Last updated 28 March 2018
Owners of all motor vehicles used or intended to be used on public roads in Australia are required to take out a compulsory third-party insurance against liability for the death or personal injury of others arising out of motor vehicle accidents. The relevant Queensland legislation is the Motor Accident Insurance Act 1994 (Qld) (MAI Act).
This Act does not provide for the payment of statutory or no-fault benefits. The legislation governs an entirely fault-based scheme. No compensation is paid to injured road users unless they can prove the injury was caused by the negligence of another person.
When a person has suffered personal injury or lost a family member in a motor vehicle accident, it is critical that legal advice be obtained as soon as possible. If a victim has been hospitalised, advice should be obtained on their behalf. Delay, especially when an unidentified motor vehicle is involved in an accident, can seriously prejudice or forfeit the chances of recovering compensation.
Compulsory third-party insurance
A compulsory third-party (CTP) insurance policy provides cover for legal liability for personal injuries or death arising out of the use of a motor vehicle. The insurance covers the relevant motor vehicle for accidents causing personal injury anywhere in Australia. Cover is not limited to accidents arising out of the actual driving of the vehicle, but can extend to a wide range of accidents involving motor vehicles.
Compulsory third-party insurance covers the legal liability of anyone who is driving the vehicle or is in charge of it, as well as the liability of the registered owner of the vehicle. The definition of ‘insured person’ in s 4 of the MAI Act ensures that anyone in charge of an insured vehicle is, for the purpose of a personal injury claim, deemed to be insured (including the owner).
This means that the registered owner and the third-party insurer will always be liable for any wrongdoing involving the vehicle that results in personal injury. For example, if a thief steals a car and, while driving away, negligently injures a pedestrian, the registered owner of the vehicle and their insurer are liable for the victim’s injuries. The same principle would apply where the owner had lent the vehicle to another driver. Making the registered owner liable for others is simply a way to allow the victim access to the CTP insurance scheme. Unlike other insurance policies, the amount of the premium is not affected by the lodging of a claim.
Vehicles that must be insured
A motor vehicle is any mechanically propelled vehicle. Any vehicle with an engine will, therefore, be considered a vehicle for the purposes of the MAI Act and must be registered, unless it is specifically exempted. The following vehicles will be exempted unless the accident happens on a road:
- a tractor, backhoe, bulldozer, end-loader, forklift, industrial crane or hoist, or other piece of mobile machinery
- an agricultural implement
- a motor vehicle adapted to run on rail tracks or tram tracks
- an amphibious vehicle.
A vehicle will only be registered by the Department of Transport and Main Roads if the owner has taken out CTP insurance. The insurance is renewed annually, with the premium being paid as part of the registration costs of the vehicle. When lodging the application, the applicant selects and nominates an insurer (s 21(1) MAI Act). The insurer cannot refuse to issue or renew an insurance policy (s 22(1) MAI Act).
Subject to certain limited exceptions, if a vehicle is to be used on a road, it must be registered under the Road Rules and insured under the MAI Act (s 20). Failure to do so is an offence under the relevant legislation.
The owner of a vehicle cannot contract out of their liability for damages for personal injury. For example, an owner cannot agree to carry passengers on the condition that they will not have any claim against the driver if there is an accident. If there is any such agreement, it will be void, at least as far as damages for personal injuries are concerned. Liability will be determined on the usual principles of negligence (see Accidents Caused by Negligence).
Uninsured or unidentified vehicles
If a person suffers personal injury because of the negligence of the driver of an unidentified or uninsured vehicle, a claim can be made against the Nominal Defendant. If the vehicle is uninsured, the accident must have occurred on a road or in a public place for the Nominal Defendant to be liable (s 5(2) MAI Act).
The Nominal Defendant is a statutory body constituted under the MAI Act and is funded by annual contributions paid on the registration of each vehicle in Queensland.
The Nominal Defendant is liable to a claimant for any damages for personal injury that the owner of the vehicle would have been legally liable to pay had the vehicle been identified and insured (s 33 MAI Act).
When a possible claim exists against the Nominal Defendant in respect of an unidentified vehicle, notification of the claim must be given to the Nominal Defendant within three months of the motor vehicle accident (s 37(2)(a) MAI Act). If notice is not given within nine months of the accident, the claim will be statute-barred which will prevent a claimant from being entitle to bring a claim. It is, therefore, vital that notice be given as soon as possible after an accident.
In order to maintain a claim against the Nominal Defendant in respect of an unidentified vehicle, it must be shown the vehicle could not be identified after proper enquiry and search (s 31(2) MAI Act).
