The Compensation Law Changes in Australia

The primary goal for the government is to reduce the time and paperwork required for obtaining compensation. However the proposed changes omit some key points without which agreement is difficult.

The major talking point in the legal circles of New South Wales these last few weeks has been the government’s proposal to make changes to the Green Slip Scheme. The existing scheme has been in place for over seventy years and there is consensus on the fact that some changes do need to happen. The primary goal for the government is to reduce the time and paperwork required for obtaining compensation. However the proposed changes omit some key points without which agreement is difficult.

The proposed changes

These changes have been modeled according to Victoria’s TAC scheme

At-fault drivers will also be eligible for compensation for any injuries that they might have suffered in the accident. This is directly opposite to the goal of cutting the cost of compensation, because this will bring about 7,000 more claims each year, most of which are going to be awarded some form of compensation. Also, by bringing more claims each year, the process will once again be lengthened.

The benefits of personal injury compensation will no longer last for life. Instead, it is proposed that benefits are terminated after some time has passed, depending on each case. Mostly, these benefits will last about 18 months for covering medical expenses and up to five years for covering wage loss. However, people who have been innocently injured on the road have been eligible for lifetime compensation since the 1942 instatement of the Green Slip Scheme.

Moreover, wage loss expenses and medical expenses will be paid out in full only to those people who can establish WPI (Whole Body Impairment) that passes the threshold of 10%. In the end, this will amount to about 600 people per year. While this supports the cutting of costs, 10% of WPI is quite a lot of damage to be suffered.

The effect of these changes 

First of all, and most importantly, the innocent victims who are injured through no fault of their own will have to reduce their claims in order to pay for those who cause accidents. While it is still proposed that victims will be compensated first, they will still receive less in compensation and this may leave many of them literally without a roof over their heads, as they will not be able to manage paying their mortgage due to decreased pay-outs.

Children will be particularly affected by these changes, as some of them will have no way to prove any wage loss for compensation simply because they will not be of legal working age within the five years following an accident. As a result these children will be left with an impairment which will affect their working capabilities, with no way to realise their full earning potential.

Lastly people who do not meet the 10% WPI are penalised whilst still suffering significant injuries. Permanent and total impairment meets the new compensation guidelines, which is fair based on their high needs. However those with less than 10% still suffer severe impairment physically and mentally which precludes them from fulfilling lives and choice of profession. Even if you have limited ability the scheme will see you as fit for work despite injuries having a severe impact on your quality of life.

When I spoke to David Marocchi, I found out that whilst the legal profession realises that change is needed in the system of personal injury compensation, they are against any changes which would harm people who deserve compensation. Instead, lawyers and law firms have come up with their own solutions that are more equitable and perhaps it would be wise for policy makers to see how small changes to the current system could achieve their goals.

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