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Recent Changes in Motor Accident Laws and Costs

Recently there have been updates to existing motor law in New South Wales that directly affect those injured and seeking compensation. To ensure that you stay informed of the changes, we have presented the two key changes in this blog.

Changes to Legal Costs in New South Wales

Historically in New South Wales costs could be determined by the client and solicitor, with the legal costs being paid relative to the compensation received by the injured party due to impact or injury. This has changed recently, however, with a significant revision of the Motor Accident Compensation Act of 1999. The 2016 amendment of the compensation act that came into effect on the 1st of November saw solicitor fees regulated into two specific brackets, thereby placing caps on the fees, costs and charges related to motor accident personal injury claims.

This has resulted in the protection of the first $50,000 of a settlement or award from solicitor-client costs and also the prohibition of contracting out of maximum solicitor-client costs for claims for settlement less than $50,000.

In the case of children, claims made by children under the age of 18 have also undergone significant revisions. There is now a limit to the legal costs depending on the settlement award amounts – for settlements of $50,000, there is now a limit of $10,000 for legal costs, and for settlements of $25,000, there is now a limit of $5,000 for legal costs. The $5,000 legal cost is also applicable to scenarios wherein the same legal practice is bringing a claim on behalf of another occupant of the same vehicle.

Motor Accident Guideline Revisions

As of the 1st of January 2017, there are also new motor accident guidelines that allow for motor accident related injuries to be more easily processed. This amendment, which applies to all current open cases, focuses on allowing for the faster treatment for those parties that have suffered injuries, fair compensation for those involved in accidents and encouraging swifter processing of claims.

To ensure these processes occur, five distinct principles have been introduced. We have listed them here to ensure our clients are aware of what should be protected through their claim.

Principle 1: The insurer will always act to resolve the claim justly and expeditiously

This first principle intends to ensure that liability is promptly determined by insurers, and includes insurers investigating claims, making decisions, making payments and handling disputes with efficiency.

Principle 2: The insurer will handle the claim proactively to support the injured person to optimise their recovery

This is a requirement necessitating that enquiries are made with respect to an injured person’s treatment, rehabilitation and attendant care needs, in addition to providing any relevant assistance throughout the life of the claim.

Principle 3: The insurer will act objectively and openly, with honesty and professionalism at all times in its handling of the claim

This principle intends for the injured persons experience is always a positive one; to that effect, it is stipulated that insurers must be consistent in approaching claims, must not mislead, and cannot discriminate in specific cases.

Principle 4: The insurer will act on each claim in a manner that promotes the integrity of the claim

This is to ensure that insurers remain vigilant regarding fraudulent claims, making sure to both deter and prevent them.

Principle 5: The insurer will keep the injured person informed at all times of the status and progress of the claim

This principle promotes that information is relayed to the injured party at all times, including status of the claim, relevant steps and expected timeframes. In this way, subpar communication does not delay progress and payment of claims by injured parties, which would result in a negative experience for injured people seeking compensation.

What does this mean for you?

If you’re living in New South Wales, have recently been involved in an accident resulting in injury or impact and are wishing to seek compensation, we hope our clarification of these new guidelines has helped you better understand your situation.

For more information related to any of these amendments, or to learn how we can help you in the instance of personal injury, please don’t hesitate to contact Paramount Lawyers today.

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