Precedent (Australian Lawyers Alliance)
THE WORK GOES ON
By Andrew Stone
This issue of Precedent is a testament to the broad array of human rights causes for which ALA members fight. Our day-to-day work is also human rights-based – defending the right of the injured to fair compensation from the tortfeasor (or the insurer who stands behind them).
The assaults on ‘fair’ compensation are almost never-ending. Caps, thresholds, deductibles and inconsistent and onerous medical determinations.
One ‘rule’ of compensation law is the statutory discount rate. The ALA has consistently agitated against the variety of discount rates in play around Australia – 5 per cent, 6 per cent and even 8 per cent.
The theory behind it is that a client who receives a lump sum upfront has the benefit of the money immediately and that this lump sum should be discounted to reflect the rate of return they will obtain on their investment (interest minus inflation and tax).
This is the so-called ‘real’ rate of return on investment. The problem is that the real rate of return is somewhere between 2 per cent and 3 per cent, not the significantly higher figures mandated by legislatures.
The difference between a 3 per cent and 5 per cent discount rate can be millions of dollars in terms of the future care of a quadriplegic, and hundreds of thousands of dollars in terms of future economic loss for somebody whose entire career has been destroyed by catastrophic injury. A 5 per cent to 8 per cent discount rate is nothing more than an act of bastardry on the part of government; the seriously injured effectively subsidising motorists, employers, doctors and councils. This level of statutory discount rate completely undermines the principle of trying to put the injured plaintiff in the position they would have been, but for the tortfeasor’s negligence.
At a broader national level, Comcare legislation is currently before the federal parliament. Senator Abetz has steadfastly refused to identify just how many ‘losers’ there will be from his radical changes, focusing instead on the isolated case of a person who was compensated following injury sustained while having sex in a motel during a work trip.
The ALA has been very active in opposing these changes. We are modestly confident of success. In a recent post-Budget press release, the ALA pointed out that the government does not seem prepared to put its own members into the Comcare scheme but, rather, is proposing its own workers’ compensation scheme.
For the ALA, the work will go on. For me, this is my last president’s page. Reflecting on my year as president, I have attended most of the state conferences, where I have raised the importance of membership to the survival of the organisation. Over the last 12 months, we have recruited 200 new members but lost nearly 240. We just cannot afford for that to continue to happen. If firms are going to cut back and stop signing up their staff, if we cannot persuade people to continue to belong, then the political effectiveness of the organisation will be diminished.
A few ‘thank yous’. We have a terrific team of staff at head office. I thank all of them but, in particular, our general manager, Richard Trim. It is no easy job to be president of an organisation like the ALA in your non-existent spare time. Richard’s patience, calm and good humour has been invaluable.
Finally, the biggest thank you I owe is to my wife, Margaret. She sees little enough of me as it is and the extra demands of the ALA presidency have been very much borne by her. I owe her endless thanks for her unfailing support.
To all the ALA members I have had the opportunity to meet over the year, thank you for your continuing support for the organisation. It is my hope that our achievements this year will be matched by yet more positive outcomes ahead. I am delighted to welcome Greg Phelps from the NT as the new national president from July, and wish him all the best in the role.
Andrew Stone is a barrister at Sir James Martin Chambers in Sydney. EMAIL firstname.lastname@example.org.