OPINION: Victims expendable in CTP proposals


Crispin Hull


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How will insurance premiums be calculated in a time where technology is reducing the amount of accidents? Image supplied.

THE political equation is clear. On one hand, every year nearly everyone pays rego and third-party and mentally puts it down as a government-imposed charge. On the other hand, only a few hundred in the ACT and a few thousand nationally are injured seriously enough in road crashes to warrant a compensation claim.

And thus, to dilute the blame for the former, the rights of the latter are made expendable. It is happening in the ACT. It has already happened in other jurisdictions.

The application of the political equation goes back a long way, as costs and damages rose and the compulsory third-party insurance premiums went up.

As far back as the 1960s, then Victorian Premier Henry Bolte capped damages in response to increased premiums. One of my siblings, then aged six, got paltry damages for life-altering injuries. The legislation was later repealed.

This week, the president of the ACT Bar Association, Ken Archer, wrote about the citizens’ jury process that recommended radical changes to the ACT’s system that would abolish common-law damages, institute caps, and impose injury thresholds below which a person could not get any damages.

Archer’s damning dissection in the latest ACT Bar Bulletin should remove any confidence that the citizens’ jury process used in this instance was applied in any fair or rational way. It was utterly skewed towards a pre-determined outcome. Leaving the system as is, or just making minor modifications was not an option.

Some jurors complained that they did not have enough time. People in industries linked to the issues – particularly law and insurance – were excluded. About 70 of the 6000 people invited to join the jury agreed to do so. In short, the very people who might shed light on the matter were excluded. Instead, the jurors were advised by government-selected experts.

The Government, in an extraordinary abdication of its fundamental role in a democracy, said beforehand that it would accept whatever the jury proposed.

This was part of its election promise to deliver “deliberative democracy”. What is wrong with ordinary democracy, one might ask. Small wonder people have little faith in the system.

Getting a few volunteer non-experts to decide such a complex matter as compensation for vehicle injury – legal, medical, actuarial, technological – without at least being able to access their own independent advice, seems like utter folly.

The jury and the government-appointed experts came up with the new and imprecise concept of whole person impairment. Payments for most will cut out after five years.

Drastically meddling with injured people’s rights just because the ACT’s premiums are about $100 higher than the national average is very poor policy.

The ACT has higher premiums because people have higher incomes here, the loss of which through someone else’s negligence has to be compensated under present arrangements.

The fact the ACT system costs just 25 percent more when the system is the most generous in Australia and deals with incomes that are up to 20 per cent higher than other jurisdictions suggests that complaints about high premiums and that the system is broken beyond repair are misguided.

Yes, things are wrong with the present system. It does not cover people injured on the roads through their own fault or the fault of non-one – mechanical failure or hitting a kangaroo, for example.

The new system at least addresses that. But it could be addressed as a modification to the present system.

The present system should allow for periodic payments, rather than only lump sums.

The present system should increase early payments before final settlements to help people rehabilitate.

And the present system has high legal costs and a fair amount of delay, but that is improving with better case management in the ACT. That said, Archer’s concerns about the proposed system should not be dismissed as self-serving. They are legitimate concerns.

The proposed system is a one-size-fits-all scheme. Many medium-to-high income earners will now have to consider income insurance, thus defeating any gains by lower premiums.

The problem should have been looked at the other way. Instead of imposing a one-size-fits-all system on victims, it should remove the present same-premium-for-all rule for vehicle owners. Premiums could be assessed according to risk.

Someone who has driven for 20 years without offence or claim driving a newish vehicle should not pay the same premium as someone with a string of driving offences and a high number of crashes driving an old bomb. Similarly, someone driving few kilometres should pay less than someone who drives a lot.

The technology to assess this is here and spreading. It is called telematics – GPS-connected computers on board can tell where, how far, how long and when a vehicle has travelled. Trucks use the technology now.

In Europe, insurance companies give recently convicted speedsters and drink-drivers and those involved in crashes an option to install telematics which the companies can monitor rather than impose higher premiums. Telematics can detect whether a driver has ever breached a speed limit or a night curfew.

None of this was considered by the citizens’ jury, mainly because experts who know about this stuff were excluded.

The technology is improving enforcement which is reducing the number of crashes. As is other vehicle technology.

With this technology around the corner, now is the wrong time for the ACT to radically overhaul its vehicle-injury scheme at the expense of victims.

The ACT Legislative Assembly should do its job. An Assembly committee should look at the system calling for public submissions from anyone, especially people who know what they are talking about. Then some of the present defects mentioned above could be fixed.

Further, matching premiums to risk might change the political equation. Instead of blaming politicians for high premiums, some drivers would have to start blaming themselves.


This article first appeared in The Canberra Times and other Fairfax Media on 19 May 2018.

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