Australia: Certificate of Impairment Issued by Review Panel Quashed – Psychiatric Impairment Rating Scale Considered

Last Updated: 3 August 2010
Article by Nathan Morehead

Judgment Date: 16 July 2010

Sanhueza v AAMI Limited [2010] NSWSC 774

Supreme Court of NSW

In Brief

  • When considering an Application for Review, the test is whether the Proper Officer has reasonable cause to suspect the medical assessment was incorrect in a material respect, having regard to the particulars set out in therein. It is not necessary for the Proper Officer to individually specify the documents he/she considered or to decide whether a particular conclusion is open or available on the material.
  • When applying the Psychiatric Impairment Rating Scale it must be remembered that the examples provided in each Class of Impairment are descriptive, not determinative, exhaustive or exclusive to each class. It is possible for an Area of Function to be allocated a Class of Impairment based on non-comparable examples.
  • The Review Panel is required to investigate an issue which formed part of the material on which the original MAS Assessor made a determination with respect to the Class of Impairment for an Area of Function. This may involve a request for further documents and/or a further examination of the claimant.


On 3 December 2006 the plaintiff, Mr Jorge Sanhueza, was driving a bus during the course of his employment along South Liverpool Road in Liverpool. A vehicle travelling at speed in the opposite direction crossed onto the incorrect side of the roadway and collided with the bus, directly in front of the driver's cabin. Mr Sanhueza became highly distressed to find the male driver of the vehicle had died as a result of the force of the impact.

In October 2008 Mr Sanhueza was examined by a MAS Assessor, who diagnosed Post-Traumatic Stress Disorder and assessed 17% WPI. The insurer sought a review of the MAS Assessment, asserting that a Class 2, not a Class 3, impairment rating should have been assigned to Social Functioning and Concentration, Persistence & Pace. Had this occurred, it would have been determined that the degree of impairment was not greater than 10%.

The insurer's Application was granted by the Proper Officer of the MAA on the basis he was satisfied there was reasonable cause to suspect the assessment was incorrect in a material respect. A Review Panel subsequently revoked the Certificate of Impairment issued by the MAS Assessor as it assessed 6% WPI. In doing so, the four Areas of Function which were allocated a Class 3 impairment rating by the MAS Assessor, including the two listed in the Review Application, were downgraded to a Class 2 impairment rating.

Supreme Court of NSW

Mr Sanhueza sought a review of the decision of the Proper Officer, based in large part on the alleged failure to give any, or any adequate, reasons and/or consideration to his Reply to the insurer's Application. It was further contended that the Proper Officer had erred in a number of respects when giving consideration to whether there was reasonable cause to suspect a material error had been made. The insurer submitted the decision of the Proper Officer was not affected by any of the errors suggested and that Mr Sanhueza had acquiesced in the decision by failing to challenge it within a reasonable time.

Mr Sanhueza also sought a review of the decision of the Review Panel and made extensive submissions on a number of grounds. The insurer submitted the decision of the Review Panel was not affected by any of the errors suggested and that Mr Sanhueza had acquiesced in the decision by allowing the Review Panel to conduct its review on the papers without insisting or making Submissions in relation to the requirement for him to be examined.

The Decision of the Proper Officer

Acting Justice Smart found the Proper Officer had employed "an unhappy choice of language" but did provide reasons when he summarised certain submissions advanced by the insurer. Further, the reference by the Proper Officer to taking into account the Application, Reply and supporting documentation indicated that he considered the matters raised by Mr Sanhueza,including his qualified medical evidence, even though it was done on a global basis and the latter did not form part of the submissions in support of the Application. His Honour determined the Proper Officer was not required to deal with each of the submissions made by Mr Sanhueza on the basis he does not decide the degree of impairment and has limited tasks. In finding the Proper Officer was entitled to have regard to any material in the Reasons which gave him reasonable cause to suspect the medical assessment was incorrect it was stated at paragraph 49:

"The test is not whether a particular conclusion is open or available on the material, but whether the Proper Officer has reasonable cause to suspect that the medical assessment was incorrect in a material respect, having regard to the particulars set out in a Review Application.

It is not uncommon for there to be major differences of opinion based on the facts revealed.This influences whether one Class of Impairment should be preferred over another and, in turn, the overall assessment of impairment and entitlement to compensation for non-economic loss. Often times, this task in made more difficult when the factual circumstances do not correlate with the descriptors in a Class of Impairment and the outcome is dictated by whether a Class 2 or Class 3 impairment rating should be selected. In the hope of offering guidance, Acting Justice Smart made a number of remarks in relation to Social Functioning and Concentration, Persistence & Pace and the differentiation between a Class 2 and Class 3 impairment rating.

As far as Social Functioning is concerned, Acting Justice Smart disagreed with the comment by the Proper Officer that the history must be capable of "providing a description and examples comparable to those in the MAA Guidelines" and, at paragraph 32, went on to state:

"There are non-comparable examples of previously established relationships being severely strained after an injury. Ultimately, it is a question of moderate impairment of social functioning. I regard the words "previously established relationship severely strained" as words of general description capable of being satisfied in a variety of ways and pointing to moderate impairment of social functioning. There may be sustained verbal or cruel abuse; such abuse may be levelled not only at the spouse but also at the children. Sometimes there may be allegations of unfaithfulness. Children or grandchildren may be wary of their father or grandfather respectively for a variety of reasons other than physical assault. The father or grandfather may shout at or abuse the children or grandchildren and they may be subjected to outbursts of bad temper. Some wives may be supportive of their husbands despite many difficulties and much long suffering. This does not mean that previously established relationships have not been severely strained and that a Class 3 moderate impairment does not exist. Economically, it may not be possible for the wife and children to leave, especially if there are a number of children and they have no alternative accommodation. A wife and children may be reluctant to leave, despite the suffering and the damage being done to relationships, if their spouse or parent has been seriously injured."

