The ACC reports

August 23rd, 2012 at 4:04 pm by David Farrar

Two reports out today on ACC. One from the Auditor-General and one by the Privacy Commissioner. Both individually and jointly they are fairly damning. Some extracts from the AG:

When Ms Pullar met Mr McCliskie in September 2011, the issues that she raised with him were arguably general issues about ACC, rather than (or not only) specific to her claim. However, the matters that ACC investigated because of Ms Pullar’s approach to Mr McCliskie focused on its handling of her claim.

In our view, the matters that Mr McCliskie recorded in his email of 14 September (illegal access to files, incompetent ACC specialists, fraudulent activities by ACC staff) are areas of risk with which a Board should be concerned. That was Mr McCliskie’s original reaction.

We looked for some reporting back to the Board, or to Mr Judge and Mr McCliskie, on the issues raised by Ms Pullar. This included issues raised at her meeting with Mr McCliskie, in her emails to Mr McCliskie of 14 and 15 October, and in the list of 45 issues presented at the 1 December meeting. We did not find any evidence of this.

We have some observations about why ACC might have failed to appreciate the risks arising from the privacy breach and the allegations of systemic wrongdoing.

In this environment of change and transition, Ms Pullar’s allegations, and the privacy breach in particular, were not recognised for the risks they presented. We have no view as to whether Ms Pullar’s wider allegations are in any way justified. We have not inquired into
those matters. However, we consider that accusations of systemic illegality and fraud are issues that any public sector organisation should take seriously.

Both Directors acted unwisely in my opinion, and as the AG noted they failed to seperate out the operational issues raised by Pullar (which were for management) and the more general allegations of wrong-doing, such as privacy breaches.

I can’t do quotes from the Privacy Commissioner report as some idiot has set the pdf, so you can not copy and paste text. Grrr, that pisses me off. Why would you set a public document to not allow copying extracts. Don’t you want the extracts to be accurate rather than retyped?

The overall assessment though was ACC had no strategies in place to properly manage data and privacy, which led to a history of privacy breaches and complaints.

I would note that ACC Minister Judith Collins has already seen a significant personnel change at board level, and instructed ACC to focus on restoring confidence in how it deals with data and privacy.

The response from Judith Collins is above. I think the reports vindicate the decisions she has taken to date.


Collins on ACC and privacy

August 13th, 2012 at 10:00 am by David Farrar

John Hartevelt at Stuff reports:

ACC Minister Judith Collins wants the state insurer to start sacking staff who breach a new “zero tolerance” policy on privacy breaches.

A furious Ms Collins has revealed her astonishment at the failure of ACC to include privacy among nine of its “top priorities”.

“I’m not going to sit back and let one of the most important government entities [that] we have let people down time and time again around things such as privacy.

“They have to act in the way that I expect them to act. When I go around the branches, most of the people there absolutely understand it.

“But, actually, a few are letting them down and when we have things like the audit and risk committee having nine priorities for the year and not one of them [being] privacy, how can that be acceptable given everything else that’s going on?”

Ms Collins’ comments come as figures from ACC show 11 staff members have been reprimanded over “serious misconduct” since 2010.

The breaches involved: theft; fraud against ACC or a claimant; serious misuse of ACC property, including information and systems; dishonesty; disobeying a lawful and reasonable instruction from a manager; and any act that had the potential to bring ACC into disrepute.

Nine staff were sacked as a result of the breaches and two were given final written warnings.

Ms Collins said while the serious misconduct cases were “a shame”, she was pleased they were taken seriously and not covered up. “I think that they need to be – and they are now – taking on a culture of zero tolerance to privacy breaches, in particular,” she said.

Police had a “zero tolerance” approach to staff accessing private details about people without good reason.

“People lose their jobs over it, and that’s something that I think ACC needs to have, which is that we have people’s very personal information, we should treat it with respect and should understand it’s a very privileged position.”


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Gareth Morgan on ACC

July 10th, 2012 at 3:00 pm by David Farrar

Gareth Morgan writes at NZ Herald:

Sir Owen doesn’t like the fact that we have different levies to reflect different accident rates in different industries or with different kinds of vehicles.

His assumption is that people naturally take all care necessary and don’t need financial incentives – higher levies – to self-manage their risk. Sadly that is a sweeping assumption that has been shown to be wrong.

The history of the world teaches us that incentives matter.

My own experience with the wonderful world of ACC over the last 18 months has involved trying to understand what has been driving the bills for on-road motorcyclist injuries through the roof.

That work has revealed that we could do this a lot better. Already the annual relicensing bill for larger motorcycles is more than for cars, and that’s despite the fact that the average bike traverses way fewer kilometres a year than the average car.

In fact research we’ve done at the Motorcycle Safety Advisory Council indicates that the risk of serious and expensive injury on a motorcycle is around 45 times higher per person-kilometre travelled as it is for occupants of other vehicles.

Ouch, that is a huge difference. It is right then that motorcyclists should pay higher premiums, rather than motorists subsidise their accidents.

It gets worse. We also found that up to 31 per cent of our injuries arise from incidents involving no other vehicles. In other words we do this to ourselves because we can’t handle the road conditions.

Now of course we can blame the road as some of us are wont to do, but the reality is in most cases it’s pure incompetence or lack of self-management.

Any charging regime that gives riders an incentive to ride within their level of competence, to self-manage risk by wearing better protective clothing for example, or even lifting competency levels has to be a win-win doesn’t it?

Sir Owen might say no, that all care and no responsibility is the right ACC model and motorcyclists’ natural preference for self-preservation is sufficient.

But he’d be wrong and the rocketing bill is the evidence.


