Former Prime Minister Sir Geoffrey Palmer called for an overhaul of ACC last night during the second annual memorial lecture for Sir Michael Woodhouse, the former distinguished judge and lead author of the 1967 Woodhouse Report that led to the introduction of the accident compensation system in 1974.

Palmer told an audience at host Victoria University’s Faculty of Law that the current ACC-administered system was discriminatory and had created “a lottery” in how people were treated depending on the cause of their incapacity.

“The person laid low by cancer, a heart attack or stroke is treated much less generously than the person who suffers an accidental injury resulting in the same incapacity,” he said. “The first group is easily impoverished by the drop in income compared with the person on ACC.”

He called for discriminatory aspects of the ACC system to be eradicated and the unfinished business of what Sir Owen intended to be finally completed. Altogether, he said, only about half of the major policy recommendations in the Woodhouse Report were implemented.

“At its inception, the scheme created two classes: those who are injured who are treated more generously than those who are sick or otherwise disabled. The Woodhouse Report made clear the recommended scheme was to be a temporary order of things. Until the discrimination the present scheme creates is removed, social justice will not have been achieved,” said Palmer in his address.

He said the scheme had improved the plight of accident victims as many more people could claim and have their hardship relieved then under the pre-ACC system.

“Yet there have been persistent criticisms of ACC in recent years about how the lines are drawn, how medical issues are assessed and many changes in administration, said Palmer. “In the past few years, the decisions of ACC have become more restrictive, similar to liability insurance not social insurance, and less people oriented.”

He said the impact of the scheme on the public health system was also a significant issue due to the “encouragement it provides to private medical providers flowing from ACC paying for treatment in private hospitals and for rehabilitation in order to get people back to work”.

“ACC has challenged the public health system to a degree and assisted the development of private health providers.”

Palmer said another aim of the Woodhouse Report to make claim procedures ‘informal and simple’ and avoid a ‘drift to legalism’ had clearly not been achieved.

“The lines of demarcation that are drawn in the current legislation are technical, difficult and sometimes unfair. The problems facing claimants are formidable. The obstacles have been deliberately increased over the years,” said Palmer

“This was a scheme to do away with the need for lawyers when claiming compensation for personal injury. Now the legislation is so intricate that lawyers are often needed,” he added.

Palmer said the original Woodhouse scheme was about the social goals and social purposes of a compassionate and just society.

The reasons that the scheme was not fully implemented revolved around financial pressures and changing political priorities. A year after accident compensation was introduced the main focus of the 1974 election campaign was on the issue of superannuation.

“This development effectively removed the issue of financing an extension of the accident compensation principles to sickness and invalidity off the agenda for many years,” said Palmer. This was along with the Royal Commission on Social Security in 1972 not taking up all the recommendations of the 1967 Woodhouse Report.

In 1990 the soon-to-be-ousted Fourth Labour Government introduced the Rehabilitation and Incapacity Bill, based on a Law Commission report when Sir Owen Woodhouse was its president. The bill was designed to extend the scheme to sickness, but it was dropped with the change of government.

Sir Geoffrey said that, 50 years after the Woodhouse Report, “we do not seem to be willing to grasp the nettle and design what a rational and humane system of income support looks like. Fairness demands a policy response and one that is properly worked through. That is what the Woodhouse legacy is saying to us, if only we would listen”.

“The Woodhouse vision was admirable, the performance of the scheme that was adopted improved matters substantially for accident victims, but there is unfinished business. The future remains uncertain. We need now a fresh infusion of Woodhouse boldness and vision.”

Sir Owen Woodhouse died in 2014, aged 97. His many legal roles included President of the Court of Appeal and President of the Law Commission.


  1. I find it incredible that ACC covers international travellers, with NZ having such a small population. Travel insurance should cover health needs while overseas. This would increase funding to open up consideration of expanding ACC’s reach.

  2. Common sense dictates the scheme, now worth $20 billion, should be contributing to health costs in general; not just accidents. Think of the savings in putting the army of bean counters who are paid to deny claims out of work


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