[petejh]

I spent 8 months in NZ and remember locals telling me about the 'no-blame' ACC scheme and how it engenders societal cohesion. Radio 4 prog this evening just reminded me of it.

In short - New Zealand's ACC 'no blame' system versus UK's claim culture. Pro's/con's? (beyond seeing out of a job lawyers who've grown rich on chasing dubious claims, whether you see that as a pro or a con...).

[Sloper]

It's been a very long time since I was asked a comparative law question, and the last time I was asked I wrote on roman vs common law.. . . and I'm not going to be 'hitting the books' before responding for the usual reasons and 'Internet Abuse for Lawyers' is now sadly out of print.

However, I would suggest from a position of no actual knowledge of the NZ, the problems would include the following:

1. the removal of moral hazard = an increase in fuckwittery,
2. Tariff based systems necessarily result in inequitable outcomes.
3. The cost is borne by all regardless as to their risk profile which in many circumstances is regarded as inequity,
4. The costs of administering the scheme are transferred from the private to the public,
5. Fewer safeguards against fraud.
6. A lack of training and progression for lawyers, if you don't have junior lawyers litigating where do you draw the (civil) judiciary from?

As to the positive aspects, I can't really think of any.

[Ru]

4. The costs of administering the scheme are transferred from the private to the public,

With the very real risk that at some point in the future a cash-strapped government will raid the scheme.

[petejh]

As to the positive aspects, I can't really think of any.

Really?!

Jesus, you're more cynical than I thought.

[slackline]

As to the positive aspects, I can't really think of any.

Really?!

Jesus, you're more cynical than I thought.

Perhaps you could link us to the Radio 4 program that prompted this post which might explain some of the positives?

I would but have no idea which show it was you were listening to or what day/time to start looking, instead here's the entry at  the font of all disinformation.

[petejh]

http://www.bbc.co.uk/programmes/b04003kz

Well worth a listen (5 days left).

In a new series of thought-provoking debates, Claire Bolderson looks at something another country does well, or differently, and asks whether it could work here.
The trend towards a US-style litigation culture in the UK in recent years has been a growing cause for concern. The costs - both financial and social - of legal claims against public services such as heath and education is escalating year-on-year. But the cases that make it to court are only the tip of the iceberg, with countless others taking up precious resources, time and bureaucracy. Is there an alternative to this name, blame and claim culture?

Is demanding compensation for accidents now seen as a the only way of holding public services to account? What does the threat of litigation do to transparency and accountability? Is the fear of litigation damaging to the professionalism of doctors, nurses and teachers and the delivery of services? Do we need to take a long, hard look at this trend and where it is likely to lead us?

In New Zealand, patients get compensation for all personal injuries and accidents through a no-fault government-funded compensation system. In turn, they relinquish the right to sue for damages arising from personal injury, except in rare cases of misconduct.

Advocates of New Zealand's no-fault system claim that it is cheaper to run and provides more-timely compensation to a greater number of patients, as well as a less stressful process for resolving disputes. Straightforward claims are processed in weeks, with a fixed award structure ensuring that similar injuries receive similar compensation. The system is funded through general taxation and employer levies and is mandatory and universal.

Would a similar system work in the UK? What would be the advantages and disadvantages?

[Sloper]

it is a misconception to suggest that there is a US style litigation culture in England & Wales (I can't speak for NI / Scotland) as there are genuine differences between the US and E&W (and also differences between different jurisdictions in the USA) a significant example being that in the UK (other than rare exceptions) claimants are not awarded exemplary or aggravated damages).

While it is easy to go on a lawyer basing foray, malpractice and dangerous systems are, if not challenged by litigation 9and simply paid for by the public purse) likely to continue, a good example is Rodney Ledwood (sp?) a consultants Obs & Gyne who was seriously dysfunctional and it was only the litigation that exposed his malpractice and led to him being struck off.  Without the litigation he would have continue unchecked.  Similar cases exist in almost all areas of 'public service'.

