Changes to the Motor Accidents Compensation Act (NSW)
Changes to the Motor Accidents Compensation Act (NSW)
by Andrew Stone, Barrister
Released July 2008
ABOUT THIS PROGRAM
Significant amendments to the NSW Motor
Accidents Compensation Act 1999 will come into effect when the Motor Accidents
Compensation Amendment (Claims and Dispute Resolution) Bill 2007 - which was
passed on 5 December 2007 – is proclaimed.
The commencement date has not been announced
but is likely to be 1 October 2008.
This program covers the following areas
where amendments have been made by the Bill:
Provision of particulars
Exchange of documents
The program also examines amendments
referable to particular Court decisions, namely:
1986 High Court decision regarding the
standard of care expected of learner drivers compared to drivers in general
2006 House of Lords decision awarding
damages contrary to the Act in respect of an accident in NSW involving
TO THE MOTOR ACCIDENTS COMPENSATION ACT:
MOTOR ACCIDENTS COMPENSATION AMENDMENT (CLAIMS AND DISPUTE RESOLUTION) BILL 2007
Stone, Barrister, Sir James Martin Chambers
Moloney, Director, Stacks/Goudkamp
Gumbert, Solicitor, Stacks/Goudkamp
This paper has been compiled to
outline the changes that will come into effect when the Motor Accidents
Compensation Amendment (Claims and Dispute Resolution) Bill 2007 is proclaimed.
The bill will significantly amend the Motor Accidents Compensation Act
The bill was passed by both
houses of Parliament on the 5th December 2007 but has not yet come into effect.
The commencement date has not been announced but is likely to be 1 October 2008.
In his second reading speech,
the Honourable John Della Bosca indicated that the purpose of the bill was to:
"... make further
efficiency improvements in the motor accidents claims and dispute resolution
process and procedures currently operating under the Motor Accidents
Compensation Act 1999" (hereinafter referred to as MACA).”
This paper will cover the
following areas which have been amended by the bill:
Provision of particulars.
Exchange of documents.
And other miscellaneous
Pursuant to MACA the claimant
is obliged to co-operate fully, which includes providing particulars such as to
enable the insurer to make an early assessment as to liability, or to make an
offer of settlement or to determine if the claim or any part of the claim is
fraudulent (Section 83).
The claimant must comply with
the insurer’s reasonable request for information and specified documents or
If the claimant fails to
provide particulars the claimant cannot commence court proceedings unless the
claimant has a reasonable excuse for not providing the information or
documentation in response to the insurer's request.
Until now the failure to
provide particulars has not been a bar to the pursuit of the claim. The claim is
simply stalled until the particulars are provided. Under the new provisions,
failure to provide particulars may result in a claim being deemed to be
The Bill introduces Section
85A, which requires the claimant to provide to the insurer all relevant
particulars of the claim as expeditiously as possible after the claim is made.
For the purposes of this
section, relevant particulars about a claim are full details of:
the injuries sustained by
the claimant in the motor vehicle accident, and
all disabilities and
impairments arising from those injuries, and
any economic losses and
other losses that are being claimed as damages, sufficient to enable the
insurer, as far as practical, to make a proper assessment of the claimant's
full entitlement to damages
Pursuant to section 85B if all
relevant particulars are not provided within two years and six months after the
motor vehicle accident and the claimant has failed to provide a reasonable
excuse as to why the particulars have not been provided, the insurer may direct
the claimant in writing to provide the particulars within two months.
If the claimant does not
provide the particulars within three months after the direction is given, the
claimant is taken to have withdrawn the claim.
The claimant will then have to
apply to either CARS (if the claim is not exempt) or to the Court to have the
claim reinstated (Section 96).
claim will only be reinstated if the Court or the claims assessor is satisfied
that the claimant has provided a full and satisfactory explanation for the
failure to provide the required particulars.
If the application for
reinstatement is made three years or more after the date of the motor vehicle
accident the claim is only to be reinstated if, as well as providing a full and
satisfactory explanation, the claimant establishes that the total damages of all
kinds likely to be awarded to the claimant are not less than 25% of the maximum
amount that may be awarded for non-economic loss at the date of the motor
Under the current system
Section 82 does not apply to a claim made in respect of the death of a person,
or a claim in respect of which the injury has not stabilised within three years
after the motor vehicle accident.
