The NSW Government has recently proposed changes to the CTP insurance scheme, which may prevent many injured people from receiving the benefits they deserve. These proposed reforms have been heavily criticised within the legal sector and have left many motorists concerned about the implications for them. Read on to find out more about the proposed changes and how it will affect you in the event of a road accident occurring.
What is the CTP insurance scheme?
The Compulsory Third Party (CTP) insurance scheme, also known as the CTP green slips scheme, is an insurance policy which provides compensation for people killed or injured as a result of a motor vehicle accident. In NSW, all vehicle owners are required to purchase CTP insurance when they are registering their vehicle. Injured parties will generally make claims against the CTP insurer of the vehicle at fault.
What are the proposed changes to the CTP insurance scheme?
Under the proposed changes, people with less serious injuries will lose their rights for certain kinds of damages.
Injured parties who have suffered less than 10% of whole person impairment will no longer be entitled to claim compensation for future medical treatment and probably future income. This deviates significantly from the current CTP insurance scheme, where compensation can be claimed for past and future medical treatment and loss of past and future income.
According to the NSW Bar Association’s Andrew Stone SC, ‘people with fractures, who’ve lost teeth, who’ve got permanent hearing loss, who are going to limp forever, who can’t get their arm above their elbow – that’s the group the Minister [for Innovation and Better Regulation] is abandoning after five years’.
It has also been proposed that the amount of compensation awarded to injured parties are not to be ultimately decided by a court, but rather by an internal administrative system run by the insurance companies themselves. Under this proposed system, injured parties will lose their rights to legal representation when challenging an assessment of their claim, and must therefore face insurance companies on their own.
This permits a clear imbalance in power between those injured and the insurers, as it may be too stressful for injured parties to negotiate their personal injury claims on their own behalf and without a lawyer to help navigate them through the CTP claims process.
Who will be the most affected by the proposed changes to the CTP insurance scheme?
These changes will affect a large majority of injured parties. The NSW Bar Association and Law Society of NSW have reported that 90% of injured parties will fall below the 10% whole person impairment threshold.
This will significantly affect manual workers in particular, such as tradespersons, who rely on a healthy body to do their job. These workers will lose their compensation after 5 years if their injuries fall under the 10% whole person impairment threshold, despite the significant impact on their continuing ability to work. This may include orthopaedic injuries to the shoulder, knee or ankle which do not meet the 10% threshold, but still clearly affects a person’s working life for many more years ahead.
Why are changes to the current CTP insurance scheme being proposed?
These changes are being put forward as an attempt to cut costs for insurers and motorists, due to the $400 million spike in fraudulent insurance claims made over recent years and the rising costs of CTP insurance premiums. However, the proposed CTP insurance scheme appears to benefit only the insurance companies while taking more away from those who have been injured. While a more viable CTP insurance scheme is certainly needed in NSW, we believe that it should not be at the expense of the injured parties.
For more information about making a motor vehicle accident claim, get in touch with Schreuders today.