Last year I wrote to the Auditor-General’s Office seeking an independent inquiry into aspects of the Accident Compensation Corporation (ACC) Sensitive Claims Unit.

Their response was that they have “decided that it is not a matter that warrants investigation by this office.”

Their suggestion was that my concerns be directed to the Minister. My letter to the Hon Judith Collins is copied below.

Download my: Request to the Auditor-General for an investigation into the NZ Accident Compensation Corporation Sensitive Claims Unit [1019 KB PDF]

9 January 2012

Hon Judith Collins
Minister for ACC
Parliament Buildings
WELLINGTON

Dear Minister

ACCIDENT COMPENSATION CORPORATION : SENSITIVE CLAIMS

I wrote to the Auditor-General’s Office on 26 October 2011 seeking an independent inquiry into aspects of the Accident Compensation Corporation (ACC). My concerns are wide and encompass financial, governance, management, legislative and scientific aspects of how ACC manages Sensitive Claims (claims for mental injury caused by criminal sexual offences).

The matters I raised appeared to be a good fit with the description of the Auditor-General’s work, as described on the website www.oag.govt.nz:

“We examine each request to decide the most appropriate way to proceed. We identify whether the matters raised suggest:
“¢ financial impropriety,
“¢ problems with the organisation’s overall governance or management, or
“¢ other systemic or significant concerns that may be important for the organisation, the sector it operates in, or the general public.

Other factors we consider include how serious the issues are, whether we have the resources and technical skills to consider them properly, and whether the issues may be better addressed through other avenues.”

However, there are limits to the work, broadly described on the website as:
“In both audits and inquiries, our role is to investigate and to report our findings and our opinion. Our scrutiny and reporting helps hold public entities to account, and we can refer issues to other agencies for action. However, we do not have direct power to change what an entity is doing.

When people ask us to inquire into an issue, it is important that they understand the limits of our role. For example:
“¢ We cannot intervene in decisions that public entities are making, or the decision-making processes they are following.
“¢ We cannot injunct or stop activities or contracts.
“¢ We cannot make a binding judgement about the legality of actions.
“¢ We cannot order redress or other remedies, or overturn decisions.
“¢ We cannot direct a public entity to act on our findings or recommendations.”

Those limiting factors appear to have led the Auditor-General to conclude that the matters I raised may be better addressed through other avenues. Re-direction of my concerns to the relevant Minister was suggested. Accordingly, I place the matter in your hands, in your capacity as Minister for ACC and ask that you make this matter a high priority.

***A copy of my letter to the Auditor-General is attached [download link above], consisting of the covering letter and three Annexes. These explain and detail my concerns. The letter in reply is also attached.

It is obvious that ACC management is unable to distinguish between good science and ideologically-driven constructs about sexual abuse. Put correctly, no evidence exists to show that sexual abuse causes any specific psychiatric, psychological or behavioural condition. There are no identifiable, reliable symptoms of sexual abuse.

However, as a result of its ill-fated and expensive contract with Massey University to undertake research into sexual abuse matters, ACC asserts that “over 700 effects” of sexual abuse have been identified (effect is synonymous with symptom). That assertion is scientifically unsound and hopelessly impractical.

Indisputably, none of the claimed effects are specific to sexual abuse and all of them have myriad possible causes. In the absence of credible evidence of criminal sexual offending, claimant behavior on its own cannot be taken as a reliable indictor that sexual abuse was experienced.

ACC applies markedly different standards of evidence to physical injuries resulting from accidents than it does to claims of mental injury arising from alleged criminal sexual offences. For accidental physical injuries, rigorous proof of cause and effect is required, but for sensitive claims, it relies on unscientific belief, assumption and opinion.

Sensitive claims have two main evidential legs. The first leg is credible evidence that a criminal sexual offence occurred. The second leg is reliable evidence that a definable mental injury actually exists and evidence that it was caused by the offence and not by some other event or trauma in the claimant’s life. Many sensitive claims fail to meet these criteria and are not evidence-based.

ACC’s unscientific and ill-informed policies and practices have resulted from fatally flawed “research”. This has allowed ACC to wrongly accept tens of thousands of sensitive claims and waste hundreds of millions of taxpayer dollars through unjustifiable and unwarranted payments of compensation, counselling fees, administration and related costs.

As well, ACC has consistently misreported data on claim numbers and costs, and continues to publish information about sexual abuse that is patently wrong and misleading.

These matters have misled Parliament and the public. They have unnecessarily caused a great deal of anguish and distress to communities, families and individuals. There is keen public interest concerning ACC’s mishandling of sexual abuse claims. Open public discussion would do much to help correct the misconceptions and systemic errors.

The solution to these problems is straightforward commonsense. No justification exists for ACC to use much lower standards of evidence for sensitive claims than the rigorous standards it sets for accidental physical injury claims.

In a nutshell, every claim accepted by ACC should be based on realistic proof of cause and effect. This can readily be achieved by administratively revising ACC’s policy and practice. It does not require any amendment to the ACC legislation.

Policy and practice revision should make it mandatory for ACC to consistently apply scientifically reliable, evidence-based standards to both accidental physical injuries (as it has traditionally done), as well as to claims that criminal sexual offending caused mental injury.

That simple administrative change would then require claimants and counsellors in sensitive claims to comply with the basic requirement to provide evidence for both legs of the claim – firstly, credible evidence of a criminal sexual offence, and secondly, evidence that a properly diagnosed mental injury exists and that it was caused by the offence and not by some other event in the claimant’s life.

It should include revision of ACC’s version of the Balance of Probabilities process, by making it mandatory for claimants to describe the alleged offence(s) and to identify the alleged offender(s), and by making it optional for alleged offenders to give evidence opposing claimant allegations. These matters do not appear to be prohibited by the legislation and would greatly improve ACC’s performance.

As an observation on the Government’s drive to broadly reduce costs, if these commonsense and practical measures were introduced, ACC’s costs for sensitive claims (in recent years exceeding $40 Million annually) would be reduced to reasonable and justifiable proportions.

Would you please acknowledge receipt of this letter and its enclosures.

I look forward to your reply to this matter.

Sincerely,
Gordon Waugh