Impact of a concession relating to permanent impairment disputes in motor vehicle accident claims

The plaintiff in Shaw v Insurance Australia Group Limited t/as NRMA Insurance [2023] NSWSC 1273 was involved in a motor vehicle accident wherein he sustained injuries to his lumbosacral spine and right hip. The insurer conceded the plaintiff suffered an injury to his lumbosacral spine which equated to a 10% whole person impairment rating in accordance with DRE III (Diagnosis-Related Estimate Category III) lumbosacral category rating.

The motor accidents scheme in New South Wales only permits plaintiffs with whole person impairment ratings of above 10% to seek and recover damages for non-economic loss.

The plaintiff later lodged an application for resolution of a medical dispute with the Personal Injury Commission. The insurer’s reply to the application annexed a document which confirmed the insurer conceded the spinal injury amounted to 10% whole person impairment.

The plaintiff was subsequently examined by a Medical Assessor who certified the injuries sustained in the motor vehicle accident resulted in 12% permanent impairment, 10% in respect of the spinal injury and 2% in relation to the right hip injury.

The insurer lodged an application for review of the medical assessment on the basis that the decision was incorrect in a material way as the Medical Assessor failed to undertake his own measurements of the percentage of the compression of the vertebra from radiological imaging, rather than depend upon percentages contained in radiology reports.

The Delegate of the President of the Personal Injury Commission agreed with the insurer’s submissions that the medical assessment was incorrect in a material way and referred the matter to a review panel.

The plaintiff sought judicial review of the decision of the Delegate of the President on three grounds:

1. That there was no medical dispute in relation to the spinal injury as the insurer had made a concession regarding the spinal injury and its permanent impairment rating. The plaintiff submitted there was therefore no medical dispute between the parties requiring review.
2. The decision of the Delegate of the President was so unreasonable that no reasonable decision maker would have come to that conclusion.
3. The insurer was estopped from asserting that the medical assessment of the spinal injury was incorrect as it had already conceded its existence and the applicable degree of impairment.

The matter was heard before Rothman J of the Supreme Court of New South Wales on 1 March 2023. The judgment was handed down on 27 October 2023. His Honour rejected the plaintiff’s first ground on the basis that a medical dispute must exist only at the time that the matter is referred to a Medical Assessor and confirmed that no dispute need exist at the time of referral to a review panel. His Honour also rejected the third ground as the plaintiff had not established same in his evidence and submissions.

Rothman J accepted the second ground. His Honour referred to the insurer’s failure to provide evidence questioning the extent of the spinal injury with its review application. His Honour reasoned that the insurer’s concession and the failure to provide evidence meant that no reasonable decision maker would find cause to suspect the medical assessment was incorrect in a material way.

His Honour’s conclusion was stated at [97] as follows:

“In those circumstances and given the nature of the agreement as to the minimum level of compression by the applicant for review and the evidence available to the Medical Assessor, it cannot be said that there is, on the material presented to the President, reasonable cause to suspect that the medical assessment was incorrect in a material respect (or an immaterial respect). Given the most peculiar circumstances of the medical assessment, the decision of the Delegate to the President was a decision, in the absence of evidence of the effect of the methodology on the assessment itself, to which no reasonable decision-maker could have come.”

His Honour found in favour of the plaintiff and made an order quashing the decision of the Delegate of the president. The application was remitted back to the Personal Injury Commission to decide in accordance with law. The insurer was ordered to pay the plaintiff’s costs of the proceedings.

If you have been medically assessed by a Medical Assessor appointed by the Personal Injury Commission and have cause to suspect the assessment is incorrect, contact Chamberlains Law Firm for an expert legal opinion.

 

*This article was prepared with the assistance of Sarah Farhat.