Standing Committee on Law and Justice

Debate resumed from 14 November 2007.

The Hon. AMANDA FAZIO [2.41 p.m.]: I speak in support of the report of the Standing Committee on Law and Justice entitled "Review of the Exercise of the Functions of the Motor Accidents Authority and the Motor Accidents CouncilEighth Report". As was outlined in detail by the Hon. Christine Robertson, who chairs the Standing Committee on Law and Justice, this is the committee's eighth report into the exercise of these functions. The committee is making much more progress with reviews into the Motor Accidents Authority and the Motor Accidents Council.

In recent times the committee has tended to focus on one or two particular areas of interest each year and has broadened the number of stakeholders involved in reviews. This year the committee did not receive as many submissions as it has received in the past but that is because many issues raised in the early days when the scheme was being reviewed have been responded to quite effectively as a result of the committee's inquiries, recommendations, the Government's response and implementation of the recommendations by the Motor Accidents Authority and the Motor Accidents Council. The committee is doing good work in ensuring that the concerns of the public are being addressed.

One of the concerns that the committee is perennially being asked to address relates to submissions from the legal profession on its opposition to the philosophy underlying the scheme. That is outside the committee's terms of reference, as it was a Government decision that has been legislated. The committee is examining the operation of the scheme, not the philosophic basis of the scheme. The issues raised by the legal fraternity in relation to the actual operation of the scheme tend to be finetuning matters and the committee gives serious consideration to those matters. The committee has not as yet examined the Lifetime Care and Support Scheme for those who have suffered catastrophic injuries in motor vehicle accidents because that scheme has not been going long enough to warrant a review and any outcomes of that review would not have been worthwhile.

I turn now to the 10 recommendations that the committee has made that finetune and improve the operation of the scheme. They are not major recommendations to make changes because overall the scheme is operating very well, but result from issues raised either by medical associations about the application of the American Medical Association guidelines to the evaluation of permanent impairment and such issues. Recommendation 1 states:

That the Chair of the Motor Accidents Council provide a response to the comments of the NSW Bar Association's representative on the Council as set out in this report regarding its effectiveness and, in particular, in relation to its role to provide advice to the Minister.

The committee is responding to issues brought to its attention and is making recommendations that allow any issues raised to be put into practice. Recommendation 2 states:

That the Motor Accidents Authority undertake a review of Whole Person Impairment assessments to establish the extent of inconsistencies and to identify, if necessary, additional quality control mechanisms to improve consistency.

The committee felt this recommendation was necessary because some submissions and evidence demonstrated discrepancies between the levels of impairment determined for somebody at the time of the initial assessment of their medical condition and at a later assessment. Many things could explain that. The committee heard anecdotal evidence claiming inconsistencies or cases of people doing assessments of permanent impairment who were not singing from the same songbook. The information we have received from assessors appointed under the Act outlined the excellent training and regular updates that they have received. This led me to feel confident that they are undertaking thorough and consistent reviews of people. However, as the issue has been raised the committee felt it had the responsibility to review the matter and resolve once and for all whether consistencies exist and, if so, what is causing them.

Recommendation 3 relates to the procedures and rules in relation to medical assessors and conflicts of interest because of the very vexed issue of some people thinking it would be better if medical assessors did only medical assessments rather than undertaking work for insurers or worked in other medical fields. The committee received the strong message from the Motor Accidents Authority and medical assessors that that restriction is too onerous. They felt it would prevent them from seeing the full range of cases necessary to ensure that medical assessors keep their skills up to date. They believed it was garnering the necessary level of peer support knowledge by working in the broader environment. Regulations and safeguards are in place to ensure that no medical assessor could be perceived by any reasonable person to be captive of either insurers or clients. However, as the issue was raised, the committee will ensure that there are no grounds for concern.

Recommendation 4 relates to delays in finalising medical assessments and claims. The committee received anecdotal evidence that delays were occurring. The committee will look at delays taking longer than 10 months because the vast majority of claims are completed well within the approved guidelines and only a rare few go beyond nine months. We thought we would look at what was causing the long delays in relation to some of the claims.

The committee received quite a deal of information from the Motorcycle Council of New South Wales regarding the premiums that are paid by motorcycle riders. The council felt that the premiums motorcycle riders were being charged were too high. We received a considerable amount of information and evidence on that aspect, which would indicate that, having raised the issue with the committee and having required people to focus their attention on it a little more closely, in effect motorcycle riders are probably being undercharged for their premiums. Indeed, in future years motorcycle riders may face increases in their premiums, simply because of the nature of the injuries they sustain and the fact that a large number of the accidents that cause these injuries do not involve another vehicle.

