ALERT DIGEST 5 of 1994
Part 1
The Committee has considered the following Bills
Accident Compensation (Amendment) Bill
Tobacco Leaf Industry (Deregulation) Bill
The Committee reports on the following Bills
Accident Compensation (Amendment) Bill
Tobacco Leaf Industry (Deregulation) Bill
Petroleum (Amendment) Bill
Environment Protection (General Amendment) Bill
Sentencing (Victim Impact Statement) Bill
Financial Management (Consequential Amendments) Bill
Consideration is proceeding on the following Bills
Local Government (Competitive Tendering) Bill
Financial Agreement Bill
Control of Weapons (Amendment) Bill
Victorian Institute of Marine Sciences (Amendment) Bill
Public Prosecutions Bill
Subdivision (Further Amendment) Bill
Land Conservation (Amendment) Bill
ACCIDENT COMPENSATION (AMENDMENT) BILL 1994
1.1
This Bill was introduced into the Legislative Assembly on 30 March 1994 by The Honourable Roger Pescott with The Honourable Phil Gude.
1.2
This Bill constitutes the third stage of the Government’s four stage reform program for workers’ compensation in Victoria. The purposes of the Bill are: -
- to amend the Accident Compensation Act 1985 to revise claims management and procedures; and
- to make further provision for occupational rehabilitation, return to workplans and risk management; and
- to further enhance the operation of WorkCover; and
- to facilitate greater harmonisation between WorkCover and workers compensation schemes in other States and Territories; and
- to make miscellaneous amendments to certain other Acts.
1.3
Clause 2 is the commencement clause.
The Committee commends the forced commencement procedure.
1.4 Part 2 - Amendment of the Accident Compensation Act 1985
Clause 9 amends section 9 (independent contractors) of the Principal Act so as to expressly exclude from its operation, contracts between direct sellers and their suppliers. The Committee notes the comments in the Second Reading Speech: -
"The operation of sections 9 and 10 of the Act has historically been unclear in the case of direct sellers. Under one interpretation, many of the persons in this category would be characterised as workers. In 1985, when introducing WorkCare, the then Treasurer said in Parliament that direct sellers are not workers. The typical agreement between direct sellers and their suppliers is far removed from a contract of employment. The amendment now makes that interpretation clear."
The Committee makes no further comment.
Clause 10 amends section 14 of the Act by expressly excluding municipal councillors from being deemed to be workers. The Committee notes the comments in the Second Reading Notes: -
" The Bill excludes local government councillors from a provision under which they are deemed to be workers, a measure which has the support of the Municipal Association of Victoria."
The Committee makes no further comment.
Clause 20 amends section 33A of the Principal Act, which requires self-insurers to pay contributions into the WorkCover Authority Fund, so as to include contributions towards the cost incurred by the Authority in meeting any liability it may incur when a body corporate ceases to be a self-insurer.
Clause 21 inserts a new section 34A into the Principal Act which requires the Authority to submit to the Minister and make publicly available a half-yearly operating and financial report. The half yearly report is in addition to the statutory annual reporting requirements. This replaces the existing provisions relating to quarterly and actuarial reports.
The Committee makes no further comment.
1.5 Conciliation
Clause 26 substitutes for section 49 of the Principal Act, a section that requires that before proceedings under the Act, other than those which relate solely to a claim under section 92,98 or 98A, may be commenced, the relevant dispute must have been referred for conciliation under Division 2 of Part III of the Act and either conciliation must have been completed or a period of 28 days after the referral must have elapsed. The Committee notes the comments in the Second Reading Notes: -
"There is a strong case for strengthening the role of conciliation in the scheme. The Bill therefore introduces amendments designed to ensure that matters capable of conciliation are indeed settled at Conciliation, and that matters do not unnecessarily proceed to Court simply because that is the forum in which legal costs are paid.
The Bill provides that court proceedings other than those which relate solely to claims under Section 92,98 and/or 98A of the Act, are not to be commenced unless a referral to conciliation has been made and until the expiry of 28 days after the referral or a Conciliation Officer issues a certificate stating that all actions relating to conciliation of the relevant dispute have been taken, whichever is the earlier date. The 28 day test establishes a clear performance benchmark for the Conciliation Service.
Finally, applications for conciliation will be required to be personally signed by the applicant. This will ensure that the applicant and not the legal adviser is driving the process. The impact of these changes to the Conciliation Service will be monitored closely and the Government will take more stringent measures if required to ensure that the conciliation process is not by-passed by solicitors simply as a device to ensure that legal costs are paid."
Following is an extract from a letter sent by the Law Institute to the Minister dated 14 April 1994.
"Certain Proceedings subject to Conciliation
Now Section 49 will require that before proceedings may be commenced the dispute must have been referred for conciliation, and either conciliation must have been completed or a period of 28 days after the referral must have elapsed.
The Institute firmly supports the investigation and implementation of alternative methods of dispute resolution but is firmly of the view that if conciliation is to be the ‘gateway’ to the legal process, the participant should be entitled to have legal representation. It should be noted in this regard that it is recognised by some conciliators that there is a role for lawyers in the conciliation conference.
It is in the interests of both employees and compensation providers that disputes be resolved rather than that the disputes require determination. For this to occur it is important that there be accessible to those using the dispute resolution system people with the necessary expertise in advising the participants and in negotiating appropriate settlements. Legal practitioners have this expertise. It is both short-sighted and unfair to deny claimants access to assistance from the legal profession.
