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ACC Ends Mediation With AFFCO

The Accident Compensation Corporation (ACC) has withdrawn from mediation with AFFCO over a $1 million debt owed to the Corporation.

“In 2000 AFFCO entered an agreement with ACC that explicitly stated they would be responsible for any injury that occurred on their premises, whether or not they were at fault. In return Affco paid reduced ACC levies. The agreement also allowed for certain high cost claims to be handed back to ACC, with AFFCO being liable to pay the first $1 million, much like an excess on a common insurance policy” said Dr Keith McLea, General Manager Levy and Scheme Management, ACC.

“When a serious injury occurred at their Wairoa plant in 2003 AFFCO initially managed the claim themselves but it became clear, because of its seriousness, that it was one that should go back to ACC, as allowed for in the agreement. Having initially accepted this was a work injury AFFCO then attempted to argue it was not, and so the liability was not theirs. ACC is clear that this is a work injury under the legislation and AFFCO is liable for costs up to their $1 million dollar cap. Similar cases have previously cost up to $10 million across their lifetimes.

“In a bid to resolve this issue ACC entered into a mediation process with AFFCO but it became clear that a mutually satisfactory outcome was unlikely”.

As a result, ACC has sent to AFFCO a letter demanding payment of the claim costs owing. If the money is not forthcoming then legal action will follow. ACC’s approach is in line with the law.

“This issue is bigger than just AFFCO. If AFFCO does not meet the costs of the claim (up to the agreed maximum) then all other employers will pay for this claim as it will be funded out of the employers account. That would not be a fair outcome”.

ENDS

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