9 May 2013COMMENT BY MAURIE STACK OAM, FORMER LAW SOCIETY PRESIDENT AND CHAIRMAN Stacks Law Firm
9 May 2013
Maurie Stack OAM, former president of the NSW Law Society and chairman of Stacks Law Firm, warned changes to the compulsory third party scheme introduced in NSW parliament will have a devastating impact on people injured in vehicle accidents.
“The changes slash the level of benefits available to the injured person for loss of income, and they will be cut off entirely after five years.
“It takes away your right to sue the negligent driver who caused the accident,” said Mr Stack.
“Under the government’s no-fault proposal, 90 per cent of those injured as a result of the negligence of others will lose their right to sue.
“A family man hit by a driver travelling on the wrong side of the road is effectively having his entitlements slashed in order to provide equal compensation to the negligent driver.
“The government says it wants to do this to lower green slips by about $50. What they’re not saying is you’ll have to spend thousands more to take out your own income protection insurance to match what we already have through the CTP scheme.
“On the government’s own figures, only about 5% of the premium dollar goes to lawyers out of 47% retained by insurers. It isn’t legal fees that are pushing up the cost of premiums.
“In any event, premiums have only increased from $350 in 1988 to $550 today – an increase of 60% over the last 25 years during which the CPI has increased by 120%.”
Maurie Stack is available for comment: 0427 668 821, maurie@stacklaw.com.au
Media contact:
Frank Walker 0417 090 346
frank.walker@optusnet.com.au
BACKGROUND
Maurie Stack warns there are five major fallacies behind the government move to change the CTP scheme, fallacies that will adversely affect everyone who drives a vehicle or is injured in an accident.
Fallacy 1: They are only minor changes. Don’t believe it. Ninety per cent of people injured in vehicle accidents will lose their right to sue the negligent driver as their injuries will be deemed to be not bad enough.
Fallacy 2: The changes are necessary to stop rising costs. The cost of green slips have gone up 60 per cent over the past 25 years while the cost of living (CPI) has risen 120 per cent.
Fallacy 3: Accident victims will be better off. Benefits will be slashed for 90 per cent of victims. Instead of payments to cover a lifetime of lost income and medical needs, victims will get weekly benefits for just three to five years. When that ends they are on their own. Insurance companies will largely determine the level of compensation for that three to five years – victims will have limited access to legal advice to pursue a better deal. Motorists lose income protection coverage in their CTP and will have to take out extra insurance, and that will cost thousands.
Fallacy 4: It’s fair the victim should pay for those who cause the accident. The government will introduce a no-fault basis for settling compensation which means the negligent driver will have equal rights to the innocent person they’ve hit. This means a child run down at a pedestrian crossing will have their right to long-term working disability slashed so that the negligent driver can be given equal rights.
Fallacy 5: Escalating legal costs are the problem: Over the last 10 years 50 per cent of the CTP dollar has been paid by insurers to accident victims. The Motor Accident Authority keeps 3 per cent. Insurance companies keep 47 per cent of each dollar collected – 28 per cent to cover expenses (including their legal costs of maybe 5 per cent) plus 19 per cent kept as profit. The average lawyer fee is estimated at 10 per cent of the compensation they have won for their client. Most lawyers don’t get paid at all if they don’t win the case.
