AAI Limited t/as GIO v Cuthbert
[2025] NSWPIC 191
•7 May 2025
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | AAI Limited t/as GIO v Cuthbert [2025] NSWPIC 191 |
| CLAIMANT: | Stephen Cuthbert |
| INSURER: | AAI Limited t/as GIO |
| MEMBER: | Bianca Montgomery-Hribar |
| DATE OF DECISION: | 7 May 2025 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; claim for damages; claimant unrepresented; section 6.23; settlement approval; right shoulder injury requiring surgery; non-threshold injury; claim for economic loss; threshold for non-economic loss not met; no claim for non-economic loss; liability admitted; whether proposed settlement appropriate; whether proposed settlement understood by the claimant; Held – injury does not impact claimant’s current employment; no claim for past economic loss; buffer for potential future economic loss due to residual effects of injury; settlement within the range of likely potential damages assessment; settlement otherwise appropriate; settlement understood by claimant; settlement approved in the sum of $125,000. |
| DETERMINATIONS MADE: | CERTIFICATE 1. The proposed settlement is approved in accordance with s 6.23(b) of the Motor Accident Injuries Act 2017. |
STATEMENT OF REASONS
INTRODUCTION
On 18 October 2021, Stephen Cuthbert (claimant) was involved in a motor vehicle accident at the intersection of Lane Cove Road and Goulding Street, Ryde, NSW (accident).
On 25 October 2021, Mr Cuthbert lodged an application for personal injury benefits and subsequently lodged a claim for damages under the Motor Accident Injuries Act 2017 (NSW) (MAI Act) on AAI Limited t/as GIO (insurer). On 9 December 2024, the insurer admitted liability for his claim for damages. The insurer has conceded that Mr Cuthbert has sustained a non-threshold injury and is entitled to damages under the MAI Act.
The parties have reached agreement on a proposed settlement in respect of Mr Cuthbert’s claim for damages. As Mr Cuthbert is not legally represented, the proposed settlement must be referred to the Personal Injury Commission (Commission) for approval in accordance with s 6.23 of the MAI Act.
I am required to consider whether the proposed settlement should be approved.
RELEVANT LEGISLATION
Section 6.23 of the MAI Act provides:
“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(1) (Repealed)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.”
Clause 7.37 of the Motor Accident Guidelines (Guidelines) provides:
“7.37 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
(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
(d) the claimant understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement.”
Rule 95 of the Personal Injury Commission Rules 2021 (PIC 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)”
Pursuant to s 21 of the Personal Injury Commission Act 2020 (PIC Act), the President of the Commission has issued Procedural Direction MA3 concerning the approval of damage settlements by the Commission.
PROCEDURAL HISTORY
On 28 April 2025, I held a preliminary conference with the parties for the purposes of determining whether to approve the proposed settlement. Mr Cuthbert participated in person and Melanie Gazdag appeared on behalf of the insurer.
REVIEW OF THE EVIDENCE
As required by rule 95 of the PIC Rules and Procedural Direction MA3, the insurer has lodged an application for approval of the proposed settlement and provided a bundle of supporting documentation.
Police report
I have considered the police report under cover letter dated 1 November 2021. The police report outlines that Mr Cuthbert was assessed by an ambulance in relation to a sore right shoulder and cleared.
Certificates of capacity / certificates of fitness
The certificate of capacity / certificate of fitness dated 25 October 2021 records that Mr Cuthbert was diagnosed with a soft tissue injury to his right shoulder / bursitis. It records that he is fit for pre-injury work from 22 October 2021.
Reports of Dr Young
The report dated 16 November 2021 from Dr Allan Young, orthopaedic surgeon, has been considered. This refers to Mr Cuthbert’s right shoulder pain and discomfort following the accident, and notes that Mr Cuthbert’s shoulder was “normal” prior to the accident. Dr Young opined that Mr Cuthbert has had a significant impact injury to his right shoulder. Conservative treatment and avoiding strenuous or impact loading activities was recommended. It was noted that there was no surgery that would be recommended for his injury.
The report dated 14 December 2023 from Dr Young has been considered. This report notes that Mr Cuthbert’s shoulder symptoms improved after his previous attendance on Dr Young but never completely recovered. It was recorded that Mr Cuthbert’s pain symptoms have deteriorated with time. An ultrasound guided cortisone injection of his right AC joint was recommended, and it was noted that surgery may be a future option.
