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No Fault Compensation

No Fault Compensation

Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion.
Briefing Paper No. 6/2005 by Talina Drabsch
This paper explores the possibilities of no fault compensation, where the entitlement to compensation is not linked to the ability to prove that a person’s injuries were due to the fault of another. It is partly a response to the discussion that followed the recent decision of the High Court to reinstate the award of $3.75 million in damages to Guy Swain, a man rendered quadriplegic after diving through a wave and hitting a sandbank at Bondi Beach in 1997. The tort law reforms in the last few years, and the ‘insurance crisis’ that preceded them, have received much recent attention as the impact of the reforms has begun to flow through. Some concerns have been raised that, as a result of the changes, some people with serious injuries receive little, if any, compensation, forcing them to rely on family, friends and social security.

The current means by which personal injuries are compensated in NSW are discussed in section 2 (pp 4-19). An overview is provided of the law of negligence, including the recent changes in 2002. Information on the workers’ compensation and motor accidents compensation schemes is also included, as is a description of victims’ compensation.

Section 3 (pp 20-32) examines the history of no fault compensation in Australia, with particular attention given to the Australian Woodhouse Report and subsequent National Compensation Bill 1974, as well as the 1984 report of the NSW Law Reform Commission that proposed a transport accidents scheme for NSW. A summary of the current no fault compensation schemes that operate in relation to motor accidents in Victoria, Tasmania and the Northern Territory is also included.

A number of no fault schemes exist throughout the world, including in New Zealand, the United States of America and Scandinavia. Section 4 (pp 33-46) includes a detailed overview of the accident compensation scheme in New Zealand, a comprehensive no fault system that has operated for more than 30 years. Information on the provision of no fault compensation for babies with birth-related neurological injuries in Virginia and Florida is also included in this section. Finally, some additional schemes operating in various countries are briefly noted.

Further analysis of the concept of no fault compensation is provided in section 5 (pp 47-53). This section highlights some of the debates that surround the relative worth of no fault compensation as opposed to the common law, including the role of fault, and issues of fairness, certainty, efficiency, the accuracy of monies received, and rehabilitation.