Are Proposed CTP Changes Simply Adding Insult to Injury?

Published 21 Sep 2016

The Compulsory Third Party insurance scheme has come in for a significant amount of criticism both nationwide and here in NSW over the years. Though clearly well-intentioned, the scheme’s track record in terms of waiting times and eventual distribution of benefits has been average at best to date.

Against that backdrop, hopes were high on all sides that the NSW government’s proposed CTP Green Slip changes would introduce some long overdue and urgently needed reforms. Unfortunately, as a new press release from the Law Society makes clear, quite the opposite seems to be taking place – the set of proposed changes on offer run the risk of making a bad situation substantially worse.

Let’s compare what we currently have with what’s coming down the line.

Where We Currently Stand With the CTP Scheme

The current CTP scheme, for all its various faults, at least firmly establishes the following:

●    Comprehensive no fault coverage for children under 16 and the catastrophically injured.
●    Compensation for full past and future loss of earnings, treatment, and paid or voluntary care.
●    No time limits on appropriate treatment.
●    Cases where fault is being disputed are run through the courts.

Though there are justifiable concerns about how long it takes to resolve current cases, and the amount of money eaten up by the process itself, the system as it stands is at least generally weighted in favour of those who potentially need help the most. The proposed changes to the system lean in a very different direction.

What’s Being Proposed for the New CTP Scheme

The changes being proposed outline a modified no fault scheme where, to quote the Law Society press release on the subject, “all people in a vehicle claim on the CTP policy of that vehicle, irrespective of fault”. This change alone is set to add around 7,000 injured drivers (who, remember, have actually caused the accidents) into an already creaking scheme each year.

The problems don’t stop there – things get worse the more you dig into the proposed changes. In stark contrast to the current situation with no time limits on treatment, it’s estimated that 90% of no fault accident victims who fall below the 10% whole person impairment limit will have their treatment expenses cut off after five years under the new arrangement – a truly shocking state of affairs.

We’re also looking at potentially disastrous changes to loss of earnings compensation where the proposal is that they be restricted to five years and capped at 1.5 times Average Weekly Earnings. To add further insult to those struggling to handle post-accident care, there will also be no compensation for care from family – a decision that borders on the ludicrous.

Finally, and perhaps most worryingly, it’s proposed that the allocation of future benefits be largely decided by an internal administrative system, rather than in a free and open court. This is potentially terrible news for those seeking redress. Not only will they be operating in an increasingly hostile legislative environment, they’ll also be forced to fend for themselves and plead their case behind closed doors.

It’s Not Too Late to Speak Out

Though the proposed changes represent a potentially significant step backwards for motorists, the fight for a fairer CTP scheme is far from over. We encourage you to review the excellent material put together on the subject by the Law Society, and make your feelings known to your local representatives.

Obviously, we’re also running through the implications of the new changes in considerable depth here internally at Gerard Malouf and Partners. Whether you’re already facing into an upcoming personal injury claim, or are worried about how the proposed changes may affect you down the line, our expert team are happy to take your call and offer truly impartial advice.

We’ll also be keeping a very close eye on ongoing amendments to the existing scheme, and doing whatever we can to help steer it in a more viable long-term direction – one that benefits injured motorists and their families rather than marginalising them.