Further issues the committee looked at are detailed in the report. I believe the review process is becoming a very valuable exercise for people involved in the operation of the scheme. It provides a good check on the operations of the Motor Accidents Authority and the Motor Accidents Council. It is also a good avenue for organisations and individuals who have a specific concern about the operation of both the authority and the council to ventilate these issues on an annual basis, and it ensures that their concerns are given due consideration by the committee and are reported upon.

The Government has introduced a number of finetuning changes to the operation of the scheme as a result of these reports. I think that is because of the constructive way in which the whole review process is undertaken and the constructive way in which the members of the committee, who are from all parties, work together to try to ensure we get a good outcome for the people who have to work within the scheme, for the victims of motor accidents, and for the medical and legal practitioners who are involved in that process. As I said, the review process is a very valuable exercise in that it ensures that the concerns identified by all the players in the operation of the scheme can be given public and open scrutiny on an annual basis, that the committee will respond to the issues raised, that the people involved know that the Government in turn will respond to the committee's recommendations, and that if changes are needed they will be made.

The Hon. GREG DONNELLY [2.52 p.m.]: I will make a brief contribution to the take-note debate on the thirty-fourth report of the Standing Committee on Law and Justice, which is entitled "Review of the Exercise of the Functions of the Motor Accidents Authority and the Motor Accidents Council—Eighth Report". As honourable members would be aware, the report was tabled in the House on 8 November 2007. First I wish to thank my fellow committee members, particularly the chair of the committee, the Hon. Christine Robertson, who once again presided over the committee's work in what has become, as the Hon. Amanda Fazio said, a very useful exercise in looking at, in some detail, the functions of the Motor Accidents Authority and the Motor Accidents Council. The committee made a total of 10 recommendations, which were adopted unanimously. I believe this reflects the degree of cooperation across party lines in examining this important issue.

The Standing Committee on Law and Justice has been nominated by the Legislative Council to conduct the ongoing review of the Motor Accidents Authority and the Motor Accidents Council, as required by section 210 of the Motor Accidents Compensation Act 1999. As in previous reviews, the committee examined the Motor Accidents Authority's overall assessment of scheme performance for 2005-06 against the four indicators of affordability, effectiveness, fairness and efficiency. Of course, the election meant that this time around we were somewhat late in our assessment of the annual report. As the Hon. Christine Robertson said in her contribution, with the introduction of the Lifetime Care and Support Scheme, which has been initiated by the State Labor Government, the Motor Accidents Authority will report on a new basis in future annual reports.

The committee found that in the last year of its current reporting structure the scheme continued to perform well when assessed against its performance indicators. During the previous review the Motor Accidents Authority advised that it was working on incorporating health outcomes for injured road users into its assessment of scheme performance. During the review the committee heard evidence of the work that the Motor Accidents Authority was undertaking with stakeholders. This was important in enabling the committee members to inform themselves about all relevant matters associated with the operation of the scheme. The committee reiterates its support for the introduction of the indicators I have referred to with respect to the scheme and the importance of using them as benchmarks.

The committee found that the Motor Accidents Authority and the Motor Accidents Council are performing their respective functions under the Act in an appropriate and competent manner. Notably, the downward trend in the price of compulsory third party premiums, both in dollar terms and as a percentage of weekly earnings, continued throughout 2005-06 and decreased even further during the course of the review. It is evident that the Motor Accidents Authority is continually seeking to improve the way the scheme performs within its current legislative framework.

The aim of many of the recommendations made by the committee in its report is to support or enhance initiatives being considered or implemented by the Motor Accidents Authority. As the Hon. Amanda Fazio said, we are talking about evolutionary, progressive improvement in some arrangements which in our estimation and assessment are fundamentally working. The committee was interested to assess the nature of the relationship between the scheme's stakeholders and the Motor Accidents Authority and the Motor Accidents Council. The committee found that the Motor Accidents Authority consults widely, is willing to discuss and explain issues, and has fostered a professional relationship with various stakeholder groups. The committee also found that generally there was a positive view of the value of the Motor Accidents Council as a representative forum in which information can be shared and differing views can be expressed. The committee heard evidence from a representative of the Bar Association who is on the Motor Accidents Council regarding what he perceived to be the difficulty in getting the council to consider making recommendations regarding the scheme through the board and to the Minister.

