AAI Limited t/as GIO v Vanzanella

CERTIFICATE OF DETERMINATION OF MEMBER
Citation:	AAI Limited t/as GIO v Vanzanella [2022] NSWPIC 524
Claimant:	Vincenzo Vanzanella
insurer:	AAI Limited t/as GIO
Member:	Michael Inglis
DATE OF DECISION:	14 September 2022
CATCHWORDS:	MOTOR ACCIDENTS - Approval of settlement; section 6.23 of the Motor Accident Injuries Act 2017; claimant now 45 years of age; injured when his motor vehicle was struck by a vehicle; severe injury to the left ankle; soft tissue injuries to the neck and back; claimant elects not to pursue claim for non-economic loss; claimant employed as a barber and unable to work full-time without significant pain; accident capacity for work; entitlement to costs where not legally represented but claim prepared by an independent advisor; Held – claimant sustained serious injury to his ankle and soft tissue injuries to the neck and back; lifestyle and work capacity curtailed; settlement for economic loss approved.
determinations made:	1. This proposed settlement is approved. 2. The proposed settlement is approved under s 6.23 (2) (B) of the Motor Accident Injuries Act 2017. 3. The proposed settlement complies with cl 7.38 of the Motor Accident Injury Guidelines.

CERTIFICATE OF DETERMINATION

INTRODUCTION

On 11 June 2019 at about 8:30 am, Vincenzo Vanzanella (the claimant) was riding his motorcycle through the roundabout at Glossop Street and Highland Avenue, Bankstown when the insured vehicle failed to give way and collided with the claimant’s motorcycle and resulted in the claimant suffering injuries.
Mr Vanzanella has made a claim against GIO Insurance Ltd, the CTP insurer of the at-fault vehicle, for lump sum damages.
The insurer accepted liability for Mr Vanzanella’s claim for statutory benefits and has paid treatment benefits to, or on behalf of Mr Vanzanella.
The insurer has accepted Mr Vanzanella had non-minor injuries and pursuant to Division 3.4 of the Motor Accident Injuries Act 2017 (the Act), he is entitled to payment of reasonable treatment and care for the rest of his life for accident-caused injuries.
Mr Vanzanella and the insurer have agreed to settle the claim for lump sum damages for the sum of $250,000. Because Mr Vanzanella is not represented by a lawyer, his settlement must be approved in accordance with the Act.
The insurer lodged the application for approval of the settlement, and it was referred to me for consideration. Video conferences were held on 20 July, 3 August and
10 August 2022.

JURISDICTION

The Personal Injury Commission (the Commission) was established on 1 March 2021 and the Dispute Resolution Service was abolished by cl 3 of Part 2P, Division 2D Schedule 1 to the Personal Injury Commission Act 2020. I am a member of the Motor Accidents Division of the Commission. Clause 14A (1) of the Personal Injury Compensation Regulation 2020 designates the application “pre-establishment proceedings” and cl 14D empowers me to determine those proceedings.
Because of the date of the accident, cl 14D (3) (b) provides that the Act of the Motor Accident Guidelines (Guidelines), the Guidelines, continued to apply.
Documents reviewed:
(a)   insurer’s submissions dated 17 June 2022;
(b)   insurer’s submissions dated 8 August 2022;
(c)   reports, various Dr Soo;
(d)   reports, various Dr Suthersan;
(e)   reports, various Dr Nyunt;
(f)    reports, various physiotherapists;
(g)   report, Dr Conrad dated 23 February 2021;
(h)   report, Dr Vickery dated 30 August 2021;
(i)    report, Dr Dryson dated 21 January 2022;
(j)    report, Dr Ugwu dated 31 March 2022;
(k)   various fitness certificates;
(l)    management fee agreement with Compensation Claims Australia dated
14 August 2019, and
(m)     agreement of release, dated 11 August 2022.

THE RELEVANT LAW

Section 6.23 (1) of the Act provides a claim for damages cannot be settled within two years after the accident unless the degree of permanent impairment of the injured person caused by the accident is greater than 10%.
Section 6.23 (2) and (3) of the 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 Act or the Guidelines.
Clause 7.38 of the Guidelines states I must be satisfied as to the following:
(a) the proposed settlement satisfies the timing requirements in s 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 where the matter to be assessed by a claims assessor 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, and
(c) the claimant understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement.

