Australia: Personal Injury Law Update: NSW workers compensation and motor accidents compensation law 2018

Last Updated: 10 July 2018
Article by Joshua Dale

Introduction

This paper will deal with current developments and recent updates in the areas of Workers Compensation (Part A) and Motor Accident Compensation (Part B) in New South Wales largely focusing on major developments in the last 12 months.

PART A – Workers Compensation in New South Wales

As we moved towards Christmas Day of 2017, this became not only a significant day for the festive season but also a very significant day for a large number of workers who on that day had their payments discontinued under Section 39 of the Workers Compensation Act 1987. As practitioners in this space will be aware, Section 39 states that an injured worker who has been receiving weekly benefits from 1 October 2012 and has not been assessed to exceed the 20% whole person impairment threshold would have their payments discontinued if they had received 260 weeks of weekly payment compensation.

From a practical perspective, WIRO has effectively dealt with this transition period setting up an ongoing funding scheme for WIRO/ILARS approved lawyers to investigate and/or challenge any notices or discontinuance of payments issued by an insurer under Section 39.

When providing clients with advice under this Section and in accordance with that funding it is important to note that it does not matter whether the 260 weeks of weekly payments are consecutive.

If you do have a client whereby they fall under the 20% whole person impairment threshold, then it is also important to note the restrictions a worker will then have to receive medical expenses which are as follows:

  1. 0% to 10% whole person impairment – a worker is entitled to a further two years of medical or related treatment from the date their weekly payments ceased.i
  2. 11% to 20% whole person impairment – a worker is entitled to a further five years of medical or related treatment from the date the weekly payments ceased.ii
  3. 21% or more whole person impairment – a worker is entitled to reasonably necessary medical expenses for lifeiii.

Section 39 will continue to affect workers as time progresses where more and more workers will meet the limits of their entitlements to weekly payments. Practitioners will need to be aware of the interplay between a worker whose payments are discontinued and any ongoing entitlements to medical expenses and be aware of the fast track funding systems through WIRO in order to seek further evidence and provide quick and adequate advice to workers who find themselves in circumstances where their payments are discontinued.

Over the last 12 months there have also been a number of significant decisions providing further clarity around the ability of a deceased worker to claim lump sum compensation, further clarity around the definition of journey claims post the 2012 amendments, the definition of a worker, the Application of Section 59A (ie the limitation on one's ability to claim medical expenses).

Is Lump Sum Compensation Payable in Addition to a Death Benefit where Injuries Lead to Death?

In the decision of Hunter Quarries Pty Limited v Alexandra Mexlan as Administrator for the Estate of Ryan Messenger [2017] NSWSC 1587, the Supreme Court dealt with the question of whether or not a worker who was killed during the course of employment also entitled his estate to claim lump sum compensation in addition to death benefits.

The deceased was working at Hunter Valley's Karuah Quarry on 9 September 2014 when a 40 tonne excavator he was operating rolled, crushing him inside the cabin. Evidence submitted by the Plaintiff in those proceedings showed that the worker was not killed instantaneously but survived for approximately 9 minutes and as such, should be awarded compensation for permanent impairment in addition to a death benefits claim.

The dispute before the Court was largely limited to what the term "permanent disability" meant and the question of whether or not two sets of compensation can be permitted by the Act. The New South Wales Supreme Court has confirmed that such an approach and payment of compensation is permitted under the Act. Justice Schmidt held that:

"Rights to compensation then accrued are not extinguished by subsequent developments, even death." iv

Further,

"Impairment which finally results in death is impairment of the most serious kind which a work injury can cause, whether death results quickly or after more prolonged suffering." v

Her Honour commented further in relation to the definition of "permanent impairment" under the Workers Compensation Act 1987 (NSW) and the Workplace Injury Management and Workers Compensation Act 1998 (NSW) indicating that:

"The legislative scheme is concerned with those who are injured at work. When a worker suffers an injury which causes an impairment so serious that he or she cannot recover from it, even with treatment, there is a permanent impairment." vi

Her Honour continued that:

"If the impairment is temporary, that is, one which the worker can recover with time and/or treatment, it is not a permanent impairment."vii

When dealing with Mr Messenger's claim, Her Honour considered the seriousness of the crush injuries sustained by him indicating that

"His heart continued to beat, but his death was likely to have followed within minutes, during which he was likely to have been unconscious." viii

Her Honour confirmed that:

"An impairment which finally resulted in death, the most serious kind a work injury can cause." ix

The importance of this decision is that it recognises that an injured worker, who suffers death as a result of those injuries, has a separate entitlement to compensation for an injury where death follows within a short time frame. It might also be arguable that even if it was not within a short time frame that there may be some causal connection between a particular workplace event and a subsequent death but each case would need to be dealt with on its own facts. The practical implication in this case is that this man's family, through his estate, was able to claim the death benefit (currently $781,900) as well as an additional claim for lump sum compensation of $598,560. It is understood that this matter is currently on appeal and is yet to be determined on a final basis.