The latter qualification has
now been omitted and replaced so that Section 82 does not apply in respect of a
claim where the injury is not sufficiently recovered within three years after
the motor vehicle accident to enable the claim to be qualified, or is a claim in
which a medical assessor has declined to make an assessment of the degree of
permanent impairment because the injury has not become permanent.
The words “as expeditiously
as possible" are open to interpretation and may lead to protracted disputes
as to whether or not the particulars have been provided expeditiously.
The wording of Section 85B is
unclear. Insurers are entitled to demand “all relevant particulars” but
there is no definition as to what this is to include. Further, there is no
requirement in the Bill for the insurer to actually specify what information it
requires. This uncertainty is likely to lead to many disputes about whether an
insurer’s request for particulars was reasonable, and whether the response to
that request was adequate for the purposes of s85B.
For guidance in relation to
what constitutes a proper request for particulars, it is helpful to turn to the
decision of Allianz Australia Insurance Ltd v Newcastle Formwork Constructions
Pty Ltd  NSWCA 144. In that case the Court of Appeal said (at 18):
purpose of particulars is to assist in defining the issues at the trial,
whereby the opposite party knows the case it has to meet and will not be taken
by surprise, so that the evidence to be led can be appropriately confined and
costs can be limited by avoiding the expense of preparing to meet issues which
will not arise. Giving particular of the case to be made out has been
distinguished from disclosing the evidence by which the case is to be proved,
but the distinction is not a clear one and the touchstone must be what is
reasonably necessary to achieve the purposes last-mentioned.”
The Court then referred to a
number of authorities and listed the following principles in relation to the
provision of particulars:
A party must be made aware
of the nature of the case he or she is called upon to meet.
The object of particulars
is to save expense in preparing to meet a case which may never be put, and
to make the party’s case plain so that each side may know what are the
issues of fact to be investigated at the hearing.
It is not a question of
whether one party has adequate knowledge of the actual facts, it is a
question of whether he has adequate knowledge of what the other party
alleges are the facts, for that is the case which he must meet.
Although there is a distinction
between particulars and evidence, the Court made it clear that in some
circumstances it will be necessary to disclose some of the evidence, or at least
an outline of it. In this regard the Court said “The starting point is what is
necessary to guard the other party against surprise; the starting point is not
what can be said without disclosing the evidence to be led.”
The initial draft of the bill
sought to introduce compulsory exchange of all documents between the parties,
similar to the open disclosure regime that is currently in operation in
In Queensland parties are
required to exchange not only all reports received but also documents, which would normally be
protected by privilege – for example file notes of conversations with experts,
employers, doctors etc.
This suggested amendment to the
NSW scheme was not included in the bill passed by parliament.
The bill does however require
the parties to exchange all documents relied on for the purpose of assessing the
claim before they participate in the compulsory settlement conference (Section
89B). Compulsory settlement conferences are another new feature introduced by
the bill, which are discussed below.
If a party fails to provide
such documents prior to the settlement conference and later attempts to rely on
those documents a claims assessor cannot take the documents into account unless
the claims assessor is satisfied that the probative value of the document
substantially outweighs any prejudicial effect on the other party (Section
There is an out clause for the
insurer in that the insurer does not have to provide documents if the insurer
suspects on reasonable grounds that the claim is fraudulent or otherwise not
made in good faith.
No consideration appears to
have been given to documents that become available after the settlement
conference date (eg. new medical reports and current tax returns etc). It is
assumed an assessor will exercise a discretion to let these documents in.
A new Section 89A requires the
parties to participate in a settlement conference before an application can be
lodged with CARS.
If one party is ready and
willing to participate in a settlement conference but the other party refuses to
partake, although they’ve had a reasonable opportunity to do so, the claim can
nonetheless be referred to CARS but only if the claims assessor is satisfied
that the referring party were ready and willing to partake in the conference and
the other party refused to do so. There
is likely to be argument as to whether the referring party was ready. The
insurer may, for example, allege that the referring party was not ready to
partake because they had not provided sufficient information about the claim
Section 98A requires the
settlement conference to be held as soon as practicable after the insurer makes
an offer pursuant to Section 82 of the Act. Remember that the insurer does not
have to make the offer until particulars are supplied.
