AAI Limited t/as AAMI v Engelbrecht
[2023] NSWPIC 151
•13 April 2023
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | AAI Limited t/as AAMI v Engelbrecht [2023] NSWPIC 151 |
| Claimant: | Robert Engelbrecht |
| insurer: | AAI Limited t/as AAMI |
| Member: | Maurice Castagnet |
| DATE OF DECISION: | 13 April 2023 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; settlement approval; section 6.23; claim for damages for past and future economic loss; claimant 65 years of age; no entitlement to damages for non-economic loss; possibility of future surgery; claimant earning more post-accident; proposed settlement increased from $31,000 to $48,000 after further negotiations; Held – proposed settlement of $48,000 approved. |
| determinations made: | CERTIFICATE OF DETERMINATION Settlement Approval 1. The proposed settlement in the amount of $48,000 is approved under sub-s 6.23(2)(b) of the Motor Accident Injuries Act2017. 2. Pursuant to sub-s 3.40(1)(b) of the Act, the insurer is entitled to deduct the sum of $9,063.77 from the proposed settlement sum by way of recovery for weekly payments of statutory benefits paid to the claimant under Division 3.3 of the Act. |
STATEMENT OF REASONS
INTRODUCTION
The insurer and the claimant, Robert Engelbrecht, have agreed to settle the claimant’s claim for common law damages in the amount of $48,000 (the proposed settlement).
The claimant is not legally represented.
Sub-section 6.23(2) of the Motor Accident Injuries Act2017 (MAI Act) provides that a claim for damages for a claimant who is not represented in respect of the claim by an Australian legal practitioner, cannot be settled unless the proposed settlement is approved by Personal Injury Commission (Commission).
An application has been lodged by the insurer with the Commission for the purpose of having the proposed settlement approved.
The matter has been referred to me to consider approval of the proposed settlement.
BACKGROUND TO THE CLAIM
The claimant is a 65-year-old man who suffered injuries in a motor accident on 8 August 2019.
On that day, the claimant was stationary on his motorcycle on Pennant Hills Road, Oatlands when the insured vehicle collided with the rear of the motorcycle.
The evidence reveals that the claimant sustained an injury to the cervical spine, multiple fractured ribs and an injury to the right ankle.
Following the accident, the claimant was taken by ambulance to Westmead Hospital where he was admitted for treatment and discharged the next day. The claimant then saw his general practitioner, Dr Stephen Chow for further treatment. Dr Chow prescribed oral analgesic medication for pain and referred the claimant to physiotherapy.
On 23 August 2019, the claimant made a claim for personal injury benefits. The insurer has since accepted liability to make weekly payments of statutory benefits for the first 26 weeks and beyond. The claimant has received weekly payments of statutory benefits to a total of $9,063.77.
On 21 November 2019, the insurer determined that the claimant had sustained more than a threshold injury in the motor accident.[1] On that basis, the claimant is entitled to receive statutory benefits for treatment and care for the rest of his life.
[1] Prior to 1 April 2023, a “threshold injury” was defined in s 1.6(1) of the MAI Act as a “minor injury”.
Although I have not been provided with a copy of the claim form, it appears that at some point during 2021, the claimant made a claim to the insurer for common law damages. On 8 November 2021, the insurer admitted liability for the claim.
The claimant was also notified on that day that the insurer had determined that his injuries has not resulted in a degree of permanent impairment that is greater than 10%. On that basis, the claimant is not entitled to recover damages for non-economic loss.
On 11 November 2021, the insurer made an offer of settlement to the claimant in the sum of $33,000 to resolve the claim. The offer comprised of damages for past loss of earnings, past loss of superannuation and re-imbursement for income tax paid on statutory benefits, a total of $17,000. The remaining amount of $16,000 represented damages by way of a buffer for future loss of earnings and loss of superannuation. On 17 November 2021, the claimant accepted the offer of settlement.
On 10 December 2021, the insurer lodged an application for approval of the settlement by the Commission.
