Thursday, February 18, 2010

Pathetic reparations? Blame ACC

According to the NZ Herald, four cyclists were badly injured, one critically, because Jennifer Lea Speakman didn’t look as she pulled out onto the road with her car.

She has lost her driving licence for six months and has been ordered to pay a paltry NZ$1000 reparations to each of the victims.

A friend of the victims calls the reparations “pathetic”. So they are, but then so they should be if one accepts the so-called “social contract” of ACC.

Speakman’s car insurance is paying out the property damage costs in replacing the bikes, which of course is fine. However, ACC creates a completely new dimension. This is one that many New Zealanders, exposed to TV legal dramas from overseas, are probably not fully aware of.

The right to sue for damages as a result of the negligence of another is gone, except in the context of exemplary damages.

In theory, as Speakman paid ACC levies both associated with her motor vehicle licence and in fuel tax, she has paid into socialised insurance scheme, much loved by the left, designed to provide compensation to the victims.

Its fundamental basis is no fault based compensation. ACC is meant to cover the needs of the victims. She should basically have walked away with simply losing her driving licence and paying court costs, if you really believe ACC is fair and reasonable. The advantages of ACC are clear, in that it offers compensation fairly quickly and without the hassle of court, but the disadvantages are also clear. It offers no deterrent to bad behaviour, no incentives to good behaviour, and the compensation is never particularly great.

If you don’t think ACC is fair and reasonable (and let’s be honest here, no other country has ACC), then you’d return the right to sue. That would mean Speakman would face significant claims for loss of income, emotional trauma, pain and suffering because of her negligence. A fair deterrent to making a foolish mistake. More likely, Speakman would have insurance to cover such an eventuality and the victims themselves would be paid out by the insurance firm – which would fight on Speakman’s behalf to not pay out, but ultimately would be likely to pay substantially more than a measly NZ$1000 per victim, on top of what ACC coughs up.

The difference is the delay.

An alternative would be for ACC to be subject to competition and for motor vehicle ACC to be a matter of personal accounts. The insurers of the victims would pay out, and Speakman would see a significant rise in her levies to reflect the risk she poses.

However, with ACC she will pay the same as any driver who has had no accidents at all. So why is any reasonable debate about this system treated as blasphemy? Isn’t it time that this nearly 40 year old experiment was subject to a fundamental review?

3 comments:

Ruth said...

Quite right. The ACC issue aside, the time has come to ask the question "Should cyclists be permitted on public roads at all?"

I suggest they should not - horses were no longer permitted on roads when motor car numbers got to critical mass - roads are simply not appropriate for cyclists now so the same should apply to bicycles.

Of course in an ideal world roads would be privately owned so this would not be an issue.

Carless said...

I have had a recent experience where the stupidity of "no fault" has really peed me off.

A place where one gets a WOF crashed my car and caused 5k of damage. That is not so bad as I am insured BUT I had to go 4 days without a car until I could get a courtesy car from a panelbeater.

I should be able to sue them for negligence, stress and expenses but we know that cannot happen.

I will try and get back the expenses that I have incurred due to no fault of my own. Seems a very long process though.

If they don't pay up they will be nAAmed.

libertyscott said...

Ruth: Local roads are part funded by ratepayers, and so I have no problem with them being used by cyclists. They impose virtually no marginal cost on the network, and as long as they obey appropriate rules then let them be. If limited access roads need to be designated (like motorways) then so be it. State highways receive no money from cyclists so should theoretically be out of bounds, so cyclists can use networks of back roads to get around the country.

Carless: You can sue for property damage. Nothing is stopping you. ACC does not prevent this, it only prohibits suing for personal injury.