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Law Society Committee supports inquiry into ACC

Fri, 16 July 2004

Law Society Committee supports inquiry into ACC

The recent decision by the New Zealand Law Society ACC Committee to register its support for a petition calling for a Parliamentary select-committee inquiry into ACC has been warmly welcomed by ACC claimant support groups across the country.

The July edition of the NZ Law Society's fortnightly magazine, Lawtalk, is reporting that its ACC Committee has discussed the public petition calling for an inquiry into ACC and has examined the recently published Auditor- General's report into ACC case management.

The committee has decided to write to the Transport & Industrial Relations select-committee registering its support for an inquiry and suggesting that it should cover Dispute Resolution Services Ltd and the Employer Partnership Programme.

ACClaim Canterbury President, Murray Jorgensen, said "Dispute Resolution Services Ltd (DRSL) reviewers conduct initial reviews of ACC decisions but are seen by a growing number of claimants and their lawyers as unfair and inequitable resulting in a huge number of appeals to the Distrcit Court."

"DRSL is a wholly-owned subsidiary of ACC itself, with more and more lawyers commenting that the way DRSL reviewers conduct reviews is like buying a ticket in a lottery." Mr Jorgensen said.

Lawtalk also reports, Mike Mercier, Manager of ACC Legal Services saying;

"...that as a publicly funded organisation, ACC tried to be fiscally responsible and maximise its limited resources. This meant that instead of instructing lawyers when a notice of appeal was filed, the corporation did not take any action until the case was set down for hearing. This meant that even if the appellant's submissions were filed the response would be delayed."

However, ACClaim groups across the country make the point that:

ACC has $5 billion of public funds invested in NZ and offshore.

"We simply cannot accept that ACC can claim to the Law Society that it has limited resources when it has $5 billion invested which the public pays for ACC to provide cover, rehabilitation and weekly compensation to injured New Zealander's," ACClaim Otago President Denise Powell said.

Under section 275 of the Act, subject to any policy direction under section 270, the Corporation must invest all money received by it in respect of any Account that is not immediately required for expenditure.

Under s164 the Corporation must pay such amounts as the Corporation and the Department of Courts agree as being the reasonable costs of appeals and the reasonable costs in relation to judicial salaries, fees and allowances.

It would certainly appear that Parliament's intention was that ACC must not invest any money that is immediately required for expenditure.

Mr Mercier then offers an excuse for the problem being the dramatic increase in appeals. He says the backlog of cases meant the registrars set down cases as soon as possible, regardless of the state of the file.

There appears to be a simple solution for ACC - comply with section 275 and take some of the money invested - which is immediately required for expenditure - and apply it to the exercise of due diligence in prosecuting its case.

If that means more internal ACC staff and Court staff and judges, then ACC is empowered to do so by virtue of section 164 of the Act.

It appears that ACC is able to financially benefit through inordinate delay and its practice of waiting for a hearing to be set down, because the appeal will invariably be about ACC not providing cover, rehabilitation or weekly compensation while it collects money from the public on a daily basis to do so.

Consequently, it can retain the public money which it collects, and ought to be spending on the claimant, in its investment accounts earning interest for many months while the person and their legal counsel grind their way through the review, appeal and, if necessary, the leave to appeal process.

In fact, ACC itself may also appeal thereby causing it to be able to make yet more profit from interest on its investments at the expense and suffering of the injured party.

ACC is therefore in a win-win situation. It has the public money earning interest for many many months even if it eventually loses at review or appeal.

Delay would certainly appear to be a very good way for ACC to manage its cash flow and maximise investment returns.

ACC's current practice of waiting for a hearing date to be set before providing submissions clearly causes inordinate and inexcusable delay, is unacceptable and considered to be an abuse of the judicial process.

"The corporation has an obligation to the Court, to litigants and to the levy-paying public to practice due diligence", Mr Jorgensen said.

Moreover, the Court is in control of its own processes, fortified by its own case management system. Therefore, the Court must control its process, not ACC.


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