State Government approves public liability reform package

28/5/02
The State Government has given in principle support to a comprehensive package of legal reforms aimed at tackling spiralling public liability insurance premiums.
Premier Geoff Gallop said Western Australia would be taking a strong position to Thursday's national public liability insurance summit to be attended by all States and the Commonwealth.
Dr Gallop said a national solution was crucial to addressing the public liability insurance crisis.
"WA will continue to be hit with unsustainable premium increases unless there is a national approach to reform," he said.
"The insurance industry does not differentiate between the States when determining premium prices and the adoption of national measures will prevent 'jurisdiction shopping' by claimants."
The Premier said tort reforms given in principle support by Cabinet included:

• limiting the cost of the general damages component of awards by bringing them into line with other personal injury compensation schemes in WA;
  
• legislating to allow self assumption of risk by people who choose to engage in inherently risky activities such as adventure tourism and sports;
  
• applying a cap for the loss of earnings component of awards;
  
• structured settlements through changes to Commonwealth taxation legislation to enable claimants to accept their awards over time rather than as a discounted lump sum payment;
  
• restricting advertising of personal injury legal services to limited factual matters;
  
• ensuring the consequences of taking drugs were taken into account as contributory negligence; and
  
• requiring insurers to contribute to a national dataset and to revise their strategic approach to claims management.

The Premier said the tort reform package was the latest in a series of measures the Government had adopted this year to assist the not-for-profit and small business sectors which had been hardest hit by skyrocketing public liability insurance premiums.
He said the Government was drafting legislation to provide members of volunteer organisations with qualified immunity from personal liability and had developed an educational program for promoting risk minimisation.
Insurance requirements in Government contracts were also being reviewed to better reflect the risks involved while alternative options such as group pooling arrangements for the not-for-profit sector continue to be considered.
As a result of pressure from the State Government, the Prime Minister had also requested the ACCC examine the profitability of the insurance industry and to ensure it is not profiteering from the events of September 11 and the HIH collapse.
The ACCC is expected to report back to the Prime Minister in July.
The Premier said the insurance industry had a responsibility to ensure that premium reductions flowing from these reform measures were passed on to consumers.
"This is an extremely complex issue that will take time to resolve," he said.
"The State Government is doing all it can but the insurance industry also needs to demonstrate its commitment by providing affordable cover to the community."
Premier's Office - 9222 9475