Journey Claims – Clarity or Confusion?

In the case of Smith v Woolworths Ltd [2017] NSWWCC 290, the matter looked at the question of journey claims in the context of the legislative changes post-2012.

In this case, the worker was employed at a Woolworths Store at the Kiama Village Shopping Centre. On 14 May 2017, the worker drove her vehicle from the Centre and parked her car within the staff car park. After parking her vehicle, the worker then walked along a walkway outside the shopping mall and prior to entering the shopping mall was attacked by a bird, sustaining a severe right eye injury. The claim was ultimately denied on the basis of Section 9A and Section 4 of the Workers Compensation Act 1987. There also remained a question in this case as to whether or not the worker was still on a journey at the time of her injury. This decision ultimately found that at the time of the worker's injury this was not to be considered part of the journey as she had driven from her house to a staff car park and while she had not crossed the boundary of her place of employment, she had indeed crossed the boundary of the land on which her employment is situated, the moment she had parked and exited her vehicle. The Arbitrator ultimately found that in this action she had effectively arrived at her place of work. The question of whether or not employment was a substantial contributing factor to the worker's injuries was then considered confirming that:

"An injury which arises directly out of circumstances encountered, places them within the scope of employment, is an injury arising out of employment."x

Therefore, whilst this worker was not engaging in direct activities associated with her employment with Woolworths, her employment had bought her to the place in which the injury had occurred and whilst ultimately her injuries were inflicted by a bird, would not have occurred had she not been employed. The worker was therefore entitled to weekly compensation and medical expenses.

To the writer's current knowledge this decision was not appealed, but certainly has wide reaching implications for workers that may be on or about the land upon which they are employed to perform employment activities. Whilst it remains clear that each case will be considered on its own facts, it would be interesting to see whether or not the Arbitrator would have found in this worker's favour had it been at the end of her working day and departed to the car park to begin her journey home as opposed to arriving at work. Arguably, based on this decision, provided a worker remains on the land i.e. within the boundary of the land as opposed to the specific workplace when an injury occurs, workers compensation entitlements would follow.

To be an Employee or not to be an Employee, That is the Question!

In a recent Court of Appeal decision of Tran v Vo [2017] NSWCA 1043, the Court considered whether or not at the time of the accident a worker was an employee or a member of the public. The Plaintiff was employed as a casual worker. On her day off, she attended to purchase a soft drink at her place of employment. Whilst there, a work colleague asked her if she could assist with cleaning the floor, a task that she would normally perform as part of her employment. When performing this task, the worker slipped and fell with her left hand getting caught in a juicing machine causing crush injuries. When considering the question of whether or not the Plaintiff was a worker, it is important to note that she had already received workers compensation benefits. Certainly, if the Plaintiff were allowed to make a public liability claim this would amount to more substantial benefits that might be available to the Plaintiff compared with any entitlement she might have under workers compensation.

Ultimately the Court found that the Plaintiff was not a worker and/or an employee finding that the requisite causal connection was not present noting the following important facts:

  1. The Respondent worker was a casual, working on rostered days. The day of her accident was not one of those days. It was accepted on all of the evidence that the worker was not required to work by the Appellants on the day of the accident.x/
  2. The Respondent worker went to the Appellant's premises, not to perform work but to buy a drink and meet her work colleague who was also a friend who was working there at the time.xi
  3. At the time of the accident, the Respondent worker was not performing a task her employer had induced or encouraged her to perform.xiii

The Court ultimately determined that it was not sufficient that "but for" the employment, the Respondent worker would not have been at the place of her accident. As such, the worker's injury was not one arising out of her employment. Therefore, the worker was permitted to pursue a claim pursuant to the Civil Liability Act 2002 (NSW) despite the error of receiving workers compensation, pursuant to an undertaking to the Court; the Plaintiff was liable to repay the workers compensation payments if she were to receive damages for the public liability matter.

What is or is not an "Artificial Aid"?

The decision of Pacific National Pty Ltd v Baldacchino [2018] NSWWCCPD 12, the question before the Workers Compensation Commission was whether or not a knee replacement was categorised as an "artificial aid" within the meaning of section 59A (6) (a) which states that no time limits apply in "the provision of crutches, artificial members, eyes or teeth and other artificial aids or spectacles (including hearing aids and hearing aid batteries)".xiv

The relevance of this question in this particular case is that the worker had suffered a knee injury while alighting from a motor vehicle on 27 October 1999. He also underwent arthroscopic surgery in that same year and received weekly compensation and treatment expenses paid for. The evidence showed that the worker's need knee condition continued to deteriorate and in 2014 the worker was made redundant. In 2016, at age 65, the worker was referred for a knee replacement which he then referred on to the insurance company and liability was denied pursuant to a Section 74 Notice. The dispute of liability concerned a question mark over whether or not there was a causal connection between the need for knee replacement surgery and the subject accident and reliance was also placed upon Section 59A limiting an entitlement to medical expenses. At first instance, the Arbitrator found in favour of the worker and ordered for the surgery to be paid relying upon the earlier decision of Thomas v Ferguson Transformers Pty Ltd [1969] No 1 NSWLR 216 where their Honours Hutley JA and Hope JA held that:

