Australia: When a "buffer" is not actually a buffer: an assessor's duty to explain reasons for an award of damages

Curwoods Case Note
Last Updated: 19 September 2012
Article by Jonathan Dennis

Allianz Australia Insurance Ltd v Sprod [2012] NSWCA 281

Jurisdiction: New South Wales Court of Appeal1

In Brief

  • Where an assessor undertakes a calculation based on precise figures, this may not be considered a "buffer", and the assessor must exercise their duty under s 126 of the Motor Accidents Compensation Act 1999 to articulate, to a reasonably obvious degree, the assumptions on which the calculation is based.
  • The assessor must provide sufficient insight into his or her reasoning process.


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 subject 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 accident.

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 on the basis that the claims assessor failed to discharge his duty under s 126, namely, to be satisfied with the assumptions forming the basis of the award and for those assumptions to be sufficiently stated.

Hoeben J rejected this argument and held that the award was in the form of a buffer, even though it was calculated as a percentage of weekly earnings rather than a lump sum, and was therefore not constrained by s 126.

Court of Appeal Judgment

In the Court of Appeal, Barrett JA set out the requirements of s 126. The first stage is for an assessor to be satisfied that the assumptions in relation to matters going to future earning capacity "accord with the claimant's most likely future circumstances but for the injury." This is supplemented by the second stage, to articulate the assumptions on which the award is based.

Barrett JA observed that all awards for future economic loss involve assumptions and "speculation as to future earning capacity". However, in this case, the award was not a nominated lump sum. Rather, it was a calculation based on an unusually high and inexplicable "jump" in earnings in the most recent financial year despite the injury. Additionally, no explicit explanation was given as to why a residual working life of 18.3 years was given or the reasons for an allowance of 15% vicissitudes. Once the assessor had embarked on this process of calculation the award moved away from a buffer towards an evaluation requiring an explanation of the assumptions relied on in making that calculation. In the absence of a sufficient explanation, the assessor breached the duties imposed by s 126 and an error of law on the face of the record was established.

While not seeking to define aspects that may or may not properly be made the subject of assumptions about future earning capacity, Barrett JA stressed "nothing I have said is intended to suggest that assessors must prepare elaborate statements of reasons and explanations of assumptions."

His Honour provided the guidance, "a brief statement of what might seem to be reasonably obvious will suffice."

The appeal was allowed and the original assessment was quashed. The matter was remitted to CARS to be determined by another assessor and the respondent was forbidden from relying on the previous assessment.


At first instance, Hoeben J warned against "an increasing number of applications for prerogative relief in respect of decisions of assessors under the MAC Act" and described them as "thinly veiled attempts at a merits appeal where no such appeal is provided under the Act".

However, in light of the successful appeal in this case, insurers should not be discouraged from seeking administrative review in appropriate cases. When the content of the assumptions and the reasons for their adoption are not reasonably obvious, an insurer may have grounds for administrative review.

The case also confirms that s 126 requires a reasonable degree of transparency and consistency in the deployment of the expertise and experience of assessors.

Generally, in a true buffer case, the obligations imposed by s 126 upon the assessor may be discharged by much more generalised statements.


1 Campbell and Barrett JJA, Sackville AJA

Ranked No 1 - Australia's fastest growing law firm' (Legal Partnership Survey, The Australian July 2010)

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.