AAI Limited t/as AAMI v Whitehead
[2025] NSWPIC 15
•15 January 2025
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | AAI Limited t/as AAMI v Whitehead [2025] NSWPIC 15 |
| CLAIMANT: | Heath Whitehead |
| INSURER: | AAMI |
| MEMBER: | Maurice Castagnet |
| DATE OF DECISION: | 15 January 2025 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; approval of settlement; section 6.23 claim for damages for non-economic loss and past and future economic loss; significant injury to the left knee requiring two surgical procedures; scarring; permanent impairment assessed at 12%; claimant was working as a landscaper at the time of the accident; claimant has returned to full-time employment in a different role as a sales merchandiser; damages for non-economic agreed at $330,000; buffer for future economic loss agreed at $300,000; Held – proposed settlement of $725,000 is approved. |
| DETERMINATIONS MADE: | CERTIFICATE Settlement Approval Issued under s 6.23 of the Motor Accident Injuries Act 2017 1. The proposed settlement sum of $725,000 is approved under sub-s 6.23(2)(b) of the Motor Accident Injuries Act 2017 (the Act). 2. Pursuant to sub-s 3.40(1)(b) of the Act the insurer is entitled to deduct the sum of $68,141.90 from the proposed settlement sum by way of recovery for weekly payments of statutory benefits paid to the claimant under Division 3.3. 3. accident was not caused wholly by the fault of the claimant. 4. The insurer is to pay the claimant’s regulated costs. |
STATEMENT OF REASONS
INTRODUCTION
On 13 September 2022, the claimant, Heath Whitehead, was involved in a motor accident when a vehicle insured by AAMI, made a right-hand turn across the path of the claimant’s motorcycle, causing the claimant to be thrown onto the roadway. As a result of the accident, the claimant sustained injuries.
The claimant has made a claim for common law damages for the injuries he sustained in the accident with the insurer. On 8 November 2024, the insurer admitted liability for the claim.
The parties have agreed to a settlement of the claim.
The claimant is self-represented. Section 6.23(2) of the Motor Accident Injuries Act 2017 (MAI Act) requires that any settlement of a claim for damages by a claimant who is self-represented be approved by Personal Injury Commission (Commission). Accordingly, on 19 November 2024, the insurer lodged an application with the Commission to have the settlement approved.
On 4 December 2024, the insurer informed the Commission that the parties had agreed to an updated settlement in the sum of $675,000.
The matter was referred to me to consider the approval.
Following discussions at a teleconference held on 10 December 2024, the insurer made a revised offer of settlement in the sum of $725,000 which was accepted by the claimant. This is the proposed settlement which is now considered for approval.
THE EVIDENCE
The claimant was 20 years old at the time of the motor accident and is now 22.
The NSW Ambulance Service attended the scene of the accident and conveyed the claimant to Nepean Hospital where he remained for treatment until 14 September 2022.
According to the clinical notes of the hospital, the claimant was diagnosed with a closed fracture of the head of the left fibula and a laceration to the lower lip. The fibula fracture was immobilised with a Zimmer splint, non-weight bearing, and the lip laceration required five sutures. The claimant was then discharged with further follow-ups at the fracture clinic.
An MRI of the left knee performed through the outpatient clinic of the hospital on 26 September 2022 showed an avulsion of the conjoint tendon of the biceps femoris and the lateral collateral ligament with avulsed fibular head.
The claimant was mobilised with Canadian crutches for a period of about four weeks and underwent an extensive program of physiotherapy.
The claimant followed up his treatment with his general practitioner Dr Muna Amin and he was referred to orthopaedic surgeon, Dr Yasser Khatib for further management.
The claimant saw Dr Khatib on 27 October 2022. He recommended surgery by way of a lateral open incision to perform neurolysis of the common peroneal nerve and to repair and reconstruct the lateral collateral ligament (LCL) and biceps tendon attachment, requiring hamstring allograft.
