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Hostile debut for new CTP scheme

March 21, 2019

The ACT has introduced no-fault compulsory third party (CTP) scheme reforms into its Legislative Assembly following a contentious process and amid criticism from lawyers that the new model remains flawed.

About 600 more people a year will be able to receive support under the new scheme compared with the current fault-based arrangements, a Government spokeswoman told insuranceNEWS.com.au.

Injured people will be entitled to up to five years of medical care and lost wages, as long as they were not breaking the law at the time of the accident, while those with a whole person impairment of 10% or more will retain the right to pursue damages through the legal system.

Decisions by insurers about defined benefit issues will be externally reviewable by the ACT Civil and Administrative Tribunal (ACAT).

The proposed model was chosen though a citizen’s jury process, but a parliamentary committee review of the draft bill last year raised a raft of concerns, with the chairman saying it should be scrapped and other members proposing amendments.

The ACT Bar Association, ACT Law Society and the ACT Director of the Australian Lawyers Alliance say the legislation will slash benefits and rights that residents currently have for “a measly $14 annual reduction” in their premiums.

“The amended bill, like the original, provides no tangible benefits to the community and simply promotes the interests of large insurance companies,” they say in a joint statement.

The lawyers are also critical of the costs of establishing the scheme, including a new division within ACAT.

“On top of this, while struggling with an injury, Canberrans will be expected to try and take on the big insurance companies alone, without legal assistance,” they say.

“You can bet the insurers will have lawyers, so why does the Government think an injured accident victim should do without?”

About 290,000 vehicles are registered in the ACT and there have been around 900 claims each year under the current CTP scheme.

But the territory’s Government says not everyone is covered, it could take up to two years or longer to get a payout and residents have been paying high premiums.

“Under the new scheme, Canberrans will continue to be able to be legally represented in pursuing CTP matters if they choose to do so,” the spokeswoman said.

“But they will not have to be represented in order to get access to the treatment, care and payment for lost income they need, as is too often the case in the current scheme.”

She says ACAT was chosen as a review body because of its use of alternative dispute resolution and less adversarial processes, which provides a more accessible forum to people to pursue their benefit claims if they need to. 

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