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Interstate Insurers and the National Injury Insurance (Qld) Act 2016 (Qld)

Interstate Insurers and the National Injury Insurance (Qld) Act 2016 (Qld)

National Injury Insurance Scheme – National Injury Insurance Scheme Act – National Injury Insurance Scheme Queensland – National Injury Insurance Scheme Levy – NIIS NDIS – NIIS Qld – CTP Insurance Law – CTP Insurance Lawyer – Motor Accident Insurance Act – Motor Accident Insurance Commission Qld – Motor Accident Insurance Regulation

Background

As of 1 July 2016, Queensland has a no-fault scheme for treatment, care and support for eligible persons who suffer serious personal injury caused by, through or in connection with the:

  • driving;
  • collision, or action to avoid a collision;
  • running out of control; or
  • defect causing loss of control,

of a prescribed vehicle, within Queensland.

The National Injury Insurance (Qld) Act 2016 (Qld) (NIISQA) was introduced to meet Queensland’s obligation to address the agreed federal benchmarks for the provision of treatment, care and support to persons involved in road accidents who suffer serious personal injury. The NIISQA does not affect the common law rights of Claimants for at-fault compulsory third party claims. However, the meaning of the term ‘insurer’ under the NIISQA will see the legislation operate differently in claims against interstate compulsory third party (CTP) insurers (Interstate Insurers), compared with claims against Queensland licensed insurers.

The NIISQA will be administered by the National Injury Insurance Agency, Queensland (Agency).

Meaning of ‘insurer’

The dictionary in the NIISQA defines certain words used in the Act.

The word ‘insurer’ is a word that is defined. Under the NIISQA:

insurer means an insurer under the statutory insurance scheme under the [Motor Accident Insurance Act 1994 (Qld)].’

The Motor Accident Insurance Act 1994 (Qld) (MAIA) defines the statutory insurance scheme as, ‘the insurance scheme established by [the] Act’: section 4.

Several sections in the MAIA refer to the ‘statutory insurance scheme’.  Those sections concern such matters as:

  • the obligations of licensed insurers;
  • the statutory insurance scheme levy;
  • the industry deed;
  • the functions of the Motor Accident Insurance Commission; and
  • premium rates,

and other matters that are of no consequence to Interstate Insurers.

Interstate Insurers are not, ‘insurers under the statutory scheme under the [MAIA]’.  The Transport Accident Commission (Vic) is the insurer under the statutory scheme under the Transport Accident Act 1986 (Vic).  The Territory Insurance Office (NT) administers the Motor Accidents Compensation (MAC) Scheme under the Motor Accidents (Compensation) Act 1979 (NT).  The Motor Accident Insurance Board (Tas) administers the funding and payment under Tasmania’s scheme.

While claims for damages against these Interstate Insurers are regulated by the pre-court procedures of the MAIA, those Interstate Insurers are ‘insurers’ under their own schemes; with their own statutory policies of insurance.

When an Interstate Insurer is an ‘insurer’ under the NIISQA

Under section 32AA of the Acts Interpretation Act 1954 (Qld) (AIA) a definition in an Act applies to an entire Act.  However, under section 32A of the AIA, a definition in an Act applies except so far as the context or subject matter otherwise indicates or requires.

So, if the context or subject matter of a particular section or part of the Act requires; the term ‘insurer’ could be interpreted to mean Interstate Insurers.

Section 102 is an example of a provision which requires that the word ‘insurer’ be a reference to Interstate Insurers. Under section 102, the Agency may recover, as a debt, the present day value of a participant’s future treatment, care and support from the ‘insurer’ under an interstate CTP policy of a vehicle at-fault.

A comparison between sections 42 and sections 102 of the Act, shows that the word ‘insurer’ has taken on two meanings within the Act. Section 42 provides that the Agency may be liable to contribute to the liability of an ‘insurer’. It could not have been Parliament’s intention for the Agency to be obliged, on the one hand, to contribute to the liability of an Interstate Insurer and, on the other, entitled to seek recovery from them.

Claims involving Interstate Insurers

Apart from under section 102, the word ‘insurer’ under the NIISQA does not appear to extend to Interstate Insurers. This does not detract from the obligation of the Agency to pay for the treatment, care and support of participants under the NIISQA.

With the word ‘insurer’ under the NIISQA limited to licensed insurers, the Agency has no obligation to contribute towards the liability of Interstate Insurers, against which common law claims are made. Accordingly, Claimants may pursue those Interstate Insurers for the total of their damages (apart from amounts already paid by the Agency) in the usual way. However, the Agency is authorised to pursue Interstate Insurers for recovery of the present day value of any future treatment, care and support required by the Claimant.

