AAI Limited t/as AAMI v Herft
[2025] NSWPIC 432
•19 August 2025
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | AAI Limited t/as AAMI v Herft [2025] NSWPIC 432 |
| CLAIMANT: | Jacinta Herft |
| INSURER: | AAMI Limited trading as AAMI |
| MEMBER: | Philip Carr |
| DATE OF DECISION: | 19 August 2025 |
| DATE OF AMENDMENT: | 27 August 2025 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; settlement approval; claimant was injured in a motor vehicle accident; claimant was not working at the time of the accident and in receipt of the aged pension; settlement complies with clause 7.37 of the Motor Accident Injuries Guidelines (version 9.3); Held –settlement approved in the amount of $325,000; consisting of non-economic loss; nil past economic loss and future economic loss. |
| DETERMINATIONS MADE: | AMENDED CERTIFICATE 1. The proposed settlement sum of $325,000 is approved under sub-s 6.23(2)(b) of the Motor Accident Injuries Act 2017. |
STATEMENT OF REASONS
INTRODUCTION
The claimant was involved in a motor vehicle accident on 9 December 2023 (the accident).
The claimant suffered, amongst other injuries, multiple bilateral rib fractures, fracture of proximal phalanx left ring finger and a crush fracture T12 vertebral body.
On 14 December 2023 the claimant made an application for personal injury benefits [page 3].
On 6 June 2025 the claimant made a claim for common law benefits [page 10].
On 1 July 2025 the insurer admitted liability [page 12].
The claimant underwent surgery for treatment of her right sided rib fractures and her fracture of her left ring finger, she remained as an inpatient at Westmead Hospital for close to three weeks. She continues to suffer from pain when sitting, lifting, bending or twisting movements for periods longer than 30 minutes and is relieved by lying down or taking medication.
The insurer retained Dr Raymond Wallace to obtain an independent medio-legal report to assess the claimant’s whole person impairment (WPI). Dr Wallace assessed the claimant’s total WPI at 20%.
On 1 July 2025 the insurer made an offer to the claimant to settle her application for common law damages in the amount of $325,000 for non-economic loss (NEL) (the offer of settlement) (page 405). There was no component for past or future economic loss as the claimant was in receipt of the aged pension at the time of the accident. The claimant has accepted the offer of settlement.
On 3 July 2025 the claimant executed the settlement agreement [page 408].
The claimant is not represented by an Australian legal practitioner and is aware that she can instruct an Australian legal practitioner to act for her, but she does not want to do this.
No deductions are to be made from the proposed settlement.
The claimant requests the Personal Injury Commission (Commission) to approve the offer of settlement.
The accident
The accident occurred on 19 December 2023 at an intersection situated on Windsor Road and Junction Road, Riverstone, NSW, where the Subaru Outback vehicle she was travelling in, as a passenger in the front seat wearing her seatbelt, was hit by a car bearing the registration number BDH61P. The claimant was taken by ambulance to Westmead Hospital following the accident.
The car’s impact caused several significant injuries that are identified below.
The claimant’s circumstances
The claimant was 73 years of age at the time of the accident.
The claimant was at the time of the accident in receipt of the aged pension.
The claimant’s injuries
The claimant sustained the following injuries:
(a) multiple bilateral rib fractures;
(b) fracture of proximal phalanx left ring finger, and
(c) crush fracture T12 vertebral body.
On 21 December 2023 the claimant required surgery and underwent open reduction and internal fixation of the fracture involving the left ring finger. She was then treated with bed rest and analgesic medication before being discharged from hospital on 27 December 2023.
The claimant was then transferred to Westmead Rehabilitation Hospital where she remained an inpatient for one month and was treated with physiotherapy. After discharge from the rehab hospital, she was reviewed by a local medical officer and treated with physiotherapy and chiropractic treatment. She did not require any further surgery. She is currently attending hydrotherapy twice a week, a chiropractor twice a week, and using medications of Targin and Panadol.
THE MEDICAL EVIDENCE
The claimant’s medical treatment
The claimant’s written submissions on NEL damages, dated 28 June 2025, to the insurer indicated the following:
(a) 17 months after the accident she remains under the care of her NTD, Dr Janaki Sureshwaran [page 403];
(b) she takes analgesia in the form of Targin and Mobic;
(c) she continues to undergo physiotherapy, hydrotherapy and LED treatment from her chiropractor twice a week [page 403], and
(d) she has consulted a rehabilitation physician, Dr Pushpa Kumari to assist with her recovery, who referred her to a respiratory specialist and neurosurgeon, both were unable to assist with her condition [page 403].
