Despite his push for tort law reform – due to be introduced into Parliament today – NSW Premier Bob Carr seems resigned to the fact that reductions in spiraling liability premiums won’t necessarily follow. “You won’t have premiums come down without tort law reform, but tort law reform in itself doesn’t guarantee a reduction in premiums,” he said last week in Sydney.

His comments follow last week’s discussions with Queensland Premier Peter Beattie, aimed at ensuring consistent approaches to their reforms. The two states have similar tort law reform proposals in place, but there are differences on specific issues such as minimum threshold payouts and caps on maximum damages.

Mr Beattie said he’s “keen for Queensland to co-operate” to achieve uniformity. “Our reforms deal with exactly the same areas that NSW does; that is, limiting damages and ensuring that at the end of it there is a system of insurance that protects the community.”

Unlike Mr Carr, who uses the carrot approach and limits the venom for when things don’t happen, Mr Beattie prefers the stick. He said he is certain liability premiums in the two states will fall, but nevertheless has a niggling fear the insurers will drag their heels. He warned there would be an “outcry across Australia” if the states brought about significant common law reform “only to find that that the insurance industry didn’t respond”.

The Insurance Council is still standing by its line that tort law reforms will have to be adopted nationally. Spokeswoman Sandie Watson said the two states’ reform plans are “definitely a step in the right direction, but reforms will have to happen across all states in order to be effective”.

“Premiums are up to individual insurers and will depend on each insurer’s claims experience. But a national package will definitely help stabilise the industry and make it a more attractive market.”