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Peter
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Christchurch law
firm Wakefield Associates has certainly shown initiative in its scheme to
drum up business. It has widely marketed itself as the middleman for sexual
abuse victims wanting to access lump sum accident compensation payments. The
move is quite legal but, for some, its contingency fee nature will smack of
the worst of American-style touting for business by lawyers. These concerns
are understandable. But the real focus should be on the return of lump sum
payments, which threaten to once more become a grievance gravy train. Lump sum
payments will return on April 1. The firm's brochure suggests that up to
$25,000 might be paid out to those suffering as a result of sexual abuse.
Wakefield Associates has seen the potential for an opportunist law firm. It
has sent out one million brochures to households pointing out the law change
and offering its services as a go-between with ACC. This campaign is aimed
not just at those who will be eligible for the lump sums, but those missing
out on existing entitlements. Naturally its services will come at a cost. It
will take 25 per cent of any lump sum payment received and all of the first
quarterly payment of any on-going compensation. Even some
lawyers find this approach distasteful and insensitive. The question may
fairly be asked how far down this aggressive American legal path our lawyers
will go in pursuit of clients. Other criticisms might be that the law firm is
simply profiting through the grief of sexual abuse victims or even awakening
unpleasant memories through its brochures. Besides, those wishing to access
these lump sums can go directly to an ACC-approved counsellor, who would help
them file a claim at no cost to applicants. Wakefield
Associates, of course, is quite entitled to make a profit. It might also be
argued that there is a need for its services. In the wider welfare area, some
government departments have been criticised for imposing barriers to
legitimate entitlements. This might be through their negative attitude to
claimants, or simply not revealing what clients are entitled to. Wakefield
Associates argues that this is the case with ACC at present. Some genuine
sexual abuse victims might also feel more comfortable dealing with ACC
through an intermediary. At the very least the furore created by the
brochures has publicised the new lump sum payments for sexual abuse victims. This publicity
should also serve to remind the public why similar payments were abolished
almost a decade ago. The simple reason is that whatever worthy intentions lay
behind the lump sum scheme it had degenerated into a costly rort. Between
1988 and 1993 the number of claims related to rape and sexual abuse blew out
from 221 to a staggering 13,000. The financial
incentive for making a claim was accompanied by an entitlement checking
system ripe for exploitation. Most claimants were paid out regardless of
whether they had lodged a complaint of sexual abuse with the police. And many
claims were apparently based on highly controversial therapy methods such as
recovered memory. The Government,
however, is adamant that lump sums are a fair method of providing compensation
for non-economic loss. It believed that the total cost of lump sum payments
for permanent impairments from accidents or sexual abuse would be about $60
million a year. It promised a careful scrutiny of claims to prevent another
blowout in costs. And it rejected the need for a complaint to the police by
saying that this would disqualify many legitimate victims. But despite
these assurances the Government has repeated the errors of the past. Again
lump sums will create a financial incentive to lodge claims. And again there
are grave doubts about the rigour of the proof of sexual abuse and its
effects which will be required. As with the previous scheme, no complaint to
the police of sexual abuse is necessary. And, as Wakefield
Associates will not be the last to take advantage of this new opportunity.
The firm's marketing may be decried as tasteless but it is simply responding
to a flawed change in ACC. Far from fairly targeting and compensating
legitimate claims from sexual abuse victims, the Government has returned to
the costly lump sum free-for-all of a decade ago. |
