The Australian Lawyers Alliance (ALA) has told a NSW Parliamentary committee inquiry that the state workers’ compensation scheme is failing people with psychological injuries.

ALA spokesman Shane Butcher says data available about psychological injury claim numbers is unclear and contradictory and doesn’t indicate a concerning increase, considering NSW population growth and pandemic challenges, but the “real concern” is the way they are handled.

“It is the ALA’s firm belief that the manner in which claims are currently handled, the conduct of the investigations, and the manner in which claims are disputed, all lead to unnecessary harm of the injured person,” he said.

Injured workers must constantly prove their injury in ways not required in other cases and are asked to retell their story to case officers, investigators, specialists, lawyers and others.

“In our experience, liability is more routinely declined than for physical injuries,” he said. “A specialised response to the management of psychological injury claims is urgently needed to prevent further harm.”

State-owned icare last week announced that six claims service providers would be appointed under contracts starting next year, with the new arrangements to include a heightened focus on psychological injuries. The insurer is also putting a greater focus on the area internally.

“We welcome icare’s recent announcement about plans to trial a new model for managing psychological injury claims, however it is yet to be seen whether this approach will be effectively implemented in a timely manner and work to prevent harm to already injured workers,” Mr Butcher said.

The NSW Standing Committee on Law and Justice is required to report on the workers’ compensation scheme every two years and has focussed the current review on the increase in psychological claims.

Executives from the State Insurance Regulatory Authority and icare were also scheduled to appear before the committee today.