CTP reform

The introduction of the Motor Accident Injuries Act 2017 establishes an at fault regime and aims to reduce the costs of green slip prices. It is anticipated to commence either 1 December 2017 or 1 January 2018 and will affect claims made from that date.

The scheme will change the way that claims are managed by Insurers and create debate around statutory benefits and the term “minor injuries” for both psychological and physical injuries.

Damages will be restricted except where the injured person as a result of the injury is greater than 10% whole person impairment as per the AMA Guidelines. This will put pressure on Centrelink and Medicare as many clients have debilitating injuries but do not reach the 10% threshold.

Weekly payments

Weekly payments will kick in similar to the current workers compensation scheme with 3 entitlement periods. The first entitlement period will be up to 13 weeks benefits will be paid at 95% of the difference between the person’s pre accident weekly earnings and the person’s post accident weekly earnings (with a maximum of $3853 per week).

The second entitlement period (14-78 weeks) will be paid at 80% in the case of total loss of earnings or 85% in the case of partial loss. The third entitlement period (after 78 weeks) will be paid the same as the second entitlement period but will take into account the persons post accident earning capacity (if any).

Treatment and Medicals Expenses

Damages for reasonable and necessary medical and treatment expenses will be for the first 6 months regardless of fault. There is no benefit for those who are at fault after the 6 month period or for those where the injuries are minor injuries. Minor injuries are is defined as soft tissue injury but does not include nerve injuries or ruptured tendons(full or partial), ligaments, menisci or cartilage.

The payment of medical expenses thereafter are for life for those with more than “minor injuries” and are able to prove fault and have not been more than 61% liable in Contributory Negligence.

Liability will be transferred to the Life Time Care after 5 years.

Contributory Negligence

The Act provides that a motor accident is caused mostly by the fault of a person if the Contributory Negligence is greater than 61%. Examples are those under the influence of alcohol/drugs, not wearing a seat belt or helmet in motorbike or cyclist accidents.

Care

Damages for reasonable commercial care will be for up to 6 months for all claims irrespective of fault. Ongoing commercial care is for life if able to prove fault except for those classed as minor injuries and must still satisfy threshold criteria. There will be no benefits paid for gratuitous care.

An injured person will cease statutory benefits after 76 weeks including weekly compensation, care and treatment if:-

a) The accident was caused wholly or mostly by the fault of the person and the person was over the age of 16years at the time; or

b) The persons injured were minor injuries.

A claim for statutory benefits must be made within 3 months of the date of the motor accident. Statutory benefits cannot be settled for lump sums.

There will be an impact on the claims management with the establishment of the Dispute Resolution Service which will replace the Motor Accident Claims Service (CARS) and the Motor Accident Medical Assessment Service (MAS).

Non Economic Loss (pain and suffering)

It must be greater than 10% whole person impairment as per the AMA4 guidelines. If under 10% WPI there is no entitlement to non economic loss but entitled to economic loss and statutory entitlements.

Legal Costs



There will be an impact on legal costs that can be charged by lawyers. Essentially there will be no contracting out of the fixed cost regime. This will be a challenge for most as the regulated costs are not match the amount of work required nor the cost of the disbursements.

The changes will bring about new challenges and debate and may assist in reducing green slip premiums but at what cost to those injured in a motor accident.