Sparke Helmore's MAD (Motor Accidents Division) Weekly - Issue 118
18 September 2024
Welcome to the 118th edition of Sparke Helmore’s MAD Weekly!
The Personal Injury Commission (Commission) commenced on 1 March 2021 and, with it, the publication of the majority of decisions issued by the Commission.
To help you navigate the recent decisions of the Motor Accidents Division (MAD) of the Commission, we are publishing weekly the relevant headnotes of select published decisions with a link to the decisions on the Australasians Legal Information Institute (AustLII) website. Please see the latest edition below.
All references to legislation are to the Motor Accident Injuries Act 2017 (NSW) (the MAI Act) unless otherwise noted.
Commentary and analysis of trends will be provided on more substantive decisions by our CTP team and will be separately published when necessary.
Merit Review
Borrow v Insurance Australia Limited t/as NRMA Insurance [2024] NSWPICMR 67 (3 September 2024)
Merit Reviewer: Belinda Cassidy
Merit review – consideration of s 3.39 of the MAI Act and how the mental harm provisions of the Civil Liability Act 2002 (CLA) should be “modified” for the purposes of the statutory benefits scheme.
On 17 March 2024, Christopher Borrow, was riding his motorcycle, when he lost control negotiating a left-hand bend, slid across the road and was struck by a vehicle coming in the opposite direction. He tragically died at the scene.
Subsequently, the claimant, Leonie Borrow (Mr Borrow’s widow), made a claim for statutory benefits under the MAI Act with NRMA Insurance, the third-party insurer of Mr Borrow’s motorcycle. The claimant was not involved in the accident and did not sustain physical injury. She made a claim on the basis of suffering a psychological or psychiatric injury as a consequence of the tragic loss of her husband in the accident.
On 24 May 2024, the insurer denied the claim on the basis that the requirements of Part 3 of the CLA were not satisfied, and accordingly refused to pay the claimant any statutory benefits under the MAI Act.
The claimant sought an internal review of the decision, which was subsequently affirmed by the insurer.
The claimant has referred the issue of whether she was entitled to statutory benefits to the Commission for merit review in accordance with Division 7.4 of the MAI Act. The proceedings were allocated to Merit Reviewer Cassidy.
The claimant was self-represented.
In its submissions, the insurer made the following notable points:
- Section 3.39 of the MAI Act imports the pure mental harm provisions of the CLA into the statutory benefits scheme.
- Clause 8 of the Motor Accident Injuries Regulation 2017 (the Regulations) applies s 30(3) of the CLA and modifies the “at-fault statutory benefits limitations” for statutory benefits payable to the claim in the same way as it would affect the benefits of victims.
- Clause 8 of the Regulations did not apply to the scenario, and therefore s 30 of the CLA was cited in full and did not require modification.
- Section 30(1) of the CLA codifies the common law and requires there to be three protagonists, a primary victim (in this case Mr Borrow), a secondary victim (in this case Mrs Borrow) and a negligent defendant or tortfeasor who owes a duty of care to both victims.
- As there is no third protagonist in the subject accident, the claimant did not have a claim.
The Merit Reviewer noted that while the intent of s 3.39 of the MAI Act is to import the mental harm provisions under the CLA into the motor accidents legislation, they are in a form of cutting and pasting with editing that is “necessary” and in accordance with cl 8 of the Regulations.
Merit Reviewer Cassidy considered the real issue in the proceedings involved how the CLA mental harm provisions were intended to be applied to the MAI Act statutory benefits scheme. Specifically, and relying on s 33 of the Interpretation Act 1987 and s 1.3(4) of the MAI Act, Merit Reviewer Cassidy noted that this involves determining whether s 30(1) of the CLA needs to be modified so as to give meaning to it that promotes the objects of the MAI Act, and if so, what these necessary modifications might be.
Merit Reviewer Cassidy noted the following possible modifications, based on cl 8 of the Regulations, that could be made to s 30(1):
- This section applies to the liability of the [relevant insurer to pay statutory benefits] for pure mental harm to [the claimant] arising wholly or partly from mental or nervous shock in connection with (the victim) being killed, injured or put in peril [by the motor accident].
This modification would not prevent the claimant from recovering statutory benefits. Further, Merit Reviewer Cassidy went on to the following possible modifications that could be made to s 30(2).
Merit Reviewer Cassidy considered that the proposed modification should be made to s 30(1) of the CLA, based on the following reasoning:
- The CLA is an Act regulating the recovery and award of damages, whilst the MAI Act is an Act which in Part 3 provides statutory entitlement to benefits.
- Consideration of persons who may or may not be entitled to damages in a civil liability claim ought not be determinative of their entitlement to statutory benefits.