At present we are charged for our ACC cost on a per-bike basis. Even though you can only ride one motorcycle at a time, the more bikes you have the more you pay.

It’s some sort of wealth tax I guess but it bears no relation to the risk of injury.

Of course we do the same with cars but given that the cost to ACC of motorcycling injuries is way more per rider than it is for other vehicle types, this disjoint between risk and negative reward (the premium) is material.

The conclusion I reached, once I got to grips with what was happening in the motorcycling injury scene and what is driving ACC’s bills in this area, is that it’s pretty obvious that the levy should be charged per rider – say through an annual rider licence renewal fee.

This makes sense to me. Not sure about the practicalities, but ideally all of the vehicle insurance funding should be based on the driver, not on the number of vehicles.

Here’s a first pass at what I’d do:

* Introduce a no-claims bonus – the annual rider licence fee should be discounted for the number of successive years you have maintained your motorcycle licence but had no ACC claims.

* An excess – there needs to be a limited discount on the annual rider licence fee available to the extent you are prepared to self-insure. All riders should be liable to pay say the first $200 of any ACC claim – this at least gets rid of expensive but trivial claims. Then as well as that, a discount should be available, say up to 10 per cent on your licence fee, if the rider is prepared to foot the bill for a further $500 of injury claims.

* A break in maintaining your annual rider licence renewal should trigger a user-pays relicensing process. Obviously by imposing the ACC levy via an annual renewal of your riding licence there is a strong incentive for riders who aren’t intending to ride not to renew that class of their licence. That’s a good thing because it enables the gate to be controlled for returning riders to ensure their competency levels are adequate. Injuries to returning riders have been a source of much angst and expense. The extent of the relicensing required should depend on how long a break from riding has been taken.

* A limit to the income replacement component to ACC’s entitlement claims can be opted for by the rider when they relicense each year. It is a fact that riders with high salaries who get injured cost us a hell of a lot more in the levies we pay. Why don’t we put a limit on income replacement, or impose an additional levy if you want income replacement above a certain level? That would reduce significantly this component of the entitlement claims made on ACC that the rest of us are compelled to fund.

All good ideas worth considering.

Under this regime those who got their motorcycle licence years ago and haven’t ridden for yonks, or at least relicensed every year, face hurdles getting back on the bike. We know returning riders are a greater injury risk and we need them to be adequately competent for the bike they get on when they return.

By switching from ACC levies being imposed on the bike to imposing them on the rider we can control the gate on who is competent to ride a motorcycle. A five-year break, say, would require a full testing process again. Shorter breaks might demand a rider training course.

Yes this is a further assault on Sir Owen’s incorporation of accident insurance within the social welfare regime.

But then unbridled social welfare without limits, where accountability is a dirty word, is a very poor piece of social engineering anyway.

The key with ACC is to achieve the benefits of avoiding litigation, so retaining the benefits of universal entitlement but all the while providing incentives for self-management.

Hear hear.

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Herald on ACC

July 2nd, 2012 at 1:00 pm by David Farrar

A sensible editorial from the NZ Herald:

The careless language and loose accusations in ACC’s internal exchanges were probably the reason the minister took drastic action. It was an insight into a culture that has been been too hard on some categories of claim, especially those requiring surgery, as Herald investigations had found. Too many rejections of those claims have been reversed on appeal.

But it would be too easy to replace that culture with one at the other extreme. ACC cannot be an automatic entitlement with no questions asked. It is an unusual system, copied by no other country, in its uncritical attitude to the cause of injury. “No-fault” compensation may be a good way to save lawyers’ fees but the same unquestioning principle could not be applied to medical assessments. When ACC seeks a second opinion, though, its medical officers must not influence it as they clearly tried to do in the Pullar case.

ACC is funded by employers, motorists and taxpayers as insurance against sudden disability. It offers cover that ordinary commercial insurance provides elsewhere. Since New Zealand has to be competitive it is vital that ACC’s costs are not out of line with workplace insurance in other places. It has to ensure it is paying out only for genuine injuries and for loss of income only for as long as the claimant is genuinely unable to work.

Exactly. You don’t want ACC assuming all long-term claimants are rorting the system, but equally you don’t want ACC just paying out lifetime earnings to anyone who thinks they are eligible.

As a public insurer, ACC has to be rigorous.

But it should also be sensitive, fair, considerate and dignified in its dealings with people and its discussions about them.

That is as far as the culture change need go.

It is a tough balancing act, but that is it – to be rigorous and fair.

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Neuropsychological testing and ACC

June 29th, 2012 at 10:00 am by David Farrar

Vernon Small at Stuff reports:

ACC’s methods are again under the spotlight after it confirmed using “neuropsychological and psychological assessments” to help decide if claimants were being straightforward.

That came to light yesterday after claims it uses “lie detector tests” to see if claimants are telling the truth.

Claimant Margaret Read told Radio New Zealand that ACC would not believe her statements of brain and spinal injuries, nor evidence from specialists, and applied a lie detector test.

An ACC spokeswoman declined to comment on an individual case, but said the no-fault insurer did not use lie detector tests.

Asked if any of its processes could be interpreted as a lie detector test, she said that was subjective. “What seems to be being referred to is the use of measures in neuropsychological and psychological assessments to provide some indication as to whether the client is presenting in a straightforward manner; that is, not under- or over-reporting their symptoms,” she said.

“Neuropsychological assessments administer tests which look at the client’s cognitive functioning (thinking functions such as language, attention, speed of thinking, memory, flexibility in thinking and problem solving skills).”

They were used to help indicate whether “clients are either minimising or exaggerating their emotional symptoms such as anxiety and depressive symptoms”. This was also to determine whether the assessment results truly reflected a client’s current emotional functioning.

