ACC health harm scheme ‘amazing’ - US expert

Sunday, 15 March 2026

Lawyer John Miller says while ACC is “a very good scheme”, his firm had “stacks” of cases of declined treatment injury claims.

New Zealand’s compensation scheme for health treatment injuries is “an amazing example of doing things almost totally right”, a visiting US health law expert says.

But lawyers and victims trying to get support for life-limiting injuries say medical mishap cases are among the most difficult ACC claims to prove.

Stanford University health law professor Michelle Mello has been studying ACC for two decades, motivated by bewilderment at the “dysfunctional” American system for dealing with healthcare-related harm. She is in New Zealand this week delivering the Owen Woodhouse Memorial lecture, in Auckland and Wellington.

Mello said the 2005 change from medical error to treatment injury, which removed any need to lay blame, had got the system “99% to where it needs to be”.

If an American was injured by their hospital care, by comparison, they may or may not get an explanation of what happened, or an apology. And to get compensation, they would likely have to convince a plaintiff’s attorney to take their case, and prove the hospital had been negligent, Mello said.

“If they did all of that, statistically they would have a 75% chance of recovering some funds. But so many people drop out at all the different stages, that the number of people injured by medical error that receive payment in the United States is vanishingly small.”

The Post last year revealed that in 2023/24 ACC paid out $221m on active claims for six key types of treatment injury - infections, pressure injuries, surgery-related injuries, drug errors, surgical mesh and neonatal brain injuries. That was more than triple the 2015/16 total of $71.7m.

Does that mean the system is failing to make healthcare safer? Mello said the increase was probably a good thing, as only a tiny percentage of treatment injuries were generally claimed for.

Michelle Mello is is Professor of Law at Stanford Law School and Professor of Health Policy in the Department of Health Policy at Stanford University School of Medicine.

Mello has also investigated whether the no-fault system provided enough accountability for medical mistakes. She acknowledged that the small number of health harm cases investigated by health watchdog the Health and Disability Commissioner meant there were few options to challenge a health worker’s competence.

However, most injured patients she talked to wanted lessons learnt, rather than revenge or punishment, and that was much easier in a no-fault system.

“It’s just an uphill battle to get people to acknowledge errors, to learn from them, to talk about them, when there’s so much shame and blame surrounding them as is the case in the US.”

Kiwi health law expert, Jennifer Schulz, also argued the New Zealand system was world-leading. Now working at the University of New South Wales, she has advocated for Australia to adopt a similar scheme.

She argued no-fault compensation schemes were quicker, less stressful for both injured patients and health professionals, offered better access to compensation, and were more likely to foster a culture of learning rather than blame.

“The system is not perfect and needs reform, but as a Kiwi living abroad, I miss systems like ACC, and feel proud to speak about them overseas.”

However, with 37% of treatment injury claims declined, critics have argued the bar is too high to qualify for help.

Among those declined were hundreds of victims of injuries from surgical mesh complications. That included Joachim Spod, who was left jobless and in excruciating pain after hernia surgery in 2012.

His treatment injury claim was finally accepted about four years ago, after ACC agreed to reconsider 377 declined mesh injury claims. While ACC paid for a pain management course, Spod said he was still fighting for compensation.

For 14 years, Jo Spod has been fighting for compensation for a surgical mesh treatment injury that left him in excruciating pain. (File photo)

“The system is flawed. Everyone has to pay into it but when something happens you need a (private) lawyer…I’m over it and ACC seem to have won.”

Lawyer Hazel Armstrong, who fights ACC appeals, said the need to prove causation was a barrier to getting cover.

“They have to prove it’s more likely than not that their injury was caused by a treatment injury, rather than caused by the underlying health condition, and that’s the first problem.

“And also it’s hard to get the evidence of that, because sometimes the profession closes ranks, and you can’t find a specialist to give the evidence that you need. So I find this an extremely difficult area of law.”

Expert ACC lawyer John Miller said while ACC was “a very good scheme”, his firm had “stacks” of cases of declined treatment injury claims.

In the absence of clear definitions in the law, many cases involved arguments about cause, or whether the injury was “an ordinary consequence” or “a necessary part” of the treatment.

“There’s lots of little hiccups on the way, so not all treatment that goes wrong is covered, that’s the problem,” Miller said.

Mello said as well as clarifying the issue of causation, the scheme could be improved by making data more available for independent researchers to investigate.

“The quote that has been top of mind is Sir Winston Churchill’s quip about democracy - that it’s the worst form of government, except for all the others. For whatever flaws the New Zealand system has, in my opinion it is so far superior to every alternative that has been tried.”