Interstate Insurers will need to consider their liability for common law damages in Queensland claims and statutory entitlements (including those under their own schemes) in the context of the NIISQA, the MAIA and any local legislation or policy applying to the vehicles registered interstate which they insure. Lawyers for Claimants will need to provide different advice to their clients as to the process under the Act, depending on the identity of the Insurer.

BOOK A FREE CONSULTATION to discuss your personal injury matter by calling (07) 3067 3025 or complete the online enquiry form below.

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Kate DenningInterstate Insurers and the National Injury Insurance (Qld) Act 2016 (Qld)
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Workers’ compensation changes to affect contribution claims

Workers’ compensation changes to affect contribution claims

Workers Compensation Qld – Workers Compensation Legislation Qld – Workers Compensation Lawyers Brisbane – Workers Compensation Law – Workers Compensation and Rehabilitation Act – Workers Compensation Insurance – Workers Compensation Scheme – Contractual Obligations – Contractual Indemnities – What is an indemnity clause? – Contractual Interpretation Australia – Contractual Indemnification – Contractual Disputes – Workers Compensation Regulator

On 14 June 2016, the Queensland Parliament introduced the Workers’ Compensation and Rehabilitation (National Injury Insurance Scheme) Amendment Bill 2016 (Qld) (Bill).

On 31 August, the Bill was passed (with amendments) that will constrain contractual indemnity clauses in workers’ compensation claims.

The Bill

The Bill is part of a broader social reform which includes the establishment of the National Injury Insurance Scheme for Queenslanders.

The Bill set out to restore the original policy intent of the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (WCRA) and provide certainty to stakeholders after recent Court decisions interpreted certain provisions of the WCRA in ways that could adversely affect the operation of the scheme.

The Amendment

Clause 31: which will amend Chapter 5 of the WCRA states as follows:

‘236B Liability of contributors

(1) This section applies to an agreement between an employer and another person under which the employer indemnifies the other person for any legal liability of the person to pay damages for injury sustained by a worker.

(2) The agreement does not prevent the insurer from adding the other person as a contributor under section 278A in relation to the employer’s liability or the insurer’s liability for the worker’s injury. 

(3) The agreement is void to the extent it provides for the employer, or has the effect of requiring the employer, to indemnify the other person for any contribution claim made by the insurer against the other person.

(4) In this section-

damages includes damages under a legal liability existing independently of this Act, whether or not within the meaning of section 10.’

The Bill also proposed to amend the definition of damages under section 10 of the WCRA, however, a motion in the parliament to change the definition was defeated.

For Parties 

This amendment will mean that if:

  • a common law claim has been made against an employer; and,
  • the employer agreed to indemnify another party for that party’s legal liability; and,
  • WorkCover Queensland brings a contribution claim against that party,

the party joined to the claim will be unable to enforce their contractual indemnity clause to neutralise the contribution claim.

In many claims, the addition of section 236B(3) will allow contribution claims to be made by WorkCover, with third parties constrained in their ability to enforce indemnities against employers. However, the application of section 236B in a claim will depend upon:

  • who the parties to the relevant agreement are; and
  • the wording of the indemnity.

For instance, in an agreement where:

  • the parent company of an employer grants indemnity to a party; and
  • the agreement was not between the ’employer’ and the other party,

but the employer is referred to as part of a ‘contractor group’ or otherwise in the agreement, then section 236B may not apply to the agreement. In such a case, an entity related to the employer (such as a parent company) may remain liable for the indemnity granted to the other party.

Otherwise, the new Section 236B(3) may not operate to defeat actions in contract against employers by other parties (e.g. for breach of warranty or, for breach of an obligation to insure).

Once enacted, the amendment will apply to existing claims; if a settlement for damages has not been agreed or, a trial has not commenced.

To read the Bill in full, click here. To read the Queensland Parliament’s third reading speech, click here.

BOOK A FREE CONSULTATION for advice and information about your rights and obligations in a workers’ compensation matter, by calling (07) 3067 3025 or contact us online.

