The 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
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
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.
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Contractors and principals should ensure they have appropriate insurance coverage instead of relying on indemnity clauses.
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