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Lawyers’ campaign stalls NSW greenslip reforms

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Reforms to the NSW compulsory third party (CTP) scheme have been delayed after the legal profession stepped up its campaign against the proposals.

The State Government aims to introduce “no-fault” compensation, extending protection to approximately 7000 people injured on the roads each year who are not covered under the current “at-fault” scheme.

The Insurance Council of Australia (ICA) has welcomed the plan, with CEO Rob Whelan saying it would introduce defined benefits for most claimants and “speed up claims processing and reduce administration, legal and medical costs”.

However the Law Society of NSW, supported by the Australian Lawyers Alliance, started a campaign to highlight the loss of many injured motorists’ right to pursue lump sum compensation.

Innovation and Better Regulation Minister Victor Dominello has confirmed the scheme will be delayed and an interim measure to restrict legal fees for low-severity claims – suggested by the legal groups – will be adopted.

“We will closely monitor its impact on the frequency and quantum of minor-severity, legally represented claims, which have escalated rapidly in recent years,” he said.

“The Government remains committed to delivering a fairer greenslip scheme for injured road users and motorists.

“It is not fair that only 45 cents in every greenslip dollar goes to injured road users, nor is it fair that NSW motorists are being asked to pay the highest premiums in the country.

“The Government’s reforms will reduce legal fees and insurer profits and bring about a significant reduction in premiums.”

A spokesman for the minister told insuranceNEWS.com.au the scheme has been delayed, and “the reforms are still going ahead, but it will be next year”.

ICA says the State Insurance Regulatory Authority (SIRA) has reassured it that the Government remains committed to the reform.

“ICA firmly believes the proposed no-fault, defined-benefits model is the best option to meet the Government’s key objectives of improving affordability and timeliness, increasing the proportion of benefits provided to the most seriously injured road users, and reduced CTP fraud and claims exaggeration,” a spokesman said.

“CTP scheme actuaries estimate the interim measure of capping legal fees on the current scheme, advocated by lawyers, would only lower premiums by up to $10 a year. SIRA notes it does nothing to reduce delays in providing benefits to injured people or ensure a higher proportion of scheme funds go to the most seriously injured.”

Andrew Stone, from the Australian Lawyers Alliance, told insuranceNEWS.com.au his group is delighted “some of the more draconian provisions” in the reforms are being reconsidered.

“The legal profession remains committed to preventing the CTP scheme being turned into another workers’ compensation scheme with minimal benefits and a lopsided power imbalance in favour of the insurers,” he said.