If you’re injured in a motor vehicle accident after 1 July 2013, you’ll find that any Compulsory Third Party (CTP) compensation available to you is different to what was available before that date. The compensation scheme for motor vehicle accidents in South Australia changed significantly in July 2013.
The traditional areas under which a person has been entitled to claim compensation remain the same but the pathway to each of them has varied significantly.
"We now find that South Australians
are the least compensated injury
victims in Australia!"
As far as we can see, the new system has been imposed on injured victims of motor vehicle accidents simply as a means of saving money for the Government. We now find that South Australians are the least compensated injury victims in Australia!
What follows is a brief description of how compensation is allowed for the various areas. The system is in many areas very complex and if you’re injured in a motor vehicle accident, it is critical that you seek appropriate legal advice before concluding your claim.
"Remember, the insurance company’s
interests are not the same as yours."
The majority of CTP claims are resolved by negotiation and result in a lump sum payment to the injured person. Remember, the insurance company’s interests are not the same as yours. If they provide you with a settlement offer, you should always seek independent legal advice.
What compensation is payable for non-economic loss?
Traditionally this was referred to as “Pain and Suffering” and the law would compensate you essentially for the effect on your life that the injuries had caused. Matters to be taken into account were the significance of the injuries, the effect on your lifestyle and whether the injuries were permanent.
What has changed under the new system is that those matters are basically no longer relevant.
What is relevant is that an assessment of your injuries will be made once they have reached “maximum medical improvement”. That is, when you reach a point where it is unlikely you will see any further improvement in your condition; your injuries are considered to have stabilised. That is the only measure that is relevant.
Using the results of your assessment, the scheme seeks to classify you under the “Injury Scale Value” (ISV). Each category on the Injury Scale has a numerical range attached to it. You have to reach at least 11 points on the ISV to be entitled to any amount of compensation (referred to as damages) for non-economic loss.
For many people injured in a motor vehicle accident, this is a significant hurdle.
What compensation is payable for past economic loss?
Past economic loss is represents wages lost by you as a result of injuries you sustained in a motor vehicle accident from the date of the accident until your claim is settled.
If you have medical certificates showing an inability to work during that period then you are entitled to recoup your losses.
"The new legislation has reduced your
entitlement from 100% to 80% for
reasons best known to the Government."
You cannot claim for your first week of wages lost but after that, you will receive 80% of your net income. The new legislation has reduced your entitlement from 100% to 80% for reasons best known to the Government. You are also entitled to interest on that sum as well as an amount for lost entitlement for superannuation.
What compensation is payable for future economic loss?
Future economic loss is your entitlement where injuries you sustained in a motor vehicle accident is likely to affect your future capacity to earn an income.
There is no automatic entitlement for future economic loss under the new legislation.
The hurdle you need to overcome is to have an injury which is assessed at being more than 7 points on the ISV scale.
In saying that, under the new legislation there are limited circumstances where you may be awarded compensation for future economic loss where your injuries do not achieve 8 points on the scale.
As far as I know this provision has not yet been tested by the court but one can see where a person who requires a particular dexterity or skill to carry out their pre-accident employment may find an inability to carry out that same employment from a relatively minor injury.
Any compensation awarded for future economic loss must now also be reduced by 20% whereas the prior legislation awarded 100% of your future loss. Superannuation is also awarded on future economic loss.
What compensation is payable for past gratuitous services?
Gratuitous services are those services frequently provided, for example by a spouse to the injured person for personal care, home help and domestic assistance where the injured person is unable to carry out their normal range of those activities.
Compensation in this category is only applicable where the care giver is engaged in a voluntary basis to assist you if you’re injured in a motor vehicle accident.
There are significant thresholds in this area namely that you need to achieve 11 points on the ISV scale and that the services, being voluntarily provided, must be provided for at least 6 hours a week and for at least 6 consecutive months.
In my experience, 6 hours of care giving a week is often achievable whereas doing this for 6 consecutive months is a more significant mountain to climb.
What compensation is payable for future gratuitous services?
Future gratuitous services are again those voluntary services that are likely to be required beyond the settlement of the claim.
There are no hurdles in this regard and if it can be made out on medical grounds that your injuries are require assistance in activities of daily living then that will compensation will be awarded to you.
What compensation is payable in relation to medical expenses as a result of injuries from a motor vehicle accident?
Generally speaking the insurance company will meet the costs of reasonably incurred medical treatment.
The insurance company keeps a careful watch over the amount of treatment that is being received and will reserve the right to cease funding at any time if it so chooses.
You should be aware that the insurer has no control over what treatment you receive. Their only control is over whether they will pay for it as the treatment is being received. If the insurance company ceases to pay for medical expenses your treating doctors say you need, you should seek immediate legal advice as this can be challenged.
You should also be aware that Medicare is entitled to be repaid for any monies it contributes to your treatment following your accident. There is a recovery process which needs to be undertaken in this regard and the amount of the recovery to Medicare is simply added on to total amount of your claim. So when it comes to settlement negotiations, remember that Medicare needs to be accounted for.