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HA6 Accident Compensation Act 1972

Accident Compensation Act 1972
Legislative change 1972-74
In 1972, following both the Woodhouse Commission’s recommendations and considerable debate before a select committee, the Accident Compensation Act 1972 was enacted under the National Government to provide compensation for personal injury by accident. This was a “no fault” scheme, but compensation was available only for earners and victims of motor vehicle accidents, leaving the remainder of the community to pursue common law remedies.
Before the Act came into force, there was a change in government in late 1972, and the incoming Labour Government promoted the passage of the Accident Compensation Amendment Act 1973 which provided a more comprehensive scheme including coverage for non-earners. The right to bring proceedings for damages for personal injury by accident in a New Zealand Court (except in respect of punitive or exemplary damages) was barred.
The 1972 Act, as amended, finally came into force on 1 April 1974, with the overall scheme under the administration of the Accident Compensation Commission.
Purposes of the 1972 Act
The Accident Compensation Act 1972 had three main purposes:
To promote safety by preventing accidents;
To promote the rehabilitation of injured people; and
To provide compensation for the injured and for the dependants of certain people whose death resulted from injury.
Benefits under the 1972 Act
As a code, the Act provided the only source of compensation for personal injury suffered in New Zealand, outside of private insurance arrangements.
The benefits payable under the Act included:
Earnings-related compensation (payable from the 7th day after the accident) to the age of 65 years at the rate of 80 percent of normal average weekly pre-accident earnings;
Hospital and medical (including dental) expenses;
Rehabilitation costs;
Transport costs associated with hospital or medical treatment;
The cost of repairing or replacing natural teeth, artificial aids or appliances, and clothing damaged in the accident;
A lump sum payment for permanent loss or impairment of bodily function;
A lump sum payment for pain and mental suffering, including nervous shock and neurosis and loss of enjoyment of life;
Compensation for pecuniary loss not related to earnings;
The cost of funeral expenses in fatal cases;
Lump sums for surviving spouses and children.
Employers were required to compensate injured employees for the first 6 days following work-related injuries.
Under the 1973 Amendment Act three particular schemes were established. They were:
The earners’ scheme. This provided cover for injured “earners” (whether employees or self-employed persons) who were not injured as a result of the use of a motor vehicle. This scheme was funded from levies paid by employers on wages paid to employees, and from levies paid by self-employed persons in relation to their tax-assessable income.
The motor vehicle accidents scheme. This covered the victims of motor vehicle accidents and was funded from levies paid by the owners of motor vehicles.
The supplementary scheme. This covered those who did not have cover under the earners or motor vehicle accidents scheme. The Government funded this scheme from the consolidated revenue.
Appeal and review rights
All decisions relating to entitlement and to the quantum of benefits were made by the Accident Compensation Commission. Any person dissatisfied with a decision could apply for a review of that decision to a hearing (review) officer who, although an officer of the Commission, could overrule the decision and substitute another decision which was binding on the Commission. Any person who was dissatisfied with a decision of the hearing officer could appeal to the Accident Compensation Appeal Authority. From the Appeal Authority there was a right of appeal to the High Court on a question of law or in matters involving the public interest. Decisions of the High Court could be appealed to the Court of Appeal and then the Privy Council.

From Personal Injury in NZ

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