INTRODUCTION

New Zealand is renowned for being the only major jurisdiction that operates a universal and comprehensive no-fault compensation fund for injury. It provides coverage for every person in New Zealand (including tourists) if they are injured in an accident, no matter their age, social security status or occupation.Individuals forego the right to sue for compensatory damages for injury under the common law, in exchange for this comprehensive cover and compensation. The fund also has a mirror injury prevention and rehabilitation focus.

The intended audience of this chapter is a European legal reader that does not already have detailed familiarity with the New Zealand jurisdiction or its no-fault compensation fund. This chapter does not aim to provide a detailed description of every minute development of the New Zealand scheme over its history. Rather, the reader will hopefully gain a philosophical and practical comparative law understanding of the New Zealand scheme as a compensation fund, and how and why it was created within the context of the New Zealand jurisdiction. This chapter will highlight some ‘tricky issues’ and recent developments which showcase the limits of the scheme and reveal legal and policy challenges for the fund's sustainable development.

For ease of referencing, the term ‘ACC Scheme’ will be used throughout this chapter to refer generally to New Zealand's no-fault personal injury compensation fund – in other words, the relevant rights and obligations enacted by primary and secondary legislation and their fulfilment by its administrative body, the Accident Compensation Corporation, on a daily basis. This is because the term ‘compensation fund’ would not be the kind of term used in New Zealand itself to describe the ACC Scheme. The ACC Scheme has always given complementary weighting to compensation, rehabilitation, administrative efficiency and community responsibility. The universal and compulsory nature of the ACC Scheme forces it to straddle the fields of personal injury compensation, social insurance and private insurance cover. The ACC Scheme is indeed a compensation fund, in the sense that it has funds available (and invested) to pay for the cost of eligible personal injuries occurring anywhere in New Zealand. But another purpose of the invested funds is to reduce the incidence and severity of injuries (through safety initiatives), as well as covering the lifetime cost of existing claims.