Page 21 - Week 01 - Tuesday, 12 February 2008

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I should highlight that there are some matters that that we will be looking at after the scheme is implemented to see how these aspects work. One of these concerns is clause 61, where the notion of a motor vehicle having a “sufficient connection with the ACT” will need to be established by regulation. As always, we will be waiting with considerable interest to see the regulations that will support this clause—indeed the entire regime.

We have had some discussions with insurance companies about the administrative requirements placed on companies that are implicit with this bill. We have been assured that the requirements will not necessarily create difficulties for companies, because they will be able to piggyback on information that is provided under the provisions operating in New South Wales for their third-party regime, but at the same time I note our concerns about the micromanaging of commercial entities through the specification of matters such as the content of a company’s business plans, in clause 202. We do not accept that it is the place of legislation such as this to specify this type of detail.

As another example, in clause 212 the bill sets out the types of accounting records that are required. It is nonsense to specify this type of detail in the bill. Accounting records are well-recognised documents and electronic material. The specification of these records in the bill is unnecessary and makes the bill more complex.

What is more, the bill provides for the appointment of an auditor to audit the accounts of an insurance company. These accounts would have been audited by a recognised auditor in the first instance. This is an unnecessary impost on both the scheme and the insurance companies.

In relation to consultation on this bill, we have been advised by the ACT Law Society that the consultation undertaken with the legal profession has been vague. The description that we have is that the legal profession has been only “vaguely involved” in the development of the bill. We were assured that consultation had been conducted in developing this bill. We have a concern that, while there has been excellent consultation with a number of insurance companies and with the regulators in New South Wales and Queensland, the legal profession seems to have been overlooked. The issue here is that the legal profession stands to potentially be the significant loser from this new third-party regime, particularly as there are provisions for early access to rehabilitation and provisions setting out strict timetables for the completion of activities within the legislative regime. We are certainly not against cheaper legal fees, but it would be appropriate for better consultation to be carried out, given this government’s commitment to consultation.

The principle underlying the provisions is to seek to reduce the proportion of resources that are absorbed by the legal process in pursing claims for compensation and the like. At present, a significant proportion of claims are taken up by legal costs. Based on the experience of the reforms to third-party regimes in New South Wales and Queensland, there is an expectation that far more matters will be resolved before they become expensive legal processes. We understand, for example, that a very small proportion of claims in Queensland are not resolved before having to resort to legal action.

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