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Welcome to the 85th 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

Betteridge v Insurance Australia Limited t/as NRMA Insurance [2023] NSWPIC 171

Member: Terence O’Riain

MOTOR ACCIDENTS—claims assessment—earning capacity assessment—loss of opportunity to run business.

The claimant was a sole motorcycle rider who was involved in a motor vehicle accident (MVA) on 30 June 2018 when the insured vehicle pulled out on his left side. In order to avoid a collision, the claimant attempted to brake but fell off his motorcycle onto his right side. As a result of the fall, the claimant sustained injuries breaking his right leg, injuring his right knee and grazing his right side, arms and hands. The claimant also claimed psychological injuries.

The insurer conceded that the claimant was entitled to non-economic loss. The issues were non-economic loss damages, quantum for past loss and ongoing impairment to the claimant’s earning capacity under Division 4.2 of the Act.

The parties provided accounting reports to assist the Commission in assessing these matters. There was also an exacerbation of psychological issues that existed before the accident arising from his infant’s death, the stress arising from the deterioration of his marriage and the eventual marriage dissolution. Following the MVA, the claimant suffered other psychological impacts in early 2020 when he was first on the scene of a fatal accident on a country highway. He was also part of the community-wide psychological trauma the NSW far South Coast suffered during the late 2019 bushfires, which were still burning in January 2020. One of the issues was whether the psychological conditions the claimant already suffered, as well as traumatic events in 2019 and 2020, should be considered as overriding the psychological trauma from the MVA.

The claimant was a qualified plumber and roof plumber, with roof plumbing requiring additional specialist training from that of an average plumber, including training in installing downpipes, rainwater tanks and gutters on commercial and residential buildings. Roof plumbers are also experts in installing roof sheeting and cladding.

The claimant had been operating a plumbing business in the region since 2004, having restructured his business in 2016 – 2017 to use a product called the “App” to generate profits. The parties agreed the claimant was working full-time at the time of the MVA, took approximately seven months off following the MVA and had not returned to full-time work since about March 2022 when right knee surgery was complicated by a wound infection.

The issues raised included whether the:

  • claimant’s mix hours of work (40 to 60 hours) could be averaged
  • monetary impact should be measured by Annual Business Income (ANBI) or replacement labour costs
  • COVID-19 pandemic impacted on the business, and
  • injuries and incapacity created a need to employ office staff to perform administration duties.

The insurer also submitted that the claimant’s past medical complaints and treatment justify a value greater than 15% vicissitudes.

Taking into consideration all of the evidence produced by both parties, the Member assessed damages as follows:

  • Non-economic loss: The claimant submitted the appropriate assessment was $325,000, and the insurer submitted $250,000. The Member noted the claimant’s doctors opined that total knee replacement was the only option available if the knee pain worsened. As well as the usual risks from this operation, the doctors opined that the claimant’s risks had increased due to the recent infection and because the skin covering that body part was fragile because of the earlier operation and infection. Another infection could lead to amputation to save his life, or the wound may not heal. Accordingly, the Member determined the appropriate non-economic loss damages at $427,000.
  • Past economic loss: At the time of the accident, the claimant had been working and his most recent work was temporary administrative work assignments and cleaning. The Member held that it was reasonable to assess that the claimant would need to hire a subcontractor as skilled and experienced as he was to replace his labour for at least 45 hours per week.  The Member accepted that the claimant was unable to return to his pre-accident work regime and that his work capacity varied between one-quarter and one-third of his previous capacity. The parties’ forensic accountant joint report provided a schedule calculating the claimant’s loss for replacement labour for time lost for chargeable work was $296,218 up to the date of assessment. The Member accepted that this was approximating the past economic loss.
  • Future economic loss: The Member accepted the claimant was likely to suffer future economic loss due to his accident related injuries and disabilities. The Member noted that since the accident the claimant had only contributed a small percentage of his previous chargeable work capacity to the business having estimated his probable chargeable hours before the accident was between 45 to 48 hours per week to replace his labour capacity. The Member noted the claimant’s ambition to work to 70 years old but held that it was probable that other risks could have caused the claimant to not reach that target, finding that he would not have worked past the age of 67 years.

