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Changes to The Sentencing Act 2014 will come into force on 6th December 2014.
 
The change will allow courts in criminal proceedings to resume sentences of reparation to victims that include consequential injury costs to the extent they are not covered by ACC entitlements. This is essentially a ‘top-up’ situation.
 
Historically, reparation can be imposed on an offender when a victim has suffered property damage, property loss or emotional harm through or by means of a criminal offence.
Victims of crime, particularly victims of serious crimes, suffer significant financial & emotional costs, & as such, the Government now considers sentences of reparation should top up any statutory shortfall in the victims ACC compensation.
 
ACC claims current regime shortfalls:
 

  • At the moment ACC pay up to 80% of a claimants wages for a period of time, following an injury/permanent disablement, this leaves 20% not recoverable under the act.
 
  • Support payments are calculated using actual earnings, not usual earnings. If the claimants actual earnings were unusually low prior to their incapacity, they may lose out financially as it would not have been calculated on their usual wage.
 
  • Claimants cannot recoup their true loss from ACC if 80% of their weekly earnings exceed the maximum weekly compensation ACC can pay under the Act.
 
The effect of the law change is that offenders, & in some situations their insurers, will be exposed to the cost of this top-up.  Civil liability will no longer be limited to offenders who have intentionally committed crimes.
For example; someone convicted of careless driving will also face this potential civil liability, leaving many people vulnerable to significant sentences for loss of income caused by their negligence.
 
Employers prosecuted under the Health and Safety in Employment Act 1992 which is generally covered under Statutory Liability policies, will discover an impact upon the level of sentences of reparation made against them.
 
Not all comprehensive car insurance policies will cover this liability. Currently most policies exclude any prosecutions under the Land Transport Act. As such, these policies will not be affected by the change as reparations can only be awarded in a criminal prosecution under the Act.
 
The change is not limited to loss of earnings. The Court will be able to make reparation awards to top-up shortfalls in other payments made by ACC including medical bills, lost income, and costs of changes to a victim’s lifestyle.
 
From an insurance perspective it is important you are aware of any exposures you may have in place; & how your current policies would respond in the event of an incident, & whether your cover is adequate & even appropriate.

For more information, please feel free to contact me here at the office:

03 548 2211                              027 548 2211 (Kenn)                         021 548 243 (Carla)
 

 

Kenn Butler
Consultant
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