Transport Accident and Accident Compensation Legislation Amendment Bill 2010

Transport Accident and Accident Compensation Legislation Amendment Bill 2010

Introduction Print

EXPLANATORY MEMORANDUM

561468

BILL LA INTRODUCTION 29/7/2010

General

The Bill will amend the Transport Accident Act 1986, the Accident Compensation Act 1985 and the Accident Compensation (WorkCover Insurance Act 1993.

The Bill updates the Transport Accident Act 1986 to ensure that—

• a person who is injured in a transport accident and who is convicted of a drug driving offence has their compensation reduced by one third;
• time limits for the making of an impairment determination are clarified under the Act;
• clients entitled to compensation as a result of accidents before 16 December 2004 have an option to buy-out their weekly annuity entitlements;
• domestic partners of pregnant women who are injured as a result of a transport accident have the same equivalent entitlement to child care assistance as their injured partner would have;
• the form of a claim is one which is approved by the Commission;
• a child who is injured as a result of a transport accident who did not make a claim or have a claim made on their behalf within the required time frames has three years from attaining the age of 18 to make a claim;
• only a natural person who has a serious injury or dies as a result of a transport accident can claim damages under the TAC scheme. This clause confirms the abolition of per quod servitium amisit actions;
• a document or information acquired under or in accordance with the Act may be used for the purposes of any other proceeding or claim for compensation under the Act; and
• the Commission is not liable to pay compensation other than medical and like services to the driver of a motor vehicle who is convicted of dangerous driving causing death or serious injury at the time of the transport accident.

The Bill updates the Accident Compensation Act 1985 by—

• removing obsolete provisions;

• updating provisions;

• inserting new provisions to introduce reforms to the accident compensation scheme;

• improving the operation of the legislation;
• allowing for more efficient management of the accident compensation scheme.

Main Changes

Transport Accident Act 1986

The main purposes of the Bill are to address anomalies and improve the efficiency of the operation of the Act. The main change in the Bill will see an option for claimants whose accidents pre date 16 December 2004 to buy out their weekly annuity entitlement with a 3 per cent discount rate to accelerate the diminishing population of claimants receiving a weekly annuity entitlement. This proposal will also be equitable for claimants placing them on a similar footing to those who received the benefit of a larger lump sum.

Accident Compensation Act 1985

The following is a summary of the main changes to the Act:

PRE INJURY AVERAGE WEEKLY EARNINGS

Clauses 21, 22, 23 and 53 operate to re-structure, streamline and simplify the provisions which govern the calculation of a worker's pre-injury average weekly earnings ("PIAWE").

Clause 21 introduces new sections 5A to 5AE. New section 5A contains a more streamlined definition of PIAWE and links the definition to other new sections which are introduced by clause 20. New section 5AA defines a relevant period as it applies to the definition of PIAWE. New section 5AB defines ordinary earnings as it applies to the definition of PIAWE and this will include either the base rate of pay of a worker or the worker's actual earnings. The section recognises that base rate of pay and actual earnings may include piece rates and commissions. This section also introduces 'directional" payments paid by the employer to a third party in accordance with the worker's directions, and also recognises that some categories of non-pecuniary benefits are also to be included in the calculation of PIAWE. Newsection 5AC introduces a definition of base rate of pay to apply to the calculation of PIAWE and new section 5AD introduces a definition of earnings enhancement and enhancement period which informs how overtime and shift allowance are incorporated in the calculation of PIAWE. Section 5AE defines a worker's ordinary hours of work, dependant on whether an industrial award applies to the particular worker.

Clause 22 substitutes section 5B and clarifies that current weekly earnings include payments of overtime, shift allowances, piece rates and commissions paid or payable to the worker during the relevant week.

Clause 23 inserts a new schedule 1A. The Schedule groups and summarises the specific calculations that apply for various categories of workers including workers who are promoted prior to the injury but where the promotion had not yet taken effect when the injury occurred.

