AAA v AAMI Insurance

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER
CITATION:	AAA v AAMI Insurance [2021] NSWPICMR 1
APPLICANT:	AAA
RESPONDENT:	AAMI Insurance
MERIT REVIEWER:	Katherine Ruschen
DATE OF DECISION:	21 March 2021
CATCHWORDS:	MOTOR ACCIDENTS- Dispute about whether for the purposes of section 3.21 of the Motor Accident Injuries Act 2017, the applicant is or has been residing outside Australia; and whether they have suffered a loss of earnings that is likely to be of a permanent nature; serious physical and psychological injuries; interim participant in the Lifetime Care and Support Scheme; Held- applicant has suffered loss of capacity and loss of earnings that is likely to be of a permanent nature; applicant prima facie entitled to weekly payments of statutory benefits provided he meets all statutory requirements; insurer to make decision about applicant’s post- accident earning capacity.
DETERMINATIONS MADE:	1. It is determined in this merit review that for the purpose of section 3.21 of the Act, AAA (the Claimant) suffered a loss of earnings that is likely to be of a permanent nature. 2. Accordingly, AAA is prima facie entitled to weekly payments of statutory benefits, as assessed in accordance with section 3.8 of the Act, provided he meets all other requirements under the Act, Regulations and Guidelines, including the requirements of sections 3.14 and 3.15 of the Act. 3. The insurer is to make a decision about AAA’s post-accident earning capacity under section 3.16 in order to assess the amount of weekly payments, if any, payable under section 3.8 of the Act. In doing so, the insurer may obtain further/updated information about AAA’s current capacity, including that it may require further information from AAA under sections 3.14 and 3.15 of the Act. 4. This decision takes effect on 19 November 2020.

Statement of Reasons

Background

The merit review application seeks a determination as to whether AAA is entitled to continue to receive weekly benefits under Division 3.3 of the Act, after he returned to France and therefore commenced residing outside Australia.
AAA received weekly payments, as a result of sustaining injury in a motor accident on 15 May 2019, for the first and second entitlement periods (under sections 3.6 and 3.7 of the Act). AAA is a French national and returned to France on 1 November 2020. The insurer ceased weekly payments on 18 November 2020 (at around the end of the second entitlement period) pursuant to section 3.21 of the Act on the basis AAA now resided outside Australia.
AAA submits that whilst he now resides outside Australia his loss of earnings is likely to be of a permanent nature and therefore, weekly payments should continue under section 3.21(2) and in turn, section 3.8.
The insurer did not conduct an internal review of their decision to cease weekly payments but instead advised AAA that he must make an application to the Commission.
Pursuant to section 7.11(2)A of the Act an application for a merit review can be made without an internal review, if the insurer has declined to conduct a review, as is the case in this matter.
Pursuant to section 3.21(2)(a) of the Act the Commission must determine whether AAA’s loss of earnings is likely to be of a permanent nature in any event. The insurer does not have jurisdiction to make this decision and accordingly, it was appropriate for the insurer not to conduct an internal review and for AAA to make his application to the Commission instead.

Submissions

AAA submits that his loss of earnings is likely to be of a permanent nature on the basis Dr James Bodel, orthopaedic surgeon is of the view AAA was not fit for work as at 3 November 2020, would not be fit for warehousing work in the foreseeable future and may struggle to return to work of that type.
The insurer submits it is premature to assess whether AAA’s loss of earnings is likely to be of a permanent nature because there is no up to date medical evidence about AAA’s current capacity for work. In the alternative, the insurer submits the current evidence is insufficient to establish the loss of earnings is of a permanent nature.

Reasons

Is the loss of earnings likely to be of a permanent nature?

Section 3.21 provides:

(1) An injured person who resides outside Australia is not entitled to receive any weekly payment of statutory benefits in respect of any period during which the person resides outside Australia, except as provided by this section when the loss of earnings in respect of which statutory benefits are payable is likely to be of a permanent nature.

(2) An injured person residing outside Australia is entitled to receive on a quarterly basis the amount of the weekly payments accruing due during the preceding quarter if:

(a) the Commission has determined that the injured person's loss of earnings is likely to be of a permanent nature, and