If the vehicle can be identified, a Department of Transport and Main Roads search should be done on the vehicle as soon as possible after the accident. This search will reveal whether the insurance on the vehicle is current. In conducting the search, care should be taken to ensure the search is conducted as at the date of the accident, not the date of the search. If the vehicle is uninsured, the Nominal Defendant should immediately be notified of the claim.
The legislation provides for a thirty-day period of grace after expiry of the CTP insurance (s 23(2)(b) MAI Act). This means that if the owner of a motor vehicle allows the registration to lapse, the CTP insurance will continue for thirty days after the expiry of the registration. A claim arising from an accident during that period of grace will be against the CTP insurer while the registration was in force and not against the Nominal Defendant.
If there is any doubt whether a vehicle is insured or if there is any chance an unidentified vehicle was involved in an accident, notice should immediately be given to the Nominal Defendant as a matter of precaution.
When the Nominal Defendant has paid out damages to an accident victim, it can seek to recover those damages from the owner and/or driver of the uninsured vehicle (s 58 MAI Act).
Pre-court claim process
The following compulsory pre-court process applies to claims for damages governed by the MAI Act:
- A person intending to make a claim (the claimant) for personal injuries must notify police of the accident (s 34).
- A person who receives a claim or demand, or notice of a claim or demand concerning personal injury must give the claim to an insurer within one month of receipt of claim (s 36).
- The claimant must give an insurer a notice of accident claim form within nine months of the accident or the first appearance of symptoms of the injury (if not immediately apparent), or within one month of consulting a lawyer about the claim (whichever time period is the earlier). This claim form can be obtained from the Motor Accident Insurance Commission (shorter time frames apply to Nominal Defendant claims) (s 37).
- The insurer must, within 14 days of receipt of notice of a claim, advise the claimant if the notice is compliant with the legislative requirements and, if not, advise how the non-compliance can be remedied, allowing at least one month to do so (s 39)
- The insurer may ask the claimant to provide additional information about the claim (s 37A).
- The insurer must, after receipt of the claim, respond in writing within six months to:
- advise whether liability is admitted in total, in part or is denied
- make a written offer of settlement or invite the claimant to do so (s 41).
- The insurer, upon admitting liability, then has a duty to pay the claimant’s reasonable medical and rehabilitation expenses (s 42).
- The parties must, before commencing court proceedings, participate in a compulsory settlement conference (s 51A). The conference should be held at a time six months after the claimant gave notice of the claim to the insurer or one month after the additional information was provided to the insurer as requested. The parties can otherwise agree to hold a compulsory conference or, if there is a good reason, dispense with the conference (ss 51A(2), 51A(4)). The procedure to be followed prior to and at the compulsory settlement conference is complex, and it is essential that legal advice be obtained at this stage.
- Court proceedings should, if the matter remains unresolved after the compulsory settlement conference, be commenced within sixty days after the compulsory conference (s 51D).
If a compliant notice of accident claim form is given before the three-year statutory limitation period expires, proceedings may, in very limited circumstances, be brought outside the limitation period. It is essential that legal advice be obtained about this.
Notice may be given to the Motor Accident Insurance Commission if there is doubt about the identity of the CTP insurer (s 57(3) MAI Act).
Where the Nominal Defendant is involved, the strict requirements discussed above must be observed. If there is any chance the Nominal Defendant might be involved, notice should be given as a matter of urgency so that the claimant’s rights are protected.
Restrictions have been placed on the rights of spouses to claim damages for loss of consortium and loss of services arising out of motor vehicle accidents. The court cannot award these types of damages unless the injured person died as a result of their injuries or is entitled to general damages above a specified threshold (s 58 Civil Liability Act 2003 (Qld)). For injuries sustained from 1 July 2015 onwards the threshold is $43 020 (reg 6 Civil Liability Regulations 2014 (Qld)).
The court may award exemplary, punitive or aggravated damages only if the conduct of the insured person is so reprehensible that such an award is justifiable (s 55 MAI Act). Those damages can only be claimed against and recovered from the insured person and not the CTP insurer.
Finally, recovery of legal costs is restricted by the MAI Act, depending on the amount of the settlement or judgment amount (s 55F MAI Act). Mandatory final offers made by both parties at the conclusion of an unsuccessful compulsory conference can carry important costs consequences. Legal advice needs to be obtained about the nature and effect of those offers.
In 2016, the Queensland Government introduced the National Injury Insurance Scheme (Queensland) Act 2016 (Qld) (NIIS Act), which establishes the Queensland branch of the National Injury Insurance Scheme (the Scheme). This Scheme aims to provide lifetime treatment, care and support to people who have sustained serious personal injuries, irrespective of fault. At present, it does, however, only apply to particular injuries sustained in motor vehicle accidents.
The Scheme is administered by the National Injury Insurance Agency, Queensland (the Agency).