The bill defines a settlement
conference as a conference in which the claimant, or the claimant’s guardian,
or a person authorised on behalf of the claimant to settle the claim and a
person authorised on behalf of the insurer takes part in.
Accordingly merely exchanging written offers will not satisfy this
section as it seems to require an actual conference to take place. However, a
telephone conference would seem to meet the requirements of the section.
Generally parties attempt to
settle claims as early as possible. Unfinished
files do not generate fees and unduly prolonged claims lead to unhappy clients.
Although section 89B may be attempting to encourage the early resolution
of claims there is a risk that it will result in some claims being rejected by
CARS due to a technical breach.
It may also lead to time being
wasted as parties will hold a compulsory conference simply to comply with the
statutory provisions when they wish to progress the matter but are not ready to
In Queensland the parties (by
agreement) can dispense with the need for the compulsory conference, which seems
a sensible provision to include in the legislation.
If the claim does not settle at
the settlement conference each party must make an offer of settlement in writing
within 14 days of the conference. The
offer must be accompanied by a schedule of damages sufficiently detailed to
explain how the offer was calculated. (Section 89C)
A claim cannot be referred to
the Authority for a CARS Assessment until the written offers of settlement are
If one party fails to make the
written offer, the other party can, after 14 days have elapsed, refer the claim
for assessment on satisfying the claims assessor that the other party has failed
or refused to make the offer. This should be easy to prove as the correspondence
should be self-evident.
As the cost regulations
currently stand there is no extra costs allowed for the extra work in having a
compulsory conference or sending the compulsory written exchange of offers. The
costs regulations are to be redrafted prior to the bill taking effect.
A potential advantage to the
provision is that it may help in those rare cases where plaintiffs refuse to
give instructions to make an offer wanting instead their day in court.
There is a penalty for failure
to comply with the above requirements (failure to partake in the settlement
conference or to make a written offer or to exchange documents prior to the
settlement conference). A costs penalty may be imposed by the claims assessor of
up to 25% on top of or less than the costs allowable under the cost regulations.
The section also provides that
it is a condition of the insurer's licence that the insurer complies with the
of Claims Assessors to require information
There is no provision for the
issue of subpoena under MACA or under the new bill. Under
MACA a claims assessor could direct a party to the claim to provide documents or
information considered relevant to the claim. The bill introduces a new regime
whereby claims assessors now have the power to direct not only a party to the
claim but any person to produce any documents and information which the claims
assessor believes are relevant to the assessment of the claim.
Failure to comply with the
assessor’s direction is a criminal offence.
To facilitate the production of
documents by non-parties, the assessor can direct a party to the claim to
provide an authority. There is no limit on this power.
The MAA will pay the reasonable
costs incurred by the person in complying with the assessor’s direction.
The documents are produced to
The section does not provide a
mechanism for giving the parties to the claim access to the documents produced.
There is no indication as to how soon after obtaining the documents the
assessor has to provide them to the parties and there is no provision for a
party to seek first access to the documents and to claim privilege if
appropriate. Amendment to the Claims
Assessment Guidelines may address some of these issues.
Under the current regime
insurers are increasingly pressing claimants to provide authorities to enable
them to obtain records, particularly GP records.
Some assessors rather than directing the claimant to provide the
authorities instead direct the claimant to obtain the records and thereafter to
provide those records to the other party. This
allows the claimant to review the records and claim privilege (as appropriate)
before releasing the documents to the other party and the assessor.
There is no provision for the
parties to provide supplementary submissions to the CARS Assessor which are
likely to be required in some cases to address issues raised in light of the
This new power of CARS
Assessors to require production of documents can potentially conflict with
existing legislative provisions. Certain government agencies including the
Health Insurance Commission, Centrelink, and the Tax Office have statutory
immunity from subpoena. This immunity is designed to protect privacy. The powers
given to CARS Assessors under s100 circumvent this by enabling CARS Assessors to
direct a claimant to sign an authority for the release of information pursuant
to freedom of information legislation.