When a client displayed evidence of a lack of effort, under-reporting or exaggeration of symptoms, ACC would try to determine why “and then provide the appropriate help the client needs to progress in their rehabilitation”.

Labour ACC spokesman Andrew Little said he was “gob-smacked” by the practice, which was evidence of the distrust ACC had for claimants. “It sounds like lie-detecting to me.”

I’m sorry but this is getting rather hysterical. This happens to be an area I know a wee bit about as I am related to a neuropsychologist. Neuropsychological assessments of head injured ACC clients has been happening since at least the 1980s. This is nothing new or unusual.

The assessments are not lie detector tests. They test damage and capacity of cognitive ability.

Of course the tests are designed to measure actual ability and damage, and can detect if people are exaggerating damage. That is why you get expert medical assessments. But that is not the primary purpose of the test, which is to assess capacity. It is like saying seeing a general practitioner is a lie detector test about your back pain.

Again these tests have been done for several decades, as far as I know.


Questions Radio NZ did not ask

June 28th, 2012 at 2:00 pm by David Farrar

Radio NZ did an interview with a Dave Wooley on ACC this morning. I suspect they are going to interview a disgruntled person a day. Now I think it is fine to interview disgruntled people with ACC, but media should be balanced, and actually ask questions, not just allow one side of the story – especially as ACC can not talk about individual cases in the media generally.

Mr Wooley had a work related accident in 2006 and has just gone off ACC compensation. Radio NZ said his family of six now live off his wife’s salary of $26,000. For a start this is clearly false. They would get WFF of $363 a week (net) on top of that, plus possible accommodation allowance.

They also reported he gets $23 a week benefit and claims that half of that is $11.50 a week to live on. Radio NZ reported this as fact, and never asked him about WFF.

Not only did Radio NZ fail to ask about WFF, and allowed the repeated assertion of a family of six surviving on $26,000 a year, they did not ask a single question about why he was no longer getting ACC. No question about what the medical assessor determined.  No question on what the independent review by Disputes Resolution Service found. No question about anything – just allowed him to say whatever he likes unchallenged.

I have said that some parts of the ACC culture do need changing, and they do. But this does not mean you accept without challenge every claim by every individual who thinks they should receive ACC support. That is not journalism. Next time I hope Radio NZ at least attempt to ask pertinent questions.

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The ACC $250 offers

June 28th, 2012 at 12:00 pm by David Farrar

Some of those who have been offered $250 compensation from ACC for the privacy breach, have said it is not enough and they want more.

The problem is that it is not really ACC that is paying them $250. It is me and you, and employers and employees all around the country. It is not the staff or managers who made the breach, or the directors of ACC.

I don’t like my premiums having to go on privacy breach settlements. I pay them to help injured workers. Why should I have to fund mistakes by ACC staff?

Surely I should be given the choice to choose an alternative workplace accident insurer? Why should I have to keep funding a company that is a monopoly, and one that I can’t withdraw my business from?


ACC and Welfare

June 23rd, 2012 at 12:00 pm by David Farrar

The Herald reports:

The proportion of long-term ACC clients moving on to benefits has surged since the corporation adopted a tough new stance, which has fuelled allegations that they are being forced off compensation before they are rehabilitated.

That may be the case, it may not. Let’s look at the numbers.

But yesterday’s figures show that the proportion of long-term claimants leaving ACC and going on to health-related, unemployment or domestic purposes benefits rose sharply from early 2009.

In the five years to 2008, the proportion going on to benefits was 12.1 per cent, but during 2009 that rose to 16.4. In the first five months of 2010, the most recent data held by ACC, the proportion rose to 19.4 per cent.

ACC figures also showed the corporation had reduced the number of long-term claimants on its books by 3644 or 25 per cent to 10773 in the three years since June 2009. That reduction is well ahead of ACC’s targets.

Okay so 3,644 people have gone off ACC, and 19.4% have gone onto welfare. First of all that presumably means 81% or 2,937 are now in employment which is a good thing.

Of the 707 who have gone onto welfare, the data suggests 441 would have been on welfare under the previous trend. That means an extra 266 have gone onto welfare.

At a macro level, an extra 266 on welfare for an extra 2,937 back in work seems pretty reasonable. But this shouldn’t really be about the macro level. In an ideal world no one would be declined ACC support who genuinely is unable to work due to an injury, and no one would remain receiving ACC support who is capable of resuming full-time work after their injury. There will always be some in both categories, and the aim should be to minimise both.

Of the 266 extra people on welfare, a key thing might be what benefit have they gone onto. If they have gone onto an invalid’s benefit or even a sickness benefit, then it suggests there could well be a problem. If however they are on the unemployment benefit, then that may just be because the jobs market is still subdued.

So that data is interesting and worth investigating more. But it is not conclusive of itself.

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Very Little proof

June 21st, 2012 at 2:00 pm by David Farrar

The Herald reports:

 ACC bosses laid a police complaint alleging blackmail by claimant Bronwyn Pullar and Michelle Boag after being pressured by their minister Judith Collins, Labour MP Andrew Little says.

In a general debate at Parliament this afternoon Mr Little claimed that during a meeting between ACC Ralph Stewart, chairman John Judge and Ms Collins in Auckland the day after a massive privacy breach at ACC was revealed, Ms Collins told the two men to “go after Michelle Boag”.

“She urged and pressured and pressed the chief executive and chairman of the board to make a complaint to the police and that’s what they did”.

It seems Andrew has learnt one lesson. He has refused to repeat this claim outside the House, so is hiding behind parliamentary privilege.

