Injured motorist Desmond Goulding. Photo: Sylvia Liber In-Young Joyce helps her husband Myung Jin Juong at their home in Epping. Photo: Kate Geraghty
Myung Jin Juong and wife In-Young Joyce at their home in Epping. Photo: Kate Geraghty
Most people injured on the road face losing their common law rights to sue insurance companies for ongoing medical costs and lost wages under radical changes to the compulsory green slip insurance scheme.
They would also lose their rights to any legal representation to challenge a disputed assessment of their insurance claim.
Under state government plans to overhaul the compulsory third-party insurance scheme, the minority of motorists who are most seriously injured would retain common law entitlements to lump sum compensation payments and legal representation. Others with less serious injuries would be given limited statutory benefits to income replacement and medical benefits for a maximum of five years.
The vast majority of injured motorists suffer less serious injuries, which can prevent them from returning to work, and will fend for themselves under the planned changes. They will no longer be able to claim for a lump sum payment for future expenses and income loss. They will be cut from the defined benefits scheme after five years.
“Under the new laws, almost no one will have the right to a solicitor. That’s disgusting,” said injured motorist Desmond Goulding, 64, from the Illawarra.
“How can a normal person go up against insurance companies. That’s ludicrous.”
A $400 million spike in fraudulent insurance claims in Sydney’s western suburbs and inefficiencies which result in just 45¢ in every green slip dollar being returned to injured motorists has spurred wholesale reform of the scheme which covers more than 2 million people.
Danielle De Paoli, from Maurice Blackburn Lawyers, said fraudulent claims had increased the cost of the scheme, but there were other cost-saving alternatives to cutting benefits and redefining the entire CTP scheme.
The Baird government appointed State Insurance Regulatory Authority deputy chair Nancy Milne and former Labor Party industrial relations minister John Della Bosca to assess the fairness and affordability of the proposed scheme.
Their report released last week says the insurance industry is calling for an internal insurer dispute resolution process which would allow it to have the final say on disputes with claimants.
NSW Greens MP David Shoebridge, a member of the standing committee on law and justice, which last month reviewed the CTP scheme, said the proposed changes would be particularly unfair on manual workers.
“A nurse or carpenter who relies on a healthy body to do their job can lose their entire career with an injury that is assessed at well below 10 per cent whole person impairment,” he said.
“They face losing their right to claim for ongoing wage loss over their entire career and have it replaced with a statutory benefit that will run out after a maximum of three to five years.”
Mr Shoebridge said the joint parliamentary committee report highlighted a “grossly disproportionate share of green slip premiums that go to fatten up insurer profits”.
“Over the lifetime of the scheme they have taken one dollar in five and the regulator has repeatedly failed to address this,” he said.
“John Della Bosca savaged workers compensation benefits 15 years ago and the government clearly sees him as someone they can rely on to do the same with CTP.”
Mr Della Bosca implemented cuts to the workers compensation scheme in 2011. Unions portrayed him as the “butcher” of workers compensation.
Government sources say Mr Della Bosca has been recognised for his significant experience in delivering important social reforms including his advocacy and leadership of the NDIS. This was said to be testament to his ability to engage with complex reform.
Mr Shoebridge said he had no doubt Minister for Innovation and Better Regulation Victor Dominello was more committed to addressing problems with the scheme than his predecessor Greg Pearce, whose planned CTP reforms failed.
Mr Dominello said his focus is on delivering a better scheme for injured road users and motorists. He said the government’s reforms were supported by social service advocates and will end “the days of insurer super profits and see a significant reduction in premiums”.
“It is not fair that only 45¢ in every green slip dollar goes to injured road users, nor is it fair that NSW motorists are being asked to pay the highest premiums in the country,” he said.
Insurance companies including Suncorp, Allianz and NRMA have made significant donations to the NSW Liberal Party and Labor Party in recent years.
In 2015/16 Suncorp’s financial contributions to political parties included $33,930 to the Liberal National Party and $34,300 to the Labor Party.
Richard Shields, the Insurance Council of Australia’s head of government and stakeholder relations, is a former deputy director of party affairs for the NSW Liberal Party. He was also touted earlier this year as a potential rival to conservative senator Concetta Fierravanti-Wells in a factional challenge from the moderate wing of the party.
A spokesman for ICA said the insurance council draws talent from all sides of politics. “These people are highly professional and they work on policy matters with political parties of all persuasions,” he said.
Spokesman Campbell Fuller said the NSW CTP scheme was “broken” and in need of reform to create a fairer more affordable scheme to better support the most seriously injured motorists. He said the number of motorists who would need treatment after five years was very small.
“Fraud and exaggerated claims add an estimated $75 to every premium,” he said.
“The final design of the scheme has yet to be determined, so it’s premature for any stakeholder to make definitive claims about how a reformed scheme may deal with issues such as claims, benefits, profits and disputes.
“The ICA rejects any suggestion of a link between proposed changes to the CTP scheme and political donations by its members. The ICA and its members are committed to transparency in the area of political donations.”
A spokeswoman for Suncorp said it works with all governments and political parties to “drive the best outcomes for customers and the wider community”.
“To that end, Suncorp is bipartisan and transparent in its engagement with government.
“We agree with the government that the current NSW CTP scheme is broken and in need of reform. We support the proposed reforms to the scheme that tackle rising incidences of fraud involving legally represented claims, while delivering the best health outcomes for motorists and improving affordability.”