How will new motor accident insurance laws impact my compensation?

If you are injured in a car or motor vehicle accident on or after 1 July 2013 in South Australia your entitlements to compensation will change significantly, writes TGB Partner Tim White. 

Injured in a motor accident? Register online here or call us on (08) 8212 1077.

From 1 July your compensation claim will fall under a new Compulsory Third Party (CTP) insurance scheme. The impact of the amended legislation and regulations will certainly be a reduction in entitlements for the thousands of South Australians injured on our roads each year, increasing the importance for injured people to seek advice about their claim from experienced lawyers who specialise in this area of law. 

The introduction of significant thresholds, and the use of the Injury Scale Values (ISV scale), is likely to result in injuries that most would view as moderate or serious (but not catastrophic) failing to meet the necessary threshold and accordingly limit or rule out entitlements to compensation. This is where it is important to seek legal advice, as entitlements will vary depending on individual circumstances.

Below is a brief summary of the significant changes brought about by the new legislation and regulations:

1. For an individual to receive any compensation for pain and suffering, consortium or gratuitous services (personal care and voluntary services), the injury must be assessed as exceeding 10 points on the ISV scale.

2. No compensation is payable for future loss of earning capacity unless a person sustains an injury assessed in excess of seven points on the ISV scale.

3. Amounts payable for pain and suffering (non economic loss) have been considerably reduced, with injuries less than 31 points on the scale effectively equal to $1,000 for each point that the assessment exceeds 10 points, on top of a base payment of $2,000.  For example, 12 points on the scale equates to a payment of $4,000.

4. If a person is entitled to a payment for past economic loss or future economic loss, the net amount assessed as payable (after taking into account any other relevant reduction that may apply, including reduction on the basis of liability issues) is reduced by 20 percent.

5. Additional information must now be provided in a prescribed form when a claim for compensation is submitted.  The injured person must provide an authority allowing the insurer (usually Allianz) or the Nominal Defendant (if the driver of the vehicle cannot be identified) to access records or other sources of information relevant to the person’s claim.  A lawyer can organise this for you.

6. The implementation of a ISV scale to assess injuries focuses on determining the dominant injury and the extent of any permanent impairment percentage.  Mental harm injuries, for permanent impairment purposes, are to be assessed utilising GEPIC (Guide to the Evaluation of Psychiatric Impairment for Clinicians).

7. In the case of multiple injuries, there is opportunity for uplift in payment for non economic loss. Again, seek legal advice on this issue.

When using the ISV scale, the actual diagnosis of the injury or injuries suffered by the person is most important.  The table makes it clear that it is typically not symptoms that are used to assess the injury but instead the focus is on what objective damage has been sustained.

Some examples of injuries under the ISV scale that potentially exceed 10 points include the following:

1. Serious facial scarring, including substantial disfigurement and significant adverse psychological reaction. 

2. Ear injury, including binaural hearing loss of at least 20 percent but less than 50 percent.

3. Neck injury, requiring a herniated disc for which there is radiological evidence, symptoms of pain and at least three of the following; sensory loss, loss of muscle strength, impaired reflexes or unilateral atrophy, and lastly impairment has not improved after non-operative treatment.

4. Thoracic or lumbar spine injury requires a herniated disc for which there is radiological evidence, symptoms of pain and at least three of the following; sensory loss, loss of muscle strength, impaired reflexes, unilateral atrophy and the impairment has not improved after non-operative treatment.

5. Shoulder injuries; a moderate shoulder injury could include either a traumatic adhesive capsulitis (frozen shoulder) persisting for about two years, a fracture from which a person has made a reasonable recovery following open reduction and internal fixation, an injury to the sternoclavicular joint causing permanent, painful instability, or painful persisting dislocation of the AC joint.

6. Elbow injury; where a person has made a reasonable recovery from surgery after requiring open reduction and internal fixation.

7. Pelvis injury; a hip fracture requiring a hip replacement.

8. Knee injury; requires a ligamentous injury, where surgery has been performed and prolonged rehabilitation, causing a whole person impairment of 15 percent and functional limitation.

9. Ankle injury; requires a long period of treatment, a long time of plaster or insertion of pins and plates, permanent significant ankle instability.  Typically a whole person impairment of 15 percent.

The above is only a very brief summary of some of the types of injuries that are required to obtain an assessment potentially greater than 10 points on the ISV scale. Again, your compensation claim will depend on your individual circumstances so seek legal advice about your situation.

Also remember that to bring a compensation claim, strict time limits also apply. Legal proceedings must be issued within three years of the date of the accident or all entitlements are lost.

Without doubt, making a claim for compensation is now a much more complex process. But despite the law changes you still may have entitlements, so it is now more important than ever to talk to an experienced lawyer who can help you negotiate this process.

Injured in an accident before July 1, 2013? Find out more about your entitlements here

Tindall Gask Bentley Lawyers are the leaders for motor vehicle compensation claims in South Australia, with the state’s largest team of lawyers dedicated to this area of law.

We offer free first interviews for motor accident compensation, and in most cases can tell you right way if you have a claim.

Call (08) 8212 1077 or register online here, or find out more about our lawyers here.