A juror who was involved in shaping Canberra's new compulsory third party insurance scheme says an inquiry into the bill is his last chance to address "significant flaws" in the model.
Subscribe now for unlimited access.
or signup to continue reading
Bill Browne will be one of the first witnesses when an ACT Legislative Assembly inquiry looking into a bill to reform the scheme begins on Friday.
He was one of 39 jurors involved with the deliberative democracy exercise earlier this year and co-authored a minority report that expressed concerns the chosen model would harm people in Canberra.
Since the jury concluded, Mr Browne said he had remained involved in the process, including attending a briefing on the legislation.
"It is this continued involvement that has convinced me that the committee inquiry, and the Legislative Assembly as a whole, represent the last chance to address significant flaws in the proposed new motor accident injuries scheme," Mr Browne wrote in a submission.
Mr Browne said while the decision to use a citizens' jury was "brave and bold", it was not conducted perfectly.
He said the jury had never been given the chance to consider a model that was high in compensation and with high defined benefits.
He believes that model would have been best, and he is deeply concerned the new scheme expanded the pool of people eligible for compensation by two-thirds while cutting overall compensation by 20 per cent.
Mr Browne said the committee should investigate ways of keeping the level of compensation payouts the same as they are now.
"All throughout the citizens' jury, the majority of jurors strongly emphasised that the current fault-based compensation system seems unfair, inefficient or even arbitrary," Mr Browne said.
"lt is not surprising that the citizens' jury subsequently chose the model with the highest defined benefits for those injured in motor vehicle accidents, regardless of fault.
"However, because only four models were presented to the jury, we could only ever choose between models with high compensation but low defined benefits and models with low compensation but high defined benefits.
"The jury was not given the opportunity to consider a model that introduced a high level of defined benefits while also keeping overall compensation roughly in line with what it is now. If such a model had been presented to us, l know I would have enthusiastically supported it - and I suspect others would have as well."
Mr Browne said the lack of a cap on insurer profits in the legislation meant the efficiency gains promised by the proposed scheme may not eventuate and could even end up more wasteful than the status quo.
He said while the model chosen by the jury - and supported by the insurance industry - was technically the most efficient, it depended on insurer profits dropping from $42 per premium to $30.
"This suggests that insurers - out of naivety or generosity - supported a model that will reduce their profits by 29 per cent - or $3 million per year. I think it is more likely that insurers do not expect their profits to go down, or they would not have supported this model in the first place," Mr Browne said.
"The only way to guarantee that the proposed scheme is more efficient than the old scheme is to place a cap on insurer profits."
The NSW scheme has a cap, brought in after long-term insurer profits averaged 19 per cent per year.
Mr Browne noted ACT's insurers did not report what their final profits were.
The ACT Bar Association, listed as a witness on Friday, also struck out at insurance companies in its submission.
"Unlike other at fault schemes such as the Transport Accident Commission scheme in Victoria, it is proposed that the scheme be privately underwritten. It is also proposed that claims will continue to be managed by private insurers," the association said.
"This proposed method of administering claims gives insurers overwhelming power in relation
to the provision of compensation to injured motorists."