"An artificial aid is anything which has been specifically constructed to enable the effects of the disability (the result of injury) to be overcome" and that "The essential quality of an artificial aid is that it is an aid specifically tailored to the needs of a person."xv

The employer proceeded to lodge an appeal which was ultimately unsuccessful whereby Deputy President Snell concluded that an "artificial aid" is anything which has been specifically constructed to enable the effects of the injury to be overcome. The Deputy President indicated that the intention of the relevant definition in the 1987 Act is substantially the same as the relevant definition in the 1926 Act and the re-enactment of virtually identical words in the 1987 Act is indicative of the legislative's intention to re-enact the same meaning as construed in the decision of Thomas. It was therefore found that the clear purpose of the 2015 Amendment was to widen potential benefits available to recover the cost of medical and related expenses beyond the expiry of the time periods dictated by Section 59A.

What this means is that despite the 2012 amendments applying strict time limits, the decision represents some reprieve to injured workers who would usually not have access to procedures such as a knee replacement or hip replacement. It also shows confirmation, at least from the Commission's perspective, that whilst there were significant legislative changes including the implementation of Section 59A that the 1969 case law of Thomas remains good law in the definition of an "artificial aid". The insurer has now lodged a Summons in the Court of Appeal seeking leave to appeal this decision and a final determination is yet to be made.

Developments to be Aware of in the Future

The Standing Committee on Law and Justice (SCLJ) has been appointed as the Legislative Council Committee to supervise the operation of the New South Wales Workers Compensation Scheme. In 2018 there will be a review of the Workers Compensation Scheme which will focus on the feasibility of a consolidated Personal Injury Tribunal for compulsory third party and workers compensation dispute resolution, as per recommendation 16 of the Committee's First Review of the Workers Compensation Schemexv.

Effectively, the New South Wales Government appears to be moving towards establishing a "one stop shop" forum for resolution of all workers compensation disputes. This falls in line with various recommendations made by the SCLJ in its previous review which also includes reference to the New South Wales Government considering the benefits of developing a more comprehensive specialised personal injury jurisdiction in the New South Wales jurisdiction. Announcements by the current Minister for Finance, Victor Dominello, appear to limit this potential modelling and further changes to dispute resolution to those workers affected by the 2012 reforms and not to workers injured prior to that time. It remains to be seen how this will be implemented and what is currently proposed by the Government. It is, however, worth noting that the SCLJ have already made a number of recommendations arising out of consultations dating back to 2014 and this will be a continuing area for development within the workers compensation sphere moving forward.

PART B – Motor Accidents Compensation in New South Wales

With the passing of the Motor Accident Injury Act 2017 and its application from 1 December 2017, there is now a new motor accident scheme in New South Wales.

As claims have been made, there are a number of issues that have arisen with the implementation of the scheme that continue to be addressed in various working groups in close consultation with stakeholders including from the Law Society of NSW and the Australian Lawyers Alliance. Practitioners will be aware that the new Act is not retrospective and therefore only applies to anyone injured in a motor accident on or after 1 December 2017.

Under the new scheme, there are now statutory benefits available to Claimants limited to weekly payments and medical and treatment expenses for everyone up to six months and thereafter, any further entitlements are based on fault and the passing of the 'minor injury test'.

Disputes moving forward regarding both the threshold and the definition of 'minor injury' will be managed by SIRA's DRS Merit Review Service after a compulsory internal review is conducted.

With the new scheme, there are also new cost regulations which practitioners will need to be across not only in relation to the work they perform but also to ensure that they act in cases where they will be reasonably compensated for the work done. Whilst the regulations do limit what legal fees can be charged in connection with legal work performed, it does not prohibit the provision of legal advice and/or assistance provided to injured people nor does it prevent pro bono arrangements. It will be extremely important for practitioners to be across the dispute categories so that they will be aware of the limitations of costs in certain matters where there is a dispute. There have been a number of helpful documents released by the State Insurance Regulatory Authority (SIRA) which will require regular revision of the SIRA New South Wales government's websites as more documents are compiled and released.

For injuries sustained prior to the inception of the new Act that is before 1 December 2017 practitioners should be aware that there are new motor accident permanent impairment guidelines effective from 1 June 2018 which are also accessible on the SIRA website.

Moving forward, like the workers compensation scheme, the motor accidents compensation scheme will also be subject to regular reviews. The SCLJ will conduct a review of the CTP scheme in New South Wales in 2018.

