Lawyers losing business because of tort reform say insurers aren’t passing on the savings to policyholders. Civil claims cases have fallen by more than 43,000 in the three years since state and territory governments began limiting the right to sue for personal injury.

The figures come from a Productivity Commission report on government services, just as the Australian Competition and Consumer Commission prepares to issue its findings on liability insurance industry pricing.

Late last year CGU and Suncorp said they would cut liability premiums because even though it would be some time before they felt the financial effects of tort reform, the market was in a good position to soften or stabilise rates.

Nationally, district court claims fell by 14,200, or more than 30%.  The greatest fall was in NSW – recognised as the most litigious state – where district court cases were down 60% to 12,600, and magistrates court cases were down more than 13% to 30,500. Only the Victorian Country Court reported an increase in civil cases (up 1800).

The Insurance Council of Australia doesn’t want the latest statistics to interfere with the tort reform process. It says the reduction in cases is good news for the community, but the statistics need to be treated with caution because most liability claims do not reach court.

Executive Director Alan Mason says the tort reform process is not over, with vital legislation to prevent litigants by-passing state reforms by using the Commonwealth Trade Practices Act yet to get through the Senate. “This continues to leave doubt in the minds of insurers about the volatility of claims.”

The legislation is a shoo-in after the Coalition gains control of the Senate in July, but Mr Mason is obviously worried about the lobbying abilities of the plaintiff lawyers – after all, many parliamentarians are also lawyers. He says the court case figures shouldn’t be an excuse to wind back reform. “These figures cover everything from neighbourhood disputes to commercial litigation, with no breakdown of types of cases.”

He hopes industry statistics due from the Australian Prudential Regulation Authority (APRA) in May will show improvements in public liability performance, including the action taken by some insurers to respond to the benefits of reform.

“It takes on average five years for a claim to be lodged, assessed and paid after an injury occurs,” Mr Mason said. “But we know these types of reforms work.”

An IAG spokesman told Sunrise Exchange News the critical figure for insurers is the cost of claims, not litigation rates. “We are committed to monitoring the results of tort reform and ensuring that the benefits are passed on to the community.”