Eleventh hour change to new compo laws; provision branded ‘unworkable’

by Astrid Wilson21 Aug 2012

Following the appointment of an independent panel to review the changes to new workers’ compensation laws, it has been formally recommended that one controversial provision of the laws be removed.

The panel found that a section of the law, which would have made injured workers pay their own legal costs, could potentially lead to an increase in the number of unrepresented parties and ultimately raise the workers' compensation scheme's administration costs.

It was determined that the provision was contrary to the long-standing rule that costs should follow the event so as to indemnify the successful party. “The current costs regime has kept disputation to a minimum and delivers certainty and equitable delivery of legal services on both sides,” the panel report found.

Yet whether the provision will in fact be successfully changed is politically charged.

The Law Society of NSW and the NSW Bar Association formally wrote to Finance Minister, Greg Pearce, expressing its concern that the amendment would create “chaos”. “Under this new system, insurers will have the privilege of being able to fund their defence from employer premiums, whilst injured workers will have to bear their own legal costs, even where a legitimate claim has been denied,” the letter said, according to The Australian. “We are seriously concerned that this removes the incentive for insurance companies to support legitimate claims.”

Pearce responded that because the government does not hold a majority in the upper house of Parliament, it would be advisable for the Law Society and Bar Association to take up the matter with the Christian Democratic Party and the Shooters and Fishers Party. Greens MP David Shoebridge has also weighed in on the matter, saying that it is irresponsible of the government to wash its hands of the problem.

Yet Pearce said the issue of costs remained a priority for discussion and welcomed the involvement of stakeholders the ongoing consultation process.

Following the passing of the Workers Compensation Legislation Amendment Bill 2012, the landscape of workers’ compensation in New South Wales significantly changed. The new laws change the way workers’ compensation benefits claims are assessed and paid, and will affect the majority of all new and existing workers’ compensation claims.

Related article: Important changes to workers' compensation in NSW


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