There are a number of issues that have arisen in the scheme including but not limited to the following:

  • The operation of section 151Z of the Workers Compensation Act 1987 – At present, if a worker suffers an injury during the course of employment where they are also operating a motor vehicle, they will be prevented from recovering their full entitlement to damages in that if they receive a lump sum amount of compensation for loss of earnings or economic loss and/or pain and suffering, they will be forced to repay not only the statutory benefit for weekly payments but also any payments they have received for treatment and care even though they can't recover those damages.
  • Treatment of foreigners – If a foreign tourist suffers an injury on a New South Wales road they are unable to recover any medical or treatment expenses once they leave Australia, either as statutory benefits or as damages. Furthermore, a foreign tourist is unable to recover fortnightly payments of statutory benefits until their final return to work prospects are clearxvii. The practical effects of these limitations are clearly unjust and are the subject of current review.
  • Minor injury – Whilst there is very little data available in terms of how the operation of the definition of minor injury will work in practice, it remains the case that an injured person could be assessed as having DRE 2 and a 5% whole person impairment at three levels of the spine which combined would total 15% whole person impairment, yet, still only satisfy the definition of 'minor injury' which would limit their entitlement under the current Act to six months of statutory benefits only. This is the subject of ongoing submissions and may be an area of reform in the Act moving forward.
  • There remains generally a question around insurer conduct including their internal review procedures and what information or lack thereof is being given to injured people in circumstances where they may not have legal advisers. This remains an area of ongoing concern and round table discussions between SIRA and major legal stakeholders including the Law Society of New South Wales and the Australian Lawyers Alliance and will likely feature as part of the 2018 review.

General Overview of the Scheme

Definition of "Minor Injury"

Section 1.6(1) of the Act defines a 'minor injury' as being one or more of a soft tissue injury or a minor psychological or psychiatric injury. Based on the current definition, minor injury includes a psychiatric injury that is not a recognised psychiatric illness (based on DSM 5 criteria)[xviii] and from a physical injury perspective any soft tissue injury but not an injury to nerves or a complete or partial rupture of tendons, ligaments, menisci or cartilagexix.

If a person injured in a motor vehicle accident meets the definition of "minor injury" the only statutory benefits available to them are for loss of income and treatment and care for up to six months, after which time those benefits will cease. An individual who suffers minor injury is now unable to pursue a common law damages claimxx.

Section 1.6 also states that Regulations can exclude or include specified injuries under the definition of minor psychological injuries or soft tissue injuries. The regulations now includes on the definition of "minor injury" any injury to a spinal nerve root that manifest in neurological signs (other than radiculopathy) and includes acute stress disorder and adjustment disorders as minor injuriesxxi.

This will mean that at the outset of any accident from 1 December 2017 that all practitioners will need to confirm the diagnosis of any injured client by reference to medical evidence and/or radiological scans verified by an appropriately qualified professional to determine whether or not it would be feasible for a retainer to be entered into.

Statutory Benefits Scheme Generally

The new CTP scheme under the Act will give people injured in motor vehicle accidents access to statutory benefits including weekly income support and medical treatment and care. The focus and purpose of the Act is to ensure injured people are rehabilitated efficiently and quickly.

An injured party previously had six months post-accident to serve the claim form however under the new act this is now 3 months. Section 6.13 provides that if the claim form is not served within 28 days then the injured party is not entitled to weekly benefits for any period prior to service of the claim form. If a claim is not made within these time frames then a full and satisfactory explanation must be provided and a claim made within 3 yearsxxii unless the claim arises from the death of a person or injury resulting in 10% whole person impairment or morexxiii.

Section 3.42 states that a liability for statutory benefits of any type cannot be redeemed or settled by a lump sum payment to the claimant.

If compensation is available under the Workers Compensation Act 1987 (NSW) in respect to an injury that concerned the worker and has made a successful claim for workers compensation, they have no right to statutory benefits. A claim is defined as successful if 'liability for any workers compensation has been accepted by the insurer for the claim'xxiv.

No Fault Statutory Benefits

Under the new scheme injured persons are entitled to weekly benefits and medical treatment expenses (including commercial care) for 26 weeks after the accident, regardless of fault. However, there are exceptions. If the driver has been charged with or convicted of a 'serious driving offencexxv or at-fault drivers or owners whose vehicle was uninsured they will not have access to these benefitsxxvi. Furthermore, in the case of contributory negligence statutory benefits may also be decreased by the percentage a driver contributed to their injuryxxvii.Section 3.38 sets out the circumstances in which contributory negligence will be found and includes conviction of drug or alcohol related offences, being a voluntary passenger with a driver affected by alcohol or drugs, not wearing a seat belt, not wearing a protective helmet, voluntary assumption of risk and other conduct defined by the regulations.

There are no benefits payable to drivers at fault after 6 months except children under the age of 16 who would be entitled to medical treatment expenses beyond that periodxxviii. Weekly payments also terminate at the date of retirement (based on the eligibility to receive the aged pension), currently age 65xxix.