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Kate DenningWorkers’ compensation changes to affect contribution claims
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Workers’ compensation changes to affect contractual indemnities

Workers’ compensation changes to affect contractual indemnities

Workers Compensation Qld – Workers Compensation Legislation Qld – Workers Compensation Lawyers Brisbane – Workers Compensation Law – Workers Compensation and Rehabilitation Act – Workers Compensation Insurance – Workers Compensation Scheme – Contractual Obligations – Contractual Indemnities – Contractual Interpretation Australia – Contractual Indemnification – Contractual Disputes – Workers Compensation Regulator

 

On 14 June 2016, the Queensland Parliament introduced the Workers’ Compensation and Rehabilitation (National Injury Insurance Scheme) Amendment Bill 2016 (Qld) (Bill).

The Bill

The Bill is part of a broader social reform which includes the establishment of the National Injury Insurance Scheme for Queenslanders, to commence from 1 July 2016.

The Bill proposes to restore the original policy intent of the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (WCRA) and provide certainty to stakeholders after recent Court decisions have interpreted certain provisions of the WCRA in ways that could adversely affect the operation of the scheme.

If passed, the legislation will prevent employers from securing cover under their workers’ compensation insurance policies for contractual indemnities they have given to third parties for damages payable to workers. In the first reading speech for the Bill, the Minister for Employment and Industrial Relations said:

‘The Bill prevents the contractual transfer of liability for injury costs from principal contractors or host employers to employers with a workers’ compensation insurance policy such as subcontractors or labour hire employers and clarifies that an insurer will not be liable to indemnify an employer for a liability to pay damages incurred by a third party contractor under a contractual arrangement.’

The Amendments

The relevant sections of the Bill that will impact contractual liabilities are:

  • Clause 5: which proposes to amend the ‘Meaning of Damages’ in Section 10 of the WCRA to say:

‘(4) Further, a reference in subsection (1) to the liability of an employer does not include a liability to pay damages, for injury sustained by a worker, arising from an indemnity granted by the employer to another person for the other person’s legal liability to pay damages to the worker for the injury.’

  • And Clause 31: which will amend Chapter 5 of the WCRA as follows:

‘236B Liability of contributors

(1) This section applies to an agreement between an employer and another person under which the employer indemnifies the other person for any legal liability of the person to pay damages for injury sustained by a worker.

(2) The agreement does not prevent the insurer from adding the other person as a contributor under section 278A in relation to the employer’s liability or the insurer’s liability for the worker’s injury. 

(3) The agreement is void to the extent it provides for the employer, or has the effect of requiring the employer, to indemnify the other person for any contribution claim made by the insurer against the other person.

(4) In this section-

damages includes damages under a legal liability existing independently of this Act, whether or not within the meaning of section 10.’

For Employers

These amendments will mean that WorkCover Queensland will only be liable to indemnify an employer to the extent of the employer’s legal liability to the worker for damages under the WCRA. So, if an employer agrees to indemnify another party for damages beyond its legal liability under the WCRA, the workers’ compensation policy will not extend to cover those damages.

The changes may result in some employers exposed to liabilities for which they hold no insurance. However, in many claims, the addition of Section 236B(3) will allow contribution claims to be made by WorkCover, with third parties constrained in their ability to enforce indemnities against employers. What is unclear from the Bill and the WCRA, is whether an employer could secure cover for their liability to indemnify another party for ‘compensation’ under the WCRA (as opposed to ‘damages’). Also, the new Section 236B(3) may not operate to defeat actions in contract against employers by third parties (e.g. for breach of warranty or, for breach of an obligation to insure).

The industries that are most likely to be affected by the changes include: construction; mining; resources; and, transport. With these amendments, and the extension of the unfair contract terms regime to small businesses later this year, employers may wish to consider updating their service agreements to limit the risks to their business and follow current developments in the law.

The changes may see a rise in the number of employers requiring independent legal representation in common law claims. An employer who has agreed to indemnify another party may require independent legal advice about their contractual obligations, rights under the WCRA, the worker’s entitlements to damages under multiple regimes, apportionment and costs.

The Parliament has nominated the Finance and Administration Committee to consider the Bill.  To read the Bill in full, click here.  To read the Queensland Parliament’s first reading speech, click here.

BOOK A FREE CONSULTATION for advice and information about a workers’ compensation or contractual indemnity dispute, by calling (07) 3067 3025 or contact us online.

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Kate DenningWorkers’ compensation changes to affect contractual indemnities
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InDefence covers legal and technical issues in a general way. Changes in circumstances or the law may affect the completeness or accuracy of the information published. InDefence is not designed to express opinions on specific cases, to provide legal advice or to establish a relationship of client and lawyer between Denning Insurance Law and the reader, or any third party. No person should act or refrain from acting solely on the basis of this publication. You should seek legal advice particular to your circumstances before taking action on any issue dealt with in this blog.