Social Policy Implications Arising from Legal Aspects of New Zealand's Latest Accident Compensation Scheme

Ursula Cheer

In 1972 the Accident Compensation Act ended New Zealand’s piecemeal approach to personal injury in favour of a comprehensive no-fault accident compensation. In 1992 the legislation received a major overhaul with the Accident Compensation and Rehabilitation Act,  reflecting a change in the underlying ideology from a desire to provide real compensation to a desire to “balance the books”.

This paper examines the social policy implications of some of the legal changes in the 1992 Act, especially the narrowed coverage and the removal or “capping” of some benefits. The history of the legislation is surveyed briefly, including the reasons advanced for change. The subsequent analysis shows that the reduced coverage of the scheme has led to a probable revival of civil actions for personal injury for compensatory damages, which creates inconsistencies between victims of injury: those covered by the scheme receive less money than those who pursue civil claims. The changes to ACC may also have distorted the benefits system, with those not covered under ACC applying for invalids’ or disability benefits.

The paper concludes that legislation would be needed to remove civil action, but to do so without plugging the gaps in the ACC scheme would be inequitable.