The multi-ligament reconstruction surgery was performed by Dr Khatib on 28 November 2022. The claimant was reviewed regularly on 13 December 2022, 12 January 2023,
11 May 2023, 8 August 2023. At the last visit, the claimant complained of instability in the left knee.At a further visit on 22 February 2024, the claimant complained of irritation around the screws used to fix the fibular head.
In March 2024, the claimant underwent surgery again by way of further left knee neurolysis of common peroneal nerve and removal of hardware. This was performed by Dr Khatib at Nepean Private Hospital.
At a follow-up visit on 4 April 2024, Dr Khatib noted that the claimant was independent and mobile with a full range of motion and good strength in the left knee. He believed that the claimant could return to full-time work duties.
On 19 November 2024, the claimant was examined by orthopaedic surgeon, Dr John Bentivoglio, at the request of the insurer. He provided a report on 20 November 2024.
Dr Bentivoglio assessed the claimant’s injury to the left knee as giving rise to a whole person impairment (WPI) of 10%. He attributed a further WPI of 2% to scarring over the lateral aspect of the left leg, resulting in an overall permanent impairment of 12%. On the basis of Dr Bentivoglio’s assessment, the insurer conceded that the claimant was entitled to damages for non-economic loss.
Dr Bentivoglio was of the opinion that the claimant will develop arthritis in his left knee in the distant future and when this occurs, the claimant would need a tibial osteotomy and a knee joint replacement.
Dr Bentivoglio noted that at the time of the accident, the claimant was working as a landscaper and was subsequently off work for about 18 months. He noted that the claimant has now changed his occupation to a sales merchandiser, working on a full-time basis. He noted that the claimant was coping with his work activities despite having ongoing symptoms.
CONSIDERATION
In conformity with s 6.23(3) of the MAI Act, before I approve the proposed settlement, I must be satisfied that that the settlement complies with the applicable requirements of the MAI Act and the Motor Accident Guidelines (the Guidelines).[1]
[1] The reference is to Version 9.2.
The claimant’s understanding of the proposed settlement
According to cls 7.37 (c) and (d) of the Guidelines, 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 two teleconferences with the parties to question the claimant about these issues.
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 to represent himself. He has accepted the proposed settlement of $725,000 and he would leave it up to the Commission to decide whether it is satisfactory.
The insurer confirmed that the claimant has been paid weekly payments of statutory benefits in the amount of $68,144.90 and that the insurer will be seeking a credit for this sum.
I explained to the claimant that the proposed settlement includes damages for economic loss and on that basis, Centrelink would seek a refund of any benefits received after the accident. The claimant indicated that he had not received any Centrelink benefits.
I explained to the claimant that once he accepts the proposed settlement, this will end his entitlement to any further claim for damages of any kind.
I explained to the claimant that because he has sustained a non-threshold injury, he is entitled to claim reasonable and necessary treatment and care expenses for life. I explained to the claimant that these claims will be managed by the insurer until 13 September 2027 and thereafter, by the Lifetime Care and Support Authority. The treatment and care benefits include costs such as medical treatment, medication, home assistance such as lawnmowing and future surgery.
The claimant reconfirmed his wish to accept the proposed settlement.
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 understands that following the settlement of his claim for damages, he has ongoing rights to claim future treatment and care.
I am satisfied that the claimant is willing to accept the proposed settlement.
Is the proposed settlement just, fair and reasonable?
According to cl 7.37 (b) of the Guidelines, before I approve the 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 is in the sum of $725,000 which represents damages as follows:
(a) non-economic loss – $330,000;
(b) a buffer for past economic loss – $95,000, and
(c) a buffer for future economic loss – $300,000.
Non-economic loss
Section 1.4 of the MAI Act defines “non-economic loss” as meaning:
(a) pain and suffering;
(b) loss of amenities of life;
(c) loss of expectation of life, and
(d) disfigurement.
