It has long been argued that an overhaul of the support services available to those with disabilities was required. The Productivity Commission (the Commission) reviewed this issue and published a report in August 2011 proposing two schemes, namely, the National Disability Insurance Scheme (NDIs) and the National Injury Insurance Scheme (NIIs).
The Commission’s proposal for a scheme designed to provide support and funding to those with a disability1 was realised when the National Disability Insurance Scheme Act 2013 (the Act), came into force on 1 July 2013. The legislation is currently being rolled-out across the country, and we will have to wait and see how it will work in practice.
One interesting element of the NDIS is the potential impact it may have on litigation, particularly medical indemnity claims. Despite the recommendation of a “no fault” NIIS for those suffering a catastrophic injury, the Commission believed that cases involving cerebral palsy should be dealt with under the NDIS. The theory behind this was that it would result in the reduction of medical indemnity costs, whilst those with cerebral palsy would still be able to sue for loss of income and general damages (if a negligent party was identified).
Despite the Commission’s intention, the effect of the legislation is somewhat different. In particular, there is no reference in the Act to cerebral palsy, or any exclusion of claims for catastrophic injury. It would therefore appear that, for the time being, all catastrophic injury cases (including cerebral palsy), which would satisfy the disability requirements2 , will be covered under the NDIS. The impact of this could be significant given there are provisions under the NDIS to essentially compel participants to take legal action for “compensation” in respect of a personal injury3 . The definition of compensation includes a payment for damages that is wholly or partly in respect of the cost of support (provided under the NDIS). If the participant refuses to proceed with litigation, their care plan is suspended.
Whilst there are a number of factors which must be taken into account in deciding whether to compel a person to pursue compensation, with such a provision in place it is difficult to see how the scheme will reduce claims, as originally envisaged. In particular:
- If the power to compel litigation is invoked, then presumably the main purpose would be for the NDIS to recoup the cost of past and future care. This is significant given that not only are catastrophic injury cases (in particular those involving cerebral palsy) very high value, but the most substantial head of damage is often future care and assistance.
- Having said that, it is highly unlikely that any litigation would be limited to the cost of past and future care costs. The participant would undoubtedly also claim for general damages and loss of earnings.
- If the intention was to ensure that the right to sue for general damages and loss of earnings was not extinguished, it is interesting to note that the Commission recommended that these heads of loss could still be pursued by those involved in the NIIS.
The Commission proposed that this smaller scheme would cover the “lifetime care and support needs of people who acquire a catastrophic injury from an accident”4 . The scheme would cover all causes of catastrophic injury, including those related to motor vehicle accidents, medical accidents, criminal injury and general accidents (with the exception of cerebral palsy claims). The Commission recommended that the scheme extinguish common law rights to sue for lifetime care and support, but not other heads of damages (which is in stark contrast to the provisions of the Act).
However, the NIIS is not yet in place. Consequently, there are many unanswered questions about the function and details of how the NIIS will work, including:
- whether it will incorporate all catastrophic injuries, thereby excluding them from the NDIS;
- whether the scheme will remain “no fault”, or whether, like the NDIS, there will be provisions allowing (or forcing) litigation in relation to care;
- what impact this will have on cases in Victoria, given that we already have (for example) the TAC and WorkSafe schemes in place; and
- how, from a practical point of view, the NIIS would function alongside the current schemes. For example if there is a debate as to whether there is a catastrophic injury, who would pay for the care in the interim?
Whilst the NIIS Advisory Committee issued a statement in April 2013 confirming that it was committed to the improvement of care and support for those with a significant and permanent disability regardless of how this was acquired, a timeframe has not been set for its implementation.
Based on the current legislative framework and despite the Commission’s intention, it is hard to see how the aim of lowering the pressure on medical indemnity insurance can be achieved.
It is also interesting to note that the Premier of Victoria has confirmed that the State and the Commonwealth will continue to negotiate on no fault medical injury coverage. No further details have been provided and it is impossible to speculate on whether such coverage will indeed be realised.
Only time will tell whether the current and proposed legislation will have an impact on the number or cost of claims, and if so, how significant that impact will be