Driving at work takes a wrong turn

The Common Law threshold has also been set too high. Over the last eleven years 5,748 injured people have been able to access Common Law, but in the second reading speech it was projected that this figure would be 48,000. Common law access is harder than originally intended by Parliament.

The law needs to be changed to allow for another category of injuries that are "grave or life threatening for a period of time".

This new category would cover less catastrophic, but still serious, injuries that cannot pass the current threshold but are those Parliament originally intended to remain in the common law sphere.

The TAC is also addressing costs by attacking isolated service providers, or ‘stakeholders’, and forcing them to reduce their price. They have done this with Long Term Care Recipients, Anaesthetists, Dentists, Physiotherapists, Lawyers and now Pharmacists. TAC calls this tactic "Tensioning the soft end of the market", because they view these groups as those who have no choice but to comply with TAC reductions.

Margaret Denys is a permanent comatose crash victim, and she needs creams and other non-prescription products applied for bedsores. But late in 1998 the Act was amended to limit pharmacy expenses to those requested by a medical practitioner or dentist. The products she needs would be free if she were in hospital, but TAC will not let her stay in an institutional care environment. So now her relatives have to get prescriptions or pay for products themselves. Not only does this policy target a vulnerable group, it might in some cases result in an increase of costs to the TAC, requiring additional attendances on doctors in order to obtain, say, a prescription for Panadol. On the other hand it might result in many claimants choosing to pay for it themselves. Whether this is a valid amendment for audit purposes, or a cynical play on victims of road trauma, remains to be seen.

One of the ironies of the situation is that since restrictions on common law damages were introduced, operating surpluses have been huge. But savings have not been passed on to consumers with premiums actually increasing over the period.

The TAC admits some confusion as to why its costs are not falling when they seem to be reducing expenditure at each turn. Some of this must come down to its being a no fault system, which statistics show are more expensive than Common Law systems.

Both US and Canadian statistics confirm this. Ontario provides a good case study as Canada has a similar public health system to Australia. The introduction of no fault schemes in that province resulted in premium decreases of 1-2% per annum when benefits were cut by 47% [1991-2] and premiums rises of 7-12% per annum when benefits were restored [1993+].

Administrative costs increase in no fault. The Victorian TAC employs 600 people whilst the NSW MAC employs less than 40.

Other factors associated with scheme costs include insurer profit margins, changing public health policy, improved community awareness of rights and ageing populations.

No Fault compensates twice as many people with both innocent and negligent parties being payed. Average profit per policy in the US in 1995 was $25 in tort states and $39 in no fault states as the wider pool of insured provides greater economies of scale.

No fault creates more claims through personal injury, property and third party claims. Lawyers are called in by client to sue insurers for not honouring policies.