Law body pushes to save Queensland’s CTP scheme from insurer campaign for change

Queensland's Compulsory Third Party (CTP) vehicle insurance system is under threat as insurers push for the scheme to be changed to a no-fault system.

The campaign, pushed especially by insurers RACQ and Suncorp, has been intense and played out in the news media over the past year or so to foster fear among the state's motorists.

Now a leading national legal body is putting its name to a push to challenge the insurers. The Australian Lawyers Alliance (ALA) is strongly opposing moves to change Queensland's Compulsory Third Party (CTP) system to a no-fault scheme.

The ALA,a national association of lawyers, academics and other professionals striving to promote justice, freedom and the rights of the individual, states the insurers want to strip rights from Queensland's CTP scheme, transforming it into a restricted, 'no-fault' scheme similar to the schemes that operate in the ACT and New South Wales.

We strongly endorse the ALA's stance which builds on our earlier arguments that the insurer moves are another scaremongering campaign designed to lower compensation to injured motorists and boost insurer profits.

Late last year the insurers' renewed a public lobby campaign to change the State's CTP scheme, using accident victims' stories to justify a change that would directly boost insurer profits.

RACQ launched its latest volley for a CTP change under the guise of informing Queenslanders what their CTP insurance covers (and does not cover) them for.

But the public should not be fooled by RACQ's claims.

In 2018 I noted RACQ's 2018 profits of $64.4 million attributable in part to the premiums they collect from Queensland's CTP scheme. That amount was more than double the $26.7 million profit RACQ made in 2017.

During that same period the two of the three largest CTP Insurer's in Queensland, RACQ and Suncorp, ran a campaign blaming Queensland lawyers for a spike in the State's compulsory third party insurance claims.

In its rebuff the Australian Lawyers Alliance argues Queensland currently has virtually the lowest CTP premiums on the Australian mainland and is renowned for having a CTP scheme that is fair for injured motorists.

"A no-fault scheme will mean higher prices for all drivers, less compensation for injured motorists and more profits for big insurance companies like RACQ and Suncorp," it claims.

We agree with the ALA push and endorse the view that in every state in mainland Australia where no-fault or threshold style damages schemes exist, drivers pay more.

In NSW CTP premiums are $533.38, compared to Queensland where average CTP premiums cost $359.20 and despite costing more for motorists, a no-fault scheme like that in NSW reduces the compensation to people hurt in accidents and requires injured people to prove their injury every six months.

Mark O'Connor says for some injured people that means dealing with an insurer all of their lives while paying premiums almost 50% higher what we pay in Queensland.

Trent Johnson says for several years now, both RACQ and Suncorp have been placing pressure on the Queensland Government to scrap the States fault-based CTP claims scheme and replace it with so-called 'guaranteed defined benefits'.

They want a no-fault-based scheme with reduced payments for injured claimants irrespective of whether they were at-fault. This has proved to be disastrous in other states such as New South Wales where those injured in motor vehicle accident under their capped scheme receive a pittance in compensation.

This forces more injured claimants to rely upon the public purse as opposed to compensation from the CTP insurer of the at-fault vehicle, the same insurers that have been profiting from collecting CTP premiums to provide injury cover over the years.

Insurers have also argued that the best way to disrupt claims farming for CTP claims (which is largely done by unscrupulous interstate and overseas agents who do so to escape regulation in Queensland) was to replace the existing fault-based CTP scheme in Queensland with a no-fault (i.e. capped payments) system.

We say claims farming should cease to be a problem in the Queensland CTP industry due to recent significant legislative changes in Queensland which outlaws the practice and penalises parties involved in it.

Now, those same two insurers (RACQ Insurance and Suncorp Insurance respectively), have launched a further scaremongering campaign warning Queensland motorists that if they are at-fault for a motor vehicle accident, they are not covered by the states CTP scheme for their injuries. I find that ironic given both Suncorp and RACQ already have voluntary at-fault driver cover that only applies to very serious injuries or death, but each have various exclusionary provisions.

Queensland's fault-based CTP scheme (like our common law workers' compensation scheme) is in very good financial health, provides adequate (but not generous) damages to injured claimants and largely accords with other common law damages schemes in Queensland such as those for slips, trips and falls, work-related injuries, medical negligence etc."

We argue insurers are doing quite well but want to enhance profits by radical changes to CTP cover which will only benefit them.

Imagine if your partner, child or relative were injured due to the negligence of another causing them to suffer significant pain and loss but they were significantly restricted in the damages they could claim and unable to claim their actual loss due to an insurer placing pressure upon the government to protect and increase its profits.

That is what has happened in the ACT and New South Wales and is what RACQ and Suncorp have again been proposing in Queensland. It's just blatant scaremongering.

The ALA's "Save Queensland's CTP scheme" is a necessary reminder that Queenslanders should fight any moves to strip them of their legal entitlements.