File photo. Canberra traffic.

File photo. Canberra traffic. Photo: Andrew Sheargold

Canberra's lawyers spent at least $131,000 on a multimedia campaign opposing attempts to reform the territory's compulsory motor insurance and workers' compensations schemes.

The revelation came a day after the ACT government walked away from its attempts to reduce car registration bills by reforming Canberra's compulsory third party motor insurance system.

Treasurer Andrew Barr said yesterday the government would not proceed with the Road Transport (Third-Party Insurance) Amendment Bill 2011 after a multi-party committee rejected the laws.

The legislation, which could not pass without ACT Greens' support, would have capped payouts and moved the focus of the compulsory third party insurance scheme away from compensation and towards rehabilitation.

Treasury officials argued the territory had a reputation in the insurance industry for high payouts and that new players would not enter the market to challenge the monopoly of NRMA without radical changes to the scheme.

But the plan, championed by Chief Minister Katy Gallagher, incensed Canberra's lawyers, whose fees account for nearly 20 per cent of the average CTP payout, and sparked a determined and well-financed lobbying campaign against the bill.

The Law Society and the Bar Association paid for a multimedia advertising campaign to oppose the laws, with the two groups arguing the proposed changes would have been fundamentally unfair to accident victims and would have taken away their right to compensation for pain and suffering.

Law Society president Noor Blumer welcomed the Assembly decision yesterday.

''We particularly support better long-term care for the catastrophically injured while other injured Canberrans are not disadvantaged,'' she said.

''We are relieved that the committee recommends that the Legislative Assembly should not support the bill in its current form.''

Both Ms Blumer and the society's executive director Larry King declined yesterday to divulge how much money had been spent on the campaign, but Ms Blumer said the media effort had nothing to do with the decision of the Assembly Committee.

Documents published by the society show that $131,221 was spent on the ''Fair Comp Campaign,'' in the 2010-11 financial year, nearly as much as the society spent on renting its Civic headquarters.

Bar Association president Phillip Walker also refused to say how much had been contributed to the campaign by his organisation.

Announcing the dumping of the bill yesterday, Mr Barr blamed the territory's other political parties for the failure of the measure.

''The Liberals have today missed an important opportunity to lower compulsory third party insurance fees for motorists, making a mockery of their claims to be concerned about Canberrans' cost of living.

''It is disappointing that the opposition did not support Labor's important reform.

''They have missed an opportunity to genuinely reduce people's bills - to reduce their cost of living.

''It's also disappointing the Greens have failed to add their support.

''CTP prices are a major issue for Canberrans, and Labor believes it is unfair and unnecessary for Canberra motorists to be paying more for their car insurance than those in Queanbeyan.''

Neither the Canberra Liberals nor the ACT Greens responded to requests for comment yesterday.