VCEC inquiry into Wrongs Act and access to compensation

The Victorian Competition and Efficiency Commission (VCEC) will conduct an inquiry into aspects of the Wrongs Act 1958 (the Act), Treasurer Michael O’Brien and Attorney-General Robert Clark announced today.

In 2002 and 2003 the Act was extensively amended in an attempt to address the insurance crisis that had developed following the collapse of one of Australia’s largest insurers, HIH, and the terrorist attacks of 11 September 2001.

“Previous reforms were designed to regulate legal actions for compensation for injuries allegedly due to the negligence of business operators and others,” Mr O’Brien said.

“The objective of these reforms was to reduce claims on public liability and professional indemnity insurance, leading to a reduction in insurance premiums and an increase in the availability of insurance. This will not be revisited by this inquiry.

“However, since the reforms were implemented, concerns have been raised about whether aspects have unnecessarily or unjustifiably restricted access to compensation.

“There is also concern that the Act deals with different plaintiffs inconsistently,” Mr O’Brien said.

Mr Clark said the VCEC inquiry would look at ways to ensure that the Act was operating efficiently and effectively, and make recommendations to address any anomalies, inequities or inconsistencies.

The Commission is to make recommendations relating to personal injury damages, including:
•the limits placed on available damages for personal injury or death, for both economic and non-economic loss, by the Act;
•the impairment thresholds for personal injury imposed by the Act in relation to damages for non-economic loss;
•discount rates applicable to lump sum damages awarded for future economic loss; and
•limitations on damages for gratuitous attendant care.

The inquiry will also consider the appropriateness of the current strict liability regime for aircraft owners.

“In recommending options for amendment to the Act, the Commission will consider the impact on the price and availability of public liability or professional indemnity insurance in Victoria, the impact on judicial and administrative decision-making, the impact on the conduct of litigation, and consistency with other legislative regimes prescribing compensation for personal injury in Victoria and interstate, having regard to the different objectives of these regimes,” Mr Clark said.

For further information about the inquiry visit www.vcec.vic.gov.au.