Personal Injury Lawyers: Help out the Helpless

I had lunch with my personal injury solicitor colleague Jim Grevell last week in Brisbane. As well as being very busy in handling catastrophic accident claims Jim has found a way to help people who suffered serious spinal injury purely by accident or their own fault ie there was no negligence. Along with Peter Yeo who became quadriplegic after a fall at home he has founded a unique charity where the lawyers who look after the victims of negligence donate a portion of their fees to the foundation to buy aids and house modifications to people who are never going to receive a payout after suffering serious spinal injuries. It contradicts the image of compensation lawyers only caring about victims who can pay out big time not the doubly unlucky. Go to point 5Zero to check it out.

COMPENSATION PAYMENTS: WILL THEY LAST FOREVER?

This article is authored by Simon Jasprizza of Wheelie Motivated Enterprises (WME). WME was founded in 2005 by Simon Jasprizza, the company's Managing Director. Simon is a T7/8 Paraplegic as a result of an accident in 1997. Simon is a Chartered Accountant (CA), and has been involved in the accounting and finance industry since 1992, having worked for an international accounting firm, as well as high net worth individuals. Simon provides advice re management of compensation received for motor accidents, workers compensation or public liability claims. There are not many industries or businesses that Simon has not been exposed to throughout his career.

The day you might be so lucky as to receive a compensation settlement, is the day the government turns its back on you.

You become ‘precluded’ from most government benefits, both financial and non-financial dependant upon your unique circumstances, for up to 96 years (on average 25–30 years).

The following are benefits you can no longer access:-

1) Disability Support Pension;
2) Carers Payment;
3) Mobility Allowance;
4) Rent Assistance;
5) PADP Benefits – Equipment & Supplies.

Also in most cases prior to receiving your lump sum compensation payment there are deductions that need to be taken out, such as:-

1) Medicare Benefits – for services used;
2) Hospital Expenses – up to $1,500/day for acute care;
3) Rehabilitation Costs – up to $850/day for specialized care;
4) Equipment Costs – Wheelchairs, hoists etc;
5) Advance Payments – in some rare cases, insurance companies will provide the claimant with upfront payments;
6) Legal Costs – quite substantial in most cases.

Most clients usually live on credit cards, loans from parents & friends and even bank loans (where the bank allows) and hence all of these liabilities need to be re-paid from settlement funds.

In addition, clients feel obliged to make payments to family members for the ‘pain & suffering’ they endured and also for personal care provided.

So a settlement (in or out of court), can suddenly become halved in the hand of the client due to the above costs that have to be paid.

But money can by no means buy happiness or our health, and if it is not properly and professionally managed, can result in erratic spending, diminishing net wealth and ultimately depression and in some cases suicide attempts.

The whole settlement process is distressing and time consuming. Once the 3-5 year ordeal is over, the client needs new challenges to avoid boredom & in some cases mental illness, which I believe affects 80-95% of Australians, not 60% (3 in 5) as published regularly.

Investing Funds

Success is attributable to 50% Information, 40% Planning & only 10% Execution.

By failing to plan, you are planning to fail.

The funds need to be protected and invested in a tax-effective manner; responsibilities need to be delegated so that the client lives a stress-free and happy lifestyle without a worry in the world, except for the odd UTI.

At the moment you can only earn up to 3.5% on your money in a dedicated on-line savings account or fixed term deposit with most banks & financial institutions. But with an average tax rate of 25% and Medicare levy of 1.5%, that return of 3.5% is reduced to 2.57%. But what also needs to be taken into account is inflation. Assuming that inflation runs at say 3%, in 12 months time when we clients receive interest on their funds (assuming a 12 month term for a fixed term deposit), general prices have increased by 3%, so the 2.57% in real terms is reduced to a negative 0.42%. So in actual terms the client is worse off in 12 months time. This is a common investment problem.

Hence, clients need to review other asset classes, such as direct property (residential, commercial, industrial, rural), indirect property (listed & unlisted property trusts), domestic shares (Australian Stock Exchange – ASX), international shares, fixed interest investments (both domestic & international) and private equity investments. A diversified portfolio will reduce risk, and this requires a properly qualified investment adviser.

Growth assets such as shares & property will historically speaking increase over time (where investment horizon is a minimum of 7-8 years) as well as paying income along the way, hence are much more attractive and tax-effective then putting your money in a high interest earning bank account. And with the 50% capital gains tax exemption on investments held longer then 12 months, these growth assets are an essential part of a client’s portfolio of investments.

The final key to the equation is the investment vehicles, such as family trusts, self-managed superannuation funds (SMSF’s) & investment companies. Theses vehicles provide asset protection to the client, as well as being much more tax effective then investing funds directly in the clients individual name.

Depending on individual circumstances, a client maybe able to invest their compensation payment into superannuation fund, a withdrawal a tax-effective pension for life.

Trust, Superannuation & Taxation Laws (both State & Federal) change more regularly then we change our underwear, hence you need to employ specialists to ensure you are receiving the best possible advice.


This article only provides general information. Before making any decision or taking any action that may affect your personal lifestyle or financial situation, you should consult a professional qualified adviser.