Weekly Payments of Statutory Benefits

Statutory benefits stop after six months for those mostly at-fault (responsible for contributory negligence of more than 61%) and for those with a minor injury. The rate of payment will depend on the entitlement period and what, if any, is the extent of the loss of earning capacity.

Weekly payments are capped at $3,853xxx.

Outside of this there are three distinct entitlement periods:

  1. From weeks 1 to 13 an earner is entitled to receive "95% of the difference between the person's pre-accident weekly earnings and the earner's post-accident earning capacity (if any)"xxxii;
  2. From weeks 14 to 78;
    1. 80% of pre accident earnings in the case of total incapacity
    2. 85% of the person's pre-accident income and the person's post-accident earning capacity which is based on pre-injury earningsxxxiii.
  3. After week 78 the same rate/ calculation as it applies from weeks 14 to 78 is used but the definition of post-accident earning capacity differs from the first two entitlement periods in that it is calculated based on the weekly amount an injured person may have the capacity to earn in employment "reasonably available to the person, determined on the basis of the person's fitness for work in any such employment."xxxiv.

The definition of "earner" is important for the purposes of the distinction between the second and third entitlement periods. The meaning of "earner" is defined in schedule 1 as someone who is at least 15 years of age who was in the last 8 weeks prior to the accident or at least 13 weeks over the past year prior to the accident or at least 26 weeks over the past 2 years prior to accident or someone who had contracted to enter into employment prior to the accident or someone receiving workers compensation prior to the accident and someone who had not permanently retired from employment. An injured person is not required to be classified as an earner to receive benefits after week 78 if they are 18 or over.

In a practical sense it is hard to see how someone who was not an earner prior to the accident might somehow be entitled to payments after week 78 and/or why there is a distinction between those aged 18 and under (note that those aged under 18 are still required to be earners). Time will tell how this could or should be interpreted and what this might mean for injured persons entitlements.

The insurer is able to make decisions about the claimant's pre accident earning capacity or post-accident earning capacity at any time during the course of the statutory claim which is subject to procedures set out in the Motor Accident guidelinesxxxv. An insurer must comply with the Act in good faith, afford procedural fairness and use plain language when making determinationsxxxvi. If an insurer is to reduce an injured person's payment they must comply with certain notice periods which is two weeks in respect of the first entitlement period, four weeks in respect to the second and 8 weeks thereafterxxxvii.

After 26 weeks or 6 months, weekly statutory benefits are to be reduced in accordance with any contributory negligencexxxviii.

Medical Treatment and Care Expenses

By introducing the new statutory scheme, it enables the majority of injured people access to reasonable and necessary treatment and care payments as long as they relate to the injury resulting from the accidentxxxix. In regards to minor injuries, treatment and care is limited to six months however some provisions allow extensions in certain circumstances such as; if there is evidence treatment will improve recovery/rehabilitation, the insurer delayed approval or some other circumstance or if the regulations further define such an entitlementxl. The guidelines also now provide what types of treatments would be considered and also now extends to circumstances where the treatment and care will improve the injury person returning to work and/or usual activitiesxli.

Notably, the new scheme provides for medical expenses for life provided they are reasonable and necessary, however, after five years, liability for medical treatment expenses transfers from the CTP insurer to the Lifetime Care and Support Authority, subject to agreement between the insurer and that schemexlii.

Gratuitous care is no longer available under the statutory benefits scheme or under the common law damages schemexliii. There remains the ability to claim the loss of the ability to provide gratuitous care by an injured person to dependents, such as childrenxliv.

Otherwise care is claimable on the basis that its cost is reasonable and includes reasonable and necessary travel and accommodation expenses in order to obtain both treatment and care which also applies to those expenses incurred by parents or other carers who might need to assist an injured personxlv.

The Act also introduces a new Dispute Resolution Service, which is to form part of SIRA and replace CARS and MAS. All claims will first be subject to an internal review before being referred to Dispute Resolution. Depending on the nature of the dispute it will then be referred to a Merit Reviewer or a claims assessorxlvi.

The new model requires more robust decision making by insurers and provides an independent dispute resolution service for disputes to be resolved independently, flexibly, fairly, cost-effectively and quickly. Reviews of decisions are still available in relation to medical assessments to a review panel of 2 merit reviewers but only if the proper officer is satisfied there is a reasonable cause to suspect that the original decision was incorrect in a material respect having regard to the particulars of the applicationxlvii.

Common Law Claims

Common law claims are limited to an injured person who has suffered something other than a minor injury. Damages are also only available for specified categories of economic and non-economic loss. Section 4.5 defines economic loss and it excludes medical treatment and care expenses within the damages claim. Past and future loss of earnings/earning capacity is capped at 2.5 x average weekly earnings which is currently $3,853.00 net per weekxlviii.