The material which may be
considered to be “relevant” to a motor accident claim is practically
endless. All manner of sensitive and confidential records could be forced to be
produced pursuant to a direction from a CARS Assessor. Further, parties will not
have the opportunity to claim privilege over material as they would be able to
do if the matter were litigated.
A new Section 94A gives the
claims assessor the power in specifying damages under Section 94 in respect of a
claim to include in the assessment an assessment of the claimant's costs, both
professional costs and disbursements. This
seems to occur in any event.
Section 94A gives all
parties to the proceedings the same right of appeal against an assessment as to
costs as if the assessment was determined by a costs assessor pursuant to the
Legal Profession Act 2004.
In making an assessment as to
costs the claims assessor may have regard to any written offer of settlement
made by either party to the matter, must take in to account the costs allowed
under the regulations and must give effect to any requirement of a court
pursuant to Section 151(3) of MACA and must also have regard to matters set out
in Section 363 of the Legal Profession Act 2004.
A new Section 95(2A) requires
that damages (including any costs assessed as payable by the insurer) must be
paid within such a period as prescribed by the regulations and also notes that
the regulations may require the payment of interest if the monies, or any part
thereof, are not paid within a certain time period.
The rate of interest is not to exceed the rate prescribed for Section 101
of the Civil Procedure Act 2005.
Pursuant to Section 96 of MACA
a claims assessor has the power to determine:
whether a late claim may be
whether the claimant has
provided a full and satisfactory explanation for not reporting the incident
to the Police;
whether the claimant has
provided a full and satisfactory explanation for late lodgment of a claim
whether the insurer is
entitled to delay the making of an offer of settlement on the grounds that
the particulars provided were insufficient or
whether payment is required
pursuant to Section 83, not being a medical dispute.
Section 96 notes that an
assessment of a dispute under this section is binding on the parties to the
dispute to the extent that it relates to the duties of the parties with respect
to the claim under Part 4.3.
The bill will also give CARS
assessors the power to determine whether there has been due search and inquiry
in Nominal Defendant cases. (Refer
Section 91(1)(a)). This seems an unnecessary amendment as disputes about due
search and enquiry are more appropriately dealt with by the trial judge who will
hear the inevitable dispute about liability that arises in Nominal Defendant
to MAS Assessments
Section 58 of MACA is amended
by the bill to remove earning capacity and stabilization disputes. Now, MAS
Assessors will only consider stabilisation when it is relevant to a dispute
about whole person impairment.
Section 58(1)(d) requires MAS
Assessors to determine whether a claimant’s whole person impairment caused by
the accident exceeds 10%. At present, s61(2) indicates that a MAS Assessor’s
Certificate is only conclusive as to the degree of whole person impairment (in
such a dispute). In Pham v Shui  NSWCA 373 it was held that the wording of
s61(2) means that the MAS Assessor’s opinion regarding causation is not
The bill amends s61(2) of MACA.
Section 61(2) will now read that an Assessor is required to issue a Certificate
regarding the matters referred for Assessment, and any such Certificate is
conclusive evidence as to the matters certified. This has the effect of
overcoming the decision in Pham v Shui and making MAS Assessor’s decisions as
to causation binding.
The bill also amends s62 of
MACA, dealing with further medical assessments. Further assessments will now
only be allowed where it is likely to lead to a material difference in the
outcome of the assessment, that is changing the result from either above 10% to
below 10% or vice versa. This standard was already being applied by MAS so the
amendment does no more than formalize existing arrangements.
Further, the bill provides that
a review of a MAS assessment will include a review of all of the assessor’s
decisions not just the issues under review. Again, this policy was already being
applied by MAS.
Section 60 has also been
amended so that the consent of the insurer is no longer required before a claim
can be referred to MAS when liability is denied.
These provisions are likely to
apply to all applications lodged with MAS from 1 October 2008.
