Australia: Difficulties for Insurer to Review CARS Assessor's Decision Confirmed

Curwoods Case Note
Last Updated: 25 August 2010
Article by Gerry Tzortzatos

Judgment date: 24 August 2010. QBE Insurance (Australia) Limited v Peter Cowan [2010] NSWSC 933. Supreme Court of New South Wales1

In Brief

  • A claims assessor is entitled to consider the medical assessment certificate, among other things, in assessing a claimant's loss of earning capacity.
  • A claims assessor may use a percentage reduction to reflect pre-existing medical conditions which impact upon earning capacity.
  • An award for future economic loss by way of buffer is permitted and avoids the need to apply s 126(2) of the Motor Accidents Compensation Act 1999 (the Act).


The Supreme Court handed down its decision in QBE Insurance (Australia) Limited v Peter Cowan [2010] NSWSC 933 on 24 August 2010.

The claimant was injured in a motor vehicle accident on 3 January 2006. He also had suffered injuries to his back and hand which predated the subject accident and he was not working at the time of the accident. The claimant was assessed below the threshold for whole person impairment by the Medical Assessment Service. His claim was referred to a claims assessor for assessment. Ultimately an award of damages was made in the sum of $228,318. The insurer filed a summons in the Supreme Court seeking that the assessor's determination be quashed.


Firstly, the insurer submitted that the assessor failed to determine whether the claimant had suffered a diminution in earning capacity and instead adopted the finding of permanent impairment of the medical assessment certificate as conclusive on that point. The Court considered that it was evident from the assessor's reasons that he had regard not only to the medical assessment certificate, but also to the video evidence, various medical reports and the claimant's own evidence in this regard. Furthermore, the Court held it was open to the assessor to have regard to matters contained in the medical assessment certificate in assessing loss of earning capacity.

Secondly, the insurer submitted the assessor failed to assess the claimant's residual earning capacity having regard to his pre-existing back and hand injuries. The assessor calculated that the claimant would have earned $600 per week from his employment had he not been injured in the subject accident and reduced this by 45% to account for the claimant's pre-existing conditions. The Court relied on the judgment of Heydon JA in State of New South Wales v Moss2 in holding that an assessor can assess the financial effects of an injury on a claimant, without specific reference to what other people with the same kind of disability can earn, using a percentage basis or any other means.

Thirdly, the insurer submitted that the assessor failed to determine whether there was a causal link between the loss of earning capacity and any actual financial loss in that the claimant had performed some work following the accident for a greater income than his pre-accident earnings. The Court rejected this submission on the basis of the claimant's evidence that the work was performed for only one day and there was no expectation that the work would have continued.

Fourthly, the insurer submitted the assessor failed to apply s 126 of the Act in the calculation of economic loss where the assessor awarded damages for future economic loss by way of buffer. The Court adopted the reasoning used in Penrith City Council v Parks3, regarding similar provisions in the Civil Liability Act 2003, that the use of a buffer was permissible when awarding future economic loss and avoided the need for compliance with s 126(2).

Finally, the insurer submitted the assessor failed to give sufficient details in relation to his findings with regard to the claimant's credibility and the award of future economic loss. The Court rejected this submission noting multiple references to the claimant's credibility and brief but adequate reasons supporting the assessment of future economic loss within the assessor's reasons.

The insurer's summons was therefore dismissed.


This case confirms the difficulty in demonstrating administrative law errors in the manner a claims assessor considers the evidence presented by the parties and forms conclusions. Unlike merits review of a decision of a District Court Judge, a decision of a CARS Assessor will only be set aside if jurisdictional error is demonstrated. The grounds for such review are very narrow. It also demonstrates the various alternate methods an assessor may employ to allow for pre-existing injuries which impact upon a claimant's future earnings capacity. Consideration should be given to applying these methods in submissions to claims assessors.

1. Hislop J

2. [2000] NSWCA 133

3. [2004] NSWCA 201

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