AAI Limited t/as AAMI v Holstein
[2025] NSWPIC 151
•14 April 2025
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | AAI Limited t/as AAMI v Holstein [2025] NSWPIC 151 |
| CLAIMANT: | Caroline Holstein |
| INSURER: | AAI Limited t/as AAMI |
| MEMBER: | Shana Radnan |
| DATE OF DECISION: | 14 April 2025 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; settlement approval; $330,000 non-economic loss only; 67-year-old pensioner; insurer conceded entitlement to non-economic loss; injuries include L1 burst fracture requiring L1 decompression and T11-L2 posterior fixation, with ongoing back pain, partial footdrop, and some sensory disturbance over dorsum of foot; pre-existing medical conditions including chronic kidney disease, diabetic neuropathy, congestive cardiac failure, and multilevel moderate degenerative disc disease; Held – settlement complied with clause 7.37 of the Motor Accident Injuries Guidelines version 9.3; approved under section 6.23(2)(b). |
| DETERMINATIONS MADE: | CERTIFICATE Issued under s 6.23 of the Motor Accident Injuries Act 2017 1. The proposed settlement in the sum of $330,000 is approved under s 6.23(2)(b) of the Motor Accident Injuries Act 2017. 2. The proposed settlement complies with cl 7.37 of the Motor Accident Injuries Guidelines version 9.3. |
STATEMENT OF REASONS
INTRODUCTION
Caroline Holstein (the claimant) was a passenger in a vehicle travelling on Whrallah Road at Woodburn when the vehicle driven by her husband failed to observe a bend in the road and lost control of the vehicle heading into an embankment.
The was claimant taken by ambulance to Lismore Base Hospital on 12 June 2023 and subsequently transferred to John Hunter hospital on 15 July 2023.
The claimant required a L1 decompression and T11-L2 posterior fixation on 17 July 2023 which was performed by Dr Catherine Johnson.
An Application for Personal Injury Benefits was lodged on 27 June 2023 which recorded injury to lower back affecting kidneys and bladder function as well as hip pain.
The claimant brought a claim for common law damages on 31 October 2024 alleging she sustained the following injuries:
(a) L1 burst fracture requiring decompression and fixation.
She reported that she has ongoing pain and restriction of movement in her back and difficulties with numerous tasks.
AAMI (the insurer) admitted liability for the common law claim on 31 October 2024
The insurer conceded that the claimant was entitled to damages for non-economic loss on 27 November 2024 on the following basis:
“You underwent a L1 Decompression +T11-L2 posterior fixation on 17 July 2023. A CT scan on 6 December 2023 revealed a compression fracture of L1 of 60% and a vertebral body compression greater than 50% is assessed at the very least as 20% WPI (i.e DRE IV) Table 6.7 the Motor Accident Guidelines”.
An updated offer was made on 28 March 2025 and the claimant agreed to the terms on 28 March 2025 executing an Agreement of Release.
The parties have reached an agreement to settle the claim in the sum of $330,000 for non-economic loss only. As the claimant was retired at the time of the motor vehicle accident, there is no claim for economic loss past or future.
The claimant is currently 67 years of age.
The claimant has a number of pre-existing health conditions which continue to impact on her general health and will for the remainder of her life.
THE RELEVANT LAW
Sections 6.23(2) and (3) of the Motor Accident Injuries Act 2017 (MAI Act) requires approval of the settlement and I am not to approve the settlement unless I am satisfied it complies with any of the requirements of the MAI Act or the Motor Accident Guidelines version 9.3 (Guidelines) commencing 4 December 2024.
Clause 7.37 of the Guidelines states I must be satisfied as to the following:
“(a) 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.”
Preliminary conference on 21 January 2025
The nature of the settlement proposed in the sum of $320,000 at that stage, was discussed between the parties. During the video-conference the claimant confirmed she was continuing with treatment provided by Drs McCarney and Johnson. She was undertaking physiotherapy and attempting various forms conservative pain management including physiotherapy, hydrotherapy and aqua aerobics.
During this conference the claimant gave me updated information as to her ongoing physical problems, the regime of treatment being undertaken and the impact of the injuries she sustained.