The Bill also requires that applications for conciliation will be required to be personally signed by the applicant. In your second reading speech you stated that "this will ensure that the applicant and not the legal adviser is driving the process". It is important for the Government to appreciate that applications for conciliation are signed by solicitors on instructions from their clients and as a service to their clients. This can be particularly important in cases where injured workers are unable to travel easily etc. Furthermore, in some instances this provision will cause difficulties for a claimant who under Section 55 must lodge the referral for conciliation of the dispute within 60 days after notice of the decision. The new requirement will disadvantage injured workers whose applications need to be lodged in a short period of time and who are unable to attend at their solicitor’s office and where there is insufficient time available for the application to be transmitted by post. The limitation period of 60 days should be reviewed in the light of the proposed requirement that applications for conciliation be signed perrsonally."
Following is an extract from a letter sent by the Minister to the Committee dated 25 April 1994:
"3.Certain Proceedings subject to Conciliation
The LIV made it clear that they support compulsory conciliation, but they believe that legal representation should be allowed.
The question of whether legal representation should be allowed at Conciliation was debated at great length in November 1992 when we introduced WorkCover. I have made it clear to the LIV that the Government is not willing to debate this issue any further."
The Committee is unable to form a concluded view in respect of these provisions and refers the matter to Parliament for debate.
1.6 Table of Maims Procedures - Costs
Clause 27 inserts a new section 50 which relates to costs. The new sub-section 2A requires that in proceedings relating to a claim under section 98 or 98A of the Act, a worker is not entitled to have his or her costs met by the defendant and must pay the costs of the defendant unless the order of the Court is for payment for compensation in an amount which is more than 120% of the amount of a final offer within the meaning of a new section 98B of the Act. This rule does not apply where the final offer is for an amount which is 83% or more of the maximum amount of compensation payable for the relevant injury or injuries.
The effect of this provision is certainly to increase the risks of those litigants who choose to go to court. Those litigants who receive 100% of the final offer by an order made by the court, will still be penalised in that he or she must pay the costs of the authorised insurer. To recover costs, the litigant must have an order made by the court which is 120% of the final offer.
The Committee notes the comment in the Second Reading Speech: -
"The success of providing settlements in a speedy and equitable way in over 17,300 common law cases dealt with since 1 December 1992 provides the basis for new procedures to be introduced for claims under sections 98 and 98A. Such claims will now be required to be accompanied by supporting medical information and in the case of disputes, Medical Panels will be asked to assess the extent of the worker's entitlement to such compensation. This advice will provide the basis for a final settlement offer to the worker.
No Court proceedings may be commenced until a final offer is made and a Court judgement or order for the payment of compensation less than 120% of the final offer will require the worker to bear his or her own costs and pay the costs of the defendant. Insurers' decisions will be governed by strict time limits. These procedures will reduce the prolonged and costly process of litigation required to settle many of these matters."
The Committee notes that these costs provisions apply after a final offer has been made in accordance with the new section 98B (Clause 43) The new section 98B specifies that a final offer must be made in accordance with section 104 of the Act. Section 104 requires a medical certificate from the Medical Panel to accompany the claim for compensation. Pursuant to the new section 98B, the final offer must be made within 14 days of receiving the opinion from the Medical Panel and must be consistent with the opinion of the Medical Panel.
In effect, the costs provisions apply to a person who chooses to litigate after receiving a final offer which must be consistent with the opinion of the Medical Panel who have independently assessed the extent of the worker’s entitlement thereby providing incentive for cases to settle.
Following is an extract from a letter sent by the Law Institute to the Minister dated 14 April 1994:
"Costs in Relation to Claims under Section 98 or 98A
A new sub-section (2A) is to be inserted into Section 50 of the Accident Compensation Act which will require that, in proceedings relating to a claim under Section 98 or 98A, a worker is not entitled to have his or her costs met by the authorised insurer, and must pay the costs of the authorised insurer, unless the order of the court is for payment of compensation in an amount which is more than 120% of the amount of a final offer. This is a severe provision and should be reconsidered by the Government. Apart from the limited instance in Section 135B, no other litigants have to carry the burden of a costs penalty even though a court has awarded them damages in excess of any formal offers made. Section 135B was a special case with a limited application to a defined and closed class of matters. New sub-section (2A), on the other hand, will have unlimited application.
The Institute earnestly recommends that the Government remove this provision from the Bill. The offer of compromise procedures in the County Court Rules would be adequate in achieving the Government’s objective."
Following is an extract from a letter sent by the Minister to the Committee on 25 April 1994:
"2. Costs in relation to Claims under Section 98 or 98A
I discussed the LIV’s concerns about the Section 135B concept of 120% applying to Sections 98 and 98A in some detail.
I pointed out that the 120% cost rule applies to an offer made by an insurer consistent with the assessment of a Medical Panel. This is important to understand, as the 120% cost rule does not apply to an offer made by an insurer in the normal course; the offer must be consistent with the Medical Panel assessment, so the offer will be reasonable. In the normal course of events, the worker should not need to appeal the assessment."
The Committee is unable to form a concluded view in respect of these provisions and refers the matter to Parliament for debate.
