Australia: PCA Dismisses CARS 2A for Procedural Non-Compliance: An Insight Into the New Pre-CARS Procedure

Curwoods Industry News
Last Updated: 22 April 2010
Article by Peter Hunt

In Brief

  • The Insurer is not required to serve a Section 82 Offer when the Claimant has not achieved a "sufficient recovery to enable the claim to be quantified" even where the Claimant has provided Section 85A Particulars.
  • On an application by the Insurer to dismiss the Claimant's CARS 2A, the PCA has demonstrated that she is prepared to analyse the medical evidence to determine whether "sufficient recovery" has been achieved.
  • A Claimant can not comply with the obligation to provide Section 85A Particulars where the Claimant's entitlement to non-economic loss damages has not been agreed or assessed by MAS.
  • An Insurer is not obligated to make a Section 82 Offer whilst a MAS permanent impairment assessment remains outstanding (including review and further assessment applications).
  • Section 85A does not obligate the Claimant to provide documents to substantiate the assertions made in the Section 85A Particulars.


The Principal Claims Assessor has recently provided an insight into her construction of some of the critical provisions contained in the October 2008 amendments to the Motor Accidents Compensation Act 1999.

In two related matters, the Insurer submitted that the Claimant had failed to comply with the new pre-CARS procedure and that the CARS 2A should be dismissed. The PCA agreed with the Insurer in each matter and found that the Claimant's CARS 2A was non-compliant.

Trigger for Section 82 Offer

At the outset, the PCA made it clear that the entire pre-CARS procedure is triggered either by the Insurer's Section 82 Offer or the Insurer's failure to make such an Offer when required to do so.

Furthermore, the PCA noted that the Insurer was not required to make a Section 82 Offer until the Claimant had "sufficiently recovered to enable the claim to be quantified" and the Claimant had served compliant Section 85A Particulars.

In each matter, the PCA analysed the available medical evidence and determined that she was not satisfied that "sufficient recovery" had been achieved.

In the first matter, the PCA noted that the Claimant was undergoing psychiatric treatment and, as such, she could not be satisfied that the claim could be quantified "with any real precision". In the second matter, the PCA came to the same conclusion on the basis that there was insufficient medical information available to allow an assessment of "sufficient recovery".

Given the PCA's approach, it is important to note that the provision of Section 85A Particulars is not the only trigger for a Section 82 Offer. The Insurer is not required to make a Section 82 Offer where it can validly argue that the Claimant's condition has not yet "sufficiently recovered" to permit a proper assessment of the likely quantification of the claim.

It is also important to note that the PCA has demonstrated that she is prepared to delve into the medical evidence in order to determine whether she is satisfied that a sufficient recovery has been achieved.

Compliance with Section 85A when MAS Assessment Outstanding

In one of the matters she dismissed, the PCA considered whether the Claimant could comply with her obligation to provide Section 85A Particulars in circumstances where the Claimant's entitlement to non-economic loss damages had not yet been agreed or assessed.

The PCA decided a Claimant is not able to comply with Section 85A where his or her entitlement to non-economic loss damages remains undetermined.

The PCA reasoned as follows:

"Section 85A(3) defines what all relevant particulars about the a claim are. Importantly, they include "all disabilities and impairments arising from those injuries". The underlined words are critical in respect of this case as the claimant seeks a review of MAS assessment in respect of her psychological injuries and the MAS assessment of her physical injuries has not yet concluded... Impairments are of course important and it is incumbent upon the claimant to particularise them so that the insurer knows whether or not to include an amount for noneconomic loss in its initial offer. How can the claimant have provided all relevant particulars of her impairment when the issue of what the degree of her impairment are is yet to be determined?"

The PCA made it clear that the purpose of Section 85A Particulars is to enable the Insurer to make a genuine Section 82 Offer which has the potential to resolve the claim. Once this purpose is understood, it naturally follows that Section 85A Particulars are not complete where the Claimant is not able to particularise whether or not there is an entitlement to non-economic loss damages.

It follows from the PCA's reasoning that an Insurer is not obligated to make a Section 81 Offer whilst MAS permanent impairment assessments remain outstanding (including review and further assessment application).

Absence of Documents to Support Particulars

On the other hand, the PCA rejected the Insurer's argument that the Claimant had failed to comply with Section 85A because the Claimant had neglected to provide some documents – such as tax returns – to substantiate some of the assertions the Claimant had made.

The PCA made the point that it is not for the Insurer to prepare the Claimant's case. If the Claimant lodges a CARS 2A with insufficient documents – or with documents which had not previously been exchanged – then that is a problem which the Claimant has to overcome.

Please contact any of the CTP partners should you wish to discuss these decisions further.

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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