New legislative changes announced by the State government in May will see the further erosion of public liability claims and a person's common law right to sue for those personal injuries suffered at the hands of a third party. The claims affected will include public liability and medical negligence claims, and occupier's liability claims. Personal injuries sustained in the course of employment or as a result of a motor vehicle accident are not affected by the reforms and remain covered by WorkCover and TAC respectively.

The start of this erosion process occurred last October with general damages for these public liability claims being capped at $371,380 (indexed to CPI), and payments for loss of earnings being capped at three times average weekly earnings. With these latest reforms, the government is going significantly further in its attempts to save the insurance industry. We are left asking, but at what cost?

The Wrongs and Limitation of Actions Act (Insurance Reform) Bill 2003, introduced in Parliament on 20 May, requires anyone claiming compensation for pain and suffering as a result of physical injuries to have suffered at least five per cent impairment as a result of their injuries. Psychiatric impairment must result in at least ten per cent impairment. The degrees of impairment are based on assessment criteria in the AMA4 guidelines (guidelines already used for TAC and WorkCover claims). Specific exemptions to the threshold requirements include the loss of a foetus at any time during pregnancy, loss of a breast or sexual abuse.

The right to sue for loss of wages or medical expenses will still be protected as reforms relate to the general damages component of claims only.

The result of these threshold requirements is that people who suffer relatively minor injuries and make an eventual full recovery will be denied the right to sue. The victims of dog bites, falls in shopping centres and, most recently, the victims of the Arthur's Seat chairlift collapse, are all likely to fall through the cracks. Similarly, those people who fail to reach an impairment rating in excess of 5% for physical injuries and 10% for psychiatric injuries cannot bring a claim. Examples such as a complete loss of the senses of taste and smell (considered 0% impairment), surgical removal of spleen (0%), and prolapse of a disc in the spine (5%) are all examples of some of the more significant injuries which cannot reach the impairment criteria. Criticism of the reforms by the legal profession is too readily seen to be motivated by self-interest, but everyone should be alarmed at what amounts to a serious denial of justice for many deserving claimants. Claims should be based on merit, not quantum.

The reforms proposed by the government also include changes to the Limitation of Actions Act 1958 (Vic), regulating the time within which claims must be made. Reforms proposed would see a reduction in the period allowed for making claims for personal injuries from six years to three years for adults (from the date the injury is discovered). The period for making claims for minors will be six years. In all cases, except claims arising from the inhalation of asbestos fibres and tobacco claims, claims will be barred 12 years after the event that caused the injury, even if the injury has not been discovered. One concession is that the courts will be given the discretion to extend time limitations where it is in the interests of justice to do so.

It is anticipated that the reforms will become law by 1 July 2003. The government has announced that the reforms apply immediately to all injuries after 20 May 2003, but for those with existing injuries, a transitional period will apply to allow them to bring proceedings up until 1 October 2003 before the new laws apply to them.

If you have suffered a personal injury and are unsure of your current position, consult your solicitor immediately.