- Where a claimant has a pre-existing tendency to one of a number of conditions contributed to by an accident, it is unnecessary to assess damages that arose from each separately.
- The Supreme Court will only interfere with a CARS Assessor's assessment of damages where there is error on the face of the record.
- The Supreme Court will not interfere with a CARS Assessor's assessment where a perceived error is made within the Assessor's jurisdiction.
- The opportunities for successfully challenging a CARS Assessment on the basis of jurisdictional error remain very limited.
The NSW Court of Appeal handed down its decision in Insurance Australia Limited -v- Helou on 7 October 2008.
The claimant had been injured in a motor accident on 22 November 2000. The claim proceeded to assessment and a certificate was issued in the sum of $1,494,794.30 plus costs.
The claimant, who was 48 years of age at the time of the accident, suffered a significant pre-existing back condition resulting from an injury which occurred in 1985. He was off work for about five years but was able to operate his concreting business, albeit with some ongoing back pain, until the date of the accident. The condition was not sufficiently severe to warrant treatment during that time.
As a result of the motor accident, the claimant sustained injury to both his cervical spine and his lumbar spine. It was common ground that all disability he suffered after the accident in his cervical spine was caused by it.
The claimant took four months off work but was then able to resume work between April 2001 and late 2005. The evidence was that he suffered pain in both regions during this time. However, his condition deteriorated and he underwent neck surgery in November 2005 and low back surgery in March and October of the following year. He did not resume work beyond November 2005.
A significant issue, in the proceedings before the Assessor, related to the extent to which the claimant's lumbar spine condition after the accident was attributable to it, rather than to the 1985 injury and degenerative changes that had occurred since then. NRMA contended that the lumbar spine condition, in the period after the claimant stopped working, was not causally connected to the accident. The claimant contended, on the other hand, that the accident was the only significant cause of his post November 2005 condition. The Assessor found that the accident had made a material contribution to the claimant's lumbar spine condition. Acknowledging the likely impact of the pre-existing condition in the absence of the accident, he discounted the relevant heads of damage accordingly.
NRMA sought to have the Section 92 Certificate set aside on the grounds of jurisdictional error. The insurer argued that the Assessor failed to apportion the claimant's disability appropriately and that his assessment of future care, in particular, was so unreasonable that no reasonable decision maker would have made it.
The Court Below
Malpass AJ concluded that the Assessor's reasons demonstrated that he had a clear and accurate understanding of the issues he was required to address. The court was not satisfied that there had been an incorrect application of principles of causation. Nor was the court satisfied that the insurer was entitled to relief on the ground that no reasonable decision maker would have reached the assessment which was determined by Assessor Quickenden.
Court of Appeal
On the insurer's behalf it was submitted that the Assessor ought to have initially assessed the damages that arose from the cervical spine condition, and bring the full quantum of the damages so assessed to NRMA's account. He should then have assessed the damages attributable to the lumbar spine condition, and divided those damages into that part which was attributable to the accident, and that part which was attributable to the pre-existing lumbar spine condition, and brought to NRMA's account only that proportion of the lumbar spine damages that was found to be attributable to the accident.
In rejecting this submission, Campbell JA observed (at 58) that this seemed to be "a highly artificial way of proceeding". The Assessor had recognised that the predictable future disability of the claimant will partly result from the motor vehicle accident and will partly result from the pre-existing lumbar spine condition. The Assessor recognised that, in particular, the entitlements to economic loss and care all needed to be discounted by reason of the pre-existing lumbar spine condition, from the figure at which they would have been assessed had there been no such pre-existing condition.
As such, for each of those heads of damage, the Assessor was held to have arrived at a figure that took into account the causal contribution of the pre-existing condition which was "exactly what is required" to perform the task of assessing damages.