DOCUMENTS CONSIDERED
In making my decision, I considered the following documents:
(a) the electronic medical record of NSW Ambulance, dated 8 August 2019;
(b) the Discharge Summary from Westmead Hospital, dated 9 August 2019;
(c) the clinical records of the claimant’s treating doctor, Dr Stephen Chow;
(d) the Certificates of fitness issued by Dr Chow, dated 8 August 2019, 22 August 2019 and 26 August 2019;
(e) the Application for Personal Injury Benefits, dated 23 August 2019;
(f) the insurer’s liability notice – benefits up to 26 weeks, dated 19 September 2019;
(g) the insurer’s liability notice – benefits after 26 weeks, dated 21 November 2019;
(h) the MRI report – Cervical Spine of Dr Robert Ward, Castlereagh Imaging, dated 30 January 2020;
(i) the Modified Duties Plan of Wesley Mission, dated 18 March 2020;
(j) the reports of neurosurgeon, Dr Andrew Kam, dated 21 May 2020, 14 November 2022 and 7 February 2023;
(k) the Notice of Assessment – year ended 30 June 2020, issued by the Australian Taxation Office;
(l) a list of weekly payments of statutory benefits paid to the claimant, issued by the insurer on 12 June 2021.
(m) the report of orthopaedic surgeon, Dr Stephen Rimmer, dated 16 July 2021;
(n) the insurer’s liability notice for the claim for damages, dated 8 November 2021;
(o) a letter from the insurer to the claimant dated 8 November 2021, advising that the insurer does not concede the permanent impairment threshold;
(p) a letter from the insurer to the claimant dated 11 November 2021, making an offer of settlement of $33,000;
(q) an email from the claimant to the insurer dated 17 November 2021, accepting the offer of settlement of $33,000;
(r) the insurer’s submissions, undated but lodged with the Commission on 10 December 2021;
(s) an email from the insurer to the claimant dated 13 March 2023, making the proposed settlement of $48,000;
(t) the email from the claimant to the insurer dated 15 March 2023, accepting the proposed settlement in the sum of $48,000;
(u) a pay advice from Transport for NSW, dated 16 March 2023;
(v) the email from the claimant to the insurer dated 21 March 2023, advising of his current weekly earnings;
(w) the Agreement of Release executed by the claimant on 22 March 2023;
(x) various payslips from Wesley Mission, and
(y) a job description for the role of Prosecution Support Officer.
LEGISLATION
In making my decision, I considered the following legislation, rules and guidelines:
· the MAI Act;
· Motor Accident Injuries Regulation 2017 (the Regulation);
· Personal Injury Commission Rules 2021 (the PIC Rules), and
· Motor Accident Guidelines, Version 9.1 (the Guidelines);
CONSIDERATION
Compliance of the PIC Rules
According to r 95 (1) of the PIC Rules, the insurer must lodge the application with the Commission within 7 days of reaching a settlement agreement with the claimant.
In this case, a settlement agreement was reached between the parties on 17 November 2021. The insurer lodged the application with the Commission on 10 December 2021. This was more than two weeks late.
As will become apparent later in these reasons, the settlement agreement of 17 November 2021 is no longer submitted for approval by the Commission. It is the proposed settlement reached between the parties on 15 March 2023 that is now the subject of approval by the Commission.
Under the circumstances, I consider that it is appropriate for the Commission to dispense with formal compliance with r 95(1) by the insurer.
The claimant’s understanding of the proposed settlement
Sub-section 6.23(3) of the MAI Act provides I am not to approve the settlement of a claim unless satisfied that the settlement complies with any applicable requirements of or made under the MAI Act or the Guidelines.
Sub-clauses 7.37 (c) and (d) of the Guidelines provide that before I approve the proposed settlement under sub-s 6.23(3) of the MAI Act, I must be satisfied that the claimant understands that he is entitled to be represented in respect of the claim by an Australian legal practitioner and understands the nature and effect of the proposed settlement and is willing to accept it.
