Motor Accident Compensation in NSW: Part 2- The Modern Scheme

This article continues our series on motor accident compensation in NSW. You can read about the history of motor accident compensation in Part 1 found here.

The Scheme Today

The Motor Accidents Compensation Act 1999 (MAC Act) came into force on 5 October 1999. In addition to promoting competition in CTP premium setting, the legislative changes were designed to encourage early and appropriate treatment and rehabilitation for those injured in a motor accident. The Act aimed to make more appropriate provision for the future needs of those with ongoing disability and encourage the early resolution of claims.

There are many outstanding claims under the MAC Act, which has proven to have a very long tail. There are even some new claims being made to this day.

Similar reforms to motor accident compensation have been made in all Australian jurisdictions, with the exception of the ACT, where unmodified common law applies. That scheme is underwritten solely by NRMA and purportedly operates very well.

There have been a number of changes to the scheme since the introduction of the MAC Act, which provide greater access to benefits for injured people. Some of the main features of the scheme are listed below.

Early Notification and Treatment

The Accident Notification Form (ANF) was introduced to provide early access to treatment and rehabilitation for those injured in a motor vehicle accident.

When first introduced in 1999:

• Injured persons not at fault could quickly claim up to $500 for medical and treatment costs.

Reforms in 2007 increased ANF benefits to:

• $5,000 for treatment and medical expenses
• Loss of earnings, in addition to treatment costs

Further reforms in April 2010 expanded ANF access to:

• Anyone injured in a motor vehicle accident, regardless of fault

Early Resolution of Claims

To encourage early resolution:

• Claims must be made within six months of the date of accident.
• Insurers must make a timely offer of settlement where recovery is sufficient to quantify the claim and relevant particulars have been provided.

If the claim cannot be resolved, the matter may be referred to the Claims Assessment and Resolution Service (CARS) for assessment.

Alternative Dispute Resolution

The scheme established CARS as an independent claims assessment and resolution service to reduce adversarial litigation under the previous system.

CARS features include:

• Assessment by independent lawyers specialising in personal injury
• Strict neutrality when acting as Assessors
• Mandatory referral of most disputes before litigation
• Exemption available for minors and incapable persons under management

Once exemption is granted by the Principal Claims Assessor (PCA), court proceedings may commence.

CARS procedures emphasise:

• Flexibility
• Informality
• Efficiency

Many CARS Assessors came through the former Philadelphia Arbitration Scheme, which similarly diverted civil claims from complex court processes.

While courts operate under an adversarial common law system, CARS uses an inquisitorial model in which the Assessor controls the hearing, subject to fair hearing and due process requirements.

Under the Motor Accidents Injuries Act 2017 (MAIA), Assessors determine a broader range of procedural matters known as:

• Merit Review matters
• Miscellaneous Claims Assessment matters

These are set out in Schedule 2 to the MAIA.

Independent Assessment of Treatment, Rehabilitation and Care Needs

The Medical Assessment Service (MAS) determines disputes concerning:

• Medical treatment
• Insurer payment obligations
• Permanent impairment

Assessments are conducted by medical experts with specialised credentials. Given the complexity of MAS, further detail will be provided separately.

Preserving Principles of Full Compensation for the Seriously Injured

The MAC Act replaced a subjective test for non-economic loss with a threshold requiring:

• More than 10% whole person impairment (WPI)

This threshold:

• Reflects a medical finding rather than a judicial assessment
• Does not affect eligibility for treatment, domestic assistance, or economic loss

What Benefits Are Available Under the MAC Act?

An innocent victim of a motor accident is entitled to damages for non-economic loss if WPI exceeds 10%, as agreed or determined by MAS.

Key entitlements include:

• Non-economic loss (maximum currently $565,000, indexed annually)
• Past and future treatment expenses
• Other out-of-pocket expenses (equipment, aids, therapy)
• Funeral expenses
• Past and future loss of earnings, including superannuation (current maximum for future economic loss is $5,184 net per week)
• Gratuitous domestic assistance provided by family
• Care formerly provided by the victim to dependants
• Commercial attendant care

Awards are reduced to reflect contributory negligence.

Read more in Part 3 of this series, “Procedural Requirements Under the MAC Act.”

If you are looking for a team of lawyers that can help with Advocacy, Equity, and Statutory Compensation, contact us.