Changes to Motor Accident Compensation Scheme

The NSW Government has recently passed legislation in the parliament which overhauls the NSW Motor Accident Compensation Scheme. There will be significant changes to the scheme which will reduce green slip premiums and reduce costs to the scheme in a number of ways.

This is done with the introduction of statutory no fault benefits which the government says will reduce legal costs and the adversarial nature of the scheme as claimants will no longer have to lodge a common law damages claim to get compensation for their injuries.

There is a further reduction in costs by removing access to common law damages for soft tissue injuries and minor psychological/psychiatric injuries. Common law claims will be reserved for claimants with more serious injuries.

A summary of the proposed changes can be found below:

At Fault Drivers

Presently claimants who are to blame for a motor vehicle accident cannot make a claim. However, under the proposed scheme an “at fault driver” may claim income support, medical and care benefits for up to 6 months.

Injured Claimants Not At Fault

• Claimants who are not at fault for an accident who have suffered a soft tissue or minor psychological injury can claim limited benefits for income support, treatment and care for up to 6 months.
• All other injured claimants who are not mostly at fault will be entitled to additional income support, treatment and care.
• Claimants with a moderate injury (above 10% Whole Person Impairment) will be entitled to income support for up to 2 years. However, claimants who make a common law damages claim will be entitled to claim income benefits for up to 3 years.
• If a claimant has greater than 10% whole person impairment, income support will be paid for up to 5 years if a common law damages claim is made.
• Furthermore, moderately injured claimants will be entitled to receive reasonable treatment and commercial attendant care costs for life.

Common Law Damages

Common Law damages claims can be made where the injured person can prove fault (negligence) against an owner or driver of a motor vehicle, except in cases were the injuries are minor.

The only damages that may be awarded are for:

1. 1 Pain & Suffering where the permanent impairment is greater than 10%; and
2. 2 Past loss of earnings and for future impairment or deprivation of earning capacity.

• A Common Law damages claim cannot be commenced earlier than 20 months after the date of the accident.
• However, proceedings must be commended within 3 years from the date of the accident.
• A Dispute Resolution Service will be established within the Motor Accidents Authority which will assess and attempt to resolve claims before they are referred to court.

We will provide further information on the new scheme when information is made available.