This article continues our series on motor accident compensation in NSW. You can read about the history of motor accident compensation in part 1 found here.
The Scheme Today
The Motor Accidents Compensation Act 1999 (MAC Act) came into force on 5 October 1999. In addition to promoting competition in CTP premium setting, the legislative changes were designed to encourage early and appropriate treatment and rehabilitation for those injured in a motor accident. The Act was intended to make more appropriate provision for the future needs of those with ongoing disability and encouraged the early resolution of claims.
There are many outstanding claims under the MAC Act, which is proving to have a very long tail. There are even some new claims being made to this day.
Similar reforms to motor accidents compensation have been made in all Australian jurisdictions, with the exception of the ACT where unmodified common law applies. That scheme is underwritten solely by NRMA and purportedly operates very well.
There have been a number of changes to the scheme since the introduction of the MAC Act, which provide greater access to benefits for injured people. Some of the main features of the scheme are listed below.
Early Notification and Treatment
The Accident Notification Form (ANF) was introduced to provide early access to treatment and rehabilitation for those injured in a motor vehicle accident. When it was first introduced in 1999, those injured and not at fault in the accident could quickly claim up to $500 for medical and treatment costs. Reforms in 2007 increased the benefit available under an ANF to $5,000 and allowed the injured person to claim for loss of earnings, in addition to medical and treatment expenses. Further reforms to the scheme from April 2010 expanded the reach of the ANF to anyone injured in a motor vehicle accident, regardless of who was at fault.
Early Resolution of Claims
To encourage early resolution, claims must be made within six months of the date of accident. The MAC Act also imposes a duty on insurers to make a timely offer of settlement if recovery is sufficient to allow the claim to be quantified and the claimant has provided all relevant particulars about the claim. If the matter cannot be resolved between the parties, either party may take the matter to the Claims Assessment and Resolution Service (CARS) for assessment of the claim.
Alternative Dispute Resolution
The scheme established the CARS to provide an independent claims assessment and resolution service to reduce the adversarial nature of the previous scheme. CARS is comprised of 35 Claims Assessors who are independent lawyers specialising in personal injury law. In their private practices, some represent claimants and others represent insurers. However, when assessing a claim, strict neutrality is demanded.
Most disputes about claims must go to CARS before being able to proceed to court. One exception is claims made by minors or incapable persons under management. Those claims are entitled to exemption from assessment of the claim at CARS. Once exemption has been granted by the Principal Claims Assessor (PCA), upon application, proceedings can be commenced in the Court.
The CARS procedures are intended to be flexible, with an emphasis on informality.
Many CARS Assessors came through the Philadelphia Arbitration scheme which operated very successfully for some time in the courts. The express aim was to divert civil cases away from the complex and expensive court processes. Courts operate under the adversarial British common law system where the complex rules of evidence apply. CARS operates under the Napoleonic inquisitorial system, where the Assessor is in complete control of the hearing and determination of the claim, subject only to the rules of fair hearing and due process.
When assessing claims under the MAC Act, Claims Assessors also can be required to determine a limited range of procedural issues. They include whether a late claim can be made and whether a claim should be exempted from assessment on procedural grounds.
Under the Motor Accidents Injuries Act 2017 (MAIA), Claims Assessors will hear and determine a much larger range of procedural matters. They are known as Merit Review matters and Miscellaneous Claims Assessment matters. These are set out in Schedule 2 to the MAIA.
Independent Assessment of Treatment, Rehabilitation and Care Needs
The Medical Assessment Service (MAS) determines all disputes about medical treatment, duties of insurers to make hospital, medical and other payments, and the degree of an injured person’s permanent impairment. Assessment is performed by medical experts and other health care professionals who have been appointed because of their particular field of expertise. As it can be a complex and strange beast, I will deal with MAS in more detail later.
Preserving Principles of Full Compensation for the Seriously Injured
The MAC Act replaced a subjective test for entitlement to non-economic loss payments with a test that requires a person to have suffered more than ten per cent whole person impairment (WPI). The advantage of this test is that it reflects a medical finding rather than a judicial decision. The impairment threshold does not affect eligibility for any other compensation entitlements, such as current and future treatment, domestic assistance or loss of earning capacity.
What Benefits Are Available Under the MAC Act?
An innocent victim of a motor accident is entitled to an award of damages for non-economic loss if the degree of WPI, caused by the motor accident exceeds 10%, as agreed by the parties, or as determined by the MAS.
That entitlement is prescribed by s 131 of the MAC Act. The maximum amount of damages that can be awarded for non-economic loss currently is $565,000.00 which is increased annually.
The other heads of damage are for various economic losses. These are past and future treatment expenses, other out-of-pocket expenses, such as equipment and therapeutic aids, funeral expenses, past and future loss of earnings, including superannuation benefits. The maximum amount that can be awarded for future economic loss currently is $5,184.00 net per week.
Under the MAC Act, a claim can be made for past and future attendant care domestic assistance provided gratuitously by family members to the victim, as well as for care which the victim no longer can provide to dependents.
Awards of damages for future commercial care of the victim are available, as is the cost of replacing services which the victim no longer can provide to dependents.
The award of damages is to be reduced by the extent to which the victim is found to be guilty of contributory negligence.
Read more about Motor Accident Compensation in NSW in part 3 of the series, “Procedural Requirements Under the MAC Act”.