I conducted several teleconferences with the parties to question the claimant about those issues. The claimant appeared in person and Ms Adriana Papaspiros, Lawyer of Suncorp, appeared for the insurer.
At the teleconference of 3 March 2022, the claimant stated that he is aware that he was entitled to be represented by a lawyer with respect to his claim, but he has chosen not to do so.
The claimant’s responses to the questions that I posed to him at that teleconference regarding his ongoing disabilities, may be summarised as follows:
(a) The injuries to his ribs and right ankle had resolved.
(b) He has ongoing problems with his neck, especially on the left side. The pain is not constant, but he experiences occasional flare ups after certain activities. When this occurs, he has to rest for several days and take analgesia.
(c) The pain in his neck caused a lot of difficulty with the maintenance aspect of his work as a bus driver, but he has since left that job in May 2020. He is now employed as a Prosecution Support Officer with Transport for NSW which involves administrative duties. He still has neck problems with that work when he moves his head up and down.
(d) He has had an initial steroid injection which provided some benefit, but the relief was only temporary.
(e) He has been examined by a neurosurgeon, Dr Andrew Kam but he has not had any follow-up appointments to discuss his ongoing neck problems.
Considering the claimant’s responses and the evidence before me, I indicated to Ms Papaspiros that it was difficult for me to assess the adequacy of the settlement reached on 17 November 2021, in the absence of a further report from Dr Kam addressing the issues of future surgery and future loss of earning capacity.
Following the discussions, the claimant expressed his wish to be further examined by Dr Kam with a view to obtaining an updated prognosis on his neck problems.
I therefore adjourned the matter to allow this to occur and to allow the insurer time to submit a further report from Dr Kam to the Commission.
A further report from Dr Kam dated 14 November 2022 was submitted to the Commission by the insurer and the matter proceeded to a further teleconference on 5 December 2022. On this occasion, the claimant reported that he had a further appointment with Dr Kam on 31 January 2023. On that basis, I adjourned the matter again to allow this to occur and to await a further report from Dr Kam.
The Commission has since been provided with another report from Dr Kam dated 7 February 2023. The matter was then listed for a further teleconference on 21 March 2023.
At this teleconference, I was informed by Ms Papaspiros that the parties had conducted further negotiations to arrive at the proposed settlement of $48,000. This represented an increase for damages for future economic loss to a total of $31,000.
On this occasion, I discussed the report of Dr Kam dated 7 February 2023 with the claimant.
In his report, Dr Kam noted that the claimant was still having symptoms in his neck, left shoulder and upper extremity but for the time being, the claimant was prepared to put up with it and he is being treated with medication. Dr Kam was of the opinion that the claimant may potentially require surgery in the future. This would be dictated by the claimant’s pain and if he unable to cope with his symptoms.
The claimant indicated that he would be trying everything to avoid having surgery and will continue to manage his symptoms with rest and medication and at the same time trying to get by with performing his work responsibilities.
On 12 July 2021, the claimant was assessed for the insurer by orthopaedic surgeon, Dr Stephen Rimmer, as having a whole person impairment of 5% as a result of his neck injury.
The claimant’s condition has not improved since then and may deteriorate to the extent that surgery will be a necessity.
I explained to the claimant that if he does succumb to surgery to his neck, he may become entitled to damages for non-economic loss and that those damages could be substantial.
The claimant asked whether the settlement could be delayed to see whether he would eventually come to surgery. I indicated to the claimant that his claim for damages could be placed in the stood over list.
I explained to the claimant that the proposed settlement, representing lump sum damages for his past and future economic loss, could be withdrawn by the insurer.
The claimant stated that he wished to accept the proposed settlement.
I explained to the claimant that proceeding with the proposed settlement meant that he would not be able to make a claim for damages for non-economic loss should he proceed with surgery in the future.
I also explained to the claimant that proceeding with the proposed settlement will not affect his ongoing rights to benefits for reasonable and necessary treatment and care, for the rest of her life. I indicated to the claimant that those benefits cover a wide range of benefits, including the costs of medication and the cost of future surgery.