REVIEW OF EVIDENCE

The claimant is currently 45 years of age and is a hairdresser by trade.
In the accident, the claimant says that the insured vehicle struck his left ankle. He then jumped off the motorcycle, falling and landing on the base of his spine.
In the accident, the claimant suffered injury to his neck and lower back but the most serious injury was to his left ankle.
An ambulance attended the scene of the accident and the paramedics examined the claimant and his son who was a pillion passenger on the claimant’s motorcycle at the time of the accident.
The claimant and his son were taken to Bankstown Hospital by the claimant’s wife where he was diagnosed as having a fracture of the ankle and some ligamentous damage. After a few hours, he was allowed to return home in a Moon Boot. He did not return to Bankstown Hospital, however he is not sure whether he saw a specialist in outpatients. He was then followed up by a Workers Doctors Centre including general practitioners (GPs) Dr Calvecchio and Eric Lim. In his clinical notes, Dr Soo records the following entry on Thursday, 24 October 2019:
“The claimant works as a hairdresser. This job requires prolonged standing and he finds that standing for over six hours, his left ankle swells and in pain. The claimant says that when he tries to run, he gets pain to both sides of the ankle.
He has not had any physiotherapy treatment to the ankle since his injury. He is taking Panadol for pain.
On examination, the claimant walks with a slight limp. He has mild swelling to the ankle compared to the right. He has marked tenderness to the anterior aspect of the distal fibula and anterior aspect of the medial malleolus. He has mild tenderness to the distal fibula and to his perineal tendon. He has dorsiflexion limited to 10 degrees, plantar flexion to 40. He is neurovascularly intact.
MRI scan shows lateral ligament complex tearing with perineal tendon subluxation and tendinopathy with a split tear.
Vincenzo is now over five months since his motorbike accident and he continues to get pain from his left ankle. MRI scan shows “severe lateral ligament tears along with perineal tendon disruption.” This correlates with his clinical findings. His ankle is also “stiff”. I recommend non-surgical measures first. This includes physiotherapy at least weekly to improve his range of motion, strength and stability (proprioceptive retraining). I will see him again in about eight weeks to check his progress.”
In July 2020, the claimant was referred to Dr Mayuran Suthersan, orthopaedic surgeon. Dr Suthersan thought it unlikely that ongoing physiotherapy would alleviate the claimant’s symptoms and recommended surgery.
On 25 September 2020, Dr Suthersan performed an arthroscopy of the left ankle as well as reconstruction of the lateral ligaments and excision of an avulsion fragment. The surgery was followed by intensive physiotherapy and whilst it relieved some of the symptoms suffered by the claimant, he has remained symptomatic until the present time.
The claimant continues to suffer symptoms in his neck, lower back, left foot and ankle.
On 17 February 2021, the claimant was examined, by Dr Peter Conrad via video Zoom. Dr Conrad noted the ongoing complaints of pain in the neck and lower back together with the left ankle and foot which pain was worse upon standing and walking up and down stairs.
Dr Conrad opined:
“He continues to have pain and stiffness in his left ankle and foot and this is made worse when he is doing a lot of standing and walking, especially standing to do hairdressing.
At this stage, he needs conservative treatment including the modalities of medication, medical supervision and physiotherapy at a present-day cost of some $3,000.00 per year.
With regard to his work ability, he would have difficulty in working full time as a hairdresser due to the amount of standing involved. He may be able to do 12-15 hours as part of a structured rehabilitation programme supervising a hair salon and doing some limited hairdressing in a special chair, mainly in a sitting position. His hours should be then increased commensurate with his symptoms. This should be part of a structured rehabilitation programme. His lifting limit should be 5 kgs in weight.
Should his wife not be able to help with the heavier part of housework and home and garden maintenance, he should be granted some six hours per week of home care assistance.
His long-term prognosis is uncertain. There is a possibility that he may need further surgery on his left ankle dependent on symptoms and MRI evidence of arthritis. It is difficult to put a timeframe on this.
