OPINION: The publication last week of research by the University of Otago Legal Issues Centre on the lamentable performance of ACC amounts to a wake-up call about what we value.

These researchers have been on ACC's case for 10 years.

Their research is worth more than the official reviews and reports that are carried out from time to time by analysts who can be trusted not to rock the boat.

The Otago report paints a dismal picture of unfairness, lack of transparency, administrative obstacles to claims, a highly legalistic approach and the use of medical evidence to erect the "barrier" of causation.

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There is little justice here in terms of access to law, access to representation, access to evidence and a failure in being heard.

The picture is one of administrative failure and unfairness on a significant scale.

How did a famous reform come to this?

Sir Owen Woodhouse was a visionary man who contributed enormously to the life of New Zealand.

He wrote every word of the 1967 Royal Commission on Personal Injury that he chaired. That report set forth a blueprint for a massive reform to enhance the welfare state.

Eventually the system accepted this visionary idea and implemented it in 1972, but not quite in the form recommended.

The deviations are the source of some of the current troubles.

Before ACC, people who suffered personal injury had two choices.

If they could prove negligence against their employer, a motor vehicle driver or anyone whose actions injured them, they could secure generous damages for their losses. There was a pot of gold in the form of a big lump sum at the end of the jury trial in what is now the High Court.

But the rewards went only to those who could prove their injury resulted from someone's else's negligence.

Proof of negligence was far from easy and required investigation.

There were defences available, such as contributory negligence.

The compensation included loss of earnings, pain and suffering and other losses.

People without a common law claim had to rely on workers' compensation, private insurance or a flat rate social security benefit.

Suing a bankrupt person will yield little, so the state legislated it was compulsory for employers and motor vehicle drivers to insure against their own negligence.

The common law action for damages was a forensic lottery and most injured people could not win.

The Woodhouse report swept all that away. Everyone who was injured by accident whether it was at work, on the road, at play or anywhere else would be compensated.

And this was the kicker – it could all be done for no extra money, given the expenditures on compulsory insurance.

That was because the old systems not only denied many people adequate compensation, but they also cost a lot to run.

Forty per cent of the money was chewed up by insurance companies and by the costs of litigation.

The basic thrust of the Woodhouse reform was to collapse all the existing programmes and replace them with one comprehensive co-ordinated system of earnings-related compensation for all incapacity resulting from injury.

The scheme provided 24-hour protection for all accident victims, without the need to exact new taxes to pay for it.

The Australian Government asked Sir Owen Woodhouse to do a report for them. That report went further – it covered all forms of incapacity.

The New Zealand accident compensation has been through many policy gyrations since it was first passed by Parliament in 1972.

Some of them were disastrous such as the ill-starred effort to allow private insurers to write insurance for the earners' scheme in 1998. It was quickly repealed

ACC was never designed as an insurance scheme. It is social insurance, which is quite different.

It is an income maintenance programme designed to relieve suffering from physical incapacity.

Woodhouse wanted it connected to what was then the Department of Social Security so it could in time become part of a seamless system of income maintenance.

What has remained constant over the years in New Zealand's income maintenance programmes is discrimination between the same incapacities depending on their cause.

Woodhouse wanted to end that, although he knew it could not be done immediately.

One lottery replaced another.

The person laid low by cancer or a heart attack is treated much less generously than the person who suffers an accidental injury resulting in the same incapacity.

Until the injustice of that distinction is faced little progress will be possible.

The Otago researchers have designed ways to improve things, and they have even drafted a Personal Injury Commissioner Bill to overcome some of the worst features of what ACC has become.

Compare what the scheme has become with what Woodhouse thought the method of dealing with claims should be.

At paragraph 309(b) the Royal Commission said: "Informal and simple procedure should be the key to all proceedings within the jurisdiction of the Board. Applications should not be made to depend upon any formal type of claim, adversary techniques should not be used, and a drift to legalism avoided."

The Otago report demonstrates we are getting back to where we began, a lottery. The vision has been betrayed. It should be recovered and repaired.

Sir Geoffrey Palmer QC is a lawyer, academic and former Labour prime minister.