AAI Limited trading as GIO v Phillips

[2022] NSWPIC 346

CERTIFICATE OF DETERMINATION OF MEMBER 

CITATION:

AAI Limited trading as GIO v Phillips [2022] NSWPIC 346

CLAIMANT:

Valerie Phillips

INSURER:

AAI Limited trading as GIO

MEMBER:

Susan McTegg

DATE OF DECISION:

7 June 2022

CATCHWORDS:

MOTOR ACCIDENTS - Approval of settlement; section 6.23 of the Motor Accident Injuries Act 2017; non-economic loss; claimant now 80 years of age; serious accident; pedestrian; reduction 10% for contributory negligence; non-economic loss only; fractured ribs; degloving injury to right hand; crushed and broken fingers of right hand; amputation of right middle finger; scarring; triangular fibrocartilage complex (TFCC) injury to right wrist; psychological injury; living independently; difficulty using right hand; Held – settlement of claim for damages for non-economic loss approved in the sum of $200,000 after reduction of 10% for contributory negligence.

DETERMINATIONS MADE:

Settlement Approval
Issued under section 6.23 of the Motor Accident Injuries Act 2017

The proposed settlement is approved under section 6.23(2)(b) of the Motor Accident Injuries Act 2017

Introduction

1. On 1 September 2020 Valerie Phillips (the claimant) sustained serious injury in a motor vehicle accident (the accident).

2. Mrs Phillips has made a claim against AAI Limited trading as GIO (the insurer) of the at fault vehicle, for lump sum damages.

3. On 24 March 2022 the insurer accepted liability for the claim for common law damages with an allegation of 10% contributory negligence.

4. The insurer has accepted that Mrs Phillips had non-minor injuries and pursuant to Division 3.4 of the Motor Accident Injuries Act 2017 (the MAI Act) she is entitled to payment of reasonable treatment and care for the rest of her life for her accident caused injuries.

5. Mrs Phillips sustained the following injures in the accident:

   ·fractured ribs;

   ·degloving injury to the right hand;

   ·crushed and broken fingers of the right hand;

   ·amputation of the right middle finger;

   ·scarring due to surgery and grafts;

   ·triangular fibrocartilage complex (TFCC) injury to the right wrist, and

   ·psychological injury.

6. The insurer has conceded Mrs Phillips has sustained a whole person impairment (WPI) of greater than 10%. This means Mrs Phillips is entitled to recover damages for non-economic loss.

7. Mrs Phillips and the insurer have agreed to settle the claim for lump sum damages for the sum of $200,000. This offer was based on an allowance of $220,000 for non-economic loss less a discount of 10% for contributory negligence. Because
   Mrs Phillips is not represented by a lawyer, her settlement must be approved in accordance with the MAI Act.

8. The insurer lodged the application for approval of the settlement, and it was referred to me for consideration.

9. I held a teleconference on 30 May 2022.  The insurer was represented by
   Ms Adrianna Papaspiros. Mrs Phillips participated accompanied by her granddaughter Valerie Phillips.

10. On 30 May 2022 I indicated on the evidence available that I was not satisfied it was appropriate to reduce the damages by 10% for contributory negligence. 
    Ms Papaspiros indicated the insurer had obtained an investigation report which included photographs of the accident site which she could make available.

11. The matter was relisted before me on 6 June 2022. Mrs Phillips was present assisted by her son Dean Phillips. Ms Papaspiros represented the insurer.

Jurisdiction of the Personal Injury Commission

1. The Personal Injury Commission (Commission) was established on 1 March 2021 and the Dispute Resolution Service was abolished by cl 3 of Part 2, Division 2, Schedule 1 to the Personal Injury Commission Act 2020.

2. I am a Member of the Motor Accidents Division of the Commission. Clause 14A (1) of the Personal Injury Commission Regulation 2020 designates the application “pre-establishment proceedings” and clause 14D empowers me to determine those proceedings.

3. Because of the date of the accident cl 14D(3)(b) provides that the MAI Act and the Motor Accident Guidelines (the Guidelines) continue to apply.

The relevant law

1. Section 6.23(1) of the MAI 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%.

2. Section 6.23(2) and (3) of the 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 Guidelines.

3. Clause 7.37 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 MAI 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 a claims assessor, taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the Mrs Phillips, and taking into account any proposed reductions or deductions in the proposed settlement, and

   (c)     Mrs Phillips understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement.”