What does the Scheme cover?
In an effort to avoid a one-size-fits-all approach, the Scheme evaluates individual needs when determining the treatment, care and support required by an applicant. The following may be available (s 8 NIIS Act):
- medical and pharmaceutical treatment
- dental treatment
- rehabilitation (e.g. physiotherapy, occupational therapy, speech therapy)
- ambulance transportation
- attendant care and support services
- aids and appliances (e.g. wheelchairs)
- educational or vocational training
- home and transport modifications
- respite care.
In determining whether treatment, care and support are necessary and reasonable, the Agency must consider the following (regs 17–20 National Injury Insurance Scheme (Queensland) Regulation 2016 (Qld) (NIIS Regulation)):
- benefits to the participant—is the treatment maximising the participant’s independence by improving their ability to conduct daily activities? Is it assisting injury management? Do the benefits of the treatment outweigh any risk they may pose to the participant?
- appropriateness of the provider—is the provider qualified, experienced and registered if necessary? Is the provider sensitive to the participant’s location, age, culture and ethnicity?
- appropriateness of services—is the service provided consistent with industry best practice and is it effective for the individual participant?
- cost effectiveness—do the benefits of the treatment outweigh costs? Is the cost of the treatment reasonable and comparable to other providers?
Who is eligible?
To be eligible, an applicant must have sustained a ‘serious’ personal injury as a result of an eligible motor vehicle accident in Queensland after 1 July 2016. This includes anyone from another Australian state or territory.
A ‘serious’ personal injury is defined in the NIIS Regulation as (regs 5–11):
- permanent spinal cord injuries
- traumatic brain injuries
- multiple or high level limb amputations
- permanent injury to the brachial plexus
- severe burns
- permanent legal blindness.
In addition, an ‘eligible’ motor vehicle accident is defined as being the result of (s 4(1)(i–iv) NIIS Act):
- the driving of a registered or registrable motor vehicle
- a collision, or an action taken to avoid a collision, of a registered, or registrable, motor vehicle
- a registered, or registrable, vehicle running out of control
- a defect in the registered or registrable vehicle causing loss of control while the vehicle is being driven.
A person is not eligible if they have already been awarded damages (by court judgment or binding settlement) in the matter relating to their injury, or if the person was suffering from a pre-existing injury or condition, and the accident did not permanently increase the extent of that disability. However, s 13 of the NIIS Act provides that a person, who is not strictly considered eligible, may apply to the Agency and, if approved, can buy into the Scheme by paying a contribution. Anyone wishing to obtain information about the potential benefits of buying into the Scheme should seek legal advice or contact the Agency directly.
In addition to the injured person themselves, a family member, friend or hospital may, provided they have obtained consent, also apply for an injured person’s acceptance to the Scheme (s 18 NIIS Act).
Also, if a common law claim for damages has been commenced by serving a compulsory third party (CTP) insurer with a Notice of Accident Claim form, a CTP insurer may make an application on behalf of the injured.
Section 16 of the NIIS Act imposes a one-year time limit, from the date of an accident, for the making an application. There is, however, a discretion to accept an application out of time where it is fair and reasonable to do so. Although there is this discretion, an application ought to be made as soon as possible after an accident that resulted in a serious personal injury.
If an applicant’s claim is refused by the Agency, the NIIS Act sets out a process for review. This is first by way of applying to the Agency for an internal review (s 106 NIIS Act). Such an application must be made within 28 days of receiving the decision information notice from the Agency (s 107(1)(ii) NIIS Act). Upon review, the Agency may confirm, amend or alter the original decision.
If the review decision affirms the Agency’s original decision to reject an application, an applicant can lodge an application for review with the Medical Assessment Tribunal (s 112 NIIS Act). If an applicant wishes to appeal any decision of the tribunal, a further application for review must be lodged with the Queensland Civil and Administrative Tribunal (QCAT) (s 127 NIIS Act) within 28 days of the tribunal’s decision (s 127(3) NIIS Act).
If the Agency fails to make an internal review decision with 28 days of such an application being lodged, an applicant can lodge an application for review direct with QCAT.
Exclusions and common law damages
The Scheme does not cover the cost of damage caused to vehicles or property as a result of an accident. It also does not cover non-serious personal injuries or provide for any other damages, such as economic loss and pain, suffering and loss of amenities. In these matters, an injured person retains whatever common law rights they may have.
An eligible person also retains the right to opt out of the Scheme and, if available, receive common law damages. For example, if a person can establish that an accident was the result of another’s negligence, they may wish to use their own finances to source treatment, care and support rather than relying on the Agency. Legal advice should be sought about the benefits of an eligible person regardless if they wish to participate in the Scheme or opt out.