I quite like that our no-fault ACC system kills off a big market in disputes. GDP is lower, because lawyers and experts would otherwise transact through markets, but so what? Do we really want that kind of GDP?
Moral hazard might be an reason: some people go nuts if they’re not controlled properly. But wouldn’t most of those people also be testing the boundaries of a competitive fault-based system? I don’t see that we lose much from the no-fault system.
Incidentally, no-fault does also seem to work in competitive insurance markets – much as bill-and-keep works between telcos.