Judgment date: 17 December 2010. Insurance Australia Limited
trading as NRMA Insurance v Hutton-Potts and Ors  NSWSC
1446. New South Wales Supreme Court1
A claims assessor's failure to provide details of the
assumptions on which an award for economic loss was based, and the
relevant percentage by which damages were adjusted to reflect the
likelihood of a future economic loss occurring regardless of the
accident, may amount to a jurisdictional error.
A claims assessor must adjourn an assessment conference where
there is a risk that a party may suffer injustice due to the other
party's failure to provide documents relevant to the assessment
of the claim.
The claimant was injured in a motor accident occurring in
December 2001 and claimed damages in excess of $3 million. There
was no issue as to liability. Although the claimant, who was riding
a scooter and wearing a helmet, hit his head on the windshield of
the other vehicle, his Glasgow Coma Scale following the accident
was full (15/15) suggesting that there was no traumatic brain
The issue of a traumatic brain injury was first raised in 2005.
During the course of its investigation the insurer obtained the
claimant's Centrelink records, which revealed a longstanding
history of acute polar disorder, hepatitis C and impaired memory
and concentration. The insurer sought the release of the
claimant's pre-accident medical records but these were not
provided prior to the assessment conference. The insurer sought to
adjourn the assessment conference in order to obtain these medical
records but this was refused by the claims assessor, who ultimately
awarded the claimant in excess of $2 million in damages.
The insurer filed a summons in the Supreme Court seeking an
order that the claims assessor's determination be quashed on
various grounds. Firstly, a failure to adhere to the requirements
of s 126 of the Motor Accidents Compensation Act 1999
(MACA). Secondly, error going to jurisdiction, by
denying the insurer an adequate opportunity to present its case,
thereby denying it procedural fairness. The third complaint was a
failure to give adequate reasons for the decision given.
Section 126 of MACA requires that a Court or claims assessor
state the assumptions on which an award for economic loss was based
and the relevant percentage by which damages were adjusted to
reflect the likelihood of a future economic loss occurring
regardless of the accident.
Shortly prior to the accident the claimant had established a new
business, which was not making a significant return at the time of
the accident. The business failed following the accident. It was
common ground that the claimant had no real earning capacity at the
time of the assessment. The claims assessor determined that the
claimant may have suffered some loss as a result of his pre-
accident conditions regardless of the accident and awarded economic
loss at $500 per week. The Court found that the claims assessor
committed a jurisdictional error in not complying with the
requirements of s 126, stating:
"33 While it must be
accepted that elaborate reasons were not required to be given for
the conclusions reached by the assessor in relation to the
assessment of [the claimant's] future economic loss that did
not relieve the assessor of the obligation of identifying the
assumptions on which the damages award for future economic loss
rested, which s 126 requires. Reasons could be given concisely, but
they had to be given."
The Court also found that the insurer was denied procedural
fairness in the refusal of its adjournment application. The Court
"59 The circumstances were
that [the claimant] had long delayed in providing the authorities
relating to the [pre-accident medical] records in question and they
had then been unsuccessfully pursued by his solicitor. It is
unlikely that no records existed. Given their obvious relevance to
the question which fell to the assessor to determine, it seems to
me to be unquestionable that the plaintiff was refused procedural
fairness in being refused the adjournment, so that it could pursue
the production of the records. Thereby it was denied an opportunity
to put its case on causation by reference to relevant medical
The Court set aside the certificate of assessment and ordered
that the matter be allocated to a different claims assessor for
This claim represents a rare instance of a successful
administrative review of a claims assessor's certificate of
determination2. Insurers should consider whether a
claims assessor has provided reasons supporting the award for
economic loss sufficient to discharge the duty pursuant to s
Insurers should also be wary of any outstanding requests for
particulars or documents. Such requests should be brought to the
attention of the claims assessor and called upon prior to the
assessment of the claim. If the claimant is unresponsive to the
requests and the requests are capable of producing information
probative to the assessment of damages, there is a risk that the
insurer may suffer an injustice if the claim proceeds to an
1. Schmidt J
2. Recent examples of failed challenges to assessments
include QBE Insurance (Australia) Limited v Peter Cowan
 NSWSC 933 and Zurich Australian Insurance Limited v
Elizabeth Pellegrino; Elizabeth Pellegrino v NRMA Insurance
Australia Ltd  NSWSC 1114. See earlier Curwoods Case
Notes for further information.
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