The Bill is described in the 2nd Reading Speech -
In 2002 and 2003 significant reforms were made to Victoria's personal injuries laws as part of a nationwide tort law reform project in the wake of the collapse of HIH Insurance in 2001. The reforms were designed to restrict some common-law rights to compensation for negligence in order to reduce insurers' liability for damages, with the aim of relieving pressure on insurance premiums and ensuring the availability of insurance.
While there is evidence to suggest that the tort law reform project was successful in reducing insurance premiums, there are concerns that the reforms have disproportionately affected the rights of claimants to access damages, and some deserving claimants have been denied compensation.
In 2013 the Victorian Competition and Efficiency Commission reviewed the personal injury provisions of the Wrongs Act to identify any anomalies or inconsistencies, in order to ensure that the act is operating fairly and is not excluding genuine claimants from accessing compensation. The commission was asked to make recommendations for improvement to the act that would not place undue pressure on the price or availability of insurance.
The bill gives effect to most of the recommendations in the commission's report, and will make it easier for certain types of claimants to access compensation for their injuries. It is a responsible, evidence-based reform package.
The current whole-person impairment threshold for access to damages for non-economic loss, which compensates for pain and suffering and loss of enjoyment of life, is 'greater than 5 per cent'. The bill will lower this threshold for claimants with spinal injuries to '5 per cent or more', which recognises that spinal injury impairments are only assessed in increments of 5 per cent. This will mean that some claimants who suffer from spinal injuries who are presently unable to access compensation for non-economic loss will be able to do so, reflecting the fact that spinal injuries often have a major impact on a claimant's overall quality of life.
The bill will also lower the impairment threshold for claimants with psychiatric injuries, from 'greater than 10 per cent' to '10 per cent or more', which will slightly increase the pool of claimants who are eligible for compensation for psychiatric injuries.
The bill will also increase the maximum amount of damages that can be awarded for non-economic loss, from $497 780 to $577 050. This will bring the Wrongs Act into line with the Victorian workers compensation scheme, and will be of particular benefit to young or catastrophically injured plaintiffs, by allowing them to access more compensation for their injuries.
The bill will benefit injured parents and carers by reinstating a limited entitlement to damages for the loss of capacity to care for dependants. This head of damages formerly existed at common law but was abolished by the High Court of Australia in 2005. Reinstating the head of damages recognises the value of the work that is performed by parents and carers in the home, and the significant financial stress that can be placed on families as a result of the injury or death of a parent or caregiver.
The bill also makes changes to the cap on damages for economic loss so that it operates more fairly with respect to people with high earning capacity and their dependants.