The report dated 19 September 2024 from Dr Young has been considered. This report notes that Mr Cuthbert was admitted for a right shoulder arthroscopic subacromial decompression and distal clavicle excision. Physiotherapy was recommended.
The report dated 26 September 2024 of Dr Young has been considered. This records that Mr Cuthbert’s surgical wounds have healed and his post-operative pain is settling.
The report dated 23 January 2025 of Dr Young has been considered. This notes that Mr Cuthbert is doing reasonably well for the stage he is post-surgery. He is recorded to report some ongoing discomfort, particularly in the morning. Dr Young opined that Mr Cuthbert should continue to improve over the next three to four months until the final outcome is achieved. Dr Young reported that Mr Cuthbert was aware there may be some ongoing mild but manageable shoulder symptoms into the future. He is able to use his shoulder without specific restrictions other than within the limits of pain.
Medico-legal reports
The independent medical examination report of Dr Thomas Rosenthal dated 20 March 2025 has been considered. Mr Cuthbert attended upon Dr Rosenthal on 17 March 2025. Dr Rosenthal noted that the accident had resulted in Mr Cuthbert requiring surgery on 18 September 2024, which included a distal clavicle excision. It was noted that Mr Cuthbert was still recovering from the surgery at the time of the consultation, and that Mr Cuthbert reported that his shoulder had improved since the surgery.
Dr Rosenthal reported Mr Cuthbert’s current symptoms to be that his right shoulder is painful and stiff, especially in the mornings. He is right-handed. He is restricted from some of his activities of daily living which involve lifting above shoulder height and reaching with the right arm above the shoulder. He is having monthly physiotherapy and doing home exercises. He is not taking any medication.
Dr Rosenthal noted that the claimant continues to work full time and did not have any time off following the accident or surgery. Driving is required for his work and he is able to drive without difficulty. It is noted that the right shoulder injury has had no impact on his ability to work. Dr Rosenthal’s clinical examination findings have been noted.
In Dr Rosenthal’s opinion, Mr Cuthbert’s injuries can be considered stabilised for assessment of impairment, noting he requires ongoing monthly physiotherapy for another six months in addition to self-managed exercises. Dr Rosenthal assessed 3% whole person impairment.
Dr Rosenthal noted that, while Mr Cuthbert’s injury does not impact his current employment, on the open labour market he would require restrictions with repetitive activities above shoulder height and lifting over 5kg above shoulder height with the right arm.
Clinical notes
The clinical notes of Balmain Sports Medicine under cover letter dated 16 December 2021 have been considered.
The clinical notes of West Ryde Marketplace Medical Centre printed on 30 November 2021 have been considered.
Radiology reports
The MRI, ultrasound and other radiology reports have been considered.
Income documentation
Mr Cuthbert’s notices of assessment for the year ended 30 June 2022, 30 June 2023 and 30 June 2024, and his payslips for October 2024, November 2024 and December 2024 have been considered.
CONSIDERATIONS
To approve the proposed settlement, I must be satisfied:
(a) that it complies with the applicable legislative requirements;
(b) that it is appropriate, in that it is just, fair and reasonable and within the range of likely potential damages assessments if the matter was to be assessed by the Commission, and
(c) of Mr Cuthbert’s understanding, including that he is entitled to be represented in respect of the claim, that he understands the nature and effect of the proposed settlement, and that he is willing to accept the proposed settlement.
Does the proposed settlement comply with the applicable legislative requirements?
In addition to the above-mentioned documents, the application bundle includes the deed of release, the amount of the proposed damages settlement, and the liability notices issued by the insurer.
There is no allegation of contributory negligence and no advanced payments have been made. Accordingly, I am satisfied that that the bundle of supporting documents provided by the insurer complies with the directions provided in Procedural Direction MA3.
I note that the application records that the proposed settlement agreement was reached on 25 March 2025. The application for approval was lodged on 31 March 2025. Accordingly, I find that the insurer lodged the application for approval within seven days of reaching the agreement as required by rule 95 of the PIC Rules.
I find that the proposed settlement complies with the applicable legislative requirements.
Is the proposed settlement appropriate?
The proposed settlement offer is in the amount of $125,000. The offer comprises $125,000 being a buffer for future economic loss inclusive of superannuation.
No allowance is made for non-economic loss or past economic loss.
Based on the medical evidence provided, I am satisfied that Mr Cuthbert is not entitled to damages for non-economic loss as his permanent impairment has been assessed as 3%. Accordingly, he does not meet the impairment threshold in the MAI Act.