Clause 53 amends section 91E to introduce a definition of the new concept of deductible amount which is introduced in order to allow for the deduction of the value of any amount or non-pecuniary benefit if the worker receives the amount or benefit while still receiving weekly payments.

CONTRACTORS

Clauses 24 to 35 simplify and streamline the current provisions in the Act (contained in sections 5 to 17) that deem an employment relationship to exist for certain categories of worker and in certain types of contractual arrangements.

Clause 24 creates a new division, Division 3—Workers, Employers and Contractors in Part 1 of the Act into which the deemed employment and contractor provisions are consolidated.

Clause 27 replaces the current complex contractor provisions (sections 8 and 9) with one simplified provision (section 8). It also inserts new sections 9 and 10, which will remove the potential for WorkSafe to collect a double premium in contractual arrangements involving an incorporated contractor who, by operation of the contractor provisions, is deemed to be a worker. Clauses 17 and 136 simplify and streamline the wording of the definitions of worker, employer and remunerationin the legislation.

Overall, this set of amendments is designed to improve the clarity and useability of those provisions that determine who is a worker and who is an employer. These are of fundamental importance to the scheme, as they are determinative of a worker's entitlement to compensation, as well as an employer's obligations, under the scheme.

LEGAL COSTS ORDERS

Clauses 97, 98 and 99 clarify and expand the effect of legal costs orders in the context of serious injury and common law applications, claims and proceedings.

Clause 97 clarifies that a legal practitioner acting on behalf of a worker in respect of any serious injury application is entitled to be paid legal costs by the Authority or a self-insurer in accordance with the relevant legal costs order.

Clause 98 amends section 134AG to ensure that the no legal costs are payable except in accordance with an order made under that section. This is to bring greater alignment with the changes introduced by clause 99.

Clause 99 introduces provisions which enable the Governor-in-Council to make legal cost orders in relation to litigated serious injury applications or common law proceedings. New section 134AGA ensures an order can be made in relation to the worker's costs and new section 134AGB enables a legal costs order in relation to WorkSafe's or a Self Insurer's costs. The new sections specify a range of procedural steps that must accompanying the making of a litigated legal costs order and confirm that where a costs order is in force legal costs can only be recovered in accordance with a legal costs order. It is intended that a legal costs orders therefore override the Court's discretion in relation to legal costs and replace existing rights to costs.

Clause Notes

PART I—Preliminary

Clause 1sets out the main purposes of the Bill which are—

• to amend the Transport Accident Act 1986 to improve its operation; and
• to make further amendments to the Accident Compensation Act 1985 and the Accident Compensation (WorkCover Insurance) Act 1993 to provide for further improvement in the operation of those Acts.

Clause 2specifies when the provisions of the Bill come into operation.

PART 2—TRANSPORT ACCIDENT ACT 1986

Clause 3amends section 39(3)(b) of the Act to insert section 319(1) of the Crimes Act 1958 to provide that the Commission is not liable to pay compensation other than section 60 benefits to the driver of a motor vehicle who is convicted of dangerous driving causing death or serious injury at the time of the transport accident.

Clause 4amends section 40(2)(b) of the Actto include drug related offences under sections 49(1)(ba), 49(1)(ca), 49(1)(ea), 49(1)(eb) of the Road Safety Act 1986.

The clause inserts a new subsection (4A) after section 40(4) of the Act which sets out that subsection (5A) applies if a person who is injured in a transport accident was driving a motor vehicle at the time of the transport accident and is convicted in respect of driving the motor vehicle at the time of an offence under section 49(1)(bb), (h) or (i) of the Road Safety Act 1986.

The clause inserts a new subsection (5A) after section 40(5) of the Act which provides that compensation under section 44 or 45 in respect of a person to whom subsection (4A) applies is reduced by one-third unless the person satisfies the Commission that the concentration of drugs in the blood of the person did not contribute in any way to the transport accident.