All the participants in the review acknowledged improvements in recent times to the general Medical Assessment Service process. From its review the committee found that the performance of the Medical Assessment Service continued to improve, including in relation to the timeliness of finalising matters. The average overall lifecycle of a Medical Assessment Service dispute reduced by 17 per cent from the last reporting period, and statutory time frames for the progress of assessments were being met in a significant majority of matters. Under the scheme, for an applicant to be eligible for compensation for non-economic loss, he or she must exceed the threshold of 10 per cent whole-person impairment, which is referred to as WPI. A significant proportion of the work of the Medical Assessment Service concerns disputes about whole-person impairment. In the reporting period, whole-person impairment disputes comprised 80 per cent of Medical Assessment Service assessments, and in 80 per cent of those assessments the outcome was not in favour of the claimant, which is similar to previous years. The 10 per cent whole-person impairment threshold was the most debated issue during this year's review.

It has been a matter of debate for some time. As the threshold is a matter of policy for the Government, the committee focused from the outset on the operation of the Medical Assessment Service in relation to the threshold rather than the threshold itself. The committee heard from both the Law Society and the Bar Association about their concerns with respect to consistencies in the assessment of whole-person impairment between the medical assessors, including on review. Both the Law Society and the Bar Association believed there was a great need for consistency among Medical Assessment Service assessors, as well as ongoing training and performance review. I invite interested honourable members to look at the evidence of those two organisations in detail. Specific examples can be seen in that evidence to validate the position of both organisations as put to the committee.

The Motor Accident Authority concurred that consistency is a fundamentally important measure of the Medical Assessment Service process. The committee was advised that the service was focusing a significant amount of development, training and resources on ensuring as much consistency and accuracy in assessment as possible. Indeed, some time was taken to provide the committee with detailed insights into the extent of training given to medical assessors. I must say I was pleasantly surprised to see how extensive and detailed that training was. It should be noted that the training is not a one-off exercise of putting someone through a half-day workshop. The authority is clearly determined to ensure ongoing training of assessors and, where necessary, refreshment training.

I conclude by reiterating my thanks to my fellow committee members for what was a bipartisan approach to producing a unanimous report. The work of the committee was well worthwhile and whilst we have not yet detailed next year's specific objectives preliminary discussions have been held. I am sure the committee will apply itself in the same way next year and produce another good report. I also take the opportunity to thank staff of the committee secretariat, who worked so hard to ensure all the evidence was provided to the committee for deliberation. A lot of work was also done in the preparation, typing and proofreading required to produce a fine report.

The Hon. CHRISTINE ROBERTSON [3.02 p.m.], in reply: I thank all members for their contribution to this debate. I will continue with my remarks on the report that I was unable to complete the first time round. Other issues raised during the review were the amount of legal and other costs recoverable by claimants under the scheme, the limit set for accident notification forms and the right to appeal to the Claims Assessment and Resolution Service.

In relation to the legal costs, currently under the Motor Accidents Scheme the maximum amount of legal costs that a claimant may recover is $1,540. This amount is set by regulation. In this and previous reviews the New South Wales Bar Association and the Law Society have argued that the amount set by the regulation is inadequate. They have also argued that this inadequacy is exacerbated in claims that are subject to medical reviews and further assessments. It was put to the committee that the amounts set by the costs regulation has in effect discouraged people from making or pursuing claims. In its seventh report the committee recommended that the Motor Accidents Authority report to the committee on its analysis of the impact of the costs regulation on claimants, with a view to determining whether the regulation significantly disadvantages claimants at the expense of insurers. We have heard from several committee members on this issue during the debate.

During the review the committee heard that after some initial delay a joint study involving the Motor Accidents Authority and the Law Society into the impact of the cost regulations on claimants is now underway. One thing that became clear during the review was that the Motor Accidents Authority's consultative processes with other stakeholders, particularly the Law Society, has been and continues to be extensive. The committee in general thought that was appropriate. The committee was of the view that if the opinion expressed to it over a number of reviews is correct—that is, that claimants are unfairly disadvantaged by the current costs regulation—then that should be remedied as soon as possible. However, the committee was mindful that the issue requires full and proper examination. Therefore, it recommended that the Motor Accidents Authority make the study of the impact of the costs regulation on claimants a priority and resource it accordingly.

