Sparke Helmore's MAD (Motor Accidents Division) Weekly - Issue 55
24 June 2022
Welcome to the 55th 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 published decisions with a link to the decisions on the Australasian Legal Information Institute (AustLII) website. Please see this week’s edition below.
All references to legislation are to the Motor Accident Injuries Act 2017 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.
Claims Assessment – Settlement Approval
QBE Insurance (Australia) Limited v Manfre [2022] NSWPIC 266
Member: Susan McTegg
MOTOR ACCIDENTS—settlement approval—non-economic loss—liability admitted—claimant is not represented by a lawyer—whether proposed settlement is just, fair and reasonable and within the range of likely potential damages assessment
The claimant, a 62-year-old female, was injured in a motor vehicle accident when the insured driver, who was driving under the influence of alcohol, collided head on into the claimant’s vehicle. As a result of the accident, the claimant suffered a cervical spine fracture, fracture to the right transverse process, fractured rib, musculoligamentous strain to the lumbar and cervical spine, small right haemothorax with contusion, subcutaneous emphysema right chest wall, injury to the right knee and seatbelt bruising. The claimant has a previous history of sore rigid shoulder.
At the time of the accident, the claimant was not in paid employment.
Liability was admitted.
Dr Raymond Wallace assessed the claimant at 23% Whole Person Impairment (WPI) for injuries to her cervical spine, chest wall, lumbar spine and a significant fracture at C2. The claimant therefore met the s 4.11 threshold for damages for non-economic loss.
The parties agreed to resolve the claim for the sum of $200,000 for non-economic loss. As the claimant was not represented by a solicitor, the proposed settlement required approval by the Commission pursuant to s 6.23 of the Act.
The Member noted that the sum of $200,000 is an appropriate award of damages considering the claimant’s age, the day-to-day impact of the injuries on her life and the likely deleterious impact on her life as she ages.
Findings: The Member accepted the proposed sum of $200,000 was just, fair and reasonable and within the range of damages likely to be awarded if this matter had progressed to hearing.
QBE Insurance (Australia) Limited v Spence [2022] NSWPIC 273
Member: Susan McTegg
MOTOR ACCIDENTS—settlement approval—non-economic loss—liability admitted—claimant is not represented by a lawyer—whether proposed settlement is just, fair and reasonable and within the range of likely potential damages assessment
The claimant, a 69-year-old female, was seriously injured in a motor vehicle accident when she was a passenger in a car driven by her husband. As a result of the accident, the claimant suffered fractured vertebrae T12, L1 and L2, and psychological trauma.
The claimant described that prior to the motor vehicle accident, she was able to drive to Melbourne without difficulty, enjoyed gardening and was able to attend to household chores.
Liability was admitted.
Dr Yiu-Key Ho assessed the claimant at 20% Whole Person Impairment (WPI) for three fractured vertebrae. The claimant therefore met the s 4.11 threshold for damages for non-economic loss.
Regarding the reported psychological trauma, the claimant stated that her psychological problems were minimal and she was not in receipt of any treatment other than the use of sleeping tablets. The claimant stated however that her symptoms had been triggered by the bushfires and required further psychological treatment.
The parties agreed to resolve the claim for the sum of $220,000 for non-economic loss. As the claimant was not represented by a solicitor, the proposed settlement required approval by the Commission pursuant to s 6.23 of the Act.
The Member noted that the sum of $220,000 is an appropriate award of damages considering that it is likely there will be an inexorable increase in her pain and disability as she ages as a result of the injuries sustained in the accident.
Findings: The Member accepted the proposed sum of $220,000 was just, fair and reasonable and within the range of damages likely to be awarded if this matter had progressed to hearing.
Claims Assessment
Sayef v IAG Limited t/as NRMA Insurance [2021] NSWPIC 270
Member: Ray Pilbersek
MOTOR ACCIDENTS—late referral of claim for claims assessment—full and satisfactory explanation—disruptions caused by the solicitor with carriage of the matter contracting COVID and Easter public holidays
The claimant was injured in a motor vehicle accident on 10 April 2019. There is an ongoing dispute about the claimant’s degree of Whole Person Impairment (WPI). .
The claim was not referred to the Commission for claims assessment until 20 April 2022, three years and nine days post-accident. Therefore, the claimant was required to provide a full and satisfactory explanation for the delay in referring the claim pursuant to s 7.33 of the Act.
At a preliminary conference on 31 May 2022, the insurer made no objection pursuant to s 7.33 and agreed that leave should be granted by the Commission.
In written submissions, the claimant’s solicitor submitted that the application was late for the following reasons:
- the outstanding whole person impairment dispute
- disruptions caused by the solicitor with carriage of the matter contracting COVID-19 in early April 2022, and
- disruptions caused by the Easter public holidays.
The Member considered the claimant’s solicitor’s explanation to be a full account of the claimant’s conduct, actions, knowledge and belief.
The Member noted that in accordance with Dijakovic v Perez [2015] NSWCA 174 that a reasonable person in the claimant’s position would have experienced the same delay, which was caused by a delay getting a medical assessment and a misplaced reliance on her solicitor’s conduct of the matter.
Findings: The Member determined that the claimant’s explanation for the delay in referring the claims to the Commission for claims assessment was full and satisfactory pursuant to s 7.33 of the Act and granted leave for the claim to be referred for assessment.