(b) the person establishes, in such manner and at such intervals as may be required by the Motor Accident Guidelines, the person's identity and the continuance of the loss of earnings in respect of which the weekly payment is payable.
The language of section 3.21 is “loss of earnings” not “loss of capacity”. Accordingly, the insurer’s submission that there is insufficient evidence about current “capacity” is misplaced, as current “capacity” does not need to be assessed under section 3.21. Capacity of course remains relevant to assessing the amount of weekly benefits payable under sections 3.6, 3.7 and 3.8 of the Act, if AAA passes the threshold test of having a loss of earnings that is likely to be of a permanent nature.
It is also not necessary to establish the loss “is of a permanent nature”. It is only necessary to establish the loss is “likely” to be of a permanent nature. This requires an assessment on the balance of probabilities.
An important distinction can be made between the terms “loss of earnings” and “loss of earning capacity”. Loss of earnings is a retrospective. Loss of earning capacity is prospective.
Loss of earnings refers to money the Claimant has already lost as a result of an injury. On the other hand, loss of earning capacity refers to the Claimant’s reduced ability to earn money in the future. Relevantly, the latter (loss of capacity) is addressed in the requirements of sections 3.8, 3.15 and 3.16 of the Act.
There is no doubt AAA has already suffered a loss of earnings as a result of injuries sustained in the motor accident. The question is whether that loss is likely to be of a permanent nature.
I agree with the insurer that the medical evidence before me is insufficient to determine whether AAA has a permanent incapacity to work and/or the extent of any current capacity. As noted, however, section 3.21 does not require an assessment of AAA’s capacity to work. It is only necessary to determine whether the loss of earnings he has suffered is likely to be of a permanent nature. This requires some consideration of the temporal nature of the loss. That is, whether the loss suffered is temporary in the sense it has ceased, or is likely to cease in the near future, or whether it is likely to continue for an indefinite period and can therefore be considered permanent in nature.
Although in the general sense loss of earnings is a retrospective, the question in section 3.21(2)(a) is whether the loss “is likely to be of a permanent nature”. “Likely” suggests some prospective assessment is required. It also means the prospective assessment only needs to be done on the balance of probabilities. The phrase “of a permanent nature” also suggests something more (in the prospective sense) is required than simply whether the money lost in the past has been or will be recovered. Nothing in section 3.21(2)(a) suggests the test is limited to whether the monetary loss is likely to be physically recovered. In my view, the test requires consideration as to whether the Claimant’s loss of earnings has characteristics which suggest the loss will likely be permanent, in the sense that it is not expected to change for an indefinite time.
On the information before me I am satisfied AAA’s loss of earnings is likely to be of a permanent nature, as there is a likelihood that there will be an ongoing loss of earnings, which is not expected to change for an indefinite time on the basis:

(a)    AAA suffered serious physical and psychological injuries, including a traumatic brain injury and a complex left elbow injury.

(b)    Neuropsychological assessment on 3 September 2019 concluded AAA demonstrated mild reductions in general auditory attention span, working memory (i.e. ability to hold and manipulate information in mind) and cognitive processing speed as compared to his pre-injury level of functioning. It was also concluded that AAA may increasingly struggle with higher level cognitive processes when he returns to his previous role in electrical engineering. AAA was considered unable to return to manual based work at the time due to ongoing physical injuries and that he will “likely take significant time to more adequately recover prior to attempting to return to pre-injury general roles”. It was considered “less clear” whether there will be long term difficulties at a later time point when returning to higher level electrical engineering roles.

(c)    On assessment by Dr Tram Anh Bui, rehabilitation physician, on 18 December 2019 it was reported AAA continued to have “physical deficits and … high level cognitive difficulty such as a reduction in his concentration and focus”. AAA was assessed as continuing to have no capacity for manual work as a result of physical injuries.

(d)    On 22 July 2020 Dr Bentivoglio recorded AAA had ongoing memory and concentration issues in addition to ongoing physical pain and restrictions. Dr Bentivoglio opined that as at 22 July 2020 AAA had no ability to undertake his pre-injury work in warehousing (the work he had been doing in Australia). Dr Bentivoglio also considered AAA was not currently fit to work on the open labour market and was unsure as to whether AAA would be able to return to the work he was trained to do in France (aeronautical engineering). Dr Bentivoglio also concluded AAA would likely have some cognitive impairment on a permanent basis.

(e)    On 3 November 2020 Dr Bodel recorded AAA had ongoing short term memory loss and was not currently fit for work. Dr Bodel also opined AAA was not fit for warehousing work for the foreseeable future and may struggle to return to that type of work.

(f)    As at the date AAA returned to France he was in receipt of weekly benefits, evidencing his incapacity was continuing at that time, 1 November 2020.

(g)    Upon being discharged by his Australian treating doctors it is clear those doctors expected various significant treatment and rehabilitation to continue in France. There is no indication as to when AAA’s ongoing treatment might be expected to cease.

(h)    AAA was accepted as an interim participant in the Lifetime Care and Support Scheme for a period of two years from June 2019 to June 2021.

(i)    AAA was continuously certified as having no capacity for any type of work from 15 May 2019 to at least 21 January 2021, a period of nearly two years. Impediments to his return to work were recorded as including poor range of motion in his left elbow, weakness in the left arm, reduced mobility and endurance, fatigue and reduced concentration and attention.

