Most Read Contributor in New Zealand, September 2016
From 6 December, people injured by an offender in the
conduct of a crime will be able to receive reparation for the
difference between the compensation received from ACC and their
This is a significant conceptual inroad into the logic
of ACC's universal 'no-fault' coverage, which prohibits
recovery of compensatory damages for personal injury.
The change was introduced in an amendment to the
Sentencing Act 2002 and will be particularly relevant in
prosecutions for workplace accidents where a company is found
Employers (both the employing entities and their
directors and officers) should check their insurance arrangements
to make sure that the extra exposure is covered.
Currently, victims of crime who suffer personal injuries may
obtain weekly compensation from ACC, capped at 80% of the
claimant's salary (up to a maximum of $1,847.23 per week). For
many, the difference is significant between what they would
actually receive had they not been injured, and what they receive
Mr Davies was charged with operating a vehicle carelessly and
causing injury to a cyclist, hurt when a mattress fell off the
trailer which Mr Davies was towing. The District Court ordered him
to pay reparation for the 20% differential between the victim's
ACC compensation and his actual lost earnings.
This decision was upheld by the Court of Appeal but was
overturned by the Supreme Court in Davies v New Zealand
Police  NZSC 47.
The Supreme Court, consistent with the no-fault principle at the
heart of the ACC scheme, held that sentences of reparation could
not be made in respect of any consequential loss or damage where
the victim already had some entitlement to ACC compensation. The
amendment effectively overturns that judgment.
Under the current law, reparations are not payable for loss or
damage in respect of which there is an 'entitlement' to ACC
cover – i.e. for personal injury. The amendment prohibits
payments of reparations for loss or damage only for which ACC
compensation is to be paid.
A meaningful part of ACC's 'social contract' is to
minimise the impact of injury on the community, specifically
including the economic and personal costs of pursuing personal
injury litigation. At least for injuries caused by criminal
conduct, the amendment tends to normalise an expectation of
indemnity for losses caused by personal injury. The social
contract, however, acknowledged 'fair', rather than full,
compensation for personal injury by accident.
Given that inroad into ACC's principled logic, at least from
the perspective of the injured, it is unclear why their recovery of
full compensation should be dependent on the injurer's
criminality and consequent sentencing. Exercise of the
prosecutorial discretion may be expected also to take into account
the quantum of victims' losses.
What it will mean in practice
The effect will not be restricted to the shortfall between ACC
entitlement and lost earnings. It will also enable victims to claim
reparation to top-up other shortfalls, such as medical bills and
loss of benefits.
We are likely to see an increase in reparation orders by the
courts – especially in relation to prosecutions under the
Health and Safety in Employment Act 1992 and its successor
legislation, the Health and Safety at Work Act (when enacted).
High reparation awards are already made in workplace injury
cases. Recent examples include:
WorkSafe New Zealand v Woods Contracting Services
Limited (23 July 2014) – Woods was ordered to pay
$22,500 in reparation after an employee's pelvis was crushed
(only $2,560 related to actual losses suffered over and above lost
wages which were not recoverable)
WorkSafe New Zealand v Hunter Laminates Nelson Limited
(1 October 2014) – Hunter Laminates was ordered to pay
$35,000 in reparation after an employee suffered serious crushing
injuries to his legs (no specific monetary losses were claimed,
reparation related to the long term consequences and emotional harm
suffered by the victim), and
WorkSafe New Zealand v Busck Prestressed Concrete
Limited (15 September 2014) – Busck was ordered to pay
$60,000 in reparation after the death of an employee who was run
over by a telehandler.
Most companies are insured for reparation awards made to
victims. However, the change to the Sentencing Act is a good reason
for employers to ensure that they have statutory liability
insurance, at an adequate level of cover.
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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