We can see in the NHS, police, teaching & etc that internal control mechanisms are very weak and often result in obfuscation rather than transparency.

The 'fear of litigation' in my view does not impede clinical practice rather it (and I hate the phrase) drives best practice by requiring clinicians to take proper consent and record things properly i.e. fluid balance, drug use & etc. If fluid balance is properly recorded it increases the risk that patients can become seriously dehydrated & etc, see the report on Stafford and sadly many other individual cases.

With the private funding (i.e via insurance) of risk if an employer requires insurance (whether mandatory by law or as a result of contractual arrangements) then an employer with a very bad claims history will either not be able to obtain insurance or will have their insurers require them to take action to prevent repeat incidents.

As for claims being 'straightforward' I was involved in a case where a lecturer slipped down some steps at a college, the light bulbs were 'out' and the cleaner hadn't put up a sign saying the steps were wet.  The initial injuries were twisted ankle and minor cuts & bruising.  The claimant ended up with an above the knee amputation and settlement was in excess of £2m.  Had this 'simple case' been settled 'in weeks' it would have resulted ina grave injustice to the claimant.

As to whether the system would work in the UK? Would you rather have a solicitor looking after your interests or 'file monkey' employed by ATOS / Crapita?

This debate comes around about every 10 years or so and the conclusion on proper examination every time is that it is not a good idea.

[Sloper]

Just a bit of a google while waiting for a meeting revealed the following:

1. The levy on employers ranges from .1% to c 6.5% of employment costs (wages) assuming things like construction etc is a high risk this would equate like a £1000 per year premium per employer on £20k which is a very significant loading and more than I imagine would be the cost of private EL cover.

Then it appears that there's a non EL contrib of 1.7% on top of tax. . . .

2. Most claims are for treatment only; so if you've got a less than catastrophic but permanent disability, for example facial scars you may not recover anything for the pain and suffering caused.

3. the LOE is capped at 80% of earnings, so if you were say aged 50 and on say a modest salary of £25k and could never work again you'd only be compensated £200k rather than £250k. 

4. Then there's a levy on drivers on average $350 (not sure if US$ or NZ$)

5. Finally it doesn't appear to be very well managed, posting a loss of nearly $5bn (again not sure whether US or NZ$) but regardless s to the currency value, it comes across as a pretty awful scheme.

A quick quote

New Zealand has had a very mixed experience with its no-fault scheme, and over the last 25 years it has declined from a visionary social program to a lean, (arguably) unfair, and complicated program that has reincorporated elements of the fault-based system. The New Zealand experience suggests that Canadian physicians and policymakers should look to sustainable and incremental reform of the tort-based system rather than pursuing the
implementation of a full-fledged no-fault scheme.

http://ualawccsprod.srv.ualberta.ca/centres/hli/userfiles/floodfrm.pdf

We already have, to some degree a no fault scheme, it's called the NHS & DWP i.e. if a drunk moron dives off a pier into 12" of water and is paralysed 'tax payer man' picks up the pieces, if the same injuries are caused by a drunk driver then tax payer man not only doesn't pay for the life long care, but gets to reclaim the cost of the NHS treatment to the cap which is currently about £50k

So all in all a nice idea but not a good idea in practice.

[petejh]

Just a bit of a google while waiting for a meeting revealed the following:

1. The levy on employers ranges from .1% to c 6.5% of employment costs (wages) assuming things like construction etc is a high risk this would equate like a £1000 per year premium per employer on £20k which is a very significant loading and more than I imagine would be the cost of private EL cover.

Then it appears that there's a non EL contrib of 1.7% on top of tax. . . .

In the UK there's a much higher 'levy' on employers... called insurance.
 

