Judgment date: 24 August 2010. QBE Insurance (Australia)
Limited v Peter Cowan  NSWSC 933. Supreme Court of New
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
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  NSWSC 933 on 24
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
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
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
1. Hislop J
2.  NSWCA 133
3.  NSWCA 201
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