If he had been able to produce even one shred of evidence for his previous claims about the Minister, then one might give him the benefit of the doubt on this issue. But we’re all still waiting for his proof.

Anyone can get up in the House and claim anything about another MP. They have a legally privileged right to do so. but it is an abuse of that right if you do not have some proof for your assertions.

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ACC levies

June 19th, 2012 at 1:00 pm by David Farrar

Vernon Small reports:

ACC is in line for a major shake-up, with the two major parties eyeing changes that could see premiums plunge by up to 25 per cent.

Labour is rethinking its ACC policy, and could scrap the fully funded model to revert to a “pay as you go” approach – and yesterday ACC Minister Judith Collins refused to rule out a similar move.

During last year’s levy review, the Cabinet agreed to “a review of the funding policy for the ACC accounts and the reasons for the fluctuations in the projections of the ACC’s accounts”.

Ms Collins said ministers were looking at the funding policy “which could include the stability of the scheme, good process for levy setting and the impact on the economy”.

“We’re not ruling out anything at this stage.”

Labour leader David Shearer said a possible change had not yet been discussed by caucus.

But the party’s ACC spokesman, Andrew Little, said it was time for a public debate about funding options, with recent controversy highlighting ACC’s overemphasis on lowering costs rather than meeting claimants’ needs.

Under full funding the corporation builds up reserves to cover the current and future costs of existing claims, and is aiming to reach that goal by 2019.

Under a pay-as-you-go approach, it would need only enough income in a year to cover annual claims, plus a possible buffer for unexpected costs or disasters.

Mr Little said his “back of the envelope” calculation was that levies could be cut by 20 per cent to 25 per cent if there was a move away from full funding.

While it would be nice to have lower levies, such a move is a false economy which really just leaves the next generation with a huge unfunded liability. Levies should reduce because ACC is managing to rehabilitate people back to work faster, not due to accounting changes.

ACC’s revenue for a year should roughly match the liabilities it incurs in that year. That way there is security for long-term ACC recipients, and we don’t leave a huge bill for future generations. The benefits of paying for the full costs as they incur is that we can then make rational decisions about what ACC covers. When that cost is partially hidden by leaving it to the next generation, it encourages reckless spending.


The Press on ACC

June 15th, 2012 at 11:00 am by David Farrar

The Press editorial:

Some change at the ACC is plainly necessary. The row between Pullar and the organisation intensified when ACC accidentally sent her an email that included files containing confidential information about many other ACC clients.

It has since emerged that such inadvertent disclosure of private information has occurred on a number of occasions.

Given the amount of highly sensitive information the ACC holds about individuals, it seems extraordinary that, so many years after email became the most common means of communication, the organisation still cannot manage it without this kind of blunder.

Other government entities that hold confidential private information – the Inland Revenue Department and Work and Income, for instance – seem to be able to do so.

Some comments made in messages between ACC personnel handling Pullar’s case have also emerged that indicate a kind of cavalier dismissiveness towards her.

These remarks have understandably been seized on as reflecting ACC’s general attitude towards its claimants.

There is no evidence that this is true but even if the comments are not at all widespread, they are deeply unprofessional and should not be tolerated.

Absolutely. I am amazed the person who made them is still working there.

Whatever other shortcomings might have occurred during his chairmanship, Judge has done that. ACC’s net deficit last financial year was reduced from $10.3 billion to $6.7 billion and it is on target to meet its legal obligation to be fully funded by 2019.

Financial viability is crucial if ACC is to survive as a no- fault accident compensation system and meet its obligations to claimants.

It must be run as a sound business. It is right, for instance, that claims are examined rigorously so that they may be dealt with fairly.

Any “change of culture” that would turn ACC into some sort of soft-hearted arm of the social-welfare industry, as some critics appear to imply, would be a backward step.

As an employer I endorse this also.

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Clifton on Little

June 15th, 2012 at 9:00 am by David Farrar

Jane Clifton writes:

There is one thing worse for an Opposition MP than getting knocked back on an application for a snap debate in Parliament on a subject embarrassing to the Government – and that is being granted a snap debate when you are not expecting it and suddenly having little to say.

That was the fate yesterday of Labour’s Andrew Little, who must have felt like the dog that chases cars, but cannot think what on earth to do on the day one obligingly stops and surrenders. He had to get up and speak about the Government’s ACC woes for 15 long minutes, and by the time he had lamented the running down of the corporation, upbraided the Government for being beastly to claimant Bronwyn Pullar and her friend Michelle Boag, and demanded ACC Minister Judith Collins be sacked, he had started to repeat himself rather forlornly.

Not a good look to call on the Minister to resign for doing exactly what you asked her to do!

But, in time, the fabled Labour machine swung into action. Frontbencher David Parker took out a pad and started scribbling large-print notes, which he passed behind him to Trevor Mallard, who appeared to proof-read them, before passing them on to Mr Little, who quickly glanced down at each sheet of paper and, without missing a beat, introduced a new aspect of the Government’s perfidy. Socialism in action.

When finally his ordeal was over – no-one was mean enough to move an extension of time

Oh dear having to have Parker write your speech and Trevor vet it.  They probably stepped in after he said this:

Then when the heat gets really tough she starts suing her political opponents, because that is the best way she knows to shut them down. This is not a Minister for ACC worth speaking of. This is not ministerial conduct that we understand in a Western democracy. This is shocking stuff. If you asked anybody else in the world “Is there a country where a Minister of Justice, who is charge of the courts, is using those courts to sue her political opponents?”, you would think we would be talking about somewhere in Africa, or maybe a Pacific Island. 