I suggested it would be prudent for additional information to be obtained from Drs McCarney and Johnstone to ascertain the prognosis of the claimant’s condition. As the claimant was unaware of her prognosis, the information contained in the reports should be available to the claimant before the matter was determined.
Directions were made for the insurer to obtain the report of Dr McCarney and clinical records.
Preliminary conference on 21 March 2025
I received an update report of treating rehabilitation physician Dr McCarney dated 20 March 2025. She reported the claimant’s current issues as:
(a) chronic back pain was a result of burst L1 fracture;
(b) right lower limb myelopathy causing partial foot drop;
(c) reduced standing tolerance due to pain;
(d) reduced walking tolerance;
(e) high risk falls exacerbated by fatigue, and
(f) exacerbation of multifaceted joint arthropathy.
Noting the contents of the report of Dr McCarney, I suggested the insurer obtain further instructions on the amount allowed for non-economic loss. A short adjournment was allowed.
Preliminary conference on 28 March 2025
The insurer confirmed that whilst it did not consider it appropriate to alter the settlement sum, in the spirit of resolution of the matter it increased the amount of non-economic loss from $320,000 to $330,000.
The insurer also referred me to the significant medical conditions the claimant suffered from prior to the accident and their likely impact on life expectancy. Whilst there was no report addressing life expectancy specifically, the impact of diabetes type 2, chronic kidney disease (stage 3(b)), diabetic neuropathy, congestive cardiac failure, periods of multiple episodes of organ failure should be considered when assessing the appropriateness of the amount agreed to for non-economic loss.
The increase in the settlement sum was agreed to by the claimant on this occasion with the binding nature and effect of the settlement reached being confirmed.
The claimant also advised she was aware of the ability to obtain legal advice and had chosen not to retain legal representation. The claimant requested the matter be approved and proceed to determination.
The insurer confirmed that there were no deductions relating to any statutory payments made and the whole amount would be paid to the claimant.
The insurer was requested to upload a signed copy of the amended settlement agreement. This was uploaded to the portal as requested.
Both parties confirmed their desire for the settlement to be approved and advised there was no other information to be relied upon.
DOCUMENTS CONSIDERED
I have regard to the following relevant documents contained in evidence bundle in excess of 334 pages:
Liability:
(a) application for common law damages dated 31 October 2024;
(b) liability notice damages claim dated31 October 2024;
(c) submissions of the insurer dated 6 December 2024;
(d) permanent impairment decision dated 27 November 2024, and
(e) settlement offer and agreement of release dated 28 March 2025.
Medical records:
(a) ambulance report dated 12 June 2024;
(b) extracts from clinical records Mayo Private Hospital dated 16 August 2023;
(c) extracts from clinical records of Manning Base Hospital;
(d) extracts from clinical records of Taree Medical Centre;
(e) certificate of capacity dated 27 June 2023;
(f) operation report dated 17 July 2023;
(g) CT lumbar spine dated 6 December 2023;
(h) report of Dr Melissa McCarney Rehabilitation Medicine Physician dated 22 April 2024 and 20 March 2025;
(i) report of Dr Catherine Johnson Neurosurgeon dated 14 August 2024;
(j) rehabilitation closure report dated 10 November 2023, and
(k) Allied Health Treatment Request dated 4 November 2024.
Claimant’s information:
(a) provided in and telephone video-link preliminary conferences, and
(b) histories contained in medical reports, rehabilitation records and clinical records of Dr Oo.
Settlement documents:
(a) settlement offer dated 28 March 2025, and
(b) Deed of Release dated 28 March 2025.
Injuries and their impact
The claimant sustained a burst fracture of L1 requiring surgical intervention.
She reports ongoing problems of back pain, hip pain, drop foot, bladder and bowel issues.
As a consequence of her injuries the claimant uses a walking stick or frame from time to time to assist her mobility. She feels pressure in her lower back when walking for long period of time.
She continues to seek assistance for pain management and ingests Gabapentin for nerve pain and panamax on a regular basis for lower back pain. She uses a support brace when travelling in a car.
