Allianz Australia Insurance Limited v Sprod & Ors
 NSWSC 1157
Supreme Court of New South Wales1
A claims assessor may award a buffer for future economic loss as
a percentage of the claimant's present earnings in
circumstances where the claimant has not presently suffered an
The claimant sustained injuries to his neck, back and left
shoulder in a motor accident on 20 June 2008. He had suffered an
earlier injury to his left shoulder at work in November 2007.
Liability was admitted and the matter proceeded to General
Assessment at CARS.
The claimant asserted that he was unable to work his usual
overtime since the accident and that he was fearful of losing his
job in the future. Nevertheless, his earnings continued to increase
after the second accident. The insurer submitted that the
claimant's inability to work overtime was as a result of his
left shoulder injury sustained in the earlier accident and that
there was no ongoing economic loss as a result of the subject
The claims assessor determined that the left shoulder injury had
resolved by the time of the subject accident. He allowed past
economic loss at $10,000 in respect of lost overtime and future
economic loss at $250 net per week for 18 years for the possibility
that the claimant may lose his job in the future.
The insurer applied to the Supreme Court for administrative
review of the award principally on the basis that claims assessor
failed to comply with the requirements of s 126 of the Motor
Accidents Compensation Act 1999 in assessing economic
At the hearing the insurer submitted that the claims
assessor's determination should be tested in the same way as
would a judge's reasons, although the claims assessor was not
obliged to provide the same level of detail as would a judge. After
considering previous cases on this issue2
the Court stated as follows:
"24 Against that background, I am of the opinion that
the appropriate test when examining the reasons of an assessor is
that of clarity. It has to be clear how the assessor reached his or
her decision and what process of reasoning was involved. It is not
necessary, however, that each step in that reasoning process be
enunciated if it is otherwise clear how the assessor arrived at his
or her conclusion."
The Court held that the award was in the form of a buffer, even
though it calculated damages as a percentage of the claimant's
weekly earnings rather than a lump sum, and was therefore not
constrained by the requirements of s 126 in any event. The
insurer's summons was dismissed.
This case confirms the difficulty in demonstrating
administrative law error 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.
The case also demonstrates the various alternate methods an
assessor may employ to allow for the possibility of future economic
It is noteworthy that in this matter the Court issued a warning
to insurers against using administrative challenges as a form of
merits review, stating:
"59 It is to be hoped that in future CTP insurers, in
accordance with the philosophy of the Act, restrict such s 69
applications to circumstances where there is a genuine
jurisdictional issue or error of law on the face of the record,
rather than as appears to be the situation here, disagreement with
a particular head of damage found by a claims
However, insurers should not be discouraged from seeking such
administrative review of awards which are so unreasonable as to
offend the Wednesbury
1 Hoeben J 2Insurance Australia Ltd trading as NRMA Insurance
Ltd v Helou  NSWCA 240; Soulemezis v Dudley (Holdings) Pty
Ltd (1987) 10 NSWLR 247 3Associated Provincial Picture Houses Ltd v
Wednesbury Corporation (1948) 1 KB 223
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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