I guess Andrew isn’t going to be Foreign Affairs Spokesperson after those comments. As I have commented, he seems more focused on stopping the lawsuit against himself (which he could have stopped with a simple retraction and apology), than on the actual ACC issues and how they impact on New Zealanders.


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Silliness from Little

June 13th, 2012 at 1:35 pm by David Farrar

Stuff reports:

Cabinet minister Judith Collins should be the next scalp in the ”ACC crisis”, Labour’s Andrew Little says.

Chief executive Ralph Stewart quit this morning following a boardroom clean out which has claimed chair John Judge, deputy John McCliskie and another director Rob Campbell.

That is either silliness by Andrew Little, or him trying to get escape the consequences of the defamation suit over his earlier remarks.

The Opposition has called for the Chair and CEO to go. That is exactly what has happened. They should be thanking the Minister for actually taking action to fix ACC’s culture.

Collins has been the Minister since December 2011. The Board and CEO all pre-date her.

Andrew may not like the fact that the Minister is suing him. His call for her to resign has no basis in substance.

I think it shows that Little is more concerned about utu against the Minister for suing him, rather than genuinely wanting change at ACC.

UPDATE: Stuff reports:

However, Green party MP Kevin Hague said Collins must stay on the job.

The “sick entitlement culture” in the House was the “big picture issue.”

“The minister who presided over that, Nick Smith; the hatchet man that he appointed, John Judge; and now Ralph Stewart – [their departures] were necessary steps to begin the process of refreshing the organisation.

“Now, in terms of Collins’ culpability around that – she wasn’t the minister that required all those changes. She has actually dealt to Judge, although I would have preferred a more explicit sacking.

“She’s clearly said ACC’s privacy sackings are unacceptable and must change and that’s actually a pretty good start. She may be the minister to do all this.”

I think this shows the stark differences between Greens and Labour. Kevin Hague actually cares about the people who have had a bad experience with ACC. He want to improve things – not just to score political points. This is in stark contrast to Labour’s Little who sees ACC purely as a political issue to help Labour gain their rightful place governing the masses.

I’ve never had a problem congratulating Labour Ministers when they do something right. Little seems incapable of doing the same with Collins.

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More ACC directors to go

June 13th, 2012 at 10:00 am by David Farrar

Stuff reports:

A cleanout of the ACC board will continue with two more directors to be released from the top of the troubled state insurer.

Chairman John Judge was effectively shown the door yesterday after political pressure over the Bronwyn Pullar case.

The Dominion Post has learnt that his deputy, John McCliskie, and another director, Rob Campbell, will also be replaced.

ACC Minister Judith Collins confirmed last night that the terms of five board members expired in March, and three would not be renewed.

“I think what you’ll see is a change in direction. The fact is, we have board members whose terms have expired and I’m taking the opportunity to bring in people who I believe will be able to help change the direction,” Ms Collins said.

It will be interesting to see who the new Directors are. They have a challenge ahead of them.

Ms Collins said she had seen a legal opinion prepared by Hugh Rennie, QC, for Mr Judge, which backed the decision to refer Ms Pullar to police over her refusal to return private details about thousands of other ACC claimants she was accidentally sent and blackmail claims.

“I don’t know what else they could do, actually, on the information that they had. They had a situation where the claimant wasn’t giving the information back to them at that stage…

It would be useful for ACC to release this legal opinion. Most importantly so it can be assessed whether it is based on the seemingly false report of the December meeting – or was written after that recording or transcript was made available.

Also if the intent was simply to get the documents returned, then surely the correct course of action would be to have informed the Privacy Commissioner of the privacy breach and ask her office to assist in getting the information deleted by Pullar. Of course they never informed the Privacy Commissioner of the breach.


ACC Chair goes

June 12th, 2012 at 2:47 pm by David Farrar

Judith Collins has announced:

ACC Minister Judith Collins today announced that Ms Paula Rebstock will be Acting Chair on the ACC Board until a new Board Chair is appointed.

To complete the financial year for ACC it has been agreed that Mr Judge will remain as Chair until 30 June 2012.

Mr Judge takes up the role of Chair of the ANZ National Bank on 23 June 2012.

Ms Collins says Mr Judge’s new role is a significant appointment and will require even more of his time than his current role as a director.

“I would like to thank Mr Judge for the contribution he has made during his time as Chair of the Board.

“I particularly acknowledge the role he has played in returning ACC to financial health.

“I believe privacy and information security is now the number one priority for ACC and it must refocus on rebuilding public trust and confidence.”

It is obvious that the Chair’s resignation is not just about his new job as Chair of ANZ National Bank. It is good to see the Minister not accepting the status quo as acceptable. And to be fair to John Judge, he did play a major role in restoring ACC to financial health.

ACC has a tough job at the best of times. There definitely are a number of people who try tot rort the system. We’ve seen some of them prosecuted in the courts, and their numbers are not insignificant. As an employer who pays many thousands in ACC levies, I do want ACC to be vigilant and not a soft touch.

However that doesn’t mean treating every long-term claimant as a rorter or faker, and especially not interfering with independent medical assessments, and also not using language such as we saw on 60 minutes. It is obvious there are parts of ACC that has a culture problem, and they also have serious privacy issues.

The focus on rebuilding public trust and confidence is the right one.

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60 minutes

June 11th, 2012 at 12:00 pm by David Farrar

Did you watch 60 minutes last night? What were your impressions?

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Questions for ACC

June 5th, 2012 at 5:14 pm by David Farrar

The Herald further reports:

The Accident Compensation Corporation maintains “a threat had been made” by former National Party insider Bronwyn Pullar at December meeting at which a massive privacy breach was discussed.