As far as Concentration, Persistence & Pace is concerned, Acting Justice Smart suggested that the capacity of an injured person to attend to "the timely completion of tasks commonly found in work settings" can be assessed by examining the tasks actually being performed. The insurer relied on Mr Sanhueza driving a bus for the same company for nine hours a day, keeping a timetable, following a specific route, collecting passengers, taking their fare and giving change to submit his ability to concentrate and perform normal duties as a bus driver would not meet a Class 3 impairment rating. His Honour found it was open to the Proper Officer to adopt a pragmatic approach and did not address the wrong question when doing so.

The Decision of The Review Panel

Acting Justice Smart highlighted that it was correct for the Review Panel to undertake a fresh assessment of all matters with which the medical assessment is concerned, even though the insurer did not seek to question the Class 3 impairment rating assigned to Self Care & Personal Hygiene or Social & Recreational Activities. His Honour found the methodology which was employed to arrive at a Class 2 impairment rating for the former Area of Function, as well as Social Functioning and Concentration, Persistence & Pace, was incorrect.

As far as Self Care & Personal Hygiene is concerned, His Honour recounted the descriptors for a Class 2 and a Class 3 impairment rating and, at paragraph 68, went on to state:

"The materials reveal that Mr Sanhueza reported for work without assistance and drove a bus for a maximum of nine hours per day and had done so for some years. While at an early stage he received some support, he had been doing so independently. As part of its reasoning process, the Panel is perhaps inferring that Mr Sanhueza can live independently without regular support by presenting for work in a clean state and driving a bus. However, where that is preceded by regular support from his wife, that does not mean that Mr Sanhueza is excluded from the category of "can't live independently without regular support". In my opinion the Panel did not apply the test stipulated in the Guidelines."

As far as Social Functioning is concerned, Mr Sanhueza submitted the Review Panel misapplied the Guidelines and failed to recognise that the wording of a particular Class of Impairment was illustrative. In other words, the Review Panel effectively stated that a Class 3 impairment rating could only be made if, literally, it was established that there had been separation or violence or outside agencies or family members involved in caring for the children and, if absent (as in this case), a Class 2 impairment rating is applicable. This submission was accepted by Acting Justice Smart, who highlighted that the two older children were adults who were not living at home with their parents, the third child was 19 years of age, the fourth child was 15 years of age and the youngest child's mother and three siblings would naturally be involved in supporting him/her. His Honour stated that the Review Panel must consider and apply the words of general description and decide whether there was "moderate impairment" so as to justify a Class 3 impairment rating.

As far as Concentration, Persistence & Pace is concerned, the Review Panel noted that Mr Sanhueza gave a history of subjective difficulties with reading. It placed particular reliance on the moment by moment demands of the work of a professional driver when considering the impact of the accident on Mr Sanhueza's capacity to concentrate, persist with a task and keep a timetable. It noted he had learned a new bus route, adapted to a new group of passengers and reportedly maintained a high standard in the workplace. However, the history of Mr Sanhueza "blanking out" while driving a bus and private vehicle after the accident was not referred to in the reasons of the Proper Officer or the Review Panel. It was, however, documented in the Reply by Mr Sanhueza and on five occasions by the MAS Assessor, who found it a relevant consideration when he assessed a Class 3 impairment rating.

Acting Justice Smart found this reasoning involved the failure to take relevant considerations into account or the irrational, unreasonable and unexplained rejection of relevant considerations, given Mr Sanhueza's subjective complaints extended beyond mere reading difficulties and included driving difficulties. It was thought improbable that the Review Panel gave the statements as to "blanking out" genuine consideration yet remained silent. In any event, it was found to be unsafe to rely on the inadequacy of reasons given. His Honour stated that if the Review Panel had taken the report of the MAS Assessor into account, it must have concluded that Mr Sanhueza's ability to meet the "moment by moment demands of the work of a professional driver" was impaired by his blanking out and difficulty in concentration. It was held that the episodes of "blanking out" required investigation on the basis they formed part of the material on which the original MAS Assessor reached his assessment.

Acting Justice Smart ordered that the impairment be assessed by a fresh Review Panel after a driving competency test had been undertaken on the basis the latter may impact on the Class of Impairment which is assigned to various Areas of Function and other heads of damage.


The doctrine of acquiescence was not applied, primarily on the basis that Acting Justice Smart found Mr Sanhueza followed the better course of action, namely, not to make an Application to the Court until the Review Panel had made its decision in the hope that, if he succeeded, that would conclude the matter. Although the delay in doing so was approximately seven months, His Honour held that it had been explained satisfactorily and noted the Assessment Conference had not yet proceeded, no aspects of the claim had been finalised and there is no relevant prejudice that could not be compensated for by an appropriate order as to costs.


This case is significant for two reasons. Firstly, it is a timely reminder of the test which must be applied by the Proper Officer when considering an Application for Review. Secondly, and perhaps of more practical value, it highlights the manner in which the Psychiatric Impairment Rating Scale is to be considered and applied, particularly by a Review Panel.

As far as the latter is concerned, it is not necessary that the factual circumstances mirror the descriptors contained in a particular Class of Impairment so as to be allocated such a rating. What must be considered is whether the history and level of functioning by reason of the psychiatric injury, which includes non-comparable factors, represents nil, mild, moderate, severe or total impairment to justify one Class of Impairment being selected over another.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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