Cook v Cook Amendment
In Cook v Cook (1986) 162 CLR
376 the High Court held that the relationship of driving instructor to learner
driver gave rise to a special situation whereby the standard of care owed by the
learner driver was different to the ordinary standard of care owed by drivers in
general. The Court said (at p384):
the standard of care which arises from the relationship of pupil and
instructor is that which is reasonably to be expected of an unqualified and
inexperienced driver in the circumstances in which the pupil is placed. The
standard of care remains an objective one. It is, however, adjusted to fit the
special relationship under which it arises.”
The effect of this decision was
that if a learner driver caused an accident and the driving instructor was
injured, the driving instructor would have to prove that the learner driver had
breached this much reduced standard of care. This issue was recently explored in
McNeilly v Imbree  NSWCA 156 where the Court upheld the findings of the
trial judge that although Cook v Cook applied, the learner driver had
nevertheless breached her duty to the instructor. Quoting the trial judge,
Basten JA said (at 72):
appellant’s action in deliberately accelerating so as to avoid an object in
the path of the vehicle she was driving involved, in the absence of any
suggestion of skidding and in circumstances where she was deliberately
steering the car off the roadway, an element of carelessness over and above
what could be attributed merely to inexperience… Any such superimposed
carelessness on the part of the appellant constituted a breach of duty of care
which she owed to the respondent.”
The High Court has granted
Special leave in McNeilly v Imbree, to hear the argument that Cook v Cook is no
longer good law. The accident in question occurred in the Northern Territory.
Fortunately, regardless of what
the High Court decides, Cook v Cook will be abolished in NSW when the bill
commences. Section 141 provides that the standard of care required of the driver
of a motor vehicle is not affected or diminished as a result of the actual or
imputed knowledge of another person as to the skill or experience of the driver.
The decision of the High Court
in McNeilly v Imbree will still be very important though, as it will have
ramifications for all other States and Territories in Australia.
attempt to overcome Harding v Wealands
The bill introduces further
subsections to s123 of MACA, stating that the damages provisions of MACA are
substantive and if the substantive law of NSW applies to a claim then the
damages provisions are to be applied. Further, the bill states that if a court,
including a court of another jurisdiction, awards damages contrary to the
provisions of MACA, the insurer is not required to pay the damages to the extent
that the award is contrary to the provisions of MACA. If the insurer does pay
the damages that have been awarded contrary to MACA, the insurer is entitled to
recover the excess from the plaintiff.
This section has been
introduced in an attempt to overcome the situation that has arisen as a result
of the House of Lords decision of Harding v Wealands  UKHL 32. This case
involved an English resident, Mr Harding, who was catastrophically injured
whilst on holiday in NSW. Mr Harding returned to England after the accident and
proceedings were commenced there. The Defendant, Ms Wealands, also resided in
The damages that Mr Harding was
entitled to recover under English law were significantly higher than the damages
that he would be entitled to recover under MACA. The issue for the court was
whether the damages provisions of MACA are substantive (in which case the court
would be bound to apply them) or procedural (in which case the court could
ignore them and apply the law of the forum). It was held that the provisions of
MACA that deal with damages are procedural, and therefore can be ignored by a
court in a foreign jurisdiction.
Lord Rodger of Earlsferry
acknowledged that treating damages as procedural may mean that the defendant
will be liable to pay more damages than they would if the provisions of MACA
applied. However, he said that this was not a compelling consideration as “the
impact on the scheme of applying a different scale of damages in claims
litigated in this country is unlikely to be anything other than marginal” (at
The decision of Harding v
Wealands prompted the NSW parliament to legislate in an attempt to prevent
foreign courts awarding damages contrary to the provisions of MACA. The Hon John
Della Bosca, apparently in emphatic disagreement with Lord Rodger of
Earlsferry’s views, said in the Second Reading Speech:
New South Wales scheme is fully-funded from green slip premiums. If insurers
are exposed to liability for awards in other jurisdictions which exceed
entitlements provided by the New South Wales scheme, this will impact on green
slip premiums for the motorists of this State.