Police this morning confirmed they would not press charges against Ms Pullar in relation to the meeting where ACC managers claim Ms Pullar threatened to go to the media about the privacy breach unless she was given a two year guaranteed benefit.

“After careful consideration of the evidence now available and a separate legal review of the facts we have determined that no offence has been disclosed,” Police Assistant Commissioner Malcolm Burgess said in a statement. …

An ACC report on the meeting found Ms Pullar “proposed in relation to her own individual case she would like to negotiate a guaranteed benefit payment for two years”.

“She made threats that if her demands weren’t met, she would not return the information and would inform the media.”

ACC Chairman John Judge this afternoon said he was completely satisfied the report was a “complete and accurate” account of what took place at the meeting.

“Our staff at the meeting considered that a threat had been made… They felt pressure.”

ACC chief executive Ralph Stewart said the corporation had “zero tolerance of wrongdoing and we felt obliged to seek an independent opinion to confirm whether there was wrong-doing that was sufficiently serious for Police to lay charges”.

“Should ACC be confronted with a similar situation the same action will be taken,” he said.

I find this situation deeply suspicious, and think the Minister should start looking for new board members. Here’s some questions I have:

  1. If ACC felt there was blackmail at the December 2011 meeting, why did they wait until March 2012 to complain to the Police? Surely they should have rushed down there the next day, rather than three and a half months later.
  2. Why did they only complain to the Police, after media stories of their privacy breach was made public? If the complaint was not made to discredit the complainant, why was the complaint made just days after the media story?
  3. Why did ACC make public their Police complaint? Have they ever publicised any other complaint to the Police?
  4. Does ACC consider a disgruntled complainant who threatens them with bad publicity is breaking the law in doing so? If so, then do they consider it against the law to criticise ACC publicly?
  5. Can ACC reconcile the report from their managers about the meeting, with the tape recording made of the meeting?
  6. Can ACC point to what part of the transcript of the meeting constitutes blackmail as they alleged?
  7. Considering the Police have stated that “no offence has been disclosed”, do they not accept they were wrong to complain to the Police?
  8. Did ACC  seek any independent legal advice before deciding to lay a complaint with the Police? If not, why not?
  9. Does ACC condone the use of complaints to the Police in future, if a customer “pressures” staff?
  10. Once again, why did they wait three and a half months to complain to the Police, and only after negative media stories emerged on their privacy breach?

If I was on the ACC Board I would be demanding management answer these questions.

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Pullar not charged

June 5th, 2012 at 11:50 am by David Farrar

Adam Bennett at NZ Herald reports:

Police will not press charges against Bronwyn Pullar, the former National Party insider at the centre of a massive privacy breach at ACC, the Herald understands.

If this is correct, then I think it will raise issues around whether the complaint to the Police was in good faith, or an attempt to punish a persistent critic of ACC. I personally won’t jump to conclusions until at a minimum the Police give details behind their decision, and preferably the full file is released publicly.

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Headline v substance

April 30th, 2012 at 2:48 pm by David Farrar

The headline:

Key questions Pullar ACC recording

The lead para:

A recording of a meeting between ACC management and whistle-blower Bronwyn Pullar that reportedly clears Ms Pullar of threatening the corporation has been questioned by Prime Minister John Key.

Further down:

Speaking to TVNZ’s Breakfast today, Mr Key raised questions about the recording.

“Yes there appears to be a difference of opinion although, as we know with recordings, that it might not be the entire recording,” he said.

“I’m not saying it is or it isn’t, I simply don’t know, but the important point there is that there are three investigations going on … and I’m sure they’ll look at all of the information that’s there.”

I have to say I take that not as “questioning” the recording, but just stating the obvious – relying on media reports based on recordings is not the same as a first hand inspection – as the Police and Privacy Commissioner will do.

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The ACC recording

April 30th, 2012 at 7:52 am by David Farrar

Phil Kitchin at Stuff reports:

A recording of a critical meeting between senior ACC managers and the whistleblower who exposed a massive privacy breach reveals the corporation misled its minister and the public.

The corporation has alleged that client Bronwyn Pullar threatened at the meeting to go to the media unless she was given a guaranteed two-year benefit.

It also alleged she said that she would withhold details of the breach involving private details of 6500 other clients – including sexual abuse victims – if her demands were not met.

Once details of the privacy breach were revealed by The Dominion Post, the ACC referred its extortion allegations against Ms Pullar to police.

However, a recording of a key meeting in December between Ms Pullar, her support person Michelle Boag – a senior National Party figure – and two ACC managers is at odds with the corporation’s claims that were included in a report ordered by ACC Minister Judith Collins.

The ACC was given a transcript of the meeting more than three weeks ago, but has refused to correct its report.

Ms Pullar said it was outrageous that, having been provided with the recording, the corporation was refusing to correct a “blatant lie” on a public report. …

The Dominion Post has heard the recording and had obtained an accurate transcript of it. It contradicts several key elements in the ACC report.

The transcript shows:

Neither Ms Pullar nor Ms Boag threatened to go to the media or withhold the data if Ms Pullar was not given a guaranteed two years’ compensation.

ACC’s statement that it was not given specific details of the breach is misleading. ACC was told the data was “highly sensitive information”, including names and details of 6500 claimants.

If ACC have filed a complaint with the Police based on incorrect information, then this is a serious matter.

But Ms Pullar said that the allegation was a misuse of power and “an attempt to smear Michelle Boag’s and my reputation”.

“Had I not recorded this meeting, it would have been ACC’s word against mine.”

Media lawyer Steven Price said the tape was recorded legitimately because Ms Pullar was a party to the conversation at the meeting.

Parties to a conversation cannot be guilty of illegally recording a conversation using an interception device.

