In New Zealand, everyone’s covered by public indemnity insurance.

That means both residents and visitors can apply for compensation if they suffer accidents while at work, on a holiday, or even in a major tragedy such as a terrorist incident or natural disaster.

Legally, this means anyone who suffers an injury on New Zealand soil does not have to take someone through the courts to prove they were at fault in order to obtain monetary compensation.

All they need to do is submit their claim to the country’s public indemnity insurance provider, the Accident Compensation Corporation (ACC), to receive compensation for their injuries — be they mental or physical.

“This whole arrangement is sometimes described as a social contract,” Simon Connell, a specialist in contract law and accidents at Otago University, told the ABC.

“So in a sense, the people of New Zealand have given up the right to sue a wrongdoer for full compensation for their right to receive fair compensation without having to identify a wrongdoing.”

Because of this, those affected by the recent Whakaari/White Island disaster will be eligible for ACC funds whether they have been directly impacted or are the relative of someone who died.

For family members of non-New Zealand citizens, the ACC may also provide funds for funeral costs and a one-off survivor grant, while domestic family members are eligible for weekly compensation payments equal to 80 per cent of what the victim was earning at the time of the accident.

While this scheme has an equal share of detractors and champions, some have suggested that removing the need to prove fault may end up exposing people to greater levels of risk.

At the heart of any public insurance scheme is the management of risk in a given community.

This ranges from the small scale to the large, from councils managing playgrounds to arena operators staging concerts and major sporting events.

In a country such as Australia, people can sue an individual or group for damages if they have suffered a direct injury as a result of their actions, as long as they can prove the damaging party had a duty of care, breached that duty of care and the breach caused them harm.

In New Zealand, this is flipped on its head, as everyone has the ability to ask for damages from the ACC, regardless of whether anyone is at fault for their injury.

Key points

• All victims of the White Island disaster will be eligible for compensation from NZ’s public insurance body
• Critics of NZ’s no-fault compensation scheme say it leads to more risk taking
• Proponents of the scheme say it improves continuity of care

“If you have a government-run social insurance scheme, then it can have a potentially lifelong relationship with somebody with a serious injury and can focus on providing rehabilitation”

Source
ABC News