Legislation dealing with third party insurance

24/11/93

The State Government announced today a compromise on its plans to introduce a threshold on third party insurance claims for non-pecuniary loss, with a cut in the proposed threshold from $15,000 to $10,000.

The Government will also legislate to set a ceiling on legal costs on third party claims, protecting injured parties from fees in excess of the scale of costs scheduled in the Legal Practitioners Act.

Minister for Finance Max Evans said the moves had been prompted by concerns expressed by Government backbenchers at a series of meetings with the Minister, and said the integrity of the amendments annnounced earlier this year had been maintained.

Last June the State Government announced a financial management strategy to enable the State Government Insurance Commission to overcome 'WA Inc' losses of $450 million incurred during the previous Labor administration.

Without this financial management strategy the SGIC would have been forced to sell assets at fire-sale values and ultimately would not have been able to meet claims without a major injection of Government funds.

Mr Evans said general damages for pain and suffering would be limited by applying a $10,000 threshold and $200,000 cap on claims arising from accidents occurring from July 1, 1993.

Awards of up to $30,000 (formerly announced - $40,000) would be reduced by $10,000.  The reduction would be scaled down for awards between $30,000 and $40,000 (formerly announced - $40,000 to $55,000).  There would be no reduction to awards over $40,000.

Mr Evans said by amending the threshold regime from that formerly announced, the Government was ensuring those at the more serious end of the minor injury scale were not disadvantaged, while protecting the Government from a continued escalation in minor claims.

The Minister said that, in addition to changes to the formerly announced thresholds, the Government would legislate to ensure that legal practitioners acting on behalf of injured parties were not entitled to receive a greater reward than was provided for by a determination in force under Section 58W of the Legal Practitioners Act.

"This will ensure that legal practitioners are able to claim no more than the amount provided in the scale of costs schedule to the Legal Practitioners Act, protecting claimants from losing an excessive proportion of their awards in fees," the Minister said.

Media contact:  Tony Barker-May 481 3244