Cross-Examination: How Universal is ACC?

James Peacock, content contributor

The Accident Compensation Commission was established in New Zealand in 1974 pursuant to the Accident Compensation Act 1972 with the purpose of  better facilitating“the rehabilitation and compensation of persons who suffer personal injury”. [1] In effect, the ACC scheme was created to act as a safety net to compensate those who injured themselves either at work or in day to day life. It continues to carry this role today as the Accident Compensation Corporation (ACC) based on the three pillars of “prevention, care and recovery”.[2]12077248_10153713031453420_1862247833_nWhen a person suffers a personal injury, they can make a claim to the ACC. If approved, they will receive a financial subsidy for the treatment of that injury.[3] This scheme makes New Zealand’s approach to compensation for personal injuries quite different to that of other countries. For example, in the United States a person who suffers an injury has three main avenues when it comes to funding their medical care: private insurance, lawsuits, paying out of pocket or a combination of three.[4] ACC protects those who can’t afford the best lawyers or expensive insurance policies, leading to a more equitable system in which all New Zealanders generally receive similar injury treatment. This universality is one of the most important principles underpinning the ACC scheme.However, some might argue that, despite the intention of the ACC scheme to minimise the importance of the quality (and therefore cost) of the claimant’s legal representation, in practice this has not been the outcome of the current system. Every month, many cases are brought before the courts, challenging decisions made by the ACC in denying compensation.[5]The main reason these challenges occur is that ACC only covers “accidents”, and in many cases distinguishing between accidents and non-accidents can be difficult. This is amplified by the fact that the initial decision making process is done internally by the ACC itself — the same establishment paying the costs if the decision falls in the claimant’s favour. If the ACC deems that the injury was not directly caused by an accident then the treatment is not covered.Historically, distinguishing between accidents and non-accidents was a process that generally favoured the claimant. However, after entering Government in 2008 and inheriting an ACC scheme “that saw the gap between its assets and liabilities grow by $4.8 billion in one year alone,” the ACC Minister Nikki Kaye led a reform to reduce expenditure by the ACC.[6]The pressure from the government has led to a situation in which the ACC has had to apply its legislation more strictly to ensure that costs were minimized.[7] This stricter approach eventually led to push back and reassessment in 2011 in which the ACC conducted an internal review and admitted that in 2011 they had been too strict in denying elective surgery applications.[8] David Wadsworth, an advocate who represents claimants seeking to overturn ACC decisions, requested a historical review of specific elective surgery decisions made since 2009 and stated that “it is safe to assume that a significant proportion of the 18,000 claimants affected may have been unfairly disadvantaged" during that time. This request was denied.Another facet of issue was brought to light in 2010 in the case of Bonsor v Accident Compensation Corporation, in which Beattie J took issue with ACC’s declining a bulk of claims for surgery on the basis that ACC does not cover “age-related degenerative issues”.[9] Beattie J implied that the ACC was using this generic response to deny cover in cases where an ACC qualified accident had occurred in an effort to save money.[10] As a result, many people, specifically the older and more vulnerable, were not being afforded the same treatment as younger claimants. This is especially concerning when it is considered that many of the people affected by this injustice were retirees without the financial ability to seek help elsewhere.It may be possible to attribute the unfair consequences to conflicting aims of the ACC. The ACC scheme functions by balancing two conflicting principles. On one hand they are striving to fulfil their role to provide compensation for accidents as specified by legislation, but on the other hand they are working to minimise the costs incurred by the Corporation in covering claims. As a result, there is a risk that some individuals who rightfully qualify for compensation under the scheme may be denied.More recently the ACC suggested that incorrect decisions were not a result of overly strict application of the law, but that it is statistically unavoidable that they will sometimes make wrong decisions by virtue of the sheer bulk of claims they receive every year.[11] In these cases where the ACC makes an “incorrect decision” the ACC states that requesting a review of the decision is a simple and free process.[12]  This stems from the fact that the reviewer’s costs are covered by ACC, and if the claimant’s appeal is declined, they will not have to pay ACC legal fees. Despite this, less than ten percent of claimants appeal adverse decisions.[13]In July 2015, a support organization for those disabled by injury called Acclaim Otago, in conjunction with the University of Otago, released a report arguing that there are clear systemic issues with the current ACC system that maintain barriers to justice to those who seek review for an adverse decision.[14] This report broke down these barriers to justice into a number of key areas:

  1. Clear barriers to access to the law, and access to evidence.
  2. Barriers to claimant’s feeling “like they are being heard”.
  3. Barriers to representation and access to a lawyer.

