Wednesday October 24, 2018
Thursday, 08 February 2018 16:49

ACC consultancy bill more than tripled in four years

ACC's spending on lawyers and consultants has more than tripled over the last four years. ACC's spending on lawyers and consultants has more than tripled over the last four years. MONIQUE FORD / Fairfax NZ

Fees paid to consultants working with ACC have more than tripled in the last four years. 

The last financial year saw a hefty consultancy bill of over $58 million, according to figures released under the Official Information Act. 

It's a dramatic rise from the $17.5m spend during the 2013/14 year.

Glenn Hodges
Glenn Hodges, who spent eight months battling ACC for reimbursement of $1000 glasses he needed after an accident, says the organisation spends too much money on specialists. Photo: CHRISTINE CORNEGE FAIRFAX NZ

And there's been a million dollar hike in money spent on external lawyers, too. 

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In the 2016/17 year $2.6 million was spent hiring lawyers outside of ACC, compared to $1.6 million in 2014/15.

ACC Chief Executive Scott Pickering said the rise in consultancy costs is largely due to of the organisation's  $456 million "Shaping our Future" overhaul, aimed at improving customer outcomes and experience.

The amount should decrease again once the transformation is complete around 2020/21.

Scott Pickering
ACC chief executive Scott Pickering said the rise in consultancy spending is largely due to a major company transformation the organisation is undergoing. Fairfax NZ

But Hamilton man Glenn Hodges said, based on his experience, ACC's specialist and consultancy costs can be more hoops for claimants to jump through.

He was denied reimbursement for a $1000 pair of glasses after an accident affected his vision.

Hodges was asked to visit specialists to determine what was going on with his eyesight, though optometrists had confirmed it was a result of the accident.  

A single appointment he was asked to attend would have charged around $550, Hodges said.  

"By the time we had paid all the consultants to do their thing, for everyone to review documents and have opinions with bits of paper, without even seeing me in person, they would have spent far more than what the glasses were worth. 

"It's just creating lots of drama and stress and that is really hard to deal with.

"I just [bought] the glasses and called it quits at that."

Hodges was reimbursed for the glasses after he went public with his story. 

"I'm sure there are other people dealing with the same crap and it needs sorting out." 

A barrister specialising in ACC disputes, Warren Forster,said stories like these were all-too familiar. 

"It upsets me everyday that people have these kinds of problems. 

"From a claimants point of view, the only thing they can do when they get denied is to challenge it. From ACC's point of view, they can spend money on lawyers and consultants until the cows come home.

"And it's public money that they're spending, denying people entitlement and support." 

Forster wasn't surprised by the hike in consultants and lawyers.

"There is no doubt that ACC spends on lawyers and consultants has massively increased. There is no doubt whatsoever about that. 

"Whatever way they measure it, there has been massive increases.

"ACC recognises that it's a broken system. But the question is how are they responding to that? 

"They're not trying to fix it, they're trying to suppress the problem."

Back in the 2012/13, financial year before the programme was initiated, a modest $4 million was spent on consultants. 

But Pickering insisted the rise in consultants over the last year was due to ACC's transformation. 

The overhaul was being designed to help, not hinder, clients, Pickering said. 

A lot of the $58 million in consultancy fees from last year was spent on massive technology system changes, he said. 

"The jump that you really see over the last 12 months is as we [went] into that delivery phase and got that expertise in to help with this significant technology change.

"We don't have that level of expertise just sitting around at our business." 

The increase also reflects a rise in claims, Pickering said. 

"We want our customers to receive absolutely what they are entitled to.

"When there is a need for specialist support or information we obviously go to the right level of expertise to ensure that we get the right outcome for our customers ... It's certainly not spiking in anyway.

"Yes, the costs have increased, but therefore the claims have increased a long side of that." 


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