Merit Review
Mackary v Allianz Australia Insurance Limited [2022] NSWPICMR 35
Merit Reviewer: Katherine Ruschen
MOTOR ACCIDENTS—claim for statutory weekly benefits—calculating claimant’s pre-accident weekly earnings (PAWE)—whether the COVID-19 disaster payments and rebate amount should be included in PAWE—whether the PAWE can be adjusted
The claimant is a self-employed solar electrician and submits that his business was “closed down” for several months during the relevant pre-accident period because of the COVID-19 pandemic lockdown.
The insurer determined that the claimant’s PAWE was $1,168.70. The claimant sought an internal review and the insurer affirmed its decision.
The claimant sought a merit review and alleged that his PAWE was incorrect and that it should be adjusted to account for:
- the impact of the COVID-19 pandemic on earnings in the pre-accident period as otherwise it does not reflect “actual or estimated earnings” but for the lockdown, and
- the COVID-19 disaster payments and a rebate amount received during the 37 weeks pre-accident.
The Merit Reviewer determined that the claimant’s PAWE is the weekly average of the gross earnings he received during the 12 months prior to the accident as:
(a) there is no evidence that indicates the claimant was regularly earning or becoming entitled to regularly earn more than he did during the 12 months before the date of the motor accident
(b) it is expected that the claimant’s earnings would likely increase post-lockdown as compared to during lockdown but not as a result of an action taken by the claimant, and
(c) the claimant was already running his business before the accident and there is no evidence to suggest that the claimant had entered into an arrangement to commence a sole trader business at a particular time and place after the day of the accident.
The Merit Reviewer stated there are no provisions under the MAI Act, Motor Accident Injuries Regulation or the Motor Accident Guidelines that permit adjustment of PAWE to account for the impact of the COVID-19 pandemic on a person’s ability to earn during the pre-accident period. The reasons for this are set out by Harrison AsJ in the Supreme Court decision in Allianz Insurance Australia Limited v Shahmiri [2022] NSWSC (Shahmiri). Accordingly, the claimant’s PAWE cannot be adjusted to account for an interruption or reduction in earnings during the COVID-19 lockdown. There can also be no adjustment to take into account anticipated post-accident earnings.
The Merit Reviewer also determined that the COVID-19 disaster payment and rebate amounts are excluded from PAWE as these payments are not earnings received by the claimant as “as an earner”. The claimant did not perform any work for those payments.
The PAWE calculated by the insurer was based on net business earnings in the period 1 July 2020 to 14 September 2021 (Adjusted Period), due to insufficient records for the specific PAWE period from 15 September 2020 to 14 September 2021. Earnings for the Adjusted Period were $60,214.88.
The Merit Reviewer noted that there was a fundamental error by the insurer in that the PAWE was not divided by 62.85 weeks (being the number of weeks in the Adjusted Period), but rather divided the total by 52 weeks. Accordingly, the Merit Reviewer determined that the correct PAWE is $958.07.
Findings: The Merit Reviewer determined the claimant’s PAWE was $958.07. The claimant’s PAWE cannot be adjusted under clause 4(1) to account for interruption or reduction in earnings during the COVID-19 lockdown.
Abboud v Insurance Australia Limited t/as NRMA Insurance [2022] NSWPICMR 36
Merit Reviewer: Kriesen Seeneevassen
MOTOR ACCIDENT—claim for statutory weekly benefits—whether there was a partial or total loss of earnings following the accident
The claimant was injured in a motor vehicle accident on 24 July 2020 and lodged an application for personal injury benefit benefits on 27 July 2020.
On 16 December 2021, the insurer found that the claimant was not an earner and that she would not be entitled to statutory benefits as she had not incurred a partial or total loss of earnings as a result of the motor vehicle accident.
An internal review was conducted at the request of the claimant, and the insurer affirmed its decision.
The claimant sought a merit review.
There is evidence that the claimant ceased her employment in March 2020 due to the COVID-19 pandemic. The claimant alleged that she was offered employment in mid-July 2020 but was unable to work following the motor vehicle accident.
The insurer submitted that the claimant had not suffered a partial or total loss of earnings for the following reasons:
- the report of the rehabilitation consultant dated 20 August 2020 noted that the claimant is a self-funded retiree living off her investments
- the statement of the claimant’s employer provided to the factual investigator stated that the claimant had resigned from her position in March 2020 due to COVID-19. It is also stated that the claimant had subsequently declined a verbal offer to resume work in her previous position in May 2020 due to COVID-19. This vacant position had since been filled.
The Merit Reviewer noted that the claimant may have had the intention to return to work once COVID-19 had eased but she did not have a position to go back to as her employer had since filled the vacant position.
The Merit Reviewer also noted there is no evidence that the claimant had been offered employment in mid-July 2020 but was unable to work following the motor vehicle accident.
The Merit Reviewer found that the claimant did not suffer any loss of earnings as a result of the accident as she was not employed at the time of the motor vehicle accident. The claimant was not likely to have incurred a loss of earnings as she had declined to return to work in May 2020 and her employer had since filled the vacant position. As for the investments, the Merit Reviewer determined that these do not constitute earnings under the Act as it is not in relation to personal exertion.
Findings: The Merit Reviewer determined that the claimant had not suffered a partial or total loss of earnings as a result of the injuries sustained in the motor vehicle accident.
