The industry has hit out at the recommendations of the NSW General Purpose Standing Committee which has called on the Government to roll back the state’s 1999 tort reforms.

The Insurance Council of Australia (ICA) says the recommendation marks a return to “the bad old days of ‘when something happens to me, someone else must pay’”.

ICA, which has been a key campaigner for tort reform, says the committee’s recommendations released last week could see the return of the “death of fun”, with a dilution of the Government’s reforms, the evaporation of the $100 saving for motorists arising from CTP reforms, and a “blow-out to the unfunded liabilities to the workers’ compensation scheme”.

“The committee’s recommendations focus on the dollars rather than the delivery of better health outcomes, recovery from injury and the ‘return to work’ policy governments adopted over a decade ago,” ICA Executive Director Alan Mason said yesterday.

He says no costings have been provided on the potential cost of the recommendations to the price of insurance. “No assessment has been done on the impact to the seriously injured resulting from the potential reduction in compensation and no consideration has been given to the impact on the availability of insurance.”

ICA believes the committee’s recommendations would reduce compensation for people who need it most – those suffering from catastrophic and serious injuries – by providing compensation to people with minor injuries.

Mr Mason says if it’s up to the NSW Parliament to decide on the levels of personal industry compensation, then they need to consider the costs which will then be charged by insurers. “The costs of the schemes and the benefits are directly reflected in the premiums.”

The committee examined the effectiveness of tort reform relating to the impact on employment in rural and regional communities; the impact on community events and activities, and community groups; the impact on insurance premium levels and the availability of cost-effective insurance; the level and availability of CTP motor accident premiums required to fund claims cost if changes had not been implemented in 1999; and the impact on the WorkCover scheme if changes hadn’t been implemented in 2001.

The legal fraternity – which has been criticised for having a vested interest in having tort reform abolished – is, logically, pleased with the committee’s findings.

The Australian Lawyers Alliance says the inquiry is the first of its type to highlight the “erosion of victims’ rights in NSW public liability, workers’ compensation and motor accident laws”.

Lawyers Alliance NSW President Richard Royle says “the only beneficiary of changes to these laws has been the insurance industry, which is making record profits at the expense of injured people and their families”. 

But the committee disagrees with the statement, saying “given the range of factors that have contributed to the current profitability of the insurance industry, the committee does not believe that the industry has been systematically profiteering as a result of the Government’s reforms to personal injury compensation law in NSW”.

The Government’s response to the recommendations is due on June 8 next year.