After months of pressure, the Baird government has caved into the demands of lawyers and will reconsider some of the controversial aspects of its green slip reforms.
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On Wednesday, the NSW Department of Innovation and Better Regulation sent a letter to legal bodies, including the Law Society of NSW and the Australian Lawyers Alliance, saying it will reconsider aspects of the proposed compulsory third party insurance scheme.
The reforms are not off the table. The government is pausing the process to re-examine recommendations put forward by the legal profession in relation to legal costs.
Minister for Innovation and Better Regulation Victor Dominello confirmed the "interim measure" to implement a proposal to restrict legal fees for low-severity claims via a regulation change.
"We will closely monitor its impact on the frequency and quantum of minor severity, legally represented claims, which have escalated rapidly in recent years," he said.
"The government remains committed to delivering a fairer green slip scheme for both injured road users and motorists."
Lawyers, especially those specialising in personal injury, have been campaigning against the reforms, arguing that innocent victims of motor vehicle accidents would lose their rights to receive payments to cover medical costs and lost wages and easily obtain legal representation.
Andrew Stone from the Australian Lawyers Alliance said they acknowledged the CTP system was broken and it needed to be changed.
"We support change - but fair change, not unfair change. We're delighted to see the government is taking a closer look at the proposed reforms," he said.
"We support their short-term solution, and understand there will be restrictions on legal costs in small claims - a suggestion that came from the legal profession six months ago."
Gary Ulman, president of the Law Society, said he was pleased the government had not rushed into the final design of the reform.
"We developed this proposal to address concerns about the recent increase in legally represented small claims," he said.
"The legal profession has been working constructively to identify the causes of this increase, and ways to address them," he said.
"We believe this proposal should remove incentives to pursue such claims and provide immediate benefits in terms of premium relief."
The Alliance and the Law Society have been running separate campaigns about how consumers are set to lose under the revamped CTP scheme.
Mr Dominello has long argued the reforms would drive down premiums and improve support for injured people.
He added that both lawyers and insurers were likely to make less money.
"It is not fair only 45 cents in every green slip dollar goes to injured road users, nor is it fair that NSW motorists are being asked to pay the highest premiums in the country," he said.
The reforms are still being considered and a timeline for the bill is yet to be determined.
On Tuesday, Fairfax Media reported lawyers were warning that drivers and pedestrians will need to buy income protection insurance to maintain their current level of cover if the reforms go ahead.
