ACC architect Sir Owen Woodhouse lays it on the line

Was National right to move ACC from pay-as-you-go to fully funded?

If ACC architect Sir Owen Woodhouse is disappointed the government has abandoned plans to revert to his pay-as-you-go ACC model and stick with the fully funded system, he’s not showing it.

For a man who has presided over countless courtroom battles he gives the impression he sees it as a small glitch on the path to vindication.

Back in 1967 the former president of the Court of Appeal chaired a Royal Commission into Accident Compensation which led to the creation of New Zealand's much acclaimed no-fault accident compensation scheme.

It was funded on a pay-as-you-go basis just like health, education and other social services.

But in 1998 the National government changed it to a fully funded insurance scheme, setting levies in each year to cover the whole future cost of accidents which occurred in that year.

"ACC suddenly became far more expensive when it became a funded system and that was a grave mistake," the sprightly 95-year-old says.

 "Immediately the cost advantage and accuracy of a pay-as-you-go welfare based system disappeared and every year since then both employers and all owners of vehicles have been required to pay much larger sums than are necessary."

Speaking exclusively to NBR ONLINE in his rambling Remuera home, Sir Owen chooses his words carefully, all too aware ACC is a hot political potato which has cost many people in high places their jobs and reputations over the years.

The fallout from the recent Bronwyn Pullar affair alone has claimed the scalps of an ACC Minister, the chairman, the chief executive and three directors, and the retired judge does not want to become collateral damage.

Which is why he made it clear from the outset that "I have no intention or desire to take sides in a political debate. After all, it was a bipartisan political decision which introduced the system".

But that said, he wasted no time commenting, albeit diplomatically, on the stands being taken by politicians with regard to ACC.

Labour and the Greens favour a return to a pay-as-you-go system which some say could see premiums plunge by up to 25%.

And until a few days ago National appeared to be entertaining similar thoughts, but is now backtracking in favour of the fully funded model or perhaps even privatisation.

National’s about face is not what Sir Owen wants to hear. But rather than engaging in a slanging match he prefers to re-state what he sees as the overwhelming advantages of his system.

He says the pay-as-you-go system originally envisaged for ACC needed a levy of no more than $1 in $100 of wages.

It would also slash levies on car licences from $228 a year at present to about $100, and on motorcycles from up to $491 to $50.

"The other benefits are that the levies could be averaged; the individual Work, Earners, and Motor Vehicles accounts could and should be amalgamated; and the way would once more be open to extending the system to sickness incapacity as proposed by the Law Commission.

"There's also the matter of the $15 billion of accumulated funds presently in hand.

"These excess funds, which are now held as investments, would become available as a large and necessary contingency reserve against the risk of a major disaster, with an appropriate balance available to underwrite reduced levies."

His advice to those who want to revamp ACC is very simple.

"When you are peering into the future it is not at all a bad idea to remember where you have been.

"The social responsibilities which underpin ACC ought never to be tested by clever equations, or brushed to one side by economic dogma.

"In the end, they depend on decent fellow feeling and the ideas and ideals that support it."

Such was the regard that his original scheme was held in that the  Australian Prime Minister at the time, Gough Whitlam, asked him to come up with something similar for Australia.

He duly produced a blueprint for an accident compensation scheme which also incorporated sickness incapacity.

Mr Whitlam was mightily impressed, with the result that the two became close friends.

But before Mr Whitlam had a chance to implement it he was controversially sacked as prime minister by Governor General John Kerr.

The pair remain good friends to this day, but the 95-year-old Australian is in failing health and there are concerns for his wellbeing following the death of his wife Margaret a few months ago.

Sir Owen describes him as a man of "immense intelligence and ability who had a real vision for his country".

The New Zealander knows only too well the grief his friend is suffering as a result of his wife's death.

Sir Owen's wife, also called Margaret but known as Peggy, died more than a decade ago, leaving a vast gap in his life.

Despite being five years short of becoming a centenarian, he still lives by himself, surrounded by the memorabilia of a very full and active life.

By today's standards he is "old school", polite and courteous to a fault, even serving coffee and cake to this reporter from a tray that he carried into the living room.

Getting him to talk about himself is no mean feat as he is a modest man who is clearly uncomfortable at saying anything that might be construed as self-serving.

He even drew the line at having his photograph taken alongside a painting of the naval vessel he served on during World War II.

It was while serving as a lieutenant commander on active operations in the Adriatic that he won the Distinguished Service Cross for gallantry, later working as a liaison officer with the Yugoslav partisans.

After the war he returned home and practised law before being appointed a judge of the former Supreme Court (now High Court) in 1961 and going on to become president of the Court of Appeal from 1981 to 1986.

He later became president of the Law Commission and a Privy Councillor and member of the Judicial Committee of the Privy Council.

By any standards it was a stellar judicial career marked by his world-leading reforms of accident compensation and ground breaking work to even up the division of matrimonial property, something that was influenced by his “rather wonderful wife”.

