ACC
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History
1900's
Prior to the 1900's compensation could only be sought via application of common law, which relied on establishing that a party was a fault. During the 1900's it was widely regarded that this approach was a failure.
The "Workers’ Compensation for Accidents Act 1900" was enacted. It was modelled on legislation introduced in the United Kingdom in 1897. It shifted away from establishing which party was at fault and replaced it with employer responsibility. Employers were required to have private insurance to cover their employees against accidents at work through employer negligence. The act didn't cover work related accidents that were the employee's fault, accidents at home, while playing sport, or motor vehicle accidents.
In 1938 the Social Security Act was introduced with the following principle[1]:
"that every citizen had a right to a reasonable standard of living and that it was a community responsibility to ensure that its
members were safeguarded against the economic ills from which they could not protect themselves. The inspiration of the Social Security Act was the determination to end poverty in New Zealand. A comprehensive system of benefits was thus established
covering all the main economic hazards which in the past had been the cause of poverty."
1950's
[2]"During the years, both in New Zealand and overseas, questions had been raised concerning the propriety of permitting such a system of social insurance to be handled by private enterprise. There had been much comment also to the effect that too great a proportion of the amounts being paid into the system were retained by the insurance companies for administrative expenses and profit. Following the amendment to the Act in 1943 which required that every employer should insure against this risk, the criticisms were renewed, and led in 1947 to a further amendment which gave a monopoly of all this business to the State owned insurer. Thereafter for a period of two years from 1949 to 1951 the State Insurance Office handled the whole of the workers' compensation insurance in New Zealand."
[3] "There was, however, a change of Government during this period, and the new Government had committed itself to repeal the monopoly provisions in the Act. The outstanding reason for this probably lay in the fact that the State Insurance Office was a competitor of the other companies in all the remaining areas of insurance business, and by many it was considered unfair that it should be put in the position of being able to attract these other types of insurance business away from the private insurers by reason of the fact that every employer in the country had willy nilly become its customer. Accordingly the monopoly ceased on 31 March 1951, and at the present time workers' compensation insurance is spread among some 61 private insurers or mutuals in addition to the State owned concern and 48 self-insurers."
41 amendments were made to the act over time, and these were consolidated in the "Works Compensation Act 1956". The need to prove negligence was removed.
1960's
In the 1960's it was recognised that the existing scheme had many short comings. Some of these included:
- To successfully gain compensation it had to be demonstrated that the employer suffered the accident out of something they were employed to do, or that they were exposed to some risk as a result of what they were employed to do. Employees often failed to prove that they were employed to do whatever it was that resulted in the accident.
- Those unemployed had no compensation, although the state did provide some social welfare benefits.
- Recreational activities had no cover.
- There was no cover for an increasing number of motor vehicle accidents.
- Because private insurance companies were involved, and the amounts involved could be large for the day, and they had a financial interest in the outcome of any claim, the insurer often favoured litigation over settlement of a policy.
[4]"In 1962 the Minister of Justice, the Hon. J. R. Hanan, appointed the Committee on Absolute Liability which was directed to report on the desirability of the introduction of some form of absolute liability for deaths, and for bodily injuries, arising out of the use of motor vehicles."
One of the findings of the Absolute Liability committee was[5]:
"There is a case for an accident insurance scheme which would cover all persons who are injured in any way without negligence on their part, provided the community can afford to bear the cost on an equitable basis."
As a result, a royal warrant was issued by Elizabeth the Second on the 14th of September 1966 to create a Royal Commission to investigate the entire issue of workers compensation. The warrant required that the Royal Commission report back by 30th day of June 1967 (which was extended to 31st day of December 1967, but was submitted on the 13th day of December 1967). The resulting report is most commonly referred to as the Woodhouse Report after its chairman the Right Honourable Sir Owen Woodhouse. Other members of the Royal Commission included Herbert Leslie Bockett and Geoffrey Arnold Parsons.
Woodhouse was at the time a judge of the supreme court of New Zealand, and very familiar with the huge legal issues that existed with the "Workers’ Compensation for Accidents Act 1900".