I explained to the claimant that in the event that an advance payment is made by the insurer to Medicare from the proposed settlement or if a Notice of Charge is raised by Medicare for any related treatment expenses under the Health and Other Services (Compensation) Act, 1995 (Cwlth), the insurer will refund him for any such advance payment or charge in addition to the proposed settlement.
The claimant confirmed that he did not receive any Centrelink benefits following the accident. On that basis, I explained to the claimant that he would not have to make any repayment to Centrelink from the proposed settlement.
In conclusion, I am satisfied that the claimant understands that he is entitled to be represented in respect of the claim by an Australian legal practitioner, but he has chosen not to do so.
I am satisfied that the claimant understands the binding nature and effect of the proposed settlement and that he will be precluded from making any further claim for damages arising from the motor accident.
I am satisfied that the claimant is willing to accept the proposed settlement.
Is the proposed settlement just, fair and reasonable?
Clause 7.37 (b) of the Guidelines provides that before I approve a proposed settlement under s 6.23(3) of the MAI Act, I must be satisfied that it is just, fair and reasonable and within the range of likely potential damages assessments for the claim were the matter to be assessed by the Commission, taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the claimant, and taking into account any proposed reductions or deductions in the proposed settlement.
The proposed settlement of $48,000 represents damages for past economic loss and future economic loss.
Past economic loss
At the time of the accident, the claimant was working as a maintenance officer and bus driver with Wesley Mission and earning about $671 net per week.
Following the accident, the claimant was off work for approximately two months, until 3 October 2019. He then returned to work on light duties for two days per week until 4 April 2020.
I note that the proposed settlement has made an allowance for past loss of earnings for eight weeks at the rate of $671 net per week and partial loss of earnings for 26 weeks at the rate of $309 net per week. Allowances have also been made for past loss of superannuation and for income tax paid on past statutory benefits.
On that basis, a total allowance of $17,000 has been made for past economic loss. I am satisfied that this is an appropriate allowance for the claimant’s past economic loss.
Future economic loss
The claimant is currently aged 65 years. He has another two years of working life to age 67.
According to s 4.7 of the MAI Act, damages for future economic loss may not be awarded unless the claimant satisfies the Commission that the assumptions about future earning capacity or other events upon which the award is to be based accord with the claimant’s most likely circumstances, but for the injury.
After the accident on 15 May 2020, the claimant left his employment with Wesley Mission and commenced with Transport for NSW on 18 May 2020 as a Prosecution Support Officer. In that role, the claimant has been earning about $1261 net per week to date. This is substantially more than his weekly earnings at the time of the accident.
According to the claimant’s evidence, he intends to continue in that role until retirement.
There is no medical evidence of any restrictions being placed on the claimant’s normal activities in that role. However, the claimant’s evidence is that as a result of his ongoing neck symptoms, he struggles with his day-today activities and when he has flare-ups, he has to rest for several days and take medication. Dr Kam is of the opinion that the claimant’s future earnings may be affected if these symptoms escalate.
In these circumstances, I accept that the claimant’s ongoing neck symptoms, flare-ups and episodes of pain are likely to result in him taking time off work to rest and seek medical treatment, which would amount to a diminution of earning capacity resulting in economic loss.
In the circumstances, I accept that the insurer’s allowance of $31,000 inclusive of loss of superannuation by way of a buffer to cater for these episodes is an appropriate allowance for the claimant’s future economic loss.
Conclusion
Having regard to all of the above matters, I am satisfied that the proposed settlement is just, fair and reasonable and within the range of likely potential damages assessments for the claim were the matter to be assessed by the Commission, taking into account the nature and extent of the claim and the injuries, the disabilities and the impairments sustained by the claimant.
The proposed settlement of the claimant’s claim for damages in the sum of $48,000 is approved under sub-s 6.23(2)(b) of the MAI Act.
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