Fund Management expenses payable by TACHarry Gill | |
The Treasury and Finance Legislation Amendment Bill 2018 was recently introduced in an attempt to address a number of issues with the legislation governing the TAC, including professional fund management.
If a person does not have the capacity to look after his or her own finances when receiving payments from TAC, VCAT can appoint an administrator who looks after these monies for the claimant. This can be a relative or friend, but can alternatively be a professional administrator who carries on business of dealing with these funds on behalf of persons who are incapable of doing so themselves. Where expenses are incurred in paying that professional administrator, they could be included in the claimant’s common law claim for damages if he or she had a right to sue for negligence after satisfying certain threshold requirements regarding severity of injury.
The latest amendment purports to take away the right to claim these expenses of common law and instead introduces provisions which allow them to be paid by TAC regardless of whether a claim of common law for negligence is available. However, the Bill as currently drafted appears to fail to entirely achieve this. In the author’s view, it only covers statutory compensation benefits. Therefore, the common law still allows administration expenses to be claimed for the following:
- The proceeds of the common law claim itself (which is often the biggest part of the fund).
- Fees payable to someone other than a professional administrator. This may include bank fees, brokerage, accounting fees and plausibly a wide variety of other items (these are likely to be relatively small)
- Fees incurred in administering the claimant’s other assets (if any) which have already been accumulated regardless of the transport accident (the amount of these fees will depend upon the relative wealth of the claimant before the transport accident).
This means that lawyers will need to be careful in advising TAC claimants to ensure that any categories of administration expenses not payable directly by TAC are claimed in the common law claim for negligence (if any).