This article is also published at http://www.injuryadvicenow.com.au/

Australian Government to increase workers compensation death benefits

A tragic loss of a loved one is never made easier because that person’s death may mean a cash payment. However the fact remains that losing a person who is financially contributing to the welfare of a family can mean that lives tossed about by death also suffer doubly by suffering financial hardship.

Thankfully there seems to be a trend of workers compensation schemes recognizing that loss by providing more adequate compensation to families for workplace deaths.

In the last Budget, the Federal Government committed to increasing Comcare lump sum death benefits from their current level of $224, 494 up to $400 000. The commitment also increases weekly benefits for dependant children from $72.98 to $110 per child.

One of the immediate beneficiaries of the decision is the family of ACT Firefighter, David Balfour who was tragically killed while fighting the Victorian bushfires.

The Rudd Government will backdate the measure to 13 May 2008 to ensure Australian families of deceased Commonwealth workers receive greater support.

These increases would bring death benefits under the Australian Government’s scheme more closely into line with death benefits payable under the state workers’ compensation schemes. NSW recently increased workers compensation death benefits .

Workers compensation schemes in the states are often more generous than the Comcare scheme. So for example a Telstra worker who dies at work was worth for a long time much less than say a V Line employee.

Workers compensation could benefit by being uniform across Australia but while there are such wide differences workers say in NSW or Victoria may want to stick with what they have while Queensland workers may want to have more generous no fault benefits but would be very reluctant to give up entitlement to sue for negligence.

Benefits are going to be increased annually based on the Wage Price Index or as prescribed.

This article is also published by the author at www.injuryadvicenow.com.au

New York Personal Injury Law Blog: Medical Malpractice Economics

New York Personal Injury Law Blog: Medical Malpractice Economics
This is a great article on why lawyers do not start claims with no merit. Rather they carefully look at whether a claim should proceed at all. Any lawyer who know what they are doing avoid any claims that have only a slight hope of succeeding. One unsuccessful claim with the loss of costs and overheads incurred can break a law practice. So next time doctors complain that lawyers are making frivolous claims and increasing their insurance costs you should know that there are no frivolous claims because lawyers cannot afford to run them. This article explains it very clearly.

Tort Reform: Accident Compensation Insurer Rip Off

There are plenty of people who slander the victims of personal injury and say that there is lack of “personal responsibility” when the injured seek compensation for the work injury, motor accident, medical negligence or public liability injuries. They call themselves tort reformers. Torts is the branch of law that deals with personal injury claims. I will write another time of the actual law that personal injury compensation is decided on.

The funny thing is that people who call for ‘personal responsibility’ are really saying that if you are injured you must cop it and the person responsible and their insurer should get off Scot-free.

However when the tort reformists or their families are injured they are shocked that they cannot get fair compensation. In the US the same people who called the victims of personal injury ‘bludgers’ bleat like sheep when they suffer an injury. The NY Personal Injury Law Blog gives a great example where a doctor who supported law to stop medical negligence claims lost his mum due to an undiagnosed bowel obstruction during a knee operation.

Don’t be fooled. Personal injury compensation law grew up over 200 years to right wrongs. Unfortunately the insurers were able to influence public opinion and lawmakers overnight to overthrow a system that was built carefully to replace it with an unfair and hard to understand mish mash of blah that makes compensation a mystery. Why does an injury in a motor accident in one state give you completely different levels of compensation when it happens in another state? Why does a work injury pay less than an identical injury caused by medical negligence?

workers compensation death benefits

It is hard to understand how in Australia wrongful death claims caused by negligence are compensated less than claims where an injured person survives. In the US you hear of claims where families of people killed at work or by negligence get millions of dollars for grief even in the case of babies dying. In Australia there are no damages for grief. The only compensation claimable by Australian surviving family is where a deceased had dependent children and partner or where the death has caused a diagnosed mental illness in a survivor either from grief or witnessing the death.

As babies, children or even young adults without dependents are not supporting anyone so most claims in such cases succeed only if members of the family are mentally ill as a result. The same applies to wrongful deaths in the aged too.

However re workers compensation it is not all bad news. The various workers compensation schemes in Australia all pay lump sum and dependents’ benefits to the dependent survivors. These workers compensation schemes vary in generosity.

Surprisingly though the NSW government has recently increased the no fault lump sum benefit to dependents of deceased workers. The benefit of $331,250 has been increased to $425,000 which is very good.

It allows the lump sum benefit to be paid to a worker’s estate where the deceased leaves no dependents. This is a very good reason to make sure any worker should have a will. If a worker without children or spouse dies without a will it is expensive and difficult to have a court administer an estate. A will can direct payments to those who the worker has made up his or her mind as needing it. Eg a brother or sister with a disability or parents.

It ensures too that workers compensation weekly payments to a dependent are not reduced because of partial dependency. However, partial dependency may still be taken into account when apportioning the lump sum between multiple dependents.

These workers compensation reforms are retrospective and apply to deaths that occur on or after 24 October 2007, and are as a result of workplace injuries that occurred on or after 30 June 1987. It is possible for those who have already claimed to claim a top up benefit.

Remember too that in some cases there may have been negligence in how the worker died who earned a great deal more than the workers compensation no fault benefit. If that is so then a claim for damages may be possible too at common law. There are caps though.

I am an avowed opponent of what NSW has done to injured peoples' rights in workers compensation, motor accidents and public liability but this is a definite step in the right direction.

Terence O'Riain