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Legislative Assembly for the ACT: 2002 Week 9 Hansard (21 August) . . Page.. 2498 ..

MR SMYTH (continuing):

It is with great pleasure that I introduce the Insurance Compensation Framework Bill 2002. Before I go into detail, I would like to bring to the attention of members that this bill has been superbly and speedily drafted. I acknowledge that the ACT Assembly is fortunate to be served by some truly gifted draftspeople.

The crisis in public liability insurance requires a fundamental rethink on the way this issue should be addressed. I do not think the current system suits anyone well. It is time to recognise that a system which focuses solely on monetary redress for injuries is flawed.

It is time, as a society, to make a decision about liability. Do we continue to provide a system of adversarial litigation which may sometimes, but by no means always, provide a pot of gold at its end? Or do we step away from this approach? Do we instead recognise that the priority for injured people is not to give them a pot of gold, after several years of expensive litigation, but to get them well-to rehabilitate them back to their pre-injury level of life?

Mr Speaker, this bill is just that-a move away from the pot of gold mentality of large payments to one of early intervention and rehabilitation, where quality of life is the priority. Indeed, my legislation will be the first step towards a no-fault system for all personal injuries claims.

We need a system where, if a person is injured, they will be looked after, their medical needs will be attended to and they are rehabilitated, where possible, to their pre-injury level of lifestyle. Of course, where someone suffers catastrophic injury, where rehabilitation is impractical, compensation should be paid as soon as possible.

The beauty of this legislation is that it has already been done in a similar field, and it works. All stakeholders involved in its development-insurers, employers and unions, believe this will have a downward effect on premiums, and it is already producing better outcomes for injured people. I am referring to the Workers Compensation Act, which I reformed last year when I was minister, which has implemented such a system.

The question I have is: why should an injury caused in medicine be treated differently from one caused at work, or indeed one caused by falling off a horse? I do not think there should be any difference at all. As it happens, and as identified by the Chief Minister yesterday, the legislation covering personal injury in the ACT is a melange of common and tort laws. There are no guidelines for judges, and insurance actuaries have no way of accurately predicting risk. They therefore hedge on the side of caution, and premiums skyrocket.

Mr Speaker, the Insurance Compensation Framework Bill 2002 will address all of this. I put on the record that there are two main drivers of premium prices. The first is volatility of outcome. An insurance actuary has no way of telling, in the current environment, what the likely payout for any particular incident will be. The second is the length of time it takes to claim. The longer a claim takes to resolve, the more it costs. Even more significant for actuaries is the period of time in which it is possible to make a claim-I refer to the statute of limitations. Again, where there is no limit, or where a litigant makes a claim many years after the event, the payout can be enormous.

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