5 December 2018

CTP Wars Heat up Between Insurers & Lawyers

Mark O’Connor
Mark O'Connor

The insurance industry and the legal profession in Queensland are exchanging cannon fire over the state’s Compulsory Third Party (CTP) scheme.

 The insurers want dramatic changes to the scheme; the lawyers say it’s fine as it is. The insurers say they want a better deal for motor vehicle accident victims; the lawyers say the insurers just want to pocket more money from premiums and pay out less to injured Queenslanders.

A few weeks out from Christmas there’s not a lot of seasonal love between the two factions, with both RACQ and Suncorp on the attack blaming lawyers for perceived shortcomings in the state’s CTP scheme.

 The latest volley, from Suncorp executive Chris McHugh pushes the scare tactic that almost half of the 14,000 people injured on Queensland roads every year will get nothing from their CTP insurance. He treads the insurers’ line that CTP insurance law in Queensland is not fair.

Mr McHugh advocates sweeping changes to Queensland’s CTP scheme, lauding the benefits of New South Wales and others and blaming the legal profession for any inadequacies in Queensland.

Insurers want Queensland to convert to a no-fault coverage scheme which they argue provides a fairer scheme for motorists and actually also sees insurer profits decrease.

Really? Insurers want a system where their profits actually decrease?

If an insurance company executive believes that an insurance scheme should be changed then it’s reasonable to presume any change he wants involves the insurance company pocketing more premium income and paying out less to injured Queenslanders.

Chris McHugh in a media article expresses concern that the current system does not provide benefits for those who cause accidents and he looks to schemes such as that in New South Wales which pay some benefits to those who cause accidents.

The sad fact is that in New South Wales claimants are unable to claim that there for their total loss of wages arising from an accident and most claimants’ benefits end at the end of 6 months, even if their injuries prevent them from been able to ever return to work.

In Queensland if another driver has caused or contributed to your injury you can claim for compensation for your pain and suffering, medical expenses  and your full loss of wages and superannuation contributions which otherwise would have been paid by the employer, had it not been for the accident.

It is true that if you cause an accident you do not receive benefits under the Queensland scheme but that is why there is the National Disability Insurance Scheme. That is why many prudent Queenslanders often have their own income protection insurance and trauma insurance to cover the possibility that they are injured in motor vehicle or other accidents to provide protection circumstances like this.

The suggestion by insurers is that lawyers are taking 50% of the injured persons settlements as well as the recovered legal costs recovered as part of fees. For it to be suggested that this is the norm in regard to a CTP injury payouts is quite frankly untrue and mischievous.

Queensland in fact has a fee capping mechanism to ensure that lawyers’ fees do not get out of proportion to the final result for a client when only a modest damages recovery is made.

Mr McHugh has criticised problems caused by “claims farming” but the fact is that the Queensland lawyers, the Queensland Law Society and the Australian Lawyers Alliance have been working with government and the Motor Accident Insurance Commission to wipe out the practice.

The sad fact is it is understood that the information which is being sold by claims farmers to a few dodgy lawyers believed to operate principally from New South Wales is being sold by persons inside the insurance industry. The insurers should put their own house in order before criticising lawyers.

Quite frankly, when an insurance company says it’s a good idea to dump a financially sound CTP system which has worked well for Queenslanders for decades because it’s worried that some people are “missing out” you should be deeply sceptical.

A report of the Motor Accident Insurance Commission from late 2017 found that the only major concern with the Queensland CTP system was the excessive profits being made by the insurers.

The Financial Services Royal Commission has already exposed some of the dishonest and deplorable activities of the insurance industry. You should think twice before believing an insurer which claims to know what’s good for Queenslanders.

 

 

Mark O’Connor is a Personal Injuries Accredited Specialist and a director of Bennett & Philp’s Compensation Law team.


Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).

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