24 Apr 2013The O’Farrell government is planning major changes to the Compulsory Third Party scheme – the green slip insurance you pay every time you register a vehicle.
The government says the changes will cut the average CTP payment by $50 to $75, something we should all welcome.
But there are five major fallacies behind the government move, 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.
The national disability scheme is a fine objective but let’s not slash the benefits of innocent accident victims to pay for those who caused the accident.