Dr Raymond Wallace
In May 2025 Dr Wallace examined the claimant and provided a report to the insurer dated
2 June 2025.Dr Wallace observed the following:
“Ms Herft suffered multiple injuries as the result of a motor vehicle collision on
9 December 2023. She was transported by ambulance to Westmead Hospital, where she remained an inpatient for nearly three weeks. She underwent operative intervention for treatment of right-sided rib fractures and a fracture involving the left ring finger. After discharge from Westmead Hospital, she was transferred to Westmead Rehabilitation Hospital, where she remained an inpatient for one month. She was then reviewed by a local medical officer and treated with physiotherapy and chiropractic manipulation. She is currently attending hydrotherapy twice a week, chiropractic manipulation twice a week, and using medication Targin and Panadol. She notes no previous history of significant injury.” [page 387]Dr Wallace observed her current complaints:
“At her chest wall, she notes constant aching pain in the region of the right pectoralis major muscle. She notes intermittent shortness of breath.
At her left ring finger she notes no pain at the digit. She notes no paraesthesia or numbness at the left hand. She claims weakness of grip at her left hand. She is right-hand dominant. She notes no stiffness at the left ring finger.
At her thoracic spine, she notes constant aching pain in the right paravertebral region at T12 radiating to the right paralumbar region of the spine with no radiation to her buttocks or legs. Pain is worse with lifting, bending, or twisting movements or sitting or standing for more than 30 minutes and is relieved by lying down or taking medication. She notes no paraesthesia or numbness at her lower limbs. She complains of weakness of the lower limbs and stiffness at her thoracic spine.” [page 387]
Dr Wallace also noted the claimant had reported disturbed sleep and was unable to undertake gardening, which she had previously enjoyed undertaking [page 388].
Dr Wallace’s prognosis was guarded and observed:
“Ms Herft is now some 17 months post-injury. She would currently benefit from an unsupervised home exercise program, concentrating on mobilisation and strengthening exercises of the thoracic spine. With the use of simple analgesic medication Panadol, she should cease her current use of narcotic analgesic medication Targin, to prevent narcotic addiction. She would not benefit from further hydrotherapy or chiropractic treatment at this stage, some 17 months post-injury, as it is highly unlikely to lead to a durable reduction in her level of symptoms nor an increase in function at her thoracic spine. She will need review with a local medical officer on a four-monthly basis over the next year. She has a guarded prognosis for further recovery of function of her thoracic spine despite ongoing treatment.” [page 389]
Dr Wallace assessed the claimant’s WPI of her chest wall injury at 20%.
Economic loss claim
The claimant was unemployed at the time of the accident and in receipt of the aged pension. In her application for personal injury benefits the claimant had stated she was retired and in receipt of the aged pension [page 7].
As the claimant was in receipt of the aged pension at the time of the accident the is no allowance for past or future economic loss [page 404].
THE STATUTORY FRAMEWORK
Clause 14D(3)(b) of the Personal Injury Commission Regulation 2020 provides that the Motor Accident Injuries Act 2017 (the MAI Act) and the Motor Accident Guidelines (the Guidelines) apply to this application.
I have considered the relevant legislation, guidelines and procedural directions, as identified below, in making my decision.
The MAI Act
Section 3.40(1)(b) of the MAI Act provides:
“3.40 Effect of recovery of damages on statutory benefits
(1) If a person (‘the claimant’) recovers damages in respect of the death of or injury to a person caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle then (except to the extent that subsection (2) or (3) covers the case)
(a) …
(b) the amount of any statutory benefits already paid under Division 3.3 in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the statutory benefits.”
Section 6.23 of the MAI Act states:
"6.23 Restrictions on settlement of claim for damages
(1) (repealed).
(2) A claim for damages cannot be settled unless -
(a) the claimant is represented in respect of the claim by an Australian legal practitioner, or
(b) the proposed settlement is approved by the Commission.
(3) The Commission is not to approve the settlement of a claim unless satisfied that the settlement complies with any applicable requirements of or made under this Act or the Motor Accident Guidelines."
The PIC Rules 2021
Regulation 95 of the Personal Injury Commission Rules provides:
"95 Application for approval of Damages settlement
(1) If a claimant, who is not represented by an Australian legal practitioner, and an insurer have agreed to a proposed damages settlement, the insurer must lodge an application for approval of a damages settlement under section 6.23 of the MAI Act, on behalf of both the claimant and the insurer, within 7 days of reaching the agreement.
(2) (Repealed)."
The Guidelines (Version 9.3)
Clause 7.37 of the Guidelines provides:
"Under section 6.23(3) of the Act, before the Personal Injury Commission may approve the settlement of a claim for damages, it must be satisfied that:
(a) the proposed settlement satisfies the timing requirements in section 6.23(1) of the Act [since repealed];
(b) 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, disabilities, impairments and losses sustained by the claimant, and taking into account any proposed reductions or deductions in the proposed settlement;
(c) the claimant understands that they are entitled to be represented in respect of the claim by an Australian legal practitioner, and
(d) the claimant understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement."
