The recent Supreme Court decision in Allianz Australia Insurance Limited v The Estate of the Late Summer Abawi [2024] NSWSC 1245 has clarified the status of skin injuries under the Motor Accident Injuries Act 2017 (NSW) (MAIA), with significant implications for claimants and insurers. The case revolved around whether lacerations to the skin can be classified as "threshold injuries" under section 1.6 of the MAIA, which defines soft tissue injuries.
Background
Since its enactment, the MAIA has introduced several complexities in determining which injuries qualify as threshold injuries, meaning claimants may not be entitled to ongoing statutory benefits or common law damages if their injuries are classified as such.
Section 1.6 of the MAIA defines a "soft tissue injury" as an injury to tissue that connects, supports, or surrounds other structures or organs of the body. This list includes muscles, tendons, ligaments, and other similar tissues, but notably excludes nerves and any complete or partial rupture of tendons, ligaments, or cartilage. The definition also excludes skin, which has long been a point of debate.
The central issue in Allianz Australia Insurance Limited v The Estate of the Late Summer Abawi 1 was whether the skin could be classified as a soft tissue injury under this section, given that skin, medically considered an organ, connects, supports, and surrounds other structures. In this case, the Medical Review Panel determined that lacerations to the claimant's wrists were non-threshold injuries, but the insurer, Allianz Australia Insurance Limited, sought judicial review, arguing that the panel had misinterpreted section 1.6.
The Supreme Court's ruling
Justice Griffiths in the NSW Supreme Court confirmed that an injury to the skin is not a soft tissue injury under the MAIA. His Honour addressed several key aspects in the statutory construction of section 1.6 including:
- Exclusion of skin in the definition – Justice Griffiths noted that Parliament had provided a detailed list of what constitutes a soft tissue injury, including muscles, tendons, and ligaments, but had explicitly excluded skin from this definition. This omission, he reasoned, was intentional, as Parliament could have added skin to the list if it had intended to classify it as a soft tissue injury.
- Non-exhaustive list – while the list in section 1.6(2) is non-exhaustive, Justice Griffiths concluded that skin could not reasonably be included as a tissue that connects, supports, or surrounds other organs or structures of the body. Even though the skin contains fibrous tissue, fat, and blood vessels, it does not meet the definition of soft tissue as described in the Act.
- Interpretation of "Other" in section 1.6(2) – Justice Griffiths disagreed with the Review Panel's interpretation of the word "other" in the section. The Panel distinguished between "organs" and "other structures," but Justice Griffiths clarified that the word "other" applied to both organs and structures, reinforcing the exclusion of skin from the soft tissue injury definition.
- Parliament's intention – His Honour also reasoned that if Parliament had intended to include skin within the definition of a minor injury, it could have done so. The Act already excludes other injuries, such as nerve injuries and ruptures of tendons, from the definition of soft tissue injuries, further supporting the exclusion of skin.
As a result, the Court dismissed the insurer's application for judicial review, upholding the Review Panel's decision that the lacerations to the claimant's skin were non-threshold injuries.
Implications of the decision
This ruling provides much-needed clarity on the classification of skin injuries under the MAIA. For claimants, the decision means that skin injuries, such as lacerations, will not be classified as soft tissue injuries, allowing them to pursue ongoing statutory benefits and common law damages, unlike those with threshold injuries.
However, the decision also highlights some of the anomalies in the statutory scheme. As Justice Griffiths noted, a claimant with several soft tissue injuries may be limited to statutory benefits for only 52 weeks, while another claimant with similar injuries but an additional skin injury could be entitled to ongoing benefits and damages. These inconsistencies may prompt further legislative reform or the use of the Motor Accident Injuries Regulation 2017 to clarify which skin injuries, if any, should be classified as threshold injuries.
Why this decision matters
The Supreme Court's decision has the potential to reshape how threshold injuries are interpreted under the MAIA, especially in cases involving skin injuries. It also highlights the importance of careful statutory construction and how the non-exhaustive nature of certain lists in legislation can lead to unintended consequences.
While the ruling resolves the question of whether skin injuries fall within the definition of soft tissue injuries, it is unlikely to end debates about other injury types that straddle the line between threshold and non-threshold classifications. The ruling may also lead to future amendments to the MAIA or its regulations to provide further clarity on injury classifications, particularly to prevent anomalous outcomes that may arise in borderline cases.
In summary, the decision in Allianz Australia Insurance Limited v The Estate of the Late Summer Abawi 2 reinforces that skin injuries, despite their connection to other bodily structures, are not considered soft tissue injuries under the MAIA. This ruling brings greater certainty to claimants and insurers alike but may prompt further legal and regulatory developments.
Footnotes
1 [2024] NSWSC 1245.
2 Ibid.
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