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NZ Law Society
August 30, 2001
Select committee picks up NZLS recommendations
By Don Rennie LLB
Don Rennie of
International Compensation Consultants Ltd in Wellington is a member of the
NZLS Accident Compensation Committee
The Injury Prevention and Rehabilitation Bill was reported to Parliament on
25 July by the Transport & Industrial Relations Select Committee with a
number of recommendations for changes, some of which resulted from NZLS
submissions.
In its submissions the NZLS noted that the scheme has moved a long way from
the "Woodhouse" Royal Commission recommendations for a
comprehensive "no fault" system to replace common law rights. The
society expressed disappointment that the Government had adopted the method
of "cutting and pasting" modifications to previous legislation and
that the opportunity had not been taken to draft a comprehensive new act
based on the "no fault" principles set out in the Woodhouse Report.
To focus on one of the important purposes of the bill, the NZLS recommended
that the words "accident" and "compensation" be included
in its title. The Select Committee has recommended that the name be changed to
"Injury Prevention, Rehabilitation and Compensation Bill" and that
its purpose be expanded to include reference to enhancement of the public
good and reinforcement of the social contract represented by the first
accident compensation scheme. The Select Committee has said "quality of
life" should be included as an outcome of rehabilitation.
The society, along with others, noted that the bill did not contain a number
of important definitions which it was felt would be necessary to ensure the
proper determination of cover and entitlements. As a result there have been
amendments to some of the definitions in Clause 6 and the addition of new
definitions of "parental leave", "rehabilitation" and
"vocational independence". The committee did not accept the society’s
submissions on the adoption of the Fenton v Thorley definition of
"accident", but the statutory definition now includes gravity in
the application of a force.
An amendment has been proposed to the definition of "personal
injury" in Clause 26 to include cover for damage to dentures or
prostheses (except for hearing aids, spectacles or contact lenses) that
replace a part of the human body. Following strong submissions from the
society and others, cover for personal injury caused by work-related gradual
process disease or infection is also to be extended (Clause 30) to conditions
arising from workplace air conditioning systems and passive smoking.
Personal injury relating to non-physical stress is still excluded, but a
person who has any of the diseases listed in a new Schedule 2 does not need
to meet the act’s proof of causation requirements to establish cover. Lung
cancer and mesothalioma caused by asbestos exposure and leptospirosis
contracted in veterinary work or similar occupations are also covered.
The society made a submission on the definition of "medical error"
which, in Clause 32, means the failure of a registered health professional to
observe a standard of skill reasonably to be expected in the circumstances.
The submission related to the provision that medical error does not exist
solely because the failure in question consists of a delay or failure
attributable to the resource allocation decisions of the organisation
providing (or failing to provide) the treatment. This means that the crucial
issue of "cover" for medical misadventure in individual cases may
be determined by bureaucratic decisions by the organisation providing the
injured person’s care based on political, financial or economic factors and
not on clinical judgment. The society did not think it was right that
decisions determined by resource constraints relating to cover in respect of
claimants who experienced the same outcome, may vary between different
organisations or within the same organisation in different parts of the country,
depending on how the particular bureaucracy managed its resource constraints.
The select committee met the society’s submission by removing sub-clause 7
from Clause 31 which deals with personal injury caused by medical
misadventure, and moving the provision to Clause 32 which deals with the
definition of "medical error".
The NZLS was concerned to see that existing common law rights were preserved
and the Select Committee has recommended that Clause 38(2) be amended to
ensure that the Code of ACC Claimants Rights do not affect the entitlements
and responsibilities of claimants under the general law.
Clause 69 provided that the claimant was responsible for his or her own
rehabilitation to the extent possible having regard to the consequences of
his or her personal injury. The select committee adopted the society’s
submission that the word "possible" be replaced by the word
"practicable", which is defined in Clause 6.
Where the corporation has revised its decision, the society was concerned
that Clause 64(2) of the bill prevented recovery from the claimant of any
payments made before the date of the revision unless the claimant has made
statements or provided information that in the opinion of the corporation
were fraudulent or misleading. In line with the society’s recommendation, the
select committee has proposed an amendment so that such statements must be
"intentionally misleading".
In line with the society’s submission, the select committee has recommended
an amendment to Clause 114(5) to allow the claimant to pursue a common law
remedy.
The strict time limit for lodging an application for review of a corporation
decision has been a concern of the society for some time because it is said
to deny access to the courts for many dissatisfied claimants.
Under the 1972 and 1982 Accident Compensation Acts a review application was
required to be made within one month of the decision but there was provision
for the corporation to extend the time limit on application being made
stating the grounds. The 1992 Act imposed a three-month limit but made no
provision for extension of time. The District Court has held on a number of
occasions that the three-month limit is mandatory and that neither the
corporation nor the court can extend the time for filing a review
application.
As a result of submissions by the society and several others, the select
committee has recommended that Clause 116 be amended to provide that
notwithstanding the three-month limit, the corporation must accept a late
application if satisfied that there are "extenuating circumstances"
that affect the ability of the claimant to meet the time limit. Sub-clauses
(3)(a), (b) and (c) of Clause116 illustrate the sort of extenuating
circumstances the act envisages which include the person being so traumatised
by the injury giving rise to the review that he or she was unable to consider
his/her review rights, or where a duly authorised agent has unreasonably
failed to make the application within the time limit or where the corporation
has failed to notify the claimant of the obligations of the person making the
application.
The society was also instrumental in obtaining the select committee’s
recommendation regarding the awarding of costs where the corporation revises
its decision fully or partly in favour of the applicant, before the review is
heard whether or not a hearing has been scheduled.
Several submitters stated that the review system is litigious, expensive and
hostile, and disenfranchised claimants. As a result the select committee
recommended an addition to Clause 121 to require the reviewer to exercise due
diligence in decision-making and "adopt an investigative approach with a
view to conducting the review in an informal, timely and practical
manner".
An important amendment which will be of interest to practitioners involved in
review hearings is an addition to Clause 122(2)(a) that the reviewer must
hold the hearing at a time and place "agreed by all the parties to the
application and the reviewer or (b) decided on by the reviewer if those
persons do not agree".
The society made a number of submissions in relation to the work capacity
tests proposed in the bill. As a result the select committee has recommended
the removal of Clauses 83 and 87 to 94 relating to "capacity for
work" and their replacement with Clauses 83, which requires the
corporation to determine the "vocational independence" of the
claimant, and 83A, 83B and 83C, which set down the rules for assessing
vocational independence. Clauses 32 to 36 were struck out of Schedule 1 and
replaced with new Clauses 36A to 36F which set out the detailed way in which
occupational and medical assessments must be carried out.
In relation to lump sum compensation, the society pointed out that the
definition of "impairment" had been carried over from the current
Accident Insurance Act but was not the same as "impairment" as
defined in the American Medical Association Guides to the Evaluation of
Permanent Impairment (AMA Guides) which are to be used to assess lump sum
entitlement. The select committee has recommended that the definition of
"impairment" be amended to accord with the definition in the AMA
Guides.
The select committee’s recommendations for changes to the bill indicate that
the society has been largely successful with its submissions, although not
all its points have resulted in changes. However, it should be noted that in
the introduction to its report, the select committee has said that this is
the second phase of the Government’s strategy relating to injury prevention,
rehabilitation and compensation. It is likely that there will be further
changes in the future and an opportunity for the society to be involved.
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