injuries such as paraplegia, quadriplegia, multiple amputations or total blindness, who are not at fault will retain their rights to sue the negligent party for damages at common law and retain legal representation.
Pedestrians Injured By Cyclists Now Covered
Pedestrians who are injured by cyclists will now be covered by the CTP scheme, provided no other insurance is available to them.
In short, if the proposed changes stick, road users will enjoy savings from lower CTP premiums and the peace of mind that the scheme is more fortified against fraudulent claims.
However the large proportion of motorists suffering moderate to serious injuries which do not meet the 10% WPI threshold will have less access to compensation for their losses and may ultimately result in a larger portion of the population requiring support from the welfare system when their 5 years of compensation is up.
These changes don’t come into effect until July 2017. If you are injured in a motor vehicle accident, speak with a motor vehicle accident lawyer as soon as possible about your compensation options.