NEW COMPENSATION LAW —II Negligence eliminated in accident act

Press, Volume CXIV, Issue 33435, 17 January 1974, Page 5

NEW COMPENSATION LAW —II Negligence eliminated in accident act

('Bi/ ROSEMARY WILSON

One of the most important changes.to be brought about by the Accident Compensation Act, 1974, will be the abolition of the “fault (principle” in all cases of injury by accident. Compensation will be paid by the Government to all victims of accident, regardless of who was at fault, and terms like “contributory negligence’’ will become a thing of the past. There are widely divergent views on whether the abolition of fault is an improvement on existing law, or a retrograde step. Lawyers, who understand the implications more easily than most of us, applaud or condemn with equal vehemence.

Those who are critical cite reasonable, if emotive examples of the differences we can expect to find this year:

Early last year; a 21-year ■old boy, permanently disabled by injury sustained when he dived into -a swimming pool, claimed damages under his present rights in, common law. Although it' [was counter-claimed that his I own negligence had contrib-' uted to the accident, settle-1 ment out of court awarded! him $125,000 in damages.' This boy. who is now a, quadraplegic, can use the! money he received to reha-1 biiitate himself in the true I sense of the word. Finan-’ cially, he need never again! be dependent on others. From April 1, the same boy, in the same circumstances, cannot receive more than $12,500 in lump-sum compensation. He will also receive medical and hospital expenses, and if he is able to prove loss of earnings, an ■income which will continue for many years. However, he must still be considered a dependent, rather than. a truly rehabilitated person. Again, a 42-year old man who was the victim of medical malpractice was recently awarded nearly SBO,OOO. It will be impossible for anyone to claim this sort of sum under the terms of the new act — or in fact, to claim any sum whatsoever, through the courts. The drunken driver, the employer who fails to fit a safety device, the incompetent surgeon, the careless electrician . . . none of these will have to pay a cent in damages to people, they “accidentally injure”.; ■ They will not even have toi insure against the possi-j bility.

Loss of redress Lawyers who approve the ! new legislation, point out That the loss of redress in law, and the loss of large amounts in compensation are two very different ; issues. The loss of legal right to redress is important, -but it would not be fair to suggest that the existing ; system under common law is infallible. I For every person who is awarded damages, others are inot. They may be unable to prove negligence, may have ibeen injured by some-one [Who carried no insurance and was unable to pay damages, may be unaware of the identity of the person “at fault”. It must be stated that it is only the “right to rei dress" that is lost — not

necessarily the receipt of |' redress. The compensationi act will provide much less, but it will provide it in all|‘ cases. Whether or not the! amount fixed as a maximum |i by the Accident Compensation Act is fair by today’s living standards, is! another matter. Most law-1 yers agree that it is patheti-i' cally small, particularly as; there will be few claimants; for the maximum since it I applies only in cases of total incapacity. No comparison | The fact that we will no! longer be able to make the sort of comparison above, is also dangerous. The maximum is to be reviewed from time to time, but it ; will be impossible to quote damages awarded by the courts in 1973 as a standard i of comparison in, say, 10 years time. There will be no outside criteria to aid the commission’s judgment of a fair compensation payment. One Auckland lawyer who could be expected to have ' made a fairly comprehensive study of the subject is Dr ' Martin Finlay, Minister of Justice. He is quoted as saying: “There is some ground! for review, but 1 don't think p it’s all that pressing. These; ■1972 figures ($7500 for loss': of enjoyment of life, pain, suffering etc. and $5OOO for incapacitation) were adopted as being about the highest I that courts were then ' ■awarding and they seem still to be about the topmost figures that juries are contemplating. I don’t think lhere has been a great deal I of change.” I| Many of .Dr Finldy’s; colleagues disagree — some I violently. Mr R. A. Adams-Smith feels that the denial of common law rights was totally unnecessary. “I consider it was not justified in. the present state of law,” he commented, “since the existing scheme could easily 1 have been modified to obtain ' any benefits derived from the new scheme without abandoning the very pre- ' cious right that innocent victims have to seek redress ■ at law. “I say, without fear of ■ contradiction from anyone 1 : who understands the true position, that the disadvantages stemming from the new compensation : scheme must outweigh any . advantages. The stated aim iof the act is to provide re-

rhabilitation. Instead, we are| going to see a community in which we have thousands of 'pensioners’.” Little by little, the impli-i cations of the act. are begin-! ning to dawn on the public. ■; Employers pay Whether any single individual stands to gain or lose by the changes which will take place early this year, , will obviously depend on his j existing place in the com-! munity. In all forms of: "social security” — and the act is super-socialistic in its aims — compensation for I the unfortunate is subsidised by those who are financially secure. In this case, employees pay nothing — it is employers and the self-em-ployed who contribute to the funds from which all “earners” can draw in the event of an accident.

At the rates payable by employers in the form of levies, a firm like Wattie Industries, for example, will pay nearly a quarter of a million dollars into the fund. It is reasonable to wonder whether large business firms will be able to absorb such costs, or whether they may find it necessary to pass; them on to consumers. Will; the scheme really be free to; employees and non-earners' after all?

The act makes provision for lost earnings, or lost potential earnings if these can be proved. How does one attempt to assess the potential earnings of a primary school child, injured in some way which will affect him for life? Was he a potential executive, or a potential digger of ditches? What is the potential tnicome of a woman who has Itaken a break from nursing or schoolteaching to have her family? If she has not worked while her children! were small, and then injury; confines her to a wheelchair,' she cannot claim loss of po-l tential earnings unless she can prove that she has made “positive plans” to return to her profession within 12 months. A general intention to return within a year or two, is not sufficient. At the age of 30 or 35, she could well be refused compensation for loss of potential income.

What expenses are “reasonable” when the otherwise unemployed mother of a family is disabled by injury? She cannot be compensated for loss of earnings, since her work is unpaid, but she can claim expenses. Do these include the loss of income her husband suffers from the inability to work as many hours a week as he did before her injury? If you have questions, say the Accident Compensation i Commission advertisements, iplease be patient. It would be interesting to see the answers to them.