Motor Accident Compensation in NSW: Part 5- Dispute Resolution Services

Motor Accident Compensation in NSW: Part 5 – Dispute Resolution Services

This article continues our series on motor accident compensation in NSW. You can read about the specific features of the Motor Accidents Injuries Act 2017 (“MAIA”) in part 4 found here.

Dispute Resolution Service

The MAIA authorises the establishment of a Dispute Resolution Service (DRS) (s 7.9 MAIA). All Claims Assessors and Medical Assessors now fall within the DRS, as does a new class of decision-maker, known as Merit Review Officers. There is some limited overlap between Claims Assessors and Merit Review Officers. Similarly, there is a limited number of Claims Assessors who only can assess claims under the MAC Act.

If a claimant is dissatisfied with the insurer’s decision relating to any aspect of the claim, for example determination of Pre-Accident Weekly Earnings (PAWE), an internal review can be required. If the claimant is dissatisfied with the internal review outcome, or if it does not occur, a merit review application can be made to the DRS. This application must be made within 28 days of the claimant receiving the insurer’s internal review decision, or where no internal review was required, within 28 days of receipt of the reviewable decision (MAG, 7.194).

Note that there is a free legal-aid scheme available for assistance of applicants for External Merit Review applications to the DRS. It is not widely publicised but is very useful.

Definition of “Earner”

The MAIA provides a definition of requirements to be met for a claimant to be considered an “earner” for the purpose of obtaining statutory benefits:

• At least 15 years old; and
• Employed:
  • at any time in the 8 weeks preceding the motor accident; or
  • during a period or periods equal to at least 13 weeks during the year immediately preceding the motor accident; or
  • during a period or periods equal to at least 26 weeks during the two years immediately preceding the motor accident; and
  • had not retired; or
• Before the accident had entered into an arrangement (whether or not an enforceable contract) to undertake employment or commence a business, at a particular time and place.

DRS to Determine Liability in Claims for Damages

Once a claim for damages is made by a claimant, the matter can be referred for assessment to the DRS. Unlike under MACA, where an insurer denies liability under MAIA, the claim will not be exempt from assessment (Motor Accidents Injuries Regulation (MAIR), 14).

An assessment on the issue of liability is not binding on any party to the assessment (s 7.38(1) MAIA). An assessment on the amount of damages for liability is binding on the insurer if:

• The insurer admits liability under the claim, and
• The claimant accepts that amount of damages in settlement of the claim within 21 days after the certificate of assessment.

Accordingly, where an insurer denies liability and the claim for damages is assessed by DSR, the insurer may elect not to accept the certificate of assessment concerning liability. However, there are potential cost implications should they proceed to Court (see below).

Restrictions on Medico-Legal Evidence

Unless a health practitioner is a treating practitioner of the claimant or is “authorised” by the MAG to give evidence, their evidence is not admissible in proceedings before a court for damages, merit reviews and medical assessment in relation to:

• Degree of permanent impairment
• Whether treatment and care is reasonable and necessary
• Whether treatment and care will improve recovery
• The degree of impairment of earning capacity
• Whether an injury is a “minor injury”

The DRS will publish a list of authorised health practitioners on its website who are authorised to give evidence. Parties are therefore limited in using the practitioners approved on this list, as the evidence from “unauthorised” practitioners will not be admissible.

Regulation of Costs

The regulation of costs under MAIA is more far-reaching than the limitations imposed by MACA. There is no real utility in my dealing with the costs provisions today.

New Key Limits

Key time limits imposed on claimant and insurer (MAIA and Motor Accidents Guidelines (MAG)):

Notice required from the insurer before discontinuing or reducing weekly payments (s 3.19):

• During the first entitlement period – 2 weeks
• During the second entitlement period – 4 weeks
• After the second entitlement period – 8 weeks

Rejection of a claim by insurer for damages for non-compliance with motor accident verification requirements (s 6.10):

• Within 2 months after receiving the claim
• Within 2 months after receiving an explanation for the non-compliance

Time for making claims for statutory benefits (s 6.13):

• Within 3 months after the date of the accident
• Within 28 days after the accident for weekly payments

Notice of acceptance of liability for statutory benefits (s 6.19):

• Within 4 weeks for claims within first 26 weeks
• Within 3 months for claims beyond 26 weeks

Notice of change in liability decision after receiving additional information (MAG 4.31):

• As soon as possible, no later than 14 days

Suspension of weekly payments for failure to minimise loss (MAG 4.56):

• Suspension notice must give claimant 14 days to comply

Insurer duty to make offer of settlement (s 6.22):

• As soon as practicable unless liability wholly denied

Restrictions on settlement of damages (s 6.23):

• Cannot settle within 2 years unless impairment exceeds 10%

Insurer may require claimant to commence proceedings (s 6.33):

• If claimant has been entitled to commence proceedings for at least 6 months

Internal review deadlines (s 7.9):

• Insurer must notify claimant within 14 days

Time limits for referring claims (s 7.33):

• Cannot refer more than 3 years after accident without satisfactory explanation

Internal review periods — Table 7.1 MAG:

• Merit review – 14 days
• Medical assessment (treatment/capacity) – 14 days
• Medical assessment (impairment/minor injury) – 21 days
• Miscellaneous assessment matters – 14 days
• Miscellaneous assessment matters (fault, mostly at fault, serious driving offence, contributory negligence) – 21 days

Reply periods for merit review — Table 7.2 MAG:

• Funeral expenses – 7 days
• Weekly payments – 7 days
• Treatment and care benefits – 7 days
• Damages – 14 days
• Other merit review matters – 7 days

Application for medical assessment:

• Within 28 days of internal review decision
• Or within 28 days of due date if insurer fails to complete review

Comment

With any new legislation setting out to achieve such a complete overhaul, only time will tell how these changes will apply in practice. On the face of it, it appears there will be a number of initial challenges for all involved:

• whether the increase in determinable disputes at the DRS results in more administrative law challenges
• whether inconsistent findings may occur between statutory benefits vs damages
• whether inconsistency arises where high permanent impairment for minor injuries gives no non-economic loss, but 11% WPI for non-minor injuries does
• whether limitations on expert opinion conflict with Evidence Act 1995 and UCPR expert evidence rules
• the impact on workers compensation insurers and s 151Z recovery actions

Read more about Motor Accident Compensation in NSW in part 6 of the series, “Medical Assessment Services”.