- Liability for statutory benefits involves liability of the relevant insurer as opposed to liability of the insured user or operator of the motor vehicle that caused the accident.
- The injured person’s entitlement to statutory benefits is not dependant on the existence of a defendant or tortfeasor.
- It would be consistent and fair for the benefits of secondary victims to parallel those of the primary victim’s entitlements.
- Clause 8 of the Regulations modifies s 30(3) to make the distinction between the two types of claims as well as fundamental changes limiting and terminating benefits in certain circumstances.
- The modification to s 30(3) of the CLA made by cl 8 of the Regulations allows there to be reduction or termination of benefits if there is no other person at fault.
- Section 3.39 of the MAI Act does not remove benefits entirely. If the parliament intended persons such as the claimant to have no entitlement to any benefits at all, then the parliament would have explicitly said so.
Accordingly, the Merit Reviewer held that s 30(1) of the CLA should be read as modified above and as the claimant was a close member of the family of the victim, the insurer was not entitled to refuse the payment of statutory benefits to the claimant.
Held: The claimant was entitled to the receipt of statutory benefits.
Determination of Review Panel
Brennan v Insurance Australia Limited t/as NRMA Insurance [2024] NSWPICMP 617 (3 September 2024)
Review Panel: Member Elizabeth Medland, Medical Assessor Paul Friend and Medical Assessor Christopher Rikard-Bell
Review Panel – The Motor Accidents Compensation Act 1999 (MACA) – whether psychological injury arose from a motor vehicle accident – claimant and his child were passengers in a vehicle driven by his pregnant wife – altercation occurred with occupants of another vehicle – some intimidating conduct occurred during driving of vehicle with claimant being victim of a serious physical assault – Certificate revoked.
On 31 March 2016, the claimant was involved in a “road rage” incident. The claimant was a passenger in a motor vehicle, along with his children, which was driven by his wife (the claimant’s motor vehicle). An altercation took place between the claimant and young male occupants of another motor vehicle (the insured motor vehicle). The claimant later exited his vehicle and was physically assaulted by the young men.
The claimant lodged a claim with NRMA Insurance, the insurer of the insured motor vehicle.
The claimant alleges he sustained a psychological injury from the incident and asserts that the injury is a consequence of the motor vehicle accident as defined by the MACA.
The claimant lodged an application with the Commission seeking a determination of the dispute.
Medical Assessor Roberts issued a Certificate dated 8 February 2023, which certified that the claimant did not suffer a psychological injury as a result of a motor vehicle accident.
The claimant subsequently lodged an application for review of the Medical Assessor’s decision with the Commission. The President’s Delegate considered that there was reasonable cause to suspect the medical assessment was incorrect in a material respect and the matter was referred to the Review Panel for determination.
Medical Assessor Roberts diagnosed the claimant with post-traumatic stress disorder, however considered that such a disorder did not arise as a consequence of a motor vehicle accident. Based on the available information, the Medical Assessor considered that the injury arose from the assault as opposed to a motor vehicle accident. Based on the finding that the injury did not arise from a motor vehicle accident, Assessor Roberts did not make an assessment of whole person impairment (WPI).
The claimant argued that the intimidation and altercation that occurred whilst all involved were travelling in motor vehicles, had materially contributed to his psychological injury.
Conversely, the insurer submitted that the psychological injury has arisen as a result of the physical assault that ensued after all those involved had exited the motor vehicles.
The Review Panel considered that the issue in question involved whether the altercation between the claimant and the occupants of the insured motor vehicle, whilst the vehicles were being driven, would constitute a motor vehicle accident.
It was acknowledged by the Review Panel that the question of whether the events involving the motor vehicles fell within the definition of a motor accident in the MACA is a question for the Court/Commission as part of a claims assessment.
However, for the purposes of the medical assessment, the Review Panel determined that the altercation that occurred when the motor vehicles were being driven would constitute a motor vehicle accident for the purposes of the MACA. Taking into consideration the definition of motor accident in s 3 of MACA and the restrictions set out in s 3A of the MACA, the Review Panel concluded that the intimidating conduct of the driver of the insured motor vehicle involved the use or operation of a motor vehicle and the psychological injury was a consequence of and was caused during the driving of the insured motor vehicle.
In its reasoning, the Review Panel considered that the events were capable of contributing to the psychological injury in circumstances where there was intimidating and menacing behaviour in the way the insured motor vehicle was driven and the threats that occurred during the driving of it by the occupants, including the driver. The Review Panel further took into account the fact that the claimant’s child and pregnant wife were in the claimant’s motor vehicle with him.
Held: The claimant sustained post-traumatic stress disorder as a consequence of the motor vehicle accident and the degree of his psychiatric permanent impairment was assessed at 8%.