Non-economic loss is only available if the claimant is assessed at 10% whole person impairment or abovexlix. Non-economic loss damages remain capped at $521,000.

Statutory benefits and claims for damages are separate entities. A damages claim can only be made as prescribed by section 6.14 that is it cannot be made until 20 months has passed since the date of accident unless an injured person is assessed at greater than 10% whole person impairment. Also a claim for damages cannot be settled within two years of the motor accidentl.

Claims which were previously referred to as blameless motor accidents are now referred to as 'no fault motor accidents' but otherwise retain the same wording as the 1999 actli.

A three year limitation period will apply to all claims however if lodged in the dispute resolution service a dispute resolution assessor can grant leave for a claim to be referred for assessment if a full and satisfactory explanation for the delay has been providedlii.

There will still be claims that will be exempt from the dispute resolution service and be permitted to proceed straight to the court, for example, legal incapacity will remain as grounds for a mandatory exemption.

Costs

The introduction of a defined statutory benefits scheme will naturally reduce costs for a number of reasons. By implementing a statutory and no-fault benefits scheme the government believes the adversarial nature of motor vehicle accident claims will minimise due to narrowing the access to common law damages claims. Part 4 of the Act will further reduce costs by the removal of access to common law damages for minor injuries. However, based on the writers current reading of the act the likelihood of medical disputes and merits reviews being appealed to the Supreme Court remains high.

Secondly, the act has introduced a strict regulation of legal fees that an injured person can be charged. Motor vehicle accident claims will now have fixed maximum costs by reference to the amount recovered by the claimant and a fee for service model.

Section 7.48 of the act permits SIRA to set up an advisory service to assist claimants in relation to benefits and damages claims. If a claimant is only receiving statutory benefits they can only recover reasonable and necessary legal costs if permitted to do so by the insurer or Dispute Resolution Service. Section 8.10(4) permits the Dispute Resolution Service only to approve legal costs if the claimant is in statutory dispute and under a legal disability or an exceptional circumstance exists.

In regards to common law claims, costs are set out in Schedule 1 of the regulationliii. Section 25 of the regulation sets out that solicitor client costs can only be charged on the component of compensation received by an injured person over the sum of $75,000[liv]. Therefore, a practitioner is only able to claim regulated costs up to $75,000 in accordance with Schedule 1 and then any solicitor client component in accordance with a costs disclosure/ agreement for the amount received by an injured person over $75,000lv.

Moving forward all practitioners should be aware of these new provisions and the likelihood that there will be a decline in the need for lawyers operating in this scheme except in cases where there is a potential common law claim or within the defined categories of statutory disputes regarding benefits relating to the entitlement of no fault statutory benefits as above.

Case Update – Relevant Cases in Recent Times

How a Brain Injury can Slip Through the Cracks of Impairment Assessment

In the case of Little v Allianz Australia Insurance Ltd [2017] NSWSC 1024, the Claimant was injured in a motor vehicle accident on 20 August 2013 and suffered a brain injury. A medical dispute over the degree of permanent impairment was referred to SIRA by the Claimant's solicitor. In accordance with the 'Brain Injuries Assessment Fact Sheet (for Assessors)', step one is for an assessment to take place by a medical assessor with particular expertise in the assessment of brain injuries, with step two then referring the matter on for psychiatric assessment unless the brain injury assessor advises otherwise. In this case, referral to a psychiatric expert had taken place. Both of the assessors found that the brain injury had not exceeded the 10% whole person impairment threshold where both experts in the assessment of the brain injuries, whilst accepting there was a significant injury, place the problem in the other expert's field of expertise. Because of this common opinion, the Plaintiff ultimately failed to exceed the 10% whole person impairment threshold which was likely, given the significance of the injury. The matter came before his Honour Justice Campbell who quashed the Psychiatrist's Certificate and remitted the matter for a fresh psychiatric assessment. It remains troubling that this decision, whilst hopefully will lead to the correct outcome through reassessment, shows that it is possible that a Plaintiff can fall through the cracks where experts are largely in agreement on the extent of impairment but defer to the other for assessment resulting in an impairment under the 10% threshold.

The Relevance of Criminal Conduct

In the Queensland Supreme Court in the decision of Captain v Wosomo & Anor [2017] QSC 86, the Court was asked to determine liability having regard to criminal conduct of an injured person. The injured person, the Plaintiff, was the front seat passenger in a vehicle that was stolen from the owner's driveway. Whilst it was accepted on the facts that his injuries were caused by the offence of dangerous driving, which the Plaintiff was not liable for, the Court indicated that it was a reasonably foreseeable consequence of the illegal conduct of stealing the vehicle and ultimately found that there was no duty of care owed by the owner of the vehicle. The Plaintiff was unsuccessful.

When a Brain Injured Child Has No Suitable Tutor, Who Steps In?