In relation to accident notification forms, the Motor Accidents Compensation Act 1999 requires the Motor Accidents Authority to review each year the maximum treatment expenses for injured persons that insurers are required to pay for a claim notified by way of an accident notification form, referred to as an ANF. A maximum of $500 has remained the same since the scheme's inception. The committee was advised that the Motor Accidents Authority had developed a proposal to expand the accident notification forms scheme and this had received unanimous support when presented to the Motor Accidents Council. The Motor Accidents Authority advised that it had examined the profile of small claims up to about $5,000 to see whether they would lend themselves to being dealt with within an expanded accident notification form scheme. Following the presentation to and support from the Motor Accidents Council, the Motor Accidents Authority advised it was developing a proposal for consideration by the Minister.

The committee noted that the 1999 legislation sought to streamline the claims process to make it less adversarial and court-based and so reduce transaction costs and provide a more claimant-friendly environment. One aim of the legislation was to improve claimants' access to earlier payment for treatment, thus assisting in improved health outcomes. A key reform of the 1999 legislation was the introduction of the accident notification form. The committee supports the introduction of an expanded accident notification form scheme as a means of facilitating the early resolution of claims and faster payments for medical treatment and other types of damages. It therefore recommended that the Minister support the expansion of the accident notification form scheme as proposed by the Motor Accidents Authority and that the authority take the necessary steps to implement the expanded scheme as soon as possible.

The committee also dealt with the right to appeal Claims Assessment and Resolution Service assessments. All disputed motor accidents claims must go to the Claims Assessment and Resolution Service. There is no access to court unless the matter has first been sent to the service. The service will either assess the claim or will find the matter exempt or unsuitable for assessment and issue an exemption certificate allowing the matter to proceed to court. The Claims Assessment and Resolution Service will assess a claim with respect to liability and to the amount of damages payable. A finding by a Claims Assessment and Resolution Service assessor about liability is not binding on either party and a finding about the amount of damages is binding on the insurer but not on the claimant.

There are two avenues for appeals against Claims Assessment and Resolution Service decisions. First, if a claimant is dissatisfied with the substance of a Claims Assessment and Resolution Service assessment of the injured person's damages, the claimant can appeal to the District Court. The insurers are not afforded this right of appeal but are bound by the assessment. Second, if either party believes the correct processes were not followed, they can make an appeal to the Supreme Court for judicial review on the common law ground of lack of procedural fairness. During the review the committee was advised that since 1999 there have been only 15 summonses issued in the Supreme Court, all of which were issued by insurers. That is a very small number when viewed in the context of the large number of claims assessed at the Claims Assessment and Resolution Service.

However, it came to the attention of the committee that the Motor Accidents Authority has no means by which to monitor how many Claims Assessment and Resolution Service assessments for damages are appealed by claimants. The Motor Accidents Authority advised that the acceptance or rejection of an assessment is a matter between the complainant and the insurer and that there is no easy mechanism within the Claims Assessment and Resolution Service to record the acceptance or rejection rate. The committee was of the view that information on the rate of acceptance or rejection by claimants of the amount of damages as assessed by the Claims Assessment and Resolution Service would provide a useful indicator of the service's assessment process. The committee therefore recommended that the Motor Accidents Authority liaise with the Insurance Council of Australia and the compulsory third party insurers to investigate the feasibility of obtaining information about the number of Claims Assessment and Resolution Service assessments regarding the damages that are accepted or rejected by claimants and that, if possible, the Motor Accidents Authority report this information in the future in its annual reports.

I look forward to the Government's response to the committee's recommendations. I thank the committee members for their contribution to the debate and the process. I recognise the right of the Hon. John Ajaka and the Hon. David Clarke to place on record their issues of concern about policy and legislation relating to the Motor Accidents Authority. The committee received evidence about some of the issues the members raised. I have spoken to some of those issues today and several of the committee's recommendations deal with them. However, the evidence referred to low levels of errors in medical assessments and associated legal issues. As previous speakers have said, the committee will collect more information on this issue following the next annual report, which we have already begun reporting on, but errors in assessments are low in comparison to successful outcomes for victims of motor accidents.

The committee tries to ensure that the views of all committee members are addressed. That is why the review of the commission was given to this committee in the first place, a long time before I was appointed a member. As I said, further issues will be canvassed next year. The review of the Motor Accidents Authority is an ongoing process and the committee properly considers the issues on behalf of the House. I look forward to the Government's response to our report. I thank the committee secretariat, whom I referred to earlier in the debate, and I thank the committee members for their work on this review. I trust that our next inquiry, which promises to address some interesting issues, will be just as satisfying as the review of the Motor Accidents Authority.

Question—That the motion be agreed to—put and resolved in the affirmative.

Motion agreed to.