Sparke Helmore's MAD (Motor Accidents Division - Special Edition
20 March 2025
Welcome to this special edition of Sparke Helmore’s Motor Accident Division Publication!
All references to legislation are to the Motor Accident Injuries Act 2017 (NSW) (the MAI Act) unless otherwise noted.
Atwal v Insurance Australia Limited trading as NRMA Insurance [2025] NSWSC 143 (6 March 2025)
Schmidt AJ
Administrative law and statutory interpretation – assessment of permanent impairment as the result of psychological injury for award of non-economic loss damages – where parties had not referred dispute for medical assessment and if non-economic loss damages can be assessed without medical assessment – summons dismissed.
The claimant sustained physical and psychological injuries in a motor accident in June 2020. The insurer accepted liability for statutory benefits and common law damages. The claimant was a claimant for much of the history discussed below, and therefore it is convenient to refer to him as a claimant even where proceedings were on foot.
The claimant sought non-economic loss damages on account of his psychological injury, relying on a report of Dr Lim who assessed 50% WPI. The insurer procured a report of Dr Cocks who assessed psychological impairment at 24% WPI. On serving this report on the claimant, the insurer advised that it did not accept the assessment nor concede that the claimant sustained more than 10% WPI. The insurer noted cl 4.129 of the Guidelines, which provide:
“The insurer must make decisions relating to non-economic loss based on all the available information and documents, consistent with the facts and in accordance with the law. For example, the insurer should concede an entitlement to non-economic loss when it is in possession of health service provider examination reports that indicate that a claimant’s WPI is greater than 10%.”
No reference was made to cl 4.130 which provides:
“The insurer must in every case, regardless of whether the claimant makes a damages claim for non-economic loss:
(a) clearly indicate that it has determined whether or not the claimant is entitled to non-economic loss
(b) when a claimant claims to be entitled to non-economic loss but the insurer disagrees, clearly explain the reasons and detail any medical information considered in the course of making its decision that the injured person’s degree of permanent impairment is not greater than 10%
(c) ensure that the explanation is sufficient to enable the claimant to make an informed decision about whether to accept the insurer’s decision
(d) where a claimant has sufficiently recovered to enable the claim to be quantified, and the insurer is unable to determine whether the claimant’s degree of permanent impairment is greater than 10%, refer the matter to the President of the Personal Injury Commission for assessment.”
The insurer did not request a supplementary report from Dr Cocks notwithstanding the issues it had with his assessment. The claimant took the view that in the absence of medical reports suggesting that he had not satisfied the impairment threshold, that the Commission could assess his damages, including non-economic loss damages, without him first being assessed by a Medical Assessor.
The claimant asked that the insurer apply for damages assessment, to which the insurer opined the matter was not ready for assessment as there was an unresolved dispute on non-economic loss. The insurer then opposed the claimant’s application for damages assessment for the same reasons.
This preliminary issue was referred to the Senior Member to be determined.
Referencing s 4.12(1) that precludes the award of damages for non-economic loss “unless the degree of permanent impairment has been assessed by a Medical Assessor under Division 7.5”, the Senior Member concluded that he could not make an allowance for non-economic loss damages “as matters presently stand if the matter proceeded to assessment”.
The claimant then applied for judicial review of the Senior Member’s decision. The claimant sought orders setting aside or declaring the Senior Member’s decision invalid and remitting the matter to the President, for allocation to a different claims assessor to determine his application for assessment of his damages, according to law.
The claimant argued before Her Honour that an assessment in the Commission (or a referral under s 7.20) was not mandatory or a precondition for non-economic loss eligibility, except where there is a dispute between the parties on the issue. The claimant made a written submission that there was a statutory presumption in favour “of Plaintiff’s degree of percentage impairment … to satisfy the impairment threshold unless and until the contrary is provided”, which was withdrawn at Hearing.
The claimant argued that the insurer failed to act in good faith in not conceding the threshold despite holding evidence in support of same and where there was no “genuine dispute between the parties”, however Her Honour rejected this. She said that cl 4.129 says that an insurer “should” make the concession where appropriate but rejected that any dispute needed to be “genuine”.
The Court could not grant the relief sought because Her Honour determined that there was a dispute on permanent impairment to be determined, even despite expert evidence indicating that the claimant satisfied the permanent impairment threshold. Her Honour further relied on Scott in commenting that “the existence of a medical dispute was not a jurisdictional fact to be determined by the Court, but rather a matter to be determined by the proper officer”.
Fundamental to the finding that the claimant’s construction of the legislation was not correct, Her Honour highlighted that the power permitting a party to refer a dispute about a miscellaneous claims assessment matter to the Commission for assessment at any time contained in s 7.42, does not have a comparable provision in regard to a dispute about claims for non-economic loss. Instead, s 4.12 precludes non-economic loss damages from being awarded “when there is a dispute about whether the impairment threshold has been satisfied, unless the degree of permanent impairment has been assessed by a medical assessor.”
It followed that the Senior Member was determined not to have erred in his determination.
Most relevant to conduct of parties in CTP proceedings generally, the Court considered this to demonstrate a “deficiency in the scheme” and requested the Registrar refer this judgment to the State Insurance Regulatory Authority to consider cl 4.129-4.130, specifically whether they were consistent with legislative objectives to resolve disputes in an efficient and timely manner, or whether amendments could be made to further that objective.
Held—Summons Dismissed.