Clause 5substitutes a new section 46A(1A) of the Act to provide that if the Commission has not made a determination of the degree of impairment of a person injured as a result of a transport accident within six years after the later of the date of the transport accident or manifestation and if within that period of six years—

• has not advised the person that they appear likely to be entitled to an impairment benefit; or
• the Commission has not received an application in writing requesting the Commission to carry out an impairment assessment—

the Commission is deemed to have made a determination that the degree of impairment is 0%. This ensures that the person has an impairment determination for the purpose of pursing a common law claim.

Clause 5 also inserts a new subsection (c) in section 46A(1B) which provides that if the injured person was a minor at the time of the transport accident, the six year period commences after the minor attains the age of 18.

Clause 6inserts a new section 56A into the Act to provide that the Commission must make an offer to redeem impairment benefit annuities in respect of pre-16 December 2004 transport accidents to each person who is, or upon attaining the age of 65, will be, entitled to periodic annuity payments.

Clause 7amends section 60(2AB) of the Act which provides that for the purposes of subsection (2)(c), a domestic partner of a woman who was pregnant at the time of the transport accident in which the domestic partner in injured s deemed to have been engaged in the care of a child in the 30 days before the transport accident and can also access child care services.

Clause 8amends section 67(1) of the Act to provide that a form of a claim must be in a form approved by the Commission, replacing the present provision for a prescribed form.

Clause 9amends section 68(3) of the Act to extend the period of time in which a claim for compensation may be made by a person who was a minor at the time that the transport accident occurred. This ensures that a minor is not disadvantaged if a claim is not made within three years of an accident but is made before age21.

Clause 10inserts a new section 93(1B) of theAct for the avoidance of doubt, to provide that nothing in subsection (1) or (1A) of section 93 is to be taken to prevent a legal person representative (not being a natural person) of a person who dies as a result of a transport accident recovering damages in any proceedings in respect of that death.

Clause 11inserts a new section 93A of the Actwhich sets out that proceedings cannot be brought in respect of the loss of the services of a person who is injured or dies as a result of a transport accident or whose injury or death is caused by or arises out of the use of a motor vehicle. This clause confirms the abolition of per quad servitium amisit actions under the Act.

Clause 12inserts a new section 126B of the Act whichprovides that a document used, or information acquired in proceedings or a claim under or in accordance with the Act may be used for the purposes of any other proceeding or claim for compensation under the Act.

Clause 13inserts a new section 132D of the Act which provides that it is the intention of section 93A as inserted by section 11 of the Transport Accident and Accident Compensation Legislation Amendment Act 2010 to alter or vary section 85 of the Constitution Act 1975. This is necessary to support the abolition of per quod servitium amisit actions under the Act.

Clause 14inserts a new Division in Part 11 of the Act which provides the transitional provisions associated with the provisions of the Bill and clarifies the application of those provisions.

New section 199 inserts definitions for amending Act,amending provisionandcommencement date and also provides that nothing in the Division limits or otherwise affects the operation of the Interpretation of Legislation Act 1984.

New section 200 provides that section 39, as amended by clause3of the Bill, applies in respect of a transport accident that occurs on or after the commencement date.

New section 201 provides that section 40, as amended by clause4of the Bill, applies in respect of a transport accident that occurs on or after the New section 202 provides that section46A, as amended by clause 5 of the Bill, applies in respect of a transport accident that occurs on or after the commencement date.

New section 203 provides that section 60, as amended by clause7 of the Bill, applies in respect of a transport accident that occurs on or after the commencement date.

New section 204 provides that section 68, as amended by section 9 of the Bill, applies in respect of claims made on or after the commencement date relating to a transport accident whenever it occurred.

New section 205 provides that section 93, as amended by section 10 of the Bill, applies to proceedings commenced on or after the commencement date relating to a transport accident whenever it occurred.