The PIC Procedural Directions
Clause 10 of the Commission's Procedural Direction MA3 provides the application must include:
(a) a deed of release;
(b) the amount of the proposed damages settlement, including a breakdown of the amount allowed for each head of damage and how each amount allowed has been calculated;
(c) the amount of any reductions in the proposed damages settlement including for contributory negligence or any other reduction, including brief reasons for that reduction and how any reductions have been calculated;
(d) the amount of any advance payments that the insurer has made in advance of the settlement and the dates of those advance payments, including brief reasons explaining why those advanced payments were made, and
(e) the evidence, documents and materials relevant to an assessment of the damages settlement including liability notices.
After reviewing the application and its supporting documentation including the executed amended deed for the settlement offer, I am satisfied it complies with cl 10 of the Commission's Procedural Direction MA3, as the application includes details:
(a) of the amount of the proposed settlement and a breakdown of the amount allowed for each head of damage [pages 405 - 407], and
(b) an executed settlement deed dated 3 July 2025, which identifies the total amount provided for the settlement and nil deductions to be made from the settlement [pages 408 - 407].
THE SETTLEMENT APPROVAL CONFERENCE
8 August 2025
On 8 August 2025 the claimant appeared at the settlement approval conference by MS Teams with her son-in-law (Mr James Buultjens). She indicated that she is still undertaking her home exercise program, which provides some relief for her ongoing pain. She remains under the medical supervision and care of her general practitioner, Dr Janaki Sureshwaran [page 403].
As identified earlier in the introduction the claimant is not represented by an Australian legal practitioner. She is aware that she can instruct an Australian legal practitioner to act, however does not want to do this and has declined to do so.
During the conference the claimant was questioned about her understanding of the settlement and her rights under the relevant legislation, that it resolves her rights arising from the accident i.e. its finality and whether she was entering the settlement without coercion. I am satisfied by her responses, that she is entering into the settlement of her own free will, with the relevant understanding of its finality.
Further, the claimant is aware there will be no deductions from the settlement monies except those deductions permitted by law including the Social Security Act 1991.
I indicated to the parties that the settlement offer would be approved.
SHOULD I APPROVE THE SETTLEMENT?
When considering the provisions of s 6.23 of the MAI Act and cl 7.38 of the Guidelines along with the rules and practice directions of the Commission, in deciding whether to approve or not approve the claimant’s settlement, I need to consider whether:
(a) the amount of the settlement is just, fair and reasonable (appropriateness), and
(b) the claimant understands the settlement and its terms and the effect of the settlement in ending her claim for damages (the claimant’s understanding).
Appropriateness
In RACQ Insurance Limited v Motor Accidents Authority of NSW (No 2) [2014] NSW SC 1126, the Court stated, when considering the issue of an appropriate damages award:
"It is a relationship of the award to the injury and its consequences … which is to be proportionate ... It is not a matter to be resolved by reference to some norm or standard supposedly to be derived from a consideration of amounts awarded in a number of other specific cases … The principle to be followed … is that the amount of damages must be fair and reasonable compensation for the injuries received and disabilities caused. It is to be proportionate to the situation of the claimant … and not to the situation of other parties in other actions, even if some similarity between their situations may be supposed to be seen. The judgment of a Court awarding damages is not to be overborne by what other minds have judged right and proper for other situations. It may be granted that a judge who is making such assessment will be aware of and give weight to current general ideas of fairness and moderation. But this general awareness is quite a different thing …The awareness must be a product of general experience and not formed ad hoc by a process of considering particular cases and endeavouring … to allow for differences between the circumstances of other cases and the circumstances of the case in hand." [Planet Fisheries Pty Ltd V La Rosa (1968) 119 CLR 118 per Barwick CJ, Kitto and Menzies JJ at paragraph 11].
The amount of the offer of settlement that I am asked to approve comprises a sum of $325,000 for NEL and nil amounts for past and future economic loss.
I am satisfied that the amount of $325,000 is a just, fair and reasonable settlement of the claimant's common law claim considering all the legislation, circumstances and materials.
The claimant’s understanding
I am also satisfied the claimant understands this settlement will be a final resolution of her claim and that she can make no further claim for damages for economic or NEL arising out of the accident and wants to accept the settlement offer made by the insurer.
I approve the settlement.
DETERMINATION
The settlement of $325,000 is approved pursuant to sub-s 6.23(2)(b) of the MAI Act.
0
1
0