In brief - High Court judgment has implications for
general liability underwriters
The High Court of Australia has held in a recent decision in
ADCO Constructions v Goudappel that the transitional
regulations of the Workers Compensation Legislation Amendment
Act 2012 (NSW) extinguished one worker's right to lump sum
compensation despite him having made a claim two years prior to its
Worker's injury assessed at six per cent permanent
His injury was assessed at six per cent permanent impairment and
he was advised by his lawyers that he was entitled to lump sum
compensation in the amount of $8,250. On 20 June 2012, Mr Goudappel
made a claim for lump sum compensation arising from the permanent
impairment in accordance with
section 66 of the WCA.
Entitlement to permanent impairment compensation limited
to impairment greater than ten per cent
On 27 June 2012, the provisions of the Workers Compensation Legislation Amendment Act 2012
(NSW) ("the Amendment Act") came into operation. The
Amendment Act amended section 66 to limit the entitlement to
permanent impairment compensation to workers who had received an
injury resulting in a degree of permanent impairment greater than
ten per cent.
For Mr Goudappel, the effect of the Amendment Act if it applied
to him, was that he was no longer entitled to make a claim for lump
However, the savings and transitional provisions (cl 15 of Pt
19H of Sch 6) of the WCA provided that the limitation did not apply
to workers who had claimed lump sum compensation for permanent
impairment prior to 19 June 2012.
During the appeal, it was accepted that Mr Goudappel's
initial claim for compensation in April 2010 subsumed (or included)
his later claim for permanent impairment compensation on 20 June
2012. Accordingly, if cl 15 applied, Mr Goudappel's entitlement
to lump sum compensation was protected.
The Amendment Act also authorised the making of savings or
transitional regulations which amended the WCA. One transitional
regulation (cl 11 of Sch 8) provided that the amendments to lump
sum compensation in the Amendment Act "extend to a claim for
compensation made before 19 June 2012, but not to a claim that
specifically sought compensation under section 66 or 67 of the
ADCO argued that Mr Goudappel's original claim for
compensation on 19 April 2010 was not "a claim that
specifically sought compensation under section 66". It
submitted that Mr Goudappel made a claim specifically seeking
compensation after 19 June 2012 and therefore he had no entitlement
to the permanent impairment compensation.
Was the transitional regulation valid?
Mr Goudappel argued that the transitional regulation was not
valid for reasons including that the WCA did not authorise
regulations to be made affecting "accrued rights for any
period of backdating".
High Court finds that the transitional regulation is
The High Court found that the transitional regulation was valid
and that Mr Goudappel was not entitled to permanent impairment
Increased likelihood that workers will seek to join
third party tortfeasors to claims
A major implication of the decision is that many workers who
have made a general claim for workers compensation prior to June
2012 will be denied the right to claim lump sum compensation if
they did not specifically seek compensation under sections 66 or 67
of the WCA.
The decision represents a challenge to general liability
insurers by increasing the likelihood that workers will seek to
join third party tortfeasors, particularly occupiers, due to the
restrictions imposed under the WCA as amended. The decision may
lead to a rise in claims for common law damages as injured workers
seek to increase their options for compensation.
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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