(j)    There is no definitive evidence of any expected return to work date for AAA. The general state of the evidence seems to be that this remains unclear. As noted, upon leaving Australia in November 2020 AAA had been certified as unfit until 21 January 2021 with no indication as to whether, upon reassessment on or after 21 January 2021, AAA might soon be ready to commence trialling a return to work.
It may be that since 21 January 2021 AAA has regained some capacity for work or that his treating doctors in France are now able to better predict when he will do so. For present purposes, however, I only need to be satisfied that AAA’s loss of earnings as a result of the accident, so far, is more likely than not to be of a permanent nature. I am satisfied on balance that:

(a)    AAA’s loss of earnings has persisted until at least 21 January 2021 (the date up to which AAA was last certified as having no capacity for any work, before he departed Australia in November 2020), being a period of more than 20 months.

(b)    The general consensus among AAA’s treating doctors and the medico-legal doctors is that whilst AAA may be able to return to work in the future, they are unsure as to when this will be or in what capacity.

(c)    The medical evidence suggests on balance AAA’s physical injuries will likely have some ongoing impact on the capacity in which he will be able to return to manual work. His ongoing cognitive impairment is likely to have some impact on his capacity to work as an engineer.

(d)    Whilst AAA may be able to return to some form of work in the future, his physical and/or cognitive impairment is likely to result in a reduced capacity to fully perform that work. In turn, this is likely to result in at least a partial loss of earnings on an indefinite basis.
I therefore conclude on balance that AAA’s loss of earnings is likely to be of a permanent nature for the purpose of section 3.21(2)(b) of the Act.

Assessment of current capacity

This decision that AAA’s loss of earnings is likely to be of a permanent nature does not mean AAA is automatically entitled to have weekly payments reinstated. Section 3.21 is in effect, the gateway that AAA must pass before he has an entitlement to receive weekly payment of statutory benefits. Once AAA steps through that gateway he remains subject to the other provisions of Division 3.3 of the Act, which deals with the issue of earning capacity and fitness for work. A determination that AAA’s loss of earnings is likely to be of a permanent nature does not mean he is entitled to ongoing weekly benefits without the need to satisfy any other requirement of the Act.
It is implicit from the words “in respect of which statutory benefits are payable” in section 3.21(1) that if it is determined by the Commission the loss of earnings is likely to be of a permanent nature, the other provisions of Part 3, Division 3.3 of the Act, the Regulations and the Guidelines applicable to an assessment of the amount of statutory benefits, if any, payable under sections 3.6, 3.7 or 3.8 continue to apply.
AAA’s entitlement to weekly benefits remains subject to his compliance with Division 3.3 of the Act and any relevant requirements of the Regulations and Guidelines.
AAA’s post-accident earning capacity, at least from 21 January 2021, is not known on the information before me.
Section 3.14 of Division 3.3 entitles the insurer to certain information, including an authority from AAA authorising his treatment and other services providers to give information to the insurer.
Section 3.15 sets out requirements for evidence as to fitness for work, including that AAA must provide “certificates of fitness for work … in respect of the period in respect of which the person is entitled to weekly payments of statutory benefits”.
Under section 3.16 an “insurer can make a decision about the pre-accident earning capacity or post-accident earning capacity of an injured person at any time”.
It is therefore now open to the insurer to obtain updated medical information to establish AAA’s earning capacity after the second entitlement period (as it wishes to do), including to require compliance by AAA with the requirements of sections 3.14 and 3.15 of the Act.
The insurer should then make a decision about earning capacity in the relevant period under section 3.16 (as distinct from this decision about whether AAA meets the threshold requirement that his loss of earnings is likely to be of a permanent nature) in order to determine the extent to which AAA is entitled to any weekly payments under section 3.8 for any period from on or after the date when payments ceased (i.e. the period after 18 November 2020).

Conclusion

It is determined in this merit review that for the purpose of section 3.21 of the Act, AAA suffered a loss of earnings that is likely to be of a permanent nature.
Accordingly, AAA is prima facie entitled to weekly payments of statutory benefits, as assessed in accordance with section 3.8 of the Act, provided he meets all other requirements under the Act, Regulations and Guidelines, including the requirements of sections 3.14 and 3.15 of the Act.
The insurer is to make a decision about AAA’s post-accident earning capacity under section 3.16 in order to assess the amount of weekly payments, if any, payable under section 3.8 of the Act. In doing so, the insurer may obtain further/updated information about AAA’s current capacity, including that it may require further information from AAA under sections 3.14 and 3.15 of the Act.
This decision takes effect on 19 November 2020.

Legislation and Guidelines

In making this decision, I have considered the following:

· The application, reply and supporting documentation.
· Motor Accident Injuries Act 2017 (NSW) (the Act).

· Motor Accident Guidelines and Personal Injury Commission Rules 2021.
· Motor Accident Injuries Regulation 2017.

Katherine Ruschen

Merit Reviewer

Personal Injury Commission

[2021] NSWPICMR 1

21 March 2021