Page 29 - Week 01 - Tuesday, 12 February 2008
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improvement across the board in the delivery of services and the administration of CTP claims. To this end, we have adopted and adapted the Queensland CTP claims procedures, but not their injury scale, which is designed to limit small claims.
I went to some length in my presentation speech to outline the structure of the claims provisions in the bill. Rather than repeat the analysis, I want to focus on a series of additional provisions, some of them by way of finetuning, in government amendments already made available to members. Small CTP claims up to $50,000 represent 80 per cent of the administrative cost for insurers but 20 per cent of payouts. Large claims, say, above $250,000 represent around 20 per cent of administrative costs but 80 per cent of payouts. Various jurisdictions have taken action to eliminate small claims, as I mentioned, but we take a different view.
To be sure, one could simply ban lower cost claims to reduce premiums, as other jurisdictions have done, to produce more innovative and, in my view, fair ways of achieving efficiencies. The government has chosen the latter course. That said, in the ACT the losers will be lawyers and inefficient service providers and the winners will be injured motor accident victims.
I previously outlined the significant dislocation in legal costs in the ACT scheme when I introduced this bill in November, and I will not repeat myself. Rather, I will briefly outline the means by which the government intends to achieve efficiencies. The bill has provisions that restrict legal fees in small claims. The government has decided to add some bite to those provisions by restricting the damages components that can be counted toward the amounts that trigger release from the fees restrictions. Injured people will not suffer because the payouts referable to their injuries will not be compromised.
As an added incentive to injured people to access the compensation scheme, at an early stage insurers will be required to pay the first $5,000 of a claimant’s medical expenses. At fault drivers will be excluded. The objective is to give injured people the confidence that there is an immediate pathway to treatment and, through that opportunity, a direct pathway to therapy, rehabilitation and recovery. The cost of claims where rehabilitation is late or not engaged in is ultimately higher than it should be. The Queensland Motor Accidents Insurance Commission, together with both plaintiff and defence lawyers in Brisbane, spoke highly of the rehabilitation available under the Queensland scheme and how insurers were all geared up to meet their responsibilities. That is why we have adopted those provisions in the ACT.
Compensation is a necessary part of this process, but the emphasis is on addressing actual needs immediately rather than the current practice in the ACT, which is far less productive. In Queensland between 25 and 40 per cent of claimants access their insurer directly and participate in medical treatment, rehabilitation, and therapy. In the ACT, only around one per cent of motor accident victims access the insurer direct. The other 99 per cent get into the hands of a lawyer and wait for something to happen. It is intolerable, costly and inefficient and there is no place for it in a modem statutory compensation framework. In effect, the emphasis is one of maximising compensation rather than minimising harm.
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