I look forward to the completion of the various reports and inquiries so we the public get a better understanding of what actually has happened.

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Will Mallard and Little promise to quit also?

April 5th, 2012 at 10:00 am by David Farrar

Stuff reports:

ACC Minister Judith Collins has promised to quit if she or her office is found to have leaked an email at the centre of a spat over an ACC claimant as the auditor-general launches an investigation into governance at the state insurer.

So will Mallard and Little resign if their allegations it was Collins are found to be untrue?

Mr Little, along with Green MP Kevin Hague, earlier asked Auditor-General Lyn Provost to look into aspects of ACC’s governance that would not be examined by the investigations already under way by the privacy commissioner and being considered by the police.

Ms Provost said yesterday she would hold an inquiry examining aspects of ACC’s governance.

“The inquiry will examine how ACC manages a range of risks at the board level of the organisation. It will also examine how any matters relating to ACC claimant Ms Pullar that came to the attention of the board or individual board members were dealt with,” she said.

As well as this inquiry, Ms Provost intended to develop an audit proposal on ACC’s general operations, with a focus on its case management.

I’m pleased the Auditor-General is investigating.

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Two further developments in the ACC saga

March 30th, 2012 at 8:59 am by David Farrar

Adam Bennett at NZ Herald reports:

Prime Minister John Key was last night dragged into the widening ACC scandal and forced to deny a report he was part of a group of senior National Party figures who backed Bronwyn Pullar’s bid for a $14 million insurance payout. …

TVNZ current affairs programme Close Up last night said it had received a letter written by Sovereign Insurance to former National Party president Michelle Boag in 2007.

The letter named 28 people, among them prominent National Party figures including John Key and former Prime Minister Dame Jenny Shipley, as supporters of Ms Pullar as she sought a $14 million payout from the company in relation to injuries she suffered in a 2002 cycling accident.

The claim, Sovereign said in the letter, was “greatly in excess of her entitlement”.

Ms Boag is a long-standing friend of Ms Pullar who supported her during her battle with ACC, including attending a December meeting with ACC which has sparked investigations by the police and the Privacy Commissioner.

In the letter, Sovereign noted, it had been given a list of members of Ms Pullar’s “claimed support/advisory team”.

The list included Sir Selwyn Cushing, Mr Key, Dame Jenny and Dr Wayne Mapp.

Mr Key was at the time the Leader of the Opposition.

He has said he met Ms Pullar when he first entered politics – which was shortly after her accident – but had not had any contact with her since he became National Party leader.

Last night, he issued a statement saying: “I have not been involved in any ‘claims support’ or ‘advisory team’ for Bronwyn Pullar.

“The claim in the letter that I was part of such a team in 2007, or indeed any other time, is wrong.”

I have no doubt that John Key was in no way part of any support group or advisory team. I can only assume that any high profile person who expressed sympathy for Bronwyn’s position, was claimed to be a member of said support group.

It is worth noting that this is a letter from Sovereign, not to Sovereign. Also Sovereign did not say exactly who gave them “the list”. The most benign explanation is that these names were mentioned at a meeting, and Sovereign mis-interpreted their status. A less benign explanation is that this was a seriously bad case of trying to big-note it, and worse not just big-noting it but getting it wrong. Claiming the support of the then Leader of the Opposition when he has done no such thing, is incredibly poor judgement to say the least.

Meanwhile, it was reported that when Ms Pullar emailed Dr Smith’s letter to ACC in support of her claim last year, she did so using software enabling her to track each time it was opened and who it was forwarded to without the knowledge of the email’s recipients.

Internet security expert Peter Gutman, of Auckland University, said such “web bugs” were uncommon.

“Spammers use it on a massive scale, and beyond that it’s used only by security geeks.”

This is is an interesting aspect. My comments are based on the media report, and one can not be conclusive without knowing exactly what software was used, and how it works.

I’m not a lawyer but am fairly familiar with S252 of the Crimes Act as InternetNZ lobbied for it to be passed. It says:

Every one is liable to imprisonment for a term not exceeding 2 years who intentionally accesses, directly or indirectly, any computer system without authorisation, knowing that he or she is not authorised to access that computer system, or being reckless as to whether or not he or she is authorised to access that computer system.

Depending on the software it is arguable that use of such tracking software could be an offence. Of course Outlook also has features where you can get read receipts for your e-mails. But Outlook asks the recipient do they wish to allow a read receipt to be sent.

If receipts of some sort are being forwarded from ACC’s computer system, without their authorisation, that is arguably a form of access. I’m not saying any offence has been committed. I’m saying that depending on the software used, there could be an arguable case.

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Collins taking defamation action against Mallard, Little and Radio NZ

March 29th, 2012 at 10:05 am by David Farrar

John Hartevelt at Stuff reports:

ACC Minister Judith Collins is taking defamation action against two labour MPs and a news organisation, her spokeswoman says.

I understand the MPs are Trevor Mallard and Andrew Little, and the media organisation is Radio New Zealand.

It will be fascinating if it proceeds, to see the proof Trevor and Andrew have to back up their assertions.

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Influence is never in writing

March 26th, 2012 at 12:00 pm by David Farrar

Labour are saying that Nick Smith may have intervened on behalf of other friends, and that there needs to be an inquiry to determine this. Personally I thought his letter on behalf of Pullar made it pretty clear how reluctant he was to do anything. But it has also dawned on me that the fact he actually wrote a letter actually strongly implies that he was not trying to improperly influence things for Pullar. Why? Well, because he did in fact put it in writing.

If Nick had really been trying to screw the scrum for Pullar, the last thing he would have done is sign his name to a letter acting as a referee for her health before her accident.

