The NSW Government has responded to the Guy Swain court decision by proposing a no-fault compensation scheme for people who won’t be able to claim under the state’s reformed liability legislation.

The scheme will go before the NSW Cabinet in the next couple of months, and if implemented will provide relief to people who are blocked from suing.

The General Purpose Standing Committee No 1 of the Legislative Council is also investigating the outcomes of tort reform in NSW, and the impact the reforms have had on premiums. The committee is accepting public submissions on the issue until March 11.

Last year NSW Chief Justice James Spigelman said the reforms had been “insurer-driven” and questioned whether they had gone too far.

But NSW Premier Bob Carr is still confident the reforms have played an important role in cutting public liability premiums and reducing the number of civil cases going to NSW courts. Now he acknowledges more needs to be done for those who can’t sue for negligence.

“The Government is working on a detailed plan to deal with those hundreds of catastrophic injuries each year,” he said. “It will see that, regardless of fault, those people are looked after.”

The details of the scheme haven’t yet been finalised, but it’s expected it will cover the continuing cost of home care for accident victims. Who will pay? Everyone, it seems. Most pundits say the most likely avenue of funding for a no-fault scheme is premiums on third party motor vehicle insurance and workers’ compensation.

Not surprisingly, plaintiff lawyers are very unhappy about Mr Carr’s scheme, which wouldn’t require their input at all.

Claiming the Carr scheme “will add insult to injury for accident victims”, Australian Lawyers Alliance (formerly the Australian Plaintiff Lawyers Association) CEO Eva Scheerlinck says introducing a no-fault scheme for personal injury victims could see people with catastrophic injuries “end up on pensions in nursing homes for the rest of their lives”.

She says the scheme is likely to provide personal injury victims with care based on basic welfare, or “the lowest possible standard of care”.

“Current compensation for loss of income and medical expenses allows people in these tragic circumstance to maintain some level of dignity by managing their own care in their own homes with their families,” she said.

Ms Scheerlinck says a similar scheme in New Zealand – the Accident Compensation Corporation – has left taxpayers out of pocket and “let insurers off the hook”.

“This has provided a boon for the insurance industry, which is posting record profits without reducing premiums,” she said. “I’m concerned the Carr Government now wants to give insurers another free kick by making taxpayers pick up the bill for accident victims.”

Victorian Finance Minister John Lenders will meet lawyers in April to discuss whether the reforms are working. But he’s already sure they are. “They were designed to restore confidence to the insurance industry and to the people’s ability to sue,” he said last week. “A lot of people had no insurance because the system wasn’t working properly.”

Insurance Council of Australia Executive Director Alan Mason told Sunrise Exchange News the implementation of a no-fault scheme is a good idea in principle, but he has yet to receive details about how the system would operate.

“On a social level there are some good points of introducing a ‘no-fault’ scheme, and the industry has a great deal of experience and knowledge about handling these kind of schemes, but the details need to be examined carefully,” he said.

“As it stands, if the states and territories were to implement separate schemes and implement a patchwork-like system, that would lead to confusion.”