Draft report of Inquiry into the Victorian Wrongs Act released

Insurance eBulletin - 2 December 2013

Summary

A package of options detailed in a draft report on the Victorian Wrongs Act 1958 by the Victorian Competition and Efficiency Commission will, if enacted, result in higher awards to some classes of personal injury plaintiffs. Notably, the options include lowering the significant injury thresholds for spinal and psychiatric injuries and adjusting caps on damages. Two options favour defendants, by restricting rights to damages for gratuitous attendant care and for pure mental harm for injuries suffered on the ground as a result of the use of an aircraft.

Submissions on the proposals are due by 17 January 2014.

 

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The Commission's draft report

The Victorian Competition and Efficiency Commission (Commission) began its Inquiry into aspects of the Wrongs Act 1958 (Vic) in May 2013. On 27 November 2013, it released its draft report.

The draft report contains some law reform options which, if enacted, would result in higher awards to some classes of personal injury plaintiffs although others would restrict awards in particular cases.

The Inquiry is examining the operation of the Act in respect of personal injuries with a view to making it operate more efficiently and equitably, whilst remaining consistent with the 2003 tort law reforms, which were introduced to reduce premiums and increase the availability of insurance.

The Commission received submissions from a number of parties including the Health Services Commissioner, Victorian Managed Insurance Authority, Australian Lawyers Alliance, Common Law Bar Association, Law Institute of Victoria, Insurance Council of Australia, Avant Mutual Group Limited and the Australian Medical Association.

 

Proposed changes

The draft report outlines a package of measures that would:

  • adjust the threshold level for eligibility to access non-economic loss damages for spinal injury to impairment of greater than or equal to five percent and, for psychiatric injury, to impairment of greater than or equal to 10 per cent;
  • provide that the cap on damages for economic loss applies to the gap between pre- and post-injury earnings;
  • provide that in claims for loss of expectation of financial support, deductions for the deceased person’s expenses are to be made before applying the cap on economic loss;
  • align the cap on damages for non-economic loss with the cap under the Accident Compensation Act 1985 (Vic);
  • provide that the thresholds that limit access to gratuitous attendant care damages are cumulative, that is, the care must be required both for at least six hours a week and for six months;
  • require that an impairment assessment for spinal injuries be based on a claimant's post-surgical, as opposed to pre-surgical, condition;
  • provide that claims for damages arising out of the use of a motor vehicle are subject to the Act's caps on damages, thresholds and discount rate; and
  • exclude claims for pure mental harm from the operation of s 31 of the Act which imposes a strict liability regime for damage caused by aircraft to persons or property on land or water.

While the aircraft liability and gratuitous care options favour defendants, the Commission states that overall, these measures could result in a net increase in relevant insurance premiums by up to four per cent. Two further measures— reducing the "discount rate" to four per cent and providing a limited entitlement to damages for loss of capacity to care for others—have not been included in the package because in the Commission's view, they could unduly impact on insurance premiums and/or decrease consistency with other Acts.

The Commission has requested suggestions on:

  • the appropriate approach to inequities associated with asymptomatic blood-borne diseases as a result of the running of limitation periods;
  • whether Victoria should adopt the New South Wales approach to provide a limited entitlement for loss of capacity to care for others; and
  • measures which may assist Medical Panels to make "timely and accurate" decisions.

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Where to from here?

Whatever amendments result from the review process, the Commission recommends that the Act be revisited closer to the time of the full implementation of the National Disability Insurance Scheme which is expected to be July 2019.

Feedback and submissions on the Commission's draft report are sought by 17 January 2014. The final report is due by 28 February 2014.

The draft report is accessible here, and further information, including submissions, are available at www.vcec.vic.gov.au.

 

Authors
Nic Cozens, Lawyer
Kate Clark, Special Counsel

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Further information

All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.

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