She reports increased pain even though she previously suffered from arthritic changes she believes “now it is worse”. This increase in pain is supported by the opinion of Dr McCarney that the injuries sustained in the motor vehicle accident have exacerbated her previous degenerative disc disease.
She was retired at the date of the accident having retired from the family business in December 2022. There is no claim for past or future economic loss.
Her pre-accident hobbies included photography, ten pin bowling, travelling which included cruises, drives and domestic as well as international travel.
The claimant reports she now has difficulties with walking on uneven grounds due to the foot drop. She also has a higher risk of falls.
Her ability to undertake activities of a domestic nature are also compromised. She needs help with vacuuming, cleaning and some cooking, where previously she did the tasks herself unassisted.
On good days, she feels there has been improvement, yet on bad days she has to stop what she is doing until her symptoms subside often needing to lay down to obtain relief.
The claimant reports ongoing constipation and bladder incontinence so being close to toilets is a paramount issue impacting her lifestyle. These symptoms have reduced somewhat over time.
Ongoing treatment regimens include physiotherapy sessions, hydrotherapy and aqua aerobics. She attends some form of treatment every few days. Such activities she finds “beneficial” as it relaxes her muscles in her back and reduces discomfort. Such treatment is also recommended by Dr McCarney.
An adjunct to physical therapies, she uses a Tens machine to stimulate leg muscles to improve the right foot drop.
She has benefitted from shopping using a trolley for support and has a mobility parking sticker which entitles her to use disability parking spaces. Enabling her independence to shop.
Treating specialists
I note the following information:
(a) The report of Dr McCarney dated 22 April 2024 noted:
· that the claimant continued to have ongoing back pain and a partial right foot drop. Recent nerve conduction studies showed right L5-S1 myotome dysfunction and general sensorimotor polyneuropathy which was moderate to severe in severity.
· An MRI scan showed diffuse lumbar spondylosis and a canal stenosis present at L1 due to retropulsion and possibly some mild cord compression. Pain management and hydrotherapy was to continue.
(b) The updated report of Dr McCarney dated 20 March 2025 confirmed:
“…this condition is expected to be able to be managed conservatively, and I anticipate her condition to be stable if she continues with the therapies as prescribed. ..In order ro function and manage her pain, she should continue with multidisciplinary rehabilitation. ..I will be reviewing Caroline in the future to prevent any deterioration and for maintenance therapy of her chronic back issues.”
(c) The report of Dr Johnson reported on 14 August 2024 noted:
· “ongoing back pain, worse in the upright position and worse with mobilisation. Pain was centred over the fracture site and right foot dorsiflexion weakness, particularly of the big toe often.”
(d) As to the bladder and bowel complaints – the Dr Johnson confirmed saddle and perianal sensation were preserved. Whilst the claimant suffered constipation from time to time she “was otherwise continent”.
(e) Review of recent scans confirmed “she has not had any progressive kyphosis or screw loosening and there was space around the canal at the decompression level”.
(f) On examination – lower limb neurology was essentially intact. “She had a little bit of ankle dorsiflexion, EHL and ankle plantarflexion weakness on the right compared to the left, but it was minimal and largely associated with pain that she experienced upon moving that leg in the lower back. There was some sensory disturbance over predominantly the dorsum of the foot, both on the L5 and S1 side. Whilst a small disc bulge at the L4/5 level was contributing to some lateral recess stenosis on that right side, but felt it was actually relatively mild. There was no significant nerve root impingement. A right L5 perineural steroid injection might improvement symptoms.”
(g) As to the claimant’s prognosis Dr Johnson reported:
“I think ultimately her symptoms will over time improve but unfortunately, as is often in her age group, this can take a lot longer. If she fails other forms of treatment, she could see a pain physician for further assessment and trial of potential percutaneous interventions which may provide her with some relief”.
Rehabilitation reports
Rehabilitation closure took place on 10 November 2023 with Peter Proctor consultant occupational therapist confirming the claimant regaining her independence with driving. Benchmark Rehab received confirmation she was “independent with travelling to treatment, shopping and her local surrounds which is consistent with pre-MVA arrangements”. (Page 30 of 289 application bundle.)