4. Then there's a levy on drivers on average $350 (not sure if US$ or NZ$)

I remember paying this when I was there. The 'insurance' cost (there isn't collision insurance, but an ACC levy like you say) to run a motor vehicle in NZ is peanuts compared to what we pay motor insurance companies in the UK.

Financial impacts on the public are lower not higher. I have to question whether part of the high insurance costs in this country stem in part from a self-serving insurance industry/self-serving accident lawyers.

Like you say there are other questions regarding fairness...

[Sloper]

The cost to industry of insurance, in respect of EL, as I understand it significantly lower in the UK than in NZ, in part because the cowboys get driven out by being un-insurable, having high excesses & etc.

The costs of motor premiums in the UK have been driven down by better car security, ANPR, fewer serious injuries resulting from collisions and reduced fees to PI lawyers. If you have data that shows otherwise then post it (bearing in mind a lot of uk insurance is wrapped up with death in service, PII, PL & etc rather than EL)

The average legal costs for a PI claim after April 2013 will probably once you remove the outliers be below £2000, and often below £1000 (MOJ costs).

I struggle to imagine how a government system would have lower costs.

But let's just keep on bashing the lawyers as banker bashing is now just so old hat.

If the NZ model were any good it would have been; after over 40 years, adopted in common law jurisdictions across the globe, that it hasn't is pretty good evidence for saying it isn't a good idea.

 

[petejh]

It can just as equally be said, can it not, that if it wasn't a good idea it wouldn't still be going after 40 years but rather would have failed after 4 or 5 years?

The costs of motor premiums in the UK have been driven down by better car security, ANPR, fewer serious injuries resulting from collisions and reduced fees to PI lawyers. If you have data that shows otherwise then post it (bearing in mind a lot of uk insurance is wrapped up with death in service, PII, PL & etc rather than EL)

There isn't a cost for motor insurance premiums in NZ because, if I remember correctly, there isn't motor insurance. The ACC levy is far lower than a typical UK motor insurance policy. Check the facts yourself.

I struggle to imagine how a government system would have lower costs.

How? Certain insurance costs are high in this country.

But let's just keep on bashing the lawyers as banker bashing is now just so old hat.

Awww, feeling picked on?

[Sloper]

No, there are plenty of good reasons why poor government schemes are not replaced, political inertia, the costs involved of starting from scratch again while putting the old scheme into run off & etc

As for the costs of motor insurance in NZ vs the UK the two are unlikely to be good comparators.

The NZ scheme has been examined in so many jurisdictions and found to be 'a bad thing' (see 1066 and all that) and if you take this as a loose parallel with a Cochrane analysis the only rational conclusion is that it's a bad policy.

[petejh]

You keep saying that, but you haven't really come up with much of anything to convince me why it's a bad policy.
Some stuff about levies which means nothing at all when taken against the costs of insurance in other countries; some utterly vague stuff about being 'poorly managed', whatever that means, - not sure how you know that?; and some slightly more convincing stuff about fairness and levels of payout. But I'd have thought an accident lawyer might be able to come up with some more convincing reasons for why your industry is so vital to us all...

[slackline]

5. Finally it doesn't appear to be very well managed, posting a loss of nearly $5bn (again not sure whether US or NZ$) but regardless s to the currency value, it comes across as a pretty awful scheme.

Do you have a link to the sauce for that as it would be interesting to know what this deficit is as a percentage.  If the overall total cost is $10bn then a 50% deficit is bad but if the overall cost is $500bn then a 1% deficit is nowhere near as bad.

Numbers always need context.

[mrjonathanr]

Do you have a link to the sauce for that


Numbers always need context.

Sauce and numbers, what more could you want? 

[slackline]

 

[Sloper]

I couldn't find the journal article again, so here's a not always reliable wiki link
http://en.wikipedia.org/wiki/Accident_Compensation_Corporation

Apparently the losses were not limited to one year, although the 'trough' was as stated.

As for Sauce and numbers don't forget No 1 Steak Sauce (a taste from my youth)