The Royal Commission determined that the following 5 principles needed to be upheld by whatever system was adopted.
- Community responsibility[6]. "This first principle is fundamental. It rests on a double argument. Just as a modem society benefits from the productive work of its citizens, so should society accept responsibility for those willing to work but prevented from doing so by physical incapacity. And, since we all persist in following community activities, which year by year exact a predictable and inevitable price in bodily injury, so should we all share in sustaining those who become the random but statistically necessary victims. The inherent cost of these community purposes should be borne on a basis of equity by the community."
- Comprehensive entitlement[7]. "The second principle involves an acceptance of the argument advanced in paragraphs 42 to 46. It cannot be regarded as just that workmen sustaining equal losses should be treated unequally by society. The productive section of the community must sustain the elderly and the young, and the latter groups cannot reasonably expect to be provided with a form of social insurance on the same level. But subject to this consideration there can be no justification for providing from community funds for the same lass of worker entirely inconsistent awards for precisely similar incapacities merely because fortuitously the causes which gave rise to them have at different stages of our social development been the subject of conflicting responses."
- Complete rehabilitation[8]. "The third principle would seem to state the obvious. Nevertheless, although it is always remembered that injury losses must be quantified in money terms, it is often overlooked that the rehabilitation of incapacitated workers cannot be achieved by money payments except to the extent of money losses. The consideration of overriding importance must be to encourage every injured worker to recover the maximum degree of bodily health and vocational utility in a minimum of time. Any impediment to this should be regarded as a serious failure to safeguard the real interests of the man himself and the interest which the community has in his restored productive capacity."
- Real compensation[9]. "Clearly if compensation is to meet real losses it must provide adequate recompense, unrestricted by earlier philosophies which put forward tests related merely to need. Such an approach may have been appropriate when poverty was a widespread evil demanding considerable mobilisation of the country's financial resources. But average modern households, geared to the regular injection of incomes undreamed of at the turn of the century, have corresponding commitments which do not disappear conveniently if one of the hazards of modern life suddenly produces physical misfortune. Increasing affluence has brought with it additional social hazards for every citizen; but fortunately, at the same time, it has left society better able to afford their real cost."
- Administrative efficiency[10]. "This final principle needs no elaboration. It speaks for itself in terms which are clear enough. It looks to evenness and method in every aspect of assessment, adjudication, and administration. The collection of funds and their distribution as benefits should be handled speedily, consistently, economically, and without contention."
The Royal Commission examined other schemes from around the world, including The United Kingdom, Australia, British Columbia, Canada and the United States. Several countries had commissioned their own reports at various times, and those were also considered.
1970's
The Accident Compensation Corporation came into existence on the 1st April 1974.
An interesting conclusions from the Royal commission about vehicles is reproduced below:
[11]DRIVERS OF VEHICLES
- In the past drivers have not been obliged to insure against the results of their own negligence on the highway. Probably it was thought that it would be difficult to identify the driver and easier to identify the vehicle.
- The problem disappears, however, with a comprehensive scheme which embraces all accidents. And we think that rather than impose a further levy upon the owners of motor vehicles the time has arrived to require individual drivers to make some direct contribution to a fund which will provide them with considerable personal advantage.
- We recommend that a small annual levy of $1.50 be charged in respect of all driving licences, and that this sum should be collected by local authorities on behalf of the compensation fund.
References
- ↑ Part 5, Section 241, Woodhouse Report
- ↑ Part 4, Section 182, Woodhouse Report
- ↑ Part 4, Section 183, Woodhouse Report
- ↑ Part 3, Section 137, Woodhouse Report
- ↑ Part 3, Section 139, Woodhouse Report
- ↑ Part 2, Section 56 of the Woodhouse Report
- ↑ Part 2, Section 57 of the Woodhouse Report
- ↑ Part 2, Section 58 of the Woodhouse Report
- ↑ Part 2, Section 59 of the Woodhouse Report
- ↑ Part 2, Section 62 of the Woodhouse Report
- ↑ Part 6, Section 313 of the Woodhouse Report