Following the release of this report, Wellington-based Barrister John Miller, who has represented claimants against the ACC for over thirty years, was interviewed by Radio New Zealand.[15]  In summarising exactly how these barriers lead to a systemic injustice in the ACC system, he stated that the ACC process was inherently “stacked against claimants”.12092386_10153713031443420_44505577_nMiller argues that claimants are in a position where their income has been shut off by ACC — the same organisation they are fighting. As a result of this lack of income, they cannot afford to collect evidence in the form of independent medical advice, cannot afford lawyers of their own, and if they represent themselves, they cannot get a word in edgeways against the voice and experience of the Crown’s experienced legal representatives. In effect, challenging ACC is a losing game. It is a claimant with limited funds against a Crown corporation with expert lawyers, medical advisors, and money.He further explains that this system even further favours the Crown simply for the fact that “there is no money” in the legal area of working on behalf of claimants, because these claimants can’t afford lawyers’ rates. As a result there are very few barristers specialising in advocacy for ACC claimants, and those that are working on behalf of claimants are effectively acting on a charitable basis. Miller identifies  himself as being more of a “social worker”  than a “lawyer” — the irony being that social workers are usually employed by the Crown rather than fighting against it.[16]An exceptional example of advocacy in this area is Peter Sara, an ACC lawyer who defended a client called Karen McGrath for $25 dollars a week in a 3 year fight against ACC following McGrath’s shattering her ankle and being unable to continue at her job.[17] However, many claimants in the same position as Ms McGrath will not have access to a lawyer with such affordable rates. As a result what should be a universally accessible system effectively gives those without the financial means no recourse against injustice.During those 3 years of fighting the ACC, Ms McGrath was injured, in fraught financial circumstances, dependant on other sources of financial support, and stressed about the upcoming ACC review. It therefore comes as no surprise that in over 25% of cases where a person was injured leading to disability and the ACC made a decision against them, they had to move out of their home.[18] This leads to a system in which the people best able to effectively challenge ACC decisions are more well-off claimants who perhaps have less need for ACC’s financial support.12076957_10153713031463420_385224420_nNow Labour Party Leader Andrew Little addressed the  “accident” vs. “degenerative” issue that leads to many of these appeals in late 2012 when he urged his party to extend ACC policy to cover not only injuries caused by accidents, but also to cover incapacity caused by illness or disease.[19] He explained that this discrepancy “is more than an inconsistency, it’s an injustice”. The fundamental principle of his argument was that is inherently unfair to discriminate on the basis of how an injury was suffered. focus should be placed on the injury itself and how it affects the claimant. Certainly, the Woodhouse Report, which led to the establishment of the ACC scheme, conceded it is arguable that it would be inconsistent to provide cover for injury arising from accidents but not from disease.[20]This inconsistency leads to a level of irony when considering the first principle of the ACC is injury “prevention”. In reality, the ACC is limited to providing financial support to those who suffered injury as a result of accident, with no way to accommodate effective preventive measures.[21] Instead, persons susceptible to certain injuries must wait until an accident occurs before ACC is able to cover it. Unfortunately this system disproportionately hits those in lower socioeconomic groups who are unable to afford unsubsidised preventative treatment. In 2011 twenty-seven percent of adult New Zealander’s had an unmet need for primary healthcare as a result of not being able to afford their GP fees, and specialist preventative treatment is often substantially more expensive.[22]While the ACC scheme was set up to protect and assist many New Zealanders, in practice it can sometimes adversely and disproportionally affect a number of vulnerable people in our society. The ACC scheme has certainly proved very valuable for many people over the last 40 years — for instance, if you hurt your knee and need to see a physiotherapist, ACC will be there to cover you.  But if the injury is something larger, something vaguer, or something that is going to hit the ACC’s pocket harder, you might find yourself out of luck.With no way to seek preventative care  or compensation for injuries caused by degenerate conditions —and, most worryingly, the severe practical difficulties facing those wishing to challenge adverse decisions — many people are neglected by the ACC. While WINZ and other government departments do offer more limited support to these people, it might be important to consider exactly what New Zealanders want from the ACC, and how its purposes can be more effectively aligned with its practices.


[1] Accident Compensation Act 1972, s 4(1).[2] ACC <>.[3] “How do I Make a Claim?” (18 March 2015) ACC <>.[4] “Paying for Medical Care” <>.[5] The cases are accessible through NZLII. <ACC Appeal Decisions 2015> (20 August 2015) NZLII <>.[6] Nikki Kaye “Budget 2015: $500m of ACC levy cuts signaled” (11 May 2015) <>.[7] Martin Johnston “ACC tells rejected claimants: We've been too strict so try again” The New Zealand Herald (online ed, New Zealand, 28 June 2011).[8] Johnston.[9] Bonsor v Accident Compensation Corporation [2010] NZACC 196.[10] Martin Johnston “The ACC files: Degeneration used as easy way out, says judge” The New Zealand Herald (online ed, New Zealand, 14 December 2010).[11] Johnston, above n 10.[12] “Unhappy with a decision ACC has made?” (5 February 2015) ACC <>.[13] “Understanding the Problem: An analysis of ACC Appeals Processes to Identify Barriers to Access to Justice for Injured New Zealanders” (9 July 2015) Acclaim Otago <> at 41.[14] At 41.[15] Radio New Zealand “A report highly critical of ACC” (Morning Report, 23 July 2015) <>.[16] Diana Dekker “For Love Not Money” John Miller Law <>.[17] Martin Johnston “Justice Demand for ACC Claimants” The New Zealand Herald (online ed, New Zealand, 23 July 2015).[18] Access Otago, above n 13 at 46.[19] Vernon Small “Little: Change ACC illness 'injustice'” The New Zealand Herald (online ed, New Zealand, 5 November 2012).[20] Royal Commission to Inquire into and Report upon Workers Compensation Compensation for personal injury in New Zealand Report of the Royal Commission of Inquiry (Government Printer, Wellington, 1967) at 114.[21] “Am I Covered?” ACC (27 January 2015) <>.[22] “Barriers to Accessing Health Care” Ministry of Health (12 December 2012) <>.


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