Findings: The Member assessed the claimant’s damages as follows:

  • Non-economic loss: $427,000
  • Past economic loss: $296,218
  • Future economic loss: $1,213,534

Total: $1,956,190

View decision

Claims Assessment – Settlement Approval

QBE Insurance (Australia) Limited v Khullar [2023] NSWPIC 178

Member: David R Ford

MOTOR ACCIDENTS—settlement approval—claimant is self-represented—claim for past and future economic loss—sustained multiple fractures of the left hand and bruising to chest and abdomen.

The claimant, a 41-year-old male, was involved in a head on collision with the insured vehicle, sustaining injuries to his left wrist, left ankle and abdomen. He was taken by ambulance to Gosford Hospital, where he was admitted and remained as an inpatient for several days. He was diagnosed with fractures in the left hand, second, third and fourth metacarpals and to his left radial styloid. He also suffered bruising to the chest and abdomen. As a result, the claimant underwent left wrist surgery, including a left carpal tunnel release, left De Quervain’s tendon release and arthroscopy cleaning out the left carpal joints. Following the surgery, he was unfit for work for a period of five months and occasionally took Panadol for pain relief. Since 10 January 2023, he had been working full time as a chef. At the time of settlement, the claimant was working 9.5 hours a day, 5 days a week with constant standing.

The insurer conceded the claimant was entitled to a claim for past and future economic loss and Fox v Wood. The insurer made an offer of settlement of $46,290.

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.

Findings: The Member accepted the proposed sum of $46,290 was just, fair and reasonable and within the range of damages likely to be awarded if the matter progressed to hearing.

View decision

Review Panel Determination

Bennett v QBE Insurance (Australia) Limited [2023] NSWPICMP 152

Panel: Principal Member Susan McTegg, Dr Neil Berry, Dr Michael Couch

MOTOR ACCIDENTS—threshold injury dispute—claimant suffered injury in a motorbike accident; pre-existing back injury — Medical Assessor found the injuries from the accident were minor injuries.

On 15 July 2021, the claimant sustained injuries as a result of a motorbike accident when a truck driven by the insured turned right in front of him and in attempt to avoid a collision, the claimant tried to brake but slid off his motorbike and crashed into a corrugated iron shed. A medical assessment in relation to minor (threshold) injury dispute was referred to Medical Assessor Wijetunga at the Commission. The insurer determined that the claimant’s injuries were minor.

At first instance, Medical Assessor Wijetunga found the claimant suffered minor injuries of cervical spine whiplash associated disorder, left knee soft tissue injury, left shoulder subacromial bursitis, lumbar spine soft tissue injury and right leg soft tissue injury.

Following a successful review application by the insurer, the matter was referred to the Review Panel.

The claimant submitted the subject accident caused injuries to both shoulders, the cervical spine, the thoracic and lumbar spine, both knees and the right leg and were not minor (threshold) injuries.

Upon re-examination, Medical Assessor Couch found that the claimant demonstrated two signs of radiculopathy and met the definition of a non-threshold injury. The Panel noted the history of lower back pain, which pre-dated the accident. However, the Panel noted prior to the accident the claimant was physically active, able to walk his dogs 7km to the beach, ride his Harley Davidson motor bike, enjoy deep sea fishing and participate in mowing and housework on the property he shares with his partner.

Following the accident, the ambulance report noted stiffness in the lumbar region, and complaints to a doctor of lower back pain with referred pain and paraesthesia to the right leg. The Panel found the claimant had sustained an aggravation of pre-existing degenerative change caused by the accident, which led to the development of right sided radiculopathy. The Panel adopted the reasoning in David v Allianz Australia Ltd that the definition of threshold injury can be satisfied at any time following the accident for the purposes of the Act.