With regard to recreational activities, he would not be able to do any strenuous sports involving lifting, running or prolonged standing.”
In a separate report, Dr Conrad also provided an impairment assessment. He assessed the claimant's whole person impairment (WPI) at 16% made up as follows:
“Table 73, DRE II Neck Impairment, 5% Whole Person Impairment.
Table 72, DRE II Back Impairment, giving a 5% Whole Person Impairment.
Left ankle, Table 42, due to loss of range of movement in the mild range flexion, 3% WPI, extension 3% WPI, using Table 43, due to loss of inversion in the mild range, 1% WPI.”
These combined, he calculated to give a 16% WPI. It would seem however that the total should in fact be 17% with 7% WPI attributable to the ankle injury.
More recently the claimant was examined by Dr Evan Dryson, occupational physician on 21 January 2022. In his findings on examination, Dr Dryson noted that restrictions in relation to foot and ankle movement but recorded that the claimant was able to walk without a limp. Insofar as the cervical spine and lower back are concerned, he recorded as follows:
“Cervical Spine
He had the following range of movement in the cervical spine;
Rotation to the right three-quarters the normal range and to the left was one-half of the normal range. Lateral flexion was one-third the normal range in both directions. Extension was near-normal. Flexion was near normal.
Lumbar Spine
He indicated tenderness to the low lumbar spine. Forward flexion was reduced to one-half the normal range. Lateral flexion was normal. Extension was two-thirds the normal range. Rotation was one-half the normal range in both directions.
Diagnosis
·Disruption to lateral ligaments left ankle with presumed avulsion fracture left lateral malleolus – post-surgery.
·Soft tissue injury cervical spine. Soft tissue injury lumbar spine.”
Dr Dryson assessed the claimant as having a 5% WPI in respect of both the neck and the lumbar spine and 6% in the left ankle, i.e. a total WPI of 16%.
In relation to the impact of his injuries of the claimant’s capacity to work, Dr Dryson said that the claimant could work 38 hours per week and:
“The only restrictions are imposed by pain. Mr Vanzanella reports unacceptable levels of pain after about three or four hours of standing. By interspersing standing and sitting and taking one-hour breaks, he has been able to control his pain to the extent that he is able to work 38 hours per week. He is, however, less productive than he was before, being slower than previously. I believe his current standing restrictions of 2-3 hours of time are reasonable.
…
Frequent to constant standing is required. As noted, Mr Vanzanella has been able to obviate this by means of alternating between sitting and standing and taking breaks. He does need regular breaks. No further rehabilitation is required.”
The insurer arranged for Mr Vanzanella to be examined by Dr Jude Ugwu, consultant occupational physician and he reported on 31 March 2022. In relation to the left ankle, Dr Ugwu noted restrictions in flexion, inversion and eversion.
However, in relation to the neck and lower back, the findings of Dr Ugwu were significantly different to those of Dr Dryson. In this regard, he says in his report:
“Cervical Spine
There was mild tenderness through C2 to C6 spinous processes. He reported paraspinal muscle tenderness bilaterally, mild. Cervical spine range of movement was full range.”
“Lumbar spine
He reported mild tenderness at L2 to L5. Left paraspinal muscle was slightly tense and tender. Straight leg raising was to 90 degrees with no pain bilaterally.
Lumbar back range of movement – flexion was to mid-shin; extension, lateral flexion, rotation movements were within full range.”
“Dr Ugwu also recorded that the claimant informed him that he had ankle and foot pain on prolonged standing as well as intermittent swelling but that the reported neck and lower back pain was not causing significant impairment.”
Dr Ugwu assessed the WPI in the left ankle at 6% but attributed nil % to both the neck and the low back.
In relation to the claimant’s ongoing work capacity, Dr Ugwu opined:
“Mr Vanzanella has resumed full-time hairdressing duties but he stated he generally sits every three hours or thereabouts, to manage pain in his left ankle. I consider he would be fit for pre-injury duties with sit-stand postures as required for comfort.”
The insurer also arranged for the claimant to be assessed by Dr Graham Vickery, psychiatrist who concluded that although the claimant was frustrated with his current restrictions, there was no psychiatric impairment noted in the clinical examination. He further noted that the claimant had undertaken psychological counselling on four occasions.

