In 2017, as a result of growing concerns that a fault-based scheme is an inefficient and a stressful process for all parties involved, the ACT Government initiated a reform for the ACT’s current CTP scheme. To facilitate the reform process, a deliberative democratic innovation known as the Citizens’ Jury was established. The Jury consisted of a diverse group of people, however current CTP claimants, personal injury lawyers, insurance company employees and public servants who deal with personal injury compensation were excluded from participation. 

To bring the Jury up to speed with CTP insurance, various legal groups, insurers and health care associations were invited to provide a crash course over a four-day period. Following this short induction, the Jury was asked to list their priorities for the reform and actuaries were commissioned by the ACT Government to use the Jury’s priorities in developing four models. When the four models were prepared, the Jury was asked to deliberate and select one. 

Models A, B, and C were dismissed on the basis that they either closely resembled the current common law system or did not provide equitable results between at fault and no-fault drivers. The Jury selected Model D (see comparison table below). 

A flawed experimental democracy

While the ACT Government’s pilot Citizens’ Jury is no doubt a commendable initiative, a recent independent report commissioned by the ACT Law Society has concluded that the close involvement of experts from an early stage of the Jury’s deliberation process risked undermining transparency and the autonomy of the jurors. 

Indeed, prejudices formed by the Jury following the experts’ initial consultations would have translated into their list of priorities which was then used to develop the four models. Importantly, the four models were not prepared by the Jury, nor did the Jury have the option of selecting the current CTP system or developing models of its own. Additionally, the four-day crash course may also have been too short a period for understanding the complexities of CTP Insurance and developing priorities for the reform.

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But the Jury’s autonomy is not the only concerning issue. The question as to whether Model D is more beneficial remains unanswered. 

The most beneficial option

There are many arguments for and against fault-based systems. For example, proponents of the no-fault system argue that the common law tort-based system is uncertain, costly, and at times inappropriate which benefits personal injury lawyers the most. On the other hand, fault-based proponents argue that genuinely aggrieved parties can obtain a fair compensation and the tort acts as a deterrent for future injuries. 

While early access to treatments and financial support for both at fault and no-fault drivers is certainly beneficial, eroding the court’s role in restoring an injured person back to the position they were prior to the injury is not a beneficial outcome. 

For hundreds of years now, the law of negligence has allowed an injured person to hold an at-fault person responsible for the injury caused. Whereas a formulaic no-fault scheme cannot alone achieve such a just and fair outcome. For example, the no-fault system in New Zealand has been assessed as ‘… far from clear that the no fault New Zealand accident compensation system provides a superior outcome in relation to medical misadventure than the schemes of any comparable country. Removing incentives is far from costless and most likely results in the outcomes that are substantially less equitable.’

At the same time, a submission by the NSW Bar Association suggests that the 10% WPI is such a high threshold that 90 per cent of those injured never get over the 10 per cent threshold. This explains why the authors of the Guides used to assess WPI themselves acknowledge that Guides are not reliable, emphasising that ‘… impairment percentages derived according to Guides criteria should not be used to make direct financial awards or direct estimates of disabilities.’ 

Considering the above analysis, in my opinion, the better outcome would be a combination of a no-fault and a different type of common law compensation schemes than what is proposed in Model D. 

The common law compensation model in Model D may be improved by substantially increasing the cap if the 10 per cent WPI is to remain in place or by removing the WPI threshold if the proposed cap is to remain in place. Such a generous yet limited hybrid system will benefit both the injured and insurance providers. Otherwise, if the true concern is that personal injury lawyers benefit more from a common law claim payout than their injured clients, then perhaps a cap on lawyers’ fees is a more appropriate solution than replacing what is already a fair, just, and an effective system.

Arthur Marusevich is a lawyer based in Canberra. He uses his five language skills to help people from disadvantaged backgrounds. Having written his first book, Arthur is an aspiring novelist and aims to publish one novel a year.