The Transport Accident Commission has been accused of adopting a "penny-pinching" culture when dealing with crash victims in order to combat poor financial results, including a $1 billion loss last year.
Crash victims have told of a hard-line attitude among TAC staff over the past year regarding compensation. Some have been denied entitlements despite the commission's scheme being "no fault".
The TAC posted a $1.02 billion deficit in 2011-12, according to its annual report tabled in Parliament last week, and recorded losses in three of the previous four years. The report also showed the Baillieu government took a $140 million dividend.
TAC chief executive Janet Dore last week said the loss would have no impact on services. She said the commission's insurance operations had recorded a $351 million profit.
But lawyers specialising in transport crash cases said the overall results were alarming, that TAC staff were already tightening belts and could be encouraged to rein in claims on entitlements such as carers and physiotherapy.
John Voyage, from Maurice Blackburn, said TAC clients had noticed a tightening at the commission in the past year, and a correlation between its financial performance and daily operations.
"There has been a noticeable change of culture. The clients speak with each other, they go to the hydrotherapy pool and ask how they're being treated," he said.
"They come up with terms like 'The toe cutters are out', making reference that the TAC is trying to penny-pinch, in particular the carer hours."
One client who was left a quadriplegic after a road crash said he had been "misled" several times recently on compensation claims and that the TAC was "behaving like an insurance company, in that the first answer is 'no' ".
"It's incredibly insulting and it's demeaning," said the man, who declined to be named.
"Any sense of worth that I have within my family trying to be somewhat productive — I'm put in a position where I'm fighting for my entitlements on a daily basis."
Lawyer Peter Burt, from Burt & Davies, said he feared that the TAC's finances would force staff to scale-back costs, which would affect people who need constant care.
"Where you have a scheme like this that has an agenda of reining in expenses, that is likely to produce an increase in stress for accident victims and particularly the most seriously injured accident victims, who are generally the costliest people when it comes to recurring medical expenditure," he said.
Mr Voyage said he doubted the TAC would ever be as generous as it previously had been to crash victims, particularly as elements of the "no-fault" scheme had been reduced through legislation.
Under the scheme, anyone injured in transport crashes is eligible for assistance, regardless of who caused the crash.
But Mr Voyage said changes over the past few years meant drivers with illegal blood-alcohol levels, in unregistered vehicles or without licences were denied benefits, where previously they received full medical, disability and rehabilitation costs and reimbursement for loss of income.
"There are lots of these little changes that have been introduced over the years that increasingly reduce it from being a no-fault scheme," he said.
The TAC yesterday said in a statement that it was bound by law to assess victims' compensation claims, but did not respond on the issue of more frugal daily operations.