Accident Compensation Commission comes into operation

New Zealand had introduced the concept of ‘no-fault’ compensation for injured workers in 1900. The provisions of that year’s Workers’ Compensation for Accidents Act entitled those injured in the workplace to a weekly payment not exceeding half of their previous earnings for a maximum of six years. In the case of a fatality payment was made to the family. Employers were encouraged to take out insurance to cover themselves against liability.

Over the next 60 years, as the number of New Zealanders unable to work as a result of motor vehicle injuries or other non-work accidents increased, the legislation became outdated. In practice it was difficult for injured workers to claim compensation if their bosses and their insurers chose to challenge their obligations to pay in the courts. These factors led to the creation in 1966 of a Royal Commission on Compensation for Injury in New Zealand. Headed by Chief Justice Owen Woodhouse, the commission recommended that the state provide 24-hour, no-fault insurance for all personal injury. In return New Zealanders would give up the right to sue for damages arising from personal injury.

These recommendations were adopted in the Accident Compensation Act 1972. The scheme was to be funded by a special levy paid by all taxpayers, employers, self-employed people and motor-vehicle owners. This fund would be managed by a separate state agency, the Accident Compensation Commission (ACC). The amount of the levy was determined by the government annually and varied according to the risk of accident in each industry.