What it does
The Motor Accidents Compensation Act 1999 establishes a comprehensive statutory scheme for the handling, assessment and payment of claims arising from motor accidents in New South Wales. At its core, the Act mandates compulsory third-party insurance for all registered motor vehicles (s 8 and Part 2.1). A third-party policy, the precise terms of which are prescribed in s 10(1), indemnifies the owner and any driver against liability for death or injury caused by fault in the use or operation of the vehicle. The policy extends to maintenance, parking and, in defined circumstances, trailers or tow trucks (see the extended definition of “use or operation of a motor vehicle” in s 3).
The Act operates on a mixed fault and no-fault basis. The default rule, set out in s 3A(1), is that the Act (including any third-party policy) applies only where death or injury is caused by the fault of the owner or driver. However, Part 1.2 (inserted by 2006 No 17, Sch 1 [7]) creates two important no-fault extensions. Division 1 deems a “blameless motor accident” (defined in s 7A as one not caused by the fault of any owner, driver or other person) to have been caused by the fault of the owner or driver, provided the vehicle had insurance cover (s 7B). Division 2 confers a special entitlement on children under 16 to recover hospital, medical, rehabilitation, respite, attendant care and funeral expenses even where the driver is not at fault (s 7J). These no-fault provisions are subject to exclusions, for example where the child’s own serious criminal conduct materially contributed to the injury (s 7K) or where the driver’s act or omission caused the accident (s 7E).
Claims procedure is tightly regulated. A claim must be notified within six months (s 72), although late claims may be accepted if a full and satisfactory explanation is provided (s 73). Insurers must attempt early resolution (s 80), admit or deny liability within three months (s 81), and make a reasonable offer of settlement once the claim can be quantified (s 82). The early payment scheme in Part 3.2 obliges insurers to meet treatment expenses and lost earnings up to a prescribed limit (currently $5,000 – s 51) on a provisional-liability basis, even where the injured person is at fault (s 50). Bulk-billing arrangements with hospitals and ambulance services extend to all injured persons, regardless of fault (s 54).