An ACT Government plan to cap compulsory third party (CTP) and workers’ compensation pay-outs in a bid to open up the market will “unfairly disadvantage” accident victims and injured workers, according to legal groups.

The legal fraternity says the proposed changes mean injured people face a dramatic reduction in assistance if the amended legislation is passed. But the ACT Government believes it will deliver a more affordable and fairer system.

The changes to the CTP scheme will see non-economic loss damages payments capped at $270,000. The Government also plans to use the same medical and injury assessment tools for determining the “whole body impairments” as other jurisdictions.

ACT Treasurer and Industrial Relations Minister Katy Gallagher says the proposed changes to the legislation will improve the performance of the two schemes and the health outcomes for injured people. It is also expected to reduce premiums for both individuals and businesses.

She says although the territory’s workers’ compensation premiums have been falling since 2007, the ACT still has one of the highest average rates in the country.

“CTP premiums have increased three times in the past 18 months, and at $487 for a private car they are the highest in Australia,” she told insuranceNEWS.com.au.

“This compulsory cost has been an increasing concern both to ACT employers and motorists and, indeed, to the Government.”

But ACT Bar Association President Phillip Walker says there has been a lack of consultation over the changes.

He says the changes are the “first ever major reduction in the fair compensation entitlement of people injured in the territory”.

Law Society President Athol Opas says the need for change hasn’t been demonstrated.

“The Government has provided no evidence the proposed changes will result in increased competition by CTP insurers,” he said.

Both groups believe the only guaranteed outcomes will be “increased profits to insurers and a major reduction in the compensation entitlements of ACT motorists and workers.”

But Ms Gallagher says the Government examined a number of options to address the issue over the past 12 months.

The proposed changes are available for public comment before being presented to the ACT Parliament next month. Submissions are open until 19 October.