If a Minister wants to push a department or agency in a particular way, they do not leave fingerprints. This will be officially denied, but ask any former Ministerial staffer from either party.

If Nick had really wanted to get ACC to give Pullar special treatment, he would have had his minsierial advisor phone the CEO. The ministerial advisor would say something like “The Minister is very concerned about this case”. That is code for “fix it”. They might say stuff like “The Minister is concerned that this could become a high profile story” and “The Minister wants to protect the PM who is constantly getting lobbied on this issue” or “The Minister thinks it would be prudent to assure yourself that the claimant has got everything they are entitled to, and has not been disadvantaged by ACC’s actions”.

Now none of this changes the fact that Nick’s actions in writing the reference were not acceptable. But in terms of motivation, I do think that they do show his intention wasn’t to apply improper pressure on ACC.  He was trying to placate Pullar. Otherwise he could have just got one of his staff to make a discrete phone call.

And no, I am not saying that agencies will break the law or even their own policies just to please a Minister. However many decisions are subjective and can go either way. It is in those situations, that Ministerial desires can have an impact.

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Pullar’s grievances

March 24th, 2012 at 10:25 am by David Farrar

The Dom Post has published the list of grievances that Bronwyn Pullar has against ACC. They are:

  1. Repeated non disclosure of correspondence regarding Bronwyn’s claim when requested.
  2. Extensive disclosure of other claimant’s information to Bronwyn
  3. No ability to restrict unauthorised access by 2500+ ACC staff and contractors to files, or medical files
  4. Medical records (considered in law to be the most sensitive of personal information) are not given protection which is appropriate to their status and are treated as general documents.
  5. Lack of procedure around dealing with statements of correction to incorrect reports
  6. Threats of legal action against Bronwyn’s GP for refusing to disclosure non-injury information. Misuse of criminal provisions in ACC legislation.
  7. Collection of information for an unlawful purpose
  8. False written and oral statements by ACC staff with the purpose of unlawfully procuring medical reports for pecuniary purposes.
  9. Defamatory statements by ACC employees
  10. Exceeding lawful powers by investigating injuries for which no claim has been made.
  11. Derogatory emails by ACC staff
  12. Excessive Access to Bronwyn’s files – 1948 accesses within 3 ½ years, by about 150 different individuals, of which 1100 were in a single one year period.
  13. Staff accessing files against management instructions
  14. ACC167 Consent – used to coerce claimant’s into authorising otherwise unlawful collections of information.
  15. Collection of personal information without claimant’s knowledge &/or attempted collection without knowledge
  16. Collection and attempts to collect information unrelated to injury/claim
  17. Imbalanced and biased decision making by Corporation
  18. Covert/inappropriate communication to assessors which bias & negatively influence outcomes against claimants
  19. Decision making without reviewing EOS
  20. Lack of workability of electronic medical file for lawfully compliant decision making
  21. Coercion, Harassment & Bullying, Unreasonable approach in management of claims. Use of threats of disentitlement to coerce
  22. Dictatorial approach of Case Managers, failure to make reasonable accommodations for claimant needs.
  23. “cherry picking” of unfavourable phrases from medical reports which contradict the ultimate conclusion.
  24. ACC abusing its monopoly position by limiting the pool of qualified medical assessors to a select group (some individuals assessors are paid up in excess of $1 million annually for services), leading to the appearance of bias and unfair market practises.
  25. Failure to demand adherence of staff to State Services Code of Conduct and to take appropriate action for  breach
  26. Failure of Office of Complaints Investigator to independently investigate complaints
  27. Failure of Office of Complaints Investigator to follow a reasonable process when conducting investigations
  28. Failure of Office of Complaints Investigator to validate the responses provided by ACC with the claimant for accuracy
  29. ACC’s case management approach to Bronwyn is disruptive and destructive of her ability to rehabilitate/work part-time
  30. ACC staff deliberately lying and writing false reports
  31. ACC staff making clinical decisions without appropriate qualification
  32. ACC staff making clinical assessments without medical competency
  33. Deliberate interference in independent medical assessments
  34. Prejudicial correspondence with independent assessors prior to assessments communicating ACC’s desired outcome – that injuries are spent &/or due to non-injury causes
  35. Provision of unqualified, non-specialist opinions, by ACC internal medical advisors, contradicting existing specialist advice, prejudicing independent assessors and compromising their independence
  36. Branches/Units having Case Managers who made an initial decision then conduct an administrative review of a matter before being sent to DRSL for review
  37. Taking advantage of disabled claimants for actuarial/financial gain
  38. Poor decision making which adds cost to the Corporation
  39. Poor OCI processes which adds cost to the Corporation
  40. Lack of flexibility over assessments/appointments/referrals
  41. Lack of reasonable consultation and flexibility over assessments/ appointments/referrals
  42. Unreasonable referrals/assessments  processes which are exploitative e.g., chaperones, multi-party assessments, lack of privacy & dignity;
  43. Focus on avoiding liability at the expense of effective early rehabilitation
  44. ‘Silo’ culture where case managers are unaware of ACC’s own research into rehabilitation best practice
  45. Constant churn of case managers – each new case manager is unaware of the medical evidence on file leading to poor decision making and is unaware of claimant’s issues; Avoidance strategy for accountability of actions.

In a related story, the Dom Post notes:

ACC’S computer storage of its clients’ confidential medical records is “so primitive” the records can be viewed by virtually every employee from a mailroom assistant up.

The corporation relies on reminding its staff they should not look at files they are not supposed to view on its EOS claims management system as one way of protecting privacy.

It seems they can not prevent access to confidential medical records.

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