ACC has been given a judicial kicking for demanding claimants sign an unlawful form gathering private information, or face their claims being cut off.
Two decisions just released from the District Court say ACC acted unlawfully when it told two clients it could insist they sign the consent forms and that, if they didn't, their compensation would end.
A lawyer specialising in ACC work said there were huge ramifications for the corporation because "there must be hundreds of thousands of these forms that are now illegal".
"This is wholesale collection of information that they had no right to," Dunedin lawyer Peter Sara said.
All clients were told they must sign the forms, known as ACC 167, which had now been deemed to be incompatible with the corporation's own laws, he said.
On top of that, there were probably thousands of ACC clients around New Zealand who had been told they would not receive compensation if they didn't sign.
And in some cases, clients who refused to sign had been cut off.
The cases were heard by Judge Grant Powell, who upheld both appeals and awarded costs against ACC.
One case involved Dunedin ACC client and ACC lobby group member Denise Powell, and the other a client suffering from a traumatic brain injury.
The judge said ACC had acted dogmatically and made unfounded claims that it had the authority to demand clients sign consent forms giving it widespread access to information about them.
Even a "casual glance" at the consent form showed its authority to collect information was far more extensive than ACC law provided for, the judge said.
The consent forms have been condemned by ACC clients and lobby groups for allowing the corporation to go on medical history "fishing expeditions" to try to find reasons to cut off clients' claims.
But in the past clients have been rebuffed by the courts, with Judge Martin Beattie saying clients had lost every case in which they had refused to sign the forms.
Judge Powell said he realised the decision would have "serious ramifications" for ACC and it was important a new consent form compatible with its own laws was developed as soon as possible.
He said, given ACC's 167 form had gone far beyond its legislated authority to gather private information, it had been reasonable for the appellants to refuse to sign it.
Sara said it was possible ACC might appeal against the decision. However, if the corporation was genuine in its recent pronouncements about wanting to restore trust in it, it should accept the ruling.
He said it had stuck in his craw that for several years he had to advise clients who did not want to sign the form to do so because they did not have the resources to fight ACC over the issue and, if they did, their claims would be be cut off.
"I've had some extremely distressed clients who've been forced to sign something they did not want to sign and it turns out now that they didn't have to," Sara said.