Are the proposed changes to CTP insurance fair?

TGB’s Dimitra Bouras writes about how thousands of people injured on South Australian roads would be potentially impacted by proposed changes to the state’s insurance scheme.

UPDATE: Many of these proposed changes became law from July 1, 2013. Click here for more information. If you have been injured in an accident, it is now more important than ever to seek legal advice. Contact us on (08) 8212 1077 for a free initial interview.

Since 1963, South Australia has had a Compulsory Third Party (CTP Insurance) Scheme.  When you register your motor vehicle in South Australia, part of the registration is protecting you against the risk of causing injury to another person via a motor vehicle accident.  Under the current scheme, if you are able to prove that someone else is at fault for the accident you are able to claim compensation for your injuries, provided you have been significantly injured for at least seven days.

The State Government is proposing to introduce changes to the current CTP system.  The aim is to save money and cut premiums, but at what cost to innocent injured individuals?  Under the plan, which was released in a Green Paper late in 2011, compensation for injured people will be slashed significantly.  These changes are set to affect over 6,000 people who claim through this scheme each year.

Some of the proposed changes are outlined below:

1. No fault cover.

Currently, if you are at fault for an accident and suffer injury, you are not entitled to any compensation.  The Government is considering a no fault system whereby if you cause an accident and suffer injury, you are still entitled to compensation.

A no fault cover system will be effectively rewarding people for their wrongdoing.  Why should someone who has injured another person in a motor vehicle accident receive the same compensation as the innocent victim?  For example a driver who has killed a motorist and fled the scene may receive compensation for nervous shock arising from that accident.

2. Cutback in compensation or reduction in compensation for pain and suffering.

Under the current system, the claimant who is able to show that they have been impaired for a period of at least seven days can receive compensation for pain and suffering.  Pain and suffering payments are based on the scale from one to 60 with fixed dollar amounts depending on the injury.  The proposed changes would assess pain and suffering under a Whole Person Impairment scale in accordance with the Australian Medical Association (AMA) Guidelines.  A threshold of 10% is being proposed and it is thought that this could mean 70% or more of injured people would not qualify or exceed this threshold.  Like the current WorkCover system, the number of people who would be entitled to a pain and suffering payment would be slashed.  People who suffer whiplash injuries, even though they would suffer the consequence of these injuries for the rest of their lives, would not be compensated.  Other injuries that would not exceed the threshold include fractured bones, injury to the back or neck and numerous other significant injuries.

The result of this must be that people who are injured on the roads will receive significantly less compensation.

3. Removal of payment for services such as future care.

Under the proposed changes, future care entitlements are also targeted for significant reduction.  You would need at least six hours care per week, for a period of six months following the accident, to be entitled to any payments for future care.  This is an extremely high threshold.  For example if you were injured in a motor vehicle accident, through no fault of your own, and required three hours of assistance per week, on ongoing basis, you would have to pay for that assistance out of your own pocket.  This is extremely unfair and limiting.  If you had to pay those costs for a period of 12 months, that alone would equate to about $5,500.

These proposed changes will be detrimental to people injured in road accidents, their rights will be eroded and it is unjust.  As we’ve seen with the WorkCover system, it is also likely to be economically disastrous for South Australia. These proposed changes should be avoided at all costs and opposed vigorously.

Author: Dimitra Bouras

For a free initial interview about your compensation claim, contact Dimitra on (08) 8212 1077.