The issue remains as to whether
the additions to s123 will have the desired effect, or any effect at all. So
called “self characterizing provisions” have been met with disdain from
Courts in the past. In Hamilton v Merck and Co Inc; Hutchinson v Merck Sharp and
Dohme (Australia) Pty Ltd  NSWCA 55 the New South Wales Court of Appeal
had to decide whether a similar provision in the Queensland Personal Injuries
Proceedings Act 2002 (PIPA) was effective in stipulating that certain provisions
of the Act were substantive. Spigelman CJ said (at 44):
Parliament of Queensland can, of course, modify the common law for purposes of
the rules to be applied by the courts of that State. However, the Parliament
of Queensland cannot vary the common law choice of the rule that is to be
applied by the courts of this State.”
It was held that the provision
of PIPA was ineffective at binding courts of other States.
Accordingly, it seems that
despite the attempt to define damages as substantive rather than procedural,
courts in other jurisdictions will be free to apply their own rules in
determining this issue, and it is likely that the decision in Harding v Wealands
will continue to be followed in the UK.
Subsection (3) of section 123
has clearly been introduced in anticipation that subsection (2) will be
ineffective. Subsection (3) may be effective for cases commenced in other
jurisdictions in Australia, where the plaintiff is likely to be resident in
Australia and have assets here. It is unlikely to have practical effect in
overseas jurisdictions where the insurer is likely to run into difficulties in
effecting service and enforcing judgment.
Report of Accident to Police
Pursuant to section 70 of MACA
a claimant is required to report a motor vehicle accident to a Police officer.
MACA does not specify the time period within which the accident is to be
reported, although it is generally accepted that the section requires accidents
to be reported as soon as possible.
If a claimant commences
proceedings in respect of a claim without reporting the accident to the police,
the claimant must provide a full and satisfactory explanation to the court for
not reporting the accident. The
court may allow the proceedings to continue if satisfied that sufficient cause
existed to justify the delay in reporting the accident to the Police and that a
report of the motor vehicle accident was made within a reasonable period.
The bill amends Section 70 to
make it a requirement that the motor vehicle accident must be reported within 28
days. This may create problems in some cases where claimants do not realise that
the accident needs to be reported to the Police, such as in cases of minor
property damage or work accidents where the claimant is unaware that the claim
falls under MACA.
Accident notification forms
The bill increases the payments
that can be made pursuant to an accident notification form from $500 to $5,000.
Section 124 has been amended so
that the insurer now has to pay for the first 5 days of economic loss.
Under MACA the insurer was not obliged to pay for the first 5 days of
Payments to be reduced by
Section 83(5) states that
payments made by insurers are to be included in the damages recoverable by the
claimant for the purposes of any reduction of those damages by reason of
contributory negligence. This simply legislates the existing position since
Golden Eagle International Trading Pty Ltd v Zhang  HCA 15.
Costs assessors pursuant to
Section 84A now have the power to award interim payments to claimants where
financial hardship is established.
Section 109 has been amended to
clarify that time stops running once a CARS Application is lodged with the Motor
Accidents Authority rather than stopping on referral of the claim to a Claims
Assessor for assessment.
The Motor Accidents Authority
has been given the power under the bill to prescribe a rate for reimbursement of
travel expenses. It is anticipated that the Motor Accidents Authority will
regulate the ATO rate of $0.55 per kilometre.
According to the Honourable
John Della Bosca, the amendments to MACA introduced by the bill will improve the
efficiency of the processing of motor accident claims. Certainly some of the
changes will have this effect. In particular, the amendment to Section 60 of
MACA comes to mind. Other amendments however have the potential to slow the
process by introducing more procedural steps to be taken before claims can
proceed to assessment and by making failure to take those steps potentially
fatal to a claim.
Explain the circumstances
where, under the new provisions, failure to provide particulars may result
in a claim being deemed to be withdrawn.
The Bill introduces Section
85A. Explain its operation.
What is the starting point
and overall objective of the “provision of particulars” regime under the
A party to a claim fails to
provide a document before a settlement conference and later attempts to rely
What are the consequences
under the new provisions?
Summarise the key
differences between the NSW and Queensland disclosure regimes.
Does a telephone conference
count as a “settlement conference”?
Explain the consequences of
a party not attending a compulsory settlement conference or exchanging a
compulsory settlement offer.
Under the new arrangements,
what powers does a claims assessor have to compel provision of information?