Law group warns government against siding with insurers on law reform proposal

ALA National president Ian Murray said insurers of small businesses, charities, and not-for-profits seek to limit the ability of victims to pursue claims for compensation in an effort to reduce costs.

Rather than reducing those costs, Murray said it would “shift them onto already stretched public systems”, such as Medicare, Centrelink, the NDIS, and onto “injured people and their families”.

“You don’t eliminate the costs of injury by restricting compensation, you simply move it elsewhere,” Murray said.

“That means more pressure on taxpayers and public services, at a time when systems like the NDIS are already under significant strain.”

The ALA said that with no data to support the insurer’s proposals, reforms need to be evidence-based and not at the expense of fairness.

Past reforms in the early 2000s “insurance crisis” saw governments reduce the rights of injured people, the alliance added.

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“Those changes created a patchwork of laws that weakened protections for injured Australians, yet there is little evidence they delivered long-term reductions in premiums,” Murray said.

“History shows that cutting rights is not an effective or sustainable solution.”

Murray said the ALA would welcome the opportunity to work with insurers on ways to make the compensation system more efficient to ease the burden on victims while also reducing costs.

“What we need is a commonsense solution and not changes to law where victims are punished,” Murray said.