Non-economic loss
The claimant is entitled to damages for non-economic loss as the insurer conceded that whole person impairment (WPI) exceeds 10%. This concession was made on the basis of the injuries sustained, the nature of the surgery undertaken and the remaining impact of the injuries on the claimant’s mobility.
The amount agreed to between the parties is $330,000.
When considering the appropriateness of the sum agreed to between the parties, I take into account the nature and extent of injuries sustained, the pain and suffering the claimant has experience from the date of accident, noting the surgery undertaken and the nature of treatment which continues to date.
The claimant has sustained significant spinal injury at L1 and the fusion whilst successful, leaves the claimant with ongoing difficulties with mobility. She experiences pain on a daily basis, particularly in her lower back. Her mobility has been compromised. There has been considerable recovery which includes her ability to return to driving.
The claimant is limited in her ability to walk for lengthy periods and her difficulty with mobility impacts on her ability to travel, something she previously enjoyed.
The use of a walker or cane for stability is permanent otherwise the claimant risks falls and further injury.
I have regard to the impact of the injuries on the claimant’s ability to participate in pre accident domestic, social and recreational activities. I also take into consideration the pre-existing conditions the claimant suffered before the accident and their impact on the claimant’s lifestyle. Issues such as life expectancy are appropriate considerations when making an assessment of non-economic loss.
I note the insurer raised her previous health conditions which include a number of comorbidities described in Dr McCarney’s report of 20 March 2025. These included:
(a) diabetes with associated diabetic sensorimotor peripheral neuropathy;
(b) diabetic nephrology causing chronic kidney disease;
(c) ischemic heart disease, and
(d) heart failure and dyslipidemia.
These conditions have previously resulted in emergency hospital attendances in August 2018, January 2019, June 2019, January 2020, July 2020 and April 2022. The claimant had a further episode of diabetes related hospitalisation on 4 September 2023 requiring a three week admission to Manning Base Hospital.
It is appropriate to consider the impact of the co-morbidies on life expectancy. The claimant has an estimated life expectancy of 21.66 years according to medium life expectancies tables Australia 2024. (Furzer and Crestani) This is before taking into consideration her significant pre-existing co-morbidities.
The claimant sustained a significant injury in the motor accident with lifelong consequences. She has made considerable progress post-surgery, but will require ongoing conservative treatment to assist in pain management according to Dr McCarney for the remainder of her life.
The claimant is currently aged 67 and continues to participate in regular weekly sessions of therapeutic management to assist her mobility and pain management. She is unlikely to be pain free for the remainder of her life and ongoing treatment will continue.
Due to the claimant’s age her recovery will be slow. Dr McCarney confirmed this. The motor vehicle accident has also exacerbated her significant pre-existing degenerative disc disease, where she now describes increased pain which was not present to the same level before the accident.
There has been some progress with noted improvement and the claimant has been motivated to retain her independence to her credit.
Insurer’s submission
It is the insurer’s submission that the proposed settlement figure is an appropriate one and complies with the requirements of cl 7.37 of the Guidelines, in 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.”
Accordingly, the insurer recommended the proposed settlement figure of $330,000 be approved.
REVIEW OF THE EVIDENCE
The clinical records confirmed the claimant sustained significant spinal injury in the motor vehicle accident which included a burst L1 fracture to her spine requiring laminectomy and fixation T11-L2 posterior fixation.
Specialists’ records have given me the details of treatment to date and the likely ongoing conservative treatment necessary for the remainder of the claimant’s life.
The rehabilitation reports evidence the claimant has been able to return to driving, enabling a level of independence post-accident which has improved the claimant’s well-being.
From the material provided in the insurer’s application and the additional information provided by the claimant in person, I am satisfied that I have sufficient information to make a determination on the application.
SHOULD I APPROVE THE SETTLEMENT
Section 6.23 of the MAI Act provides the following restrictions on settling claims for damages:
(a) the settlement must be approved by a Member of the Personal Injury Commission (Commission) and I am not to approve the settlement unless I am satisfied there is compliance with any of the requirements of the MAI Act or the Motor Accident Guidelines.
