Motoraccidents Act Concerns
Illawarra Mercury
Saturday July 10, 1999
I AM an experienced personal injury lawyer concerned about the proposed changes to the Motor Accidents Act.
I am perplexed as to why the costs of this scheme are continuing to blow out when, from an anecdotal point of view, I have to advise the majority of people across my desk that they do not have a claim or that their claim has been severely diminished under the existing scheme.
I suspect that the answer lies in the manipulation of the fund by the insurance companies. Documentation from the Australian Plaintiff Lawyers Association suggests the insurers have manipulated the figures and have steadfastly refused to open their books for inspection.
I suspect that most of the amendments to the scheme over the past few years have been brought about by insurance company manipulation. As a practitioner I have been able to have advance warning of when a campaign was about to start to lower the benefits as the insurance companies would start to make offers far in excess of what they had previously offered in the same matter. This would generally last for a few weeks and then the press would report how much the insurers had paid out.
I recently observed an insurer insisting that a large proportion of an infant's settlement should be paid as legal costs, despite the practitioner stating that his fees were not that high. The insurer would not settle unless the terms of the settlement reflected this. The practitioner was in a dilemma as he did not believe he could win the case. He solved this dilemma by reporting the matter to the judge and paying the client additional funds from his costs. It came as no surprise to see the insurers mount an attack on legal costs shortly after.
In short, the insurers have attacked every aspect of the cost structure in Motor Accident Act matters except their own profit share (estimated by Ernst & Young in its 1998 report to be 21% of premiums) and have gone to great lengths to avoid proper disclosure of their cost structure and profits taken. The evidence to date is suggestive that costs from other divisions of at least some of the insurers have been passed across to the Motor Accidents Act section to disguise the true picture.
When a scheme compensates a quadriplegic for his pain and loss of quality of life in the sum of $259,000 and a person who is assessed at 25% of a quadriplegic at $17,000 how can it be said that the scheme over compensates?
- T W Sherley,
Solicitor, Wollongong.
© 1999 Illawarra Mercury
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