In the case of Smith v NRMA Insurance Ltd [2016] NSWCA 250, an interlocutory decision, the Court of Appeal was asked to consider the parens patriae jurisdiction of the Court. In this case, the Appellant was a minor who had suffered catastrophic injuries, including brain damage and as such, was a protected person. The Court of Appeal proceedings were commenced on behalf of the Appellant by his father who acted as tutor. Due to a conflict of interest, the father of the Appellant was removed as tutor and an application was made seeking the Court to exercise its parens patriae jurisdiction with a view to having the President of the Law Society nominate an independent solicitor who would act as tutor on behalf of the Plaintiff. The general proposition for the appointment of an independent tutor was not opposed by the Respondent insurer however, in circumstances where the appointment will carry with it an indemnity or protection against the new tutor as to the question of costs, the insurer defended the application. His Honour Justice Gleeson considered the function of UCPR Rule 7.18 providing for the appointment and/or removal of a tutor in proceedings. His honour acknowledged that the Court had a direct responsibility for those who could not look after themselves including infants as well as those of unsound mind. His Honour suggested that it is the function of the Court in exercising its parens patriae jurisdiction to consider not only the protection of the person with the disability but also the processes of the Court.

The real question in this interlocutory application was whether or not it would be appropriate and/or whether or not the Court has jurisdiction, to appoint an independent tutor with a view to also indemnifying that independent tutor as to the question of costs regardless of the outcome of the substantive appeal. His Honour acknowledged there is no explicit provision to limit the effect of such an order and in fact, suggested that it is the jurisdiction of the Court to do whatever is necessary to enable it to act effectively within its jurisdiction and to control its own processes and proceedings. In summary, his Honour suggested that:

'In my view, an order protecting a tutor from the personal liability for cost may be made as an incidental term of an order appointing a tutor under UCPR Rule 7.18(1)(b), or in reliance on the power conferred by UCPR Rule 2.1. Alternatively, if there be any doubt as to how to make such an order, it is not in dispute that the Court has inherent power under its parens patriae jurisdiction to appoint a tutor on terms protecting the tutor from personal liability for costs.'lvi

The practical implications of this case is that when acting on behalf of the estate of a protected person in circumstances where there is no willing and able tutor to be appointed that the Court, in exercising its functions, may appoint a tutor, nominated by the Law Society on the basis that a protective costs order be made in respect of the appointed tutor. It is important to note that the Court will balance competing interests in making such an appointment and it is likely this type of appointment would be limited to very specific circumstances such as those that occurred in this matter. Nonetheless, it does allow, in certain circumstances almost risk-free litigation from a cost perspective to be pursued on behalf of a minor or person without capacity. However, practitioners would arguably not be immune from a personal costs order if advantage were taken of such an order in a case where there are no prospects of success.

Clarity on "Inherent Risk" and The Question of Contributory Negligence When Two Friends on Unregistered Motorcycles Have an Accident

Whilst it sounds like the start of a bad joke, the Court of Appeal was asked to consider this very factual scenario in the decision of The Nominal Defendant v Buck Cooper [2017] NSWCA 280. The Plaintiff (respondent on the appeal) was injured when his motorcycle collided with one ridden by his friend. Both motorcycles were unregistered and both riders had consumed alcohol. Mr Cooper succeeded at first instance but that decision was then appealed on behalf of the Nominal Defendant.

In considering the Trial Judge's findings, whilst some errors were noted, the Court found that the decision was broadly acceptable. The Nominal Defendant also advanced arguments based on section 5L i.e. materialisation of an inherent risk, as well as a defence of joint criminal enterprise noting that the riders were both drinking together. The Court of Appeal ultimately found that both defences would fail. In particular, the defence under section 5L failed because:

"[105] In Barbara McDonald, "Legislative Intervention in the Law of Negligence: The Common Law, Statutory Interpretation and Tort Reform in Australia" (2005) 27 Sydney Law Review 443, McDonald makes the following observations at 461:
"'Inherent risk' is defined as 'a risk of something occurring that cannot be avoided by the exercise of reasonable care and skill'. Logically of course, if a risk cannot be avoided by reasonable care, there could be no negligence arising from its materialisation. This was pointed out by Kitto J in Rootes v Shelton, a case involving water skiing. Many activities involve inherent risks. If on the other hand the risk could have been avoided by reasonable care, then there may well be negligence on the part of the defendant and the risk of such negligence is neither inherent nor likely to have been readily assumed (such as to give rise to the common law defence of voluntary assumption of risk) by a participant in an activity." (footnotes omitted)
[106] I agree with this passage. As Rootes v Shelton (1967) 116 CLR 383; [1967] HCA 39 itself explains, water skiing is an inherently risky activity and involves a number of inherent risks (such as hitting submerged objects). If, however, the risk of something occurring (in that case of colliding with another boat) could have been avoided by the exercise of reasonable care and skill it was not "inherent".