I am satisfied that there has been compliance with the Act and the Guidelines.
(b) the insurer to include in its application details of the following:
(i)the amount of the proposed settlement and a breakdown of the amount allowed for each head of damage.
The amount for non economic loss is $330,000; there is no economic loss claimed as the claimant is an aged pensioner.
(ii)The amount of any deductions in the proposed settlement.
Therer are no statutory payments to be deducted. The claimant will receive net proceeds of $330,000.
(iii)The amount of any advanced payments made be specified. There had not been any advanced payments made.
(iv)The evidence, documents and materials relevant to an assessment of the proposed settlement figure.
I have reviewed the clinical and medical records effectively convering the period of injury and the relevant period to date of assessment. I note the medical records accord with the claimant’s reported symptoms, level of improvement and ongoing incapacity. The information produced by the insurer has given me a good indication of the injuries, treatment and prognosis.
(c) Clause 7.37 of the Guidelines, requires me to consider the following:
(i)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 injuries, disabilities impairments and losses sustained by the claimant, and taking into account any proposed reductions or deductions in the proposed settlement.
Having reviewed the medical evidence produced in this matter, I am satisfied that the claimant has ongoing symptoms which impact her daily life, she has a level of lower back pain constant in nature. She is regularly undertaking treatment for pain management including ongoing physiotherapy, hydro therapy and aqua aerobics. She remains under the care of her treating neurosurgeon and rehabilitation speciailists. The amount of damages for non-economic loss agreed to between the parties is within the range of of likely range of damages had the matter been assessed by a member of the Commission. An assessment of damages would include factors such as the claimant’s age and her pre-existing conditions. Her prognosis is guarded, with no further surgical treatment envisaged.
I find the sum agreed upon in the sum of $330,000 is just, fair and reasonable and within the likely range of damages were it to have been assessed by a Member of the Commission.
(ii)The claimant understands the nature and effect of the proposed settlement is the finality of her claim for damages and is willing to accept the proposed settlement.
The claimant was made aware in the teleconferences that in the event she took the settlement, she could not seek any further damages for non-economic losses and economic losses. She was advised that the insurer would still provide ongoing medical treatment and care needs for the period of 5 years from the date of accident, if required and approved by the insurer based upon medical need. She was 0also made aware of the treatment and care she will received post 5 years with icare CTP Care Scheme.
The claimant was also made aware that the insurer would continue to meet any charge issued by Medicare and that the insurer has agreed to reimburse Health Insurance Commission separately, if appropriate.
I am satisfied that the claimant was aware of her rights and had freely agreed to the terms of settlement with an understanding of the settlement and its implications.
CONCLUSION
I am satisfied the proposed settlement of $330,000 is just, fair and reasonable and within the range of likely potential damages assessments if the claim was to proceed to assessment by a Member of the Commission taking into account the nature and extent of the claim, the injuries, disabilities, impairments and losses sustained by the claimant, the age of the claimant – 67 years of age and her pre-existing conditions.
I am satisfied the claimant was aware she could seek legal advice, she undertook some investigations with a legal practitioner and but chose not to retain legal representation.
I am satisfied the claimant understands the binding nature of the settlement and that she will be precluded from making a further claim for damages arising out of the subject accident.
I am satisfied the claimant was willing to accept the proposed settlement and her decision to accept it was of her own volition.
I am satisfied the claimant is aware that there are no deductions from the proceeds of settlement and that she will receive $330,000 in final settlement of her claim.
Accordingly, pursuant to s 6.23(2)(b) of the MAI Act I approve the settlement of the claimant’s claim for damages in the sum of $330,000.
The proposed settlement complies with cl 7.37 of the Guidelines version 9.3.
Legislation
In making my decision I have considered the following legislation and guidelines:
· MAI Act;
· Motor Accident Injuries Regulation 2017, Personal Injury Commission Regulation 2020, Motor Accidents and Workers Compensation Legislation Amendment Regulation 2020, and
· Motor Accident Guidelines version 9.3 / Personal Injury Commission Rules 2021.
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