During his time as president of the Court of Appeal he became involved in the Air New Zealand Erebus disaster, presiding over a judicial review of certain findings in the controversial Mahon report.

Justice Peter Mahon headed a Royal Commission of Inquiry into the crash and accused Air New Zealand of a conspiracy and a cover-up, saying that he had listened to “an orchestrated litany of lies” from the airline.

Not surprisingly, the airline took umbrage at this and went to the Court of Appeal.

Sir Owen and the four judges who sat alongside him took Justice Mahon to task, concluding that by “not directly confronting the alleged conspirators with his grave findings of concerted misconduct" he breached the laws of natural justice.

Today, Sir Owen is reticent about discussing the case, not wishing to cause distress to the widows and families of the late Justice Mahon and Jim Collins, the captain of the doomed airliner.

But he stands by his findings and his firm belief that the Chippindale report into the accident, which largely put it down to pilot error, got it right.

“There was a chain of unfortunate events which contributed to the disaster but the ultimate cause was the captain’s decision to descend below 16,000 feet when there were written instructions, actually carried in the flight deck, prohibiting this.”

As with almost everything he says Sir Owen delivers these words with the gravitas of the Bench, his eyes locked on his audience daring them to avoid his gaze, but it’s not done in an intimadatory or hostile way.

It is the pose of a man speaking with the authority and conviction of someone who knows his subject inside out and does not wish to be trifled with.

But sometimes appearances can be deceptive and  there is, by his own admission, a sentimental and deeply caring side to the man when it comes to the welfare of his fellow human beings.

If there’s one thing lacking in society and the law today, he says, it is mercy.

“When the monarch takes the various oaths at his or her coronation they say 'in mercy I will do these things'.

“To me, that means the society we live in ought ot make its decisions in a just, balanced and merciful way, especially as far as the law is concerned.

“I think any judge should be left with some kind of discretion to exercise mercy, but we’re getting to the stage where no judge would be prepared to do this because it would probably be overruled in the Court of Appeal.

“Why should we feel it necessary to have sentencing put into a moral straightjacket?”

To illustrate his point, Sir Owen recounted the story of an offender who contacted him some years after appearing before him in the High Court.

“I got a telephone call from the man who said 'you won't remember me, but I did something wrong and they told me I would be going to prison for two years'.

“'To my amazement, you discharged me without conviction and ordered me to pay $2000 towards the cost of the prosecution'.”

The man then explained that as a result of this he had turned his life around and now held a position of great trust and responsibility.

It is a story which still resonates with Sir Owen all these years later.

“To salvage a life like that is pretty important, isn’t it?” he says. “It makes you feel quite good when that happens.”

His son is Justice Peter Woodhouse, QC, a judge of the High Court.

His daughter, the writer and Auckland District Health Board member Susan Buckland, says what her father did on that occasion is typical of his humanitarian nature.

“Fairness is central to dad’s view of life,” she says. “And it is behind his life-long desire to try and help those less able to help themselves.

“I can remember the house being awash with files and papers as he pressed on through multiple midnights to finish his ACC report and to condense the complexities of a revolutionary proposal into a lucid document that could be easily read and understood.
“Meanwhile, he  signs off notes to his grand- and great-grandchildren with 'be kind and good', and is not beyond reminding his middle-aged children to be the same.”

In most respects, the eminent jurist is more than satisfied with the administration and application of law in this country and believes the newly created Supreme Court is a success.

“It takes a while for this kind of change to settle down but I think on the whole those who have been appointed to the Supreme Court have done well.

“I was told by Lord Diplock when I was sitting beside him in the Privy Council that he thought that little New Zealand had a particularly strong appellate court.

“In fact, he said he didn’t think it was outdone by any of the others in the Commonwealth so I have no doubt we have the right people now to do this.”

Sir Owen also believes it is probably inevitable New Zealand will eventually become a republic, although it is not something he personally favours.

“I know that in some ways it sounds a bit absurd to have a head of state on the other side of the world. But for myself, I think the present system is a pretty efficient and sensible one that doesn’t cost us anything.

“To put a different one in place is going to be very awkward.

“How are you going to appoint that person? Is it going to be done the way it is at the moment by the people who happen to be in government or should there be an election of the president of the country?

“Yes, I know what we have now is absurd in some ways, but for me I’d rather leave sleeping dogs lie.”

And on that note, it was time to take leave of Sir Owen Woodhouse, ONZ, KBE, KB, DSC - but not before he pressed a very fine bottle of shiraz into my hand.

“I know you will be cross with me for giving you this, but please accept it,” he said, locking me once again in his sights.

Accepting gifts is a cardinal sin according to the journalists' training manual. But it offers no advice on what to do when they are offered by of one of New Zealand’s most distinguished High Court judges.

After all, their word is sacrosanct, be it in the courtroom or their place of abode, and I had no option but to thank him profusely and disappear down the street, bottle in hand.  

READ ALSO: ACC architect Sir Owen Woodhouse dies aged 97 - Key pays tribute

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