In other words, a risk is only "inherent" if it arises from the doing of a particular activity as opposed to the intervention in that activity of a person/s or action/s not exercised with reasonable care and skill. The Court also found that the defence of joint criminal enterprise was not made out on the authorities.

In decided in favour of the plaintiff (respondent on appeal) the Court indicated that given the accident occurred on the Plaintiff's side of the road and despite some errors in fact-finding, it was appropriate that the Court of Appeal would uphold the first instance decision that the Plaintiff's contributory negligence was 33% in the circumstances, notwithstanding the obvious dangerous nature of the circumstances of the accident and the consumption of alcohol. This case is an important reminder that each case will be considered on its own facts and individual circumstances are wholly relevant to the ability of a Plaintiff to be successful irrespective of what appears on face value to be a defendable claim.

Conclusion

The complexities and developments in the statutory personal injury schemes in New South Wales continue to be a forever moving feast creating a highly specialised environment for practitioners and injured persons alike. It is now more than ever that we must ensure the rights of injured people in NSW are preserved and protected by continuing to challenge and develop the provisions of new and aging laws.

Footnotes

i Section 59A(2)(a) Workers Compensation Act 1987 (NSW)

ii Section 59A(2)(b) Workers Compensation Act 1987 (NSW)

iii Section 59A(5) Workers Compensation Act 1987 (NSW)

iv Hunter Quarries Pty Limited V Alexandra Mexlan as Administrator for the Estate of Ryan Messenger [2017] NSWSC 1587 at [119]

v Hunter Quarries Pty Limited V Alexandra Mexlan as Administrator for the Estate of Ryan Messenger [2017] NSWSC 1587 at [65]

vi Hunter Quarries Pty Limited V Alexandra Mexlan as Administrator for the Estate of Ryan Messenger [2017] NSWSC 1587, at [22]

vii Hunter Quarries Pty Limited V Alexandra Mexlan as Administrator for the Estate of Ryan Messenger [2017] NSWSC 1587 at [25]

viii Hunter Quarries Pty Limited V Alexandra Mexlan as Administrator for the Estate of Ryan Messenger [2017] NSWSC 1587 at [110]

ix Hunter Quarries Pty Limited V Alexandra Mexlan as Administrator for the Estate of Ryan Messenger [2017] NSWSC 1587 at [65]

x Smith V The Australian Woollen Mills Limited (1933) 50 CLR 504 at [517-5018], Starke J

xi Tran v Vo [2017] NSWCA 1043 at [96]

xii Tran v Vo [2017] NSWCA 1043 at [102-105]

xiii Tran v Vo [2017] NSWCA 1043 at [88-89]

xiv Section 59A(6)(a) Workers Compensation Act 1987 (NSW)

xv Thomas v Ferguson Transformers Pty Ltd [1969] No 1 NSWLR 216 at [220-221], Hutley JA and Hope JA.

xvi Standing Committee on Law and Justice – First review of the workers compensation scheme – Report 60 March 2017 accessible at: https://www.parliament.nsw.gov.au/committees/inquiries/Pages/inquiry-details.aspx?pk=2414#tab-reportsandgovernmentresponses.

xvii See sections 3.21 and 3.33 of the Motor Accidents Injuries Act 2017 (NSW)

xviii Ibid, s1.6 (3)

xix Ibid, s1.6 (2)

xx Motor Accident Injuries Act 2017 (NSW) s4.4

xxi Motor Accident Injuries Regulation 2017 (NSW) r5(1) and (2)

xxii Ibid, s6.13(3)(a)

xxiii Ibid, s6.13(3)(b)

xxiv Ibid, s3.35 (3)

xxv Ibid, s3.37.

xxvi Ibid, s3.36.

xxvii Ibid, s3.38.

xxviii Ibid, s3.28

xxix Ibid, s3.13

xxx Ibid, s3.9

xxxi Ibid, s3.12

xxxii Ibid, s3.6(2)

xxxiii Ibid, s3.7(2)

xxxiv Ibid, Schedule 1 (8).

xxxv Ibid, s3.16

xxxvi Motor Accident Guidelines (Version 2 effective from 30 April 2018) clauses 4.45, 4.46 and 4.47 and 4.49

xxxvii Ibid, s3.19

xxxviii Ibid, s3.38.

xxxix Ibid, s3.24

xl Ibid, s3.28 (3).

xli Motor Accident Guidelines (Version 2 effective from 30 April 2018) clause 5.6.11

xlii Ibid, s3.45

xliii Ibid, s3.25

xliv Ibid, s3.26

xlv Ibid, s3.24

xlvi Ibid, see Division 7.4.

xlvii Ibid, s7.15 (3).

xlviii Ibid, s3.9

xlix Ibid, s4.11.

l Ibid, s6.23.

li Ibid, s5.1.

lii Ibid, s7.33

liii Motor Accident Injuries Regulation 2017 (NSW)

liv Ibid, r25 (1)(e)

lv Ibid, r(2)

lvi At 36 per Gleeson J

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