As I have previously indicated, the claimant was 20 years of age at the time of the motor accident. He is now 22. Taking into account the claimant’s significant injury to the left knee requiring surgery and extensive rehabilitation, ongoing pain and restriction of movement in the left knee, scarring, the likelihood of a future need for a tibial osteotomy and a knee joint replacement, I am of the view that this allowance is within the range of damages for non-economic loss likely to be assessed by a member of the Commission.
Past and future economic loss
Section 4.5(1)(a) of the MAI Act provides that damages may be awarded for past or future economic loss due to loss of earnings or the deprivation or impairment of earning capacity.
In cases such as Medlin v State Government Insurance Commission [1995] HCA 5 and Husher v Husher [1999] HCA 47, the High Court of Australia confirmed that the issue to be determined in the present case is whether the claimant has sustained a loss or diminution of his earning capacity and if so, whether that loss or diminution will result in economic loss.
In calculating any economic loss into the future, I must have regard to the provisions of
s 4.7 of the MAI Act.Section 4.7(1) of the MAI Act provides that damages may not be awarded for future economic loss unless the claimant first satisfies the court or Commission that the assumptions about future earning capacity or other events on which the award is to be based, accorded with the claimant’s most likely future circumstances but for the injury.
Section 4.7(2) of the MAI Act provides that the amount of damages for future economic loss that would have been sustained on those assumptions is to be adjusted by reference to the percentage possibility that the events concerned might have occurred but for the injury.
Section 4.7(3) of the MAI Act provides that if an award for future economic loss is made, the Court or Commission is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted.
Section 4.9(1) of the MAI Act provides that where an award of damages is to include compensation, assessed as a lump sum, in respect of damages for future economic loss which is referrable to deprivation or impairment of earning capacity, the present value of the future economic loss is to be qualified by adopting the prescribed discount rate. Section 4.9(2) of the MAI Act prescribes a discount rate of 5%.
Section 4.7 of the MAI Act does not preclude the awarding of a buffer for future economic loss. The occasion for a buffer in accordance with the principles enunciated in Penrith City Council v Parks [2004] NSWCA 201 is when the impact of the injury on the economic benefit from exercising earning capacity after injury is difficult to determine.
At the time of the accident and since May 2022, the claimant was working as a landscaper on a full-time basis, earning about $768 net per week.
He was off work for a period of about 18 months.
The insurer has made an allowance of $95,000 for past economic loss which includes superannuation and a Fox v Wood component. Upon review of the evidence, I am satisfied that this is an appropriate allowance for past economic loss.
The claimant was able to obtain his current employment as a sales merchandiser with the assistance of his stepfather. He commenced this job in July 2024. He said that this involved lighter duties which do not require any heavy physical exertion. He experiences aches and pain in his left knee on occasions. He said that the left knee is still not stable and gives way on occasions. He otherwise can cope with his present work duties. He said he was earning an average of about $1,200 net per week.
He indicated that he was not sure what his career path would have been if the accident had not occurred, but he would have preferred to have continued working as a landscaper.
His working life expectancy but for the accident is about 45 years. His capacity to perform manual work has been reduced by his injuries and consequently the future employment opportunities available to him will be more limited. The condition of his left leg will probably worsen in the longer term so that he may find it more difficult to obtain and sustain employment. He will likely require time off work for future surgery and rehabilitation.
In the circumstances, I am of the view that a buffer of $300,000 is within the range, albeit at the lower end of the range, for damages for future economic loss that would likely be assessed by a member of the Commission to compensate the claimant for future losses.
CONCLUSION
Having regard to all 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 $725,000 is approved under sub-s 6.23(2)(b) of the MAI Act.
Pursuant to sub-s 3.40(1)(b) of the Act the insurer is entitled to deduct the sum of $68,141.90 from the proposed settlement sum by way of recovery for weekly payments of statutory benefits paid to the claimant under Division 3.3.
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