Where the Insurer rejects an explanation for delay and does not "accept liability under the claim" the Insurer is arguably not bound by the result of a General Assessment irrespective of the outcome of the Special Assessment of the late claim dispute.
One of the controversial aspects of Hayek v Trujillo arises from the obiter comments made by Ipp JA in paragraph 67, as follows:
"67 Thus, in my view, a claimant, who has received an unfavourable certificate under s 96(1)(a), is entitled, thereafter, so long as the claim is not exempt from assessment, to require the claims assessor to make an assessment of the issue of liability (unless the insurer has accepted liability – see s 94(1)(a)) and the amount of damages for that liability, and to issue a certificate as to the assessment under s 96(4). The claimant, thereafter, would be entitled to commence court proceedings (despite the unfavourable s 96 certificate). That is because that certificate is not binding on the parties."
It appears to be clear that there is typing error in the Judgment and the reference to s 96(4) should read s 94(4).
In any event, his Honour’s observations have been interpreted as suggesting that a matter should proceed to General Assessment even where a Special Assessment Certificate has been issued certifying that a late claim may not proceed.
As I understand the view formed by the Principal Claims Assessor, the practice at CARS will now be that, where possible, a Special Assessment Application and an
General Assessment Application will be allocated to the same Assessor and heard together.
Importantly, my understanding of the PCA’s view is that the General Assessment Certificate which results will not be binding on either the Claimant or the Insurer. This is because the Special Assessment Certificate, itself, is not binding on the parties (see s 96(4))
However, the PCA’s view appears to be predicated upon the assumption that an Insurer will not "accept liability under the claim" – for the purpose of s 95(2)(a) – in cases where the Insurer rejects the Claimant’s explanation for delay.
Accordingly, a General Assessment Certificate will not be binding on the Insurer where:
The claim is a late claim,
The Insurer rejects the explanation for delay, and
The Insurer does not issue a Section 81 Notice accepting liability.
In cases where the Special Assessment takes place prior to the General Assessment, it remains the case that the General Assessment will not be binding on the Insurer where the Insurer rejects the explanation and does not accept liability irrespective of the outcome of the Special Assessment.
Accordingly, it is imperative that Insurers avoid issuing Section 81 Notices in cases where they maintain that the Claimant does not have a full and satisfactory explanation for delay, even after the Special Assessment process has concluded.
By not issuing a Section 81 Notice accepting liability, the Insurer may be able to force Court proceedings and preserve the right to challenge the claim on the basis of delay when those proceedings are commenced.
Given these developments, I suggest that Insurers:
Decline to issue a Section 81 Notice in cases where the Insurer’s position is that the Claimant does not have a full and satisfactory explanation for delay,
Where dissatisfied with the outcome of a late claim dispute, write to the Claimant’s Solicitors and advise them that you do not agree with the result and do not consider yourselves bound by it,
Consider at the conclusion of the General Assessment whether you wish to voluntarily accept the sum assessed or force the Claimant to commence Court proceedings, and
Where dissatisfied with the outcome of the General Assessment, write to the Claimant’s Solicitors and advise them that you do not consider yourselves bound by the result, given the live late claim dispute, and invite Court proceedings.
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.
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