SHOULD I APPROVE THE SETTLEMENT

Although both Drs Conrad and Dryson have assessed the claimant’s WPI at well above 10% threshold, the claimant had been reluctant to undergo an independent assessment. I raised with him the potential entitlement to non-economic loss in the event that a Medical Assessor assessed his WPI in similar fashion to Drs Conrad and Dryson. I also expressed the opinion, I believe somewhat conservatively, that any award of damages for non-economic loss would be likely to exceed $100,000. I invited the claimant to consider his position further. He indicated that he would prefer to adopt this course and accordingly, the assessment conference was adjourned. The claimant further indicated that he wished to consider obtaining legal advice.
At the time of the initial conference, the proposed settlement sum was $210,000 made up of $60,000 for past economic loss and a $150,000 for future economic loss. To be deducted from that sum was $37,017.43 already made to the claimant pursuant to the statutory benefits claim. I indicated to the insurer at that time that I had some concerns about the adequacy of the amount proposed for future loss of earnings and the insurer indicated that it would review its position. In its submissions in support of the approval, the insurer accepted that the claimant had sustained a loss of earning capacity as a result from the accident and that he will be prejudiced on the open labour market in the event that he is required to find alternate employment. The insurer also noted the claimant’s complaints of reduced productivity, requiring breaks every two to three hours to manage the pain in his left ankle as well as a chair with lumbar support.
Not unrealistically, the insurer supported its global buffer approach by noting that, alternatively, an allowance of $200 per week less vicissitudes plus superannuation at 12.5%, rounded up amounted to $150,000.
By the time of the second conference, the insurer had increased its offer to $235,000 less deductions. The claimant had been unable to obtain legal advice that he had contemplated. However, he had considered the prospect of undergoing an independent medical assessment, discussed it with his family and determined that he would prefer to resolve his claim in the best interests of himself and his family. He correctly pointed out that the injuries to the neck and low back were both soft tissue and that there was no guarantee that the independently-assessed WPI would exceed the threshold.
The question of legal advice was relevant for another reason. Although the claimant had not sought legal advice, he had engaged the services of a business known as Compensation Claims Australia (CCA) which “managed” his claim. The insurer, in my opinion quite reasonably, raised the question of CCA’s legal right to charge the claimant fees.
Prior to the second conference, the insurer wrote to the claimant at the time of increasing its offer and stated relevantly:
“We note that this is an increase of $25,000.00 from our offer to you of $210,000.00 plus $30,000.00 for legal costs. As discussed with the member previously, as CCA has advised they are not lawyers, no allowance can be made in the settlement for legal costs.”
On 3 August, the claimant undertook to obtain a copy of his agreement with CCA and provide it to both the Commission and the insurer. That occurred and a copy was available to me also at the time of the resumed teleconference on 12 August 2022. By that time the offer to the claimant by the insurer had increased to $250,000 less deductions. This effectively increased the allowance for future economic loss to $190,000. I considered this figure to be in the relevant range of the amount likely to be awarded by a Member of the Commission. The final figure had been negotiated directly by the claimant with the insurer without the intervention of CCA. The claimant also indicated that he proposed to revoke the authority to receive in favour of CCA and direct the insurer to pay the settlement monies to him.
I am satisfied that the claimant has agreed to forgo his potential entitlement to damages for Non-Economic Loss after careful consideration.
Bearing in mind the injuries to the neck and low back were soft tissue only and that there were inconsistencies between the presentation and finding on examination when the claimant was examined by Drs Dryson and Ugwu. There is also a strong possibility that the WPI assessed by the independent assessor would not meet the relevant statutory threshold.

CONCLUSION

I find the timing requirements of s 6.23(1) has been satisfied in that the accident occurred on 11 June 2019.
I am satisfied the proposed settlement is just, fair and reasonable and within the range of likely potential damages assessments if the claim was to proceed to assessment, taking into account the nature and extent of the claim, the injuries, disabilities, impairments and losses sustained by Mr Vanzanella.
I am satisfied that Mr Vanzanella is aware that he could obtain legal advice but does not wish to do so.
I am satisfied Mr Vanzanella 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 Vanzanella is willing to accept the proposed settlement.
Accordingly, pursuant to s 6.23 (2)(b) of the Act I approve the settlement of
Mr Vanzanella’s claim for damages in the sum of $250,000 and I authorised the insurer to deduct the amount of $37,917.43 for weekly payments already made to the claimant in the form of statutory benefits.

I note further that after the final teleconference I became aware of the fact that, although, no allowance was made for professional costs, the claimant should not be out of pocket for disbursements reasonably incurred in the preparation of his claim in the form of medicolegal examinations and reports.
I have been informed that the insurer is prepared to indemnify the claimant in respect of these expenses which is appropriate in the circumstances.

[2022] NSWPIC 524

14 September 2022