PART 3—ACCIDENT COMPENSATION ACT 1985

Division 1—General Amendment of Part I

Clause 15inserts a heading for a new Division 1—General of Part I of the Act, containing general interpretative and other provisions. Anew Division 2is to contain provisions relating to pre-injury average weekly and current earnings (to be inserted by clause21) and a new Division 3is to contain provisions relating to workers employers and contractors (to be inserted by clause24). This restructure is designed to improve the structure and useability of the Part.

Clause 16inserts new section 3A, replicating current section 14A, which is to be repealed by clause 30(1). The provision confirms the application of the Act to the Crown. As is it is a general provision, it is more appropriately located at the start of the Act, in Division 1.

Clause 17introduces several new definitions into section 5(1) of the Act—

professional servicewhich is relocated from current section 248A(3) so that the definition of professional service applies across this Act. This section also updates the definition of professional service by including "nursing service, accident rescue service and ambulance service" to streamline it with liability for the medical and like services under current section99 (new Division 2B of Part IV). This amendment was necessary to improve the usability of this Act as the section 248A(3) definition is currently referenced in a number of other provisions in the Act while section 248A(3) only relates to false or misleading information. Current section 248A(3) is repealed by this Bill.

occupational rehabilitation servicewhich corrects an anomaly in the definition of occupational rehabilitation service in section 5(1)(k) and updates it for the terminology used in current Return to Work Part 7B of the Act.

domestic partner is revised so that it aligns with the meaning of the term in the Relationships Act 2008 and encapsulates current section 5(18). The purpose is to streamline the provisions which define who a "domestic partner" is for the purpose of the Act. Section 5(18) is thus repealed by section19(1).

applicable prescribed percentageis a new definition. TheAccident Compensation legislation recognises that certain types of workers, including deemed workers under the Act, provide materials and equipment as well as services (labour) pursuant to their employment arrangements (including contractual arrangements which under the Act are deemed to give rise to an employment relationship).

However, the Accident Compensation (WorkCover Insurance) Act 1993 recognises that remuneration—being the basis upon which an employer's premium liability is calculated —is the amount paid or payable by an employer to a worker for services (only) provided by the worker.

Currently, Regulation 13 and Schedule 3 of the Accident Compensation Regulations 2001 prescribes the deductions that are to be applied to contract amounts for certain types of contract that typically involve the worker providing material and equipment (non labour) as well as services to the employer. The deduction represents the percentage that on average reflects the materials and equipment component of the contract. Thus,after deduction of the prescribed percentage to the total contract amount, the balance represents the "remuneration", that is the amount reflecting payment for the worker's services only, and upon which the employer's premium liability will be calculated.

declared trainingprogram—a new definition, meaning a training program in respect of which a declaration under new section 5G (to be inserted by clause 24) is in force.

employer is a revised definition. The intention of the revision is to simplify the definition, as part of the overall streamlining and consolidation of the deemed employment provisions in the Act to implement recommendation 2 of the Hanks Report, paragraph 2.17. Clause 17(8) revises the current definition of worker for similar reasons.

The new definitions together are intended to better describe the relationship between the employer and the worker that is fundamental to the determination of rights and obligations under the scheme. However, the revisions are not intended to alter coverage of who is and who is not an employer, and who and who is not a worker, for the purposes of the Act.

The content of the new definition of employer largely mirrors the current definition, with the drafting changes being explained below.

Paragraph (b) of the current definition refers to the inclusion of "the Crown in the right of the State" as an "employer" under the Act. This provision has been excluded from the revised definition. The intention is not to exclude the Crown in the right of the State from being an employer under the Act. Rather, the omission of a provision like paragraph (b) from the revised definition is because it is considered that such provision is unnecessary. Section 3A already makes it clear that the Act binds the Crown, and if the Crown enters into an employment relationship with a worker, it will be an employer under the general definition of employer in section 5(1).