Reform of compulsory third party insurance

11/04/2016

As members would be aware, the NSW Government has released a discussion paper into CTP reform. Whilst the government is seeking views with regard to improving scheme performance and efficiency there is a more immediate issue of concern with regard to scheme performance.

Over the past three years there has been a significant escalation in claim numbers. The increase is almost entirely in low severity legally represented claims. There has not been any corresponding increase in accident numbers.

The increase in claim numbers is sufficient to threaten the stability of the scheme, and the NSW Government has released a discussion paper seeking views on four options for reform.

To address this immediate crisis the Bar Association, the Law Society and the Australian Lawyers Alliance have made a joint submission to government, recommending changes to the costs regulations to deter some of the claims behaviour that may be fuelling the increase in claims numbers. These proposals were viewed as an essential measure to help restore balance to the scheme. A failure to address the current crisis risked a far more severe response from the government.

The Bar Association is involved in extensive discussions with the government and SIRA over the broader reform agenda and members will be kept advised as to the progress of those discussions.