As Mr Cuthbert has a non-threshold injury, I am satisfied that he is entitled to damages for economic loss.
The proposed settlement contains no allowance for past economic loss. Mr Cuthbert is recorded to have had no time off work as a result of the accident, with the exception of his time off for his surgery. At the assessment conference, Mr Cuthbert confirmed that he did not wish to make a claim for this time, and that he did not otherwise wish to make a claim for any past economic loss.
No payments of weekly benefits have been made to Mr Cuthbert and accordingly no deductions are proposed.
Mr Cuthbert confirmed that there have been no Centrelink benefits paid.
In respect of future economic loss, $125,000 is proposed as a buffer inclusive of superannuation. This is said to compensate Mr Cuthbert for any impact that his accident caused injuries may have in the future should he lose his current employment.
Mr Cuthbert is 55 years of age and, at the time of the accident and currently, is employed as the Chief Operating Officer – Marketing Services at a marketing communications agency. Mr Cuthbert confirmed that his injuries from the accident are limited to his shoulder injuries. He also confirmed that the injuries resulting from the accident have not impacted or limited his work. This is supported by the fact that Mr Cuthbert has had minimal, if any, time off work since the accident. It is also supported by the medical evidence before me.
Mr Cuthbert has a work life expectancy of 12 years and may work beyond this. While he reports that his injuries do not impact his work, he reports stiffness and pain and it is noted that he recently had surgery to address these symptoms. Dr Rosenthal records that, on an open labour market, Mr Cuthbert would require restrictions with repeated lifting of his right arm and lifting over 5km.
Accordingly, while I accept that Mr Cuthbert’s accident caused injuries do not impact his current employment, I am satisfied that the residual effects of Mr Cuthbert’s shoulder injury may at some time in the future give rise to a loss of capacity to earn that will be productive of financial loss. In the circumstances, I consider a buffer to be appropriate.
My review of the claimant’s earning information suggests that the buffer provided for the claimant’s past loss of earnings is appropriate.
The insurer indicated that there was no Medicare payback and accordingly it will not deduct or pay any monies to Medicare under the Health and Other Services (Compensation) Act 1995 (Cth) from the settlement sum. In the event a Notice of Charge is raised by Medicare for reasonable and necessary treatment expenses, the insurer confirmed it will pay the charge in addition to the settlement sum.
I am satisfied that the total amount of damages in the proposed settlement is appropriate and within the range that would be assessed by the Commission.
Does Mr Cuthbert understand the proposed settlement?
At the preliminary conference, Mr Cuthbert presented as an articulate and intelligent person. He confirmed that he is willing to accept the proposed settlement.
I am satisfied that Mr Cuthbert is aware that the settlement is intended to compensate him for all past and future economic loss arising from the accident, and the damages are being awarded on a once and for all basis. I am satisfied that he understands that an injured person cannot usually make a claim for further damages once a claim has been settled.
I am satisfied that Mr Cuthbert understands the effect of s 3.40 of the MAI Act and that he will not be entitled to statutory benefits or other compensation for any future time taken off work due to his injury, including if it impacts his future employment or if he is required to take any time off due to further surgery.
I am satisfied that Mr Cuthbert understands that he is not entitled to damages for non-economic loss.
I note s 4.5 of the MAI Act does not allow a claimant to be awarded damages for economic losses related to treatment and care as these continue to be paid under the statutory benefits claim. It was explained to Mr Cuthbert, and I am satisfied that he understands, that the proposed settlement does not impact his entitlement to recover reasonable and necessary accident-related treatment and care, such as physiotherapy.
Mr Cuthbert confirmed that he understood he could seek legal advice, and that he did not wish to engage the services of a lawyer in relation to the proposed settlement.
I am satisfied that Mr Cuthbert understands the proposed settlement, and the nature and effect of the settlement agreement in which he is proposing to enter.
CONCLUSION
I am satisfied that the proposed settlement is just, fair and reasonable and within the range of likely potential damages assessment if the claim was to proceed to assessment, considering the nature and extent of the claim.
I am satisfied that Mr Cuthbert is aware he can seek legal advice but does not wish to do so.
I am satisfied that Mr Cuthbert understands the binding nature of the settlement and that he will be precluded from making a further claim for damages arising out of the accident.
I am satisfied that Mr Cuthbert is willing to accept the proposed settlement.
Accordingly, pursuant to s 6.23(2)(b) of the MAI Act, I approve the settlement of $125,000 in respect of Mr Cuthbert’s claim for damages.
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