In brief - NSW government seeks submissions to reform
In response to the 2013
CTP Green Slip Roundtable and feedback that the scheme
"requires improvement", the NSW government has announced
a consultation process to reform the state's CTP insurance
scheme. It has recently released the On the road to a better CTP Scheme options paper which
outlines proposed improvements. Submissions must be lodged by
Friday 22 April 2016.
CTP insurance protects not-at-fault injured parties from
CTP insurance (also known as the "Green Slip") is
mandatory in New South Wales. It provides third party personal
injury cover in the event of a motor vehicle accident. CTP protects
not-at-fault parties injured as a result of motor vehicle accidents
from the perils of uninsured drivers.
It is a modified free market scheme, in that authorised
for-profit insurers compete for premium with limited scope for
personal rating. The policy is fixed by the legislation and cannot
Reforms include improved proportion of benefits, timeliness of
payments, affordability and reduction in fraud
The options paper details four key objectives for a reformed NSW
Increase the proportion of benefit provided to the most
seriously injured road users
Under the current scheme, only around 45% of premium collected
is awarded to injured persons. The common-law fault-based design
requires driver fault to be established. This leads to delay,
investigations and other legal costs, and potentially higher
profits for insurers, who can raise short-term prices to balance
the uncertainty of having to prove fault.
Reduce the time it takes to resolve a claim
In NSW, the majority of payments are made between three and five
years after the motor vehicle accident occurs. This is a
significant lag compared to other statutory benefit and CTP schemes
in other Australian states.
A lack of timeliness may inhibit injured persons from having
access to funds at the point in time when they most need them.
Reduce opportunities for claims fraud and exaggeration
Additional costs arising from fraudulent claims may be passed on
as increased prices for Green Slips. New South Wales has one of the
lowest penalties for fraud of any CTP scheme in Australia, with a
maximum penalty of only $5,500 and/or 12 months'
The government has announced the formation of a CTP Fraud
Taskforce to help combat this issue.
Reduce the cost of Green Slip premiums
The provision of higher benefits in NSW carries higher premium
prices. Long-term prices are forecast to rise as much as 20% in the
coming year, with Sydney metropolitan drivers paying the highest
premiums in Australia, at an average of $637.
Moving from current fault scheme to no-fault also under
The options paper also outlined additional policy issues to be
considered as part of the process of reforming the CTP scheme,
Whether the current fault scheme (ie driver fault must be
proved) or no-fault scheme is best.
Extending CTP cover to people not currently covered (eg
"at-fault" drivers and persons injured by non-motorised
vehicles, such as bicycles).
Whether a first party scheme (ie injured person claims against
their own insurer) or the current third party scheme (ie injured
person claims against at-fault driver's insurer) is best.
Profit of CTP insurers and lack of competition (there are only
four CTP insurers in NSW).
Whether the CTP scheme should remain privately underwritten,
and if so, whether a risk pooling arrangement is appropriate.
Fairness of the current method of accounting for contributory
Adequacy of lump sum settlement payments (especially as it may
encourage fraud of the scheme).
A hybrid or fully no-fault, defined benefits scheme among
options for reform
Four reform options have been presented as non-exhaustive
alternatives to the current NSW CTP scheme:
Source: On the road to a better CTP scheme, NSW
The options paper suggests that Option 3 or Option 4 will be
best placed to meet the objectives of a reformed CTP scheme.
Option 3 introduces defined statutory benefits for anyone
injured in a motor vehicle accident, irrespective of fault, while
retaining common law benefits for the most seriously injured.
Option 4 completely removes the assessment of fault and provides
defined statutory payments instead of lump sum payments.
Given the evident political will to overhaul and improve the
current CTP scheme in NSW, it seems likely that the CTP system is
going to be subject to further structural change. Evidence from
other Australian states should be helpful in assisting stakeholders
to consider the options and the possible consequences.
The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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