Campbell JA went on to observe (at 59) that whilst some of the figures arrived at by the Assessor for his assessment of future domestic care were "puzzling", it had not been demonstrated that they were wrong, let alone wrong in a way that amounts to jurisdictional error or error of law. The court's difficulty, in this regard, was that it did not have a transcript of the oral evidence heard by the Assessor. Importantly, His Honour highlighted the distinction between errors 'within jurisdiction' and errors' on the face of the record'.
'59 If the assessor has made any errors in carrying out that task, they are errors within jurisdiction, and not errors of law on the face of the record. In putting it that way, I am not to be taken as expressing a view that the assessor has actually made any such error. While the figures at which he arrived for items 9.6.5 and 9.6.6 of his assessment of future domestic care needs are puzzling by comparison with the evidence of Ms Petrovska, I am not in a position to say they are wrong (let along wrong in a way that amounts to jurisdictional error or error of law) when the assessor had before him more evidence on this topic than just the reports of Ms Petrovska."
The court considered, in some detail, the relevant principles for assessment of damages, including those arising from Watts -v- Rake  HCA 58, Purkess -v- Crittenden  HCA 34, Malec -v- JC Hutton Pty Limited  HCA 20.
The court went on to note, with approval, the following passage from the judgment of Ipp JA in the more recent decision in Seltsam Pty Limited v Ghaleb  NSWCA 208:
"Malec has an important bearing, for example, on the way in which a court must determine whether a defendant has discharged the 'disentangling' evidentiary burden on it of showing that part of the plaintiff's condition was traceable to causes other than the accident and that, had there been no accident, the plaintiff would have suffered disability from his pre-existing condition. Where a defendant alleges that the plaintiff suffered from a pre-existing condition, the evidential onus as explained in Watts -v- Rake and Purkess -v- Crittenden remains on the defendant and must be discharged by it. Nevertheless, to the extent that the issues involve hypothetical situations of the past, future effects of physical injury or degeneration, and the chance of future or hypothetical events occurring, the exercise of 'disentanglement' discussed in those cases is more easily achieved. That is because the court is required to evaluate possibilities in these situations – not proof on a balance of probabilities. ... A proper assessment of damages requires the making of a judgment as to the economic and other consequences which might have been caused by a worsening of a pre-existing condition, had the plaintiff not been injured by the defendant's negligence. A pre-existing condition proved to have possible ongoing harmful consequences (capable of reasonable definition) to the plaintiff, even without any negligent conduct on the part of the defendant, cannot be disregarded in arriving at proper compensation."
The court concluded that the Assessor had performed the task required of him to assess the claimant's damages. His reasons identified the various heads of damage he had awarded and how he arrived at the numbers attributed to each of those heads of damage. As such, his statutory obligation had been discharged. There was no jurisdictional error or error of law. The appeal was dismissed with costs.
- This decision again highlights the limited opportunities which exist to set aside a CARS assessment on the basis of jurisdictional error. The courts are loathe to interfere with the reasoning process in the absence of all the evidence which was before the Assessor. Given that transcripts of oral evidence before CARS Assessors are not available, it will take compelling submissions to engage a finding that the exercise or purported exercise of power was flawed sufficient to warrant intervention.
- The case also shows that an Assessor may make errors which are not susceptible to judicial review, provided they are 'within jurisdiction'. The Supreme Court will only interfere with a CARS Assessor's assessment of damages if satisfied that the Assessor acted outside his or her jurisdiction.
- To date, only one such challenge has succeeded, in Richards v Richards, where an Assessor assessed future care contrary to the thresholds in s 128 (prior to Harrison v Melhem). In that case, the Supreme Court was satisfied the Assessor acted outside his jurisdiction by awarding damages for future care after making a finding that the claimant's need for care did not satisfy the thresholds (as then understood).
- By contrast, in Helou, any error in respect of the apportionment of loss between pre-existing and accident-caused injuries, was found to be an error 'within jurisdiction' and therefore not susceptible to judicial review.
- The decision also highlights the relevant principles of causation and the difficult evidential onus on an insurer to disentangle multiple causes.
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.