Findings: The Review Panel determined the injury (namely lumbar spine)—aggravation of degenerative change, with development of right-sided radiculopathy—was assessed as a non-threshold injury. Accordingly, the Certificate of Medical Assessor Wijetunga dated 30 August 2022 was revoked.

View decision

Certificate of Determination of Member

Ibrahim v Insurance Australia Limited t/as NRMA Insurance [2023] NSWPIC 173

Panel: Senior Member Brett Williams

MOTOR ACCIDENTS—whether the claimant failed to use her best endeavours to settle the claim before referring it for assessment.

On 31 December 2019, the claimant was injured in a motor accident and subsequently made a claim for damages on the insurer. The claimant then referred her damages claim for assessment to the Commission on 19 December 2022. The insurer submitted that the claim for damages was made on 14 October 2022, and a decision with respect to liability had not been made. It was argued that the only injuries the claimant suffered as a result of the accident were minor injuries and, accordingly, no damages should be awarded to the claimant. The claimant submitted that the application for assessment of damages was lodged with the Commission to preserve the claimant’s rights to pursue a claim for damages within the three-year period prescribed by the Act. 

The Member held that it was evident that since 24 September 2021, when the insurer confirmed in writing it did not concede that the claimant was entitled to damages for non-economic loss or that her injuries relating to the accident exceeded 10% whole person impairment, there was a dispute about the degree of the claimant’s permanent impairment as a result of her accident caused injuries. In the circumstances of her claim, using her best endeavours to settle the claim before referring it to the Commission for assessment under Division 7.6 required the claimant to refer the medical dispute about her permanent impairment to the Commission with due dispatch. The claimant received the insurer’s decision of minor injury 14 months before referring the medical dispute to the Commission. The Member considered that a reasonable time for referring the medical dispute for assessment was within six months, and certainly within 12 months, of receiving the internal review decision. 

Findings:  The Member held that the claimant failed to use her best endeavours to settle the claim before referring it for assessment and the proceedings were dismissed.

View decision

Merit Review

Haouli v Insurance Australia Limited t/as NRMA Insurance [2023] NSWPICMR 26

Merit Reviewer: Brett Williams

MOTOR ACCIDENTS—merit review—dispute about payment of weekly benefits— where there was a gap in earnings in the 12 months prior to the accident due to COVID-19 lockdown.

The claimant made a claim for statutory benefits in relation to an accident on 28 May 2022. The matter was brought before the Commission with regard to a dispute between the parties about the payment of the claimant’s pre-accident weekly earnings (PAWE).

The insurer determined the claimant’s PAWE in the amount of $1,527.32. The claimant sought an internal review of that decision. On 16 November 2022, an internal reviewer made a decision in substitution of the insurer’s PAWE decision, determining that the claimant’s PAWE was $942.31.

The claimant lodged an application with the Commission disputing the insurer’s decision.

The claimant submitted that on the day of the motor accident he was ‘earning continuously’ but had not been ‘earning continuously for at least 12 months’. This was because there was a significant hiatus in his earnings due to the requirement to obey lockdown laws and stop working. The claimant submitted that the weekly average of the gross earnings received by him as an earner during the period from when he started to earn continuously to immediately before the day of the motor accident should have been used. The claimant submitted that, on the facts, his PAWE should be determined in accordance with cl 4(2) of the Act.

The insurer submitted that, in taking into account the full 52 week period when it determined PAWE, it correctly applied cl 4(1) and not cl 4(2) of the Act. The insurer submitted that that the issues raised by the claimant were resolved in Shahmiri.

The Merit Reviewer differentiated the current case with Shahmiri, finding that an individual was not earning because they were in lockdown was a relevant fact when determining which sub-clause in cl 4 applies, but it was only one fact to be taken into consideration, together with all other relevant facts.

Accordingly, the Merit Reviewer calculated the claimant’s PAWE was to be determined in accordance with cl 4(2) of the Act.

Findings: The Merit Reviewer determined that the claimant’s PAWE was to be determined in accordance with Sch 1 cl 4(2)(a) of the Act and the insurer’s decision of 16 November 2022 was set aside.

View decision

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