Documents considered

1. I considered the following documents:

   ·        insurer’s submissions;

   ·        Application for Personal Injury Benefits 14 September 2020;

   ·        Liverpool Hospital discharge summary;

   ·        Dr Yang surgery request;

   ·        Dr Yang operation report 1 September 2020; 

   ·        Activities of Daily Living (ADL) report of Rehab Management 2 October 2020; 

   ·        Ambulance report;

   ·        physiotherapy report 6 October 2020; 

   ·        Certificate of Fitness 3 November 2020;

   ·        ADL report of Rehab Management 20 November 2020;

   ·        physiotherapy report 1 December 2020;

   ·        Dr Yang report 3 December 2020;

   ·        rehab progress report 23 December 2020; 

   ·        Certificate of Fitness 17 December 2020; 

   ·        Dr Yang report 11 January 2021; 

   ·        Certificate of Fitness 25 January 2021; 

   ·        rehabilitation progress report 29 January 2021; 

   ·        report of Dr Danesh 9 February 2021; 

   ·        report of Dr Yang 8 February 2021; 

   ·        physiotherapy report 25 February 2021; 

   ·        Certificate of Fitness 22 February 2021; 

   ·        Dr Danesh report 1 March 2021;

   ·        Dr Danesh report 11 March 2021; 

   ·        occupational therapy report 25 March 2021; 

   ·        Dr Yang report 29 March 2021; 

   ·        Certificate of Fitness 19 April 2021; 

   ·        Dr Danesh report 22 April 2021;

   ·        rehabilitation Progress Report 31 May 2021; 

   ·        Dr Yang report 31 May 2021; 

   ·        Dr Danesh report 17 June 2021; 

   ·        rehabilitation progress report 28 July 2021; 

   ·        Dr Yang report 23 August 2021; 

   ·        rehabilitation closure report 15 September 2021;

   ·        Dr Yang report 7 September 2021;

   ·        Certificate of Fitness 30 September 2021; 

   ·        report of Dr Yang 18 October 2021;

   ·        Dr Yang operation notes; 

   ·        activities of daily living report 1 December 2021;

   ·        Dr Yang report 15 November 2021;

   ·        physiotherapy report 2 February 2022;

   ·        report of Associate Professor Peter Haertsch 2 December 2021; 

   ·        insurer letter 15 December 2021;

   ·        insurer letter 24 March 2022;

   ·        insurer offer 24 March 2022; 

   ·        police report;

   ·        Allied health recovery request of Alanna Mao dated 1 April 2021, and

   ·        Brooksight Investigation report dated 21 December 2020.

Review of the evidence

The pre-accident medical history

1. Mrs Phillips is now 80 years of age. Prior to the accident she lived alone in a one-bedroom apartment with a kitchenette.  Mrs Phillips was independent with personal care, meal preparation, shopping and all domestic tasks. She did not drive but was able to use public transport including trains and buses.

2. She underwent a left breast mastectomy in April 2020 resulting in a reduced range of movement and strength of the left upper limb.

3. Mrs Phillips had ischemic heart disease associated with the insertion of a stent in 2012 and a history of hypertension. She had also experienced an upper gastrointestinal bleed, peptic ulcer disease and iron deficiency anaemia.

The accident

1. The accident occurred on 1 September 2020 when Mrs Phillips was a pedestrian. In the Application for personal injury benefits Mrs Phillips described how the accident occurred as follows:

   “I stopped on the side of Dumaresq St noticed lights were red both ends and proceeded to cross when a car was exiting the carpark across the road and hit me towards the middle of the road.  Hit front on knocking me to the ground running over my hand.”

The police report

1. The police report bearing Event Reference No. E74417160 provides the following crash summary details:

   “Driver 2 was exiting the car park located in between Dumaresq and Lithgow Street, Campbelltown. Driver 2 was turning right onto Dumaresq St into the west bound lane, heading in the direction of Queen St, Campbelltown.  Upon crossing the east bound lane an unknown VOI has quickly turned out of a driveway on the opposite side of the road entering into the west bound lane. This has caused driver 2 to swerve to avoid a collision.  At this time, the pedestrian was crossing Dumaresq St and had not seen driver 2 exit the car park. Upon swerving slightly, driver 2 has collided with the pedestrian in the middle of the road. Driver 2 did not cross onto the incorrect side at this time.”

2. Mrs Phillips stated she has no independent recollection of the accident. However, she saw CCTV footage of the accident when she attended the Local Court to give evidence.  She said there are traffic lights at each end of the street, and she crossed in the middle of the road.

3. The investigation report of Brooksight Investigations dated 21 December 2020 includes three photographs of the accident scene.  It also contains a record of interview between Constable Robert Weeks and investigator Robert Whelen of 5 December 2020. 

4. Constable Weeks reported Mrs Phillips was halfway across the road when the at fault driver turned out of the car park.

5. Further, Constable Weeks stated he did not think there was anything that would have stopped the at fault driver seeing Mrs Phillips at the time he exited the carpark.

6. The three photographs suggest that both the at fault driver and Mrs Phillips would have had a clear line of sight of the other. Unfortunately, Mrs Phillips has no recollection of the accident and is unable to advise whether she was or was not able to see the at fault vehicle.

7. The investigator was not able to obtain a copy of the police brief including the statement of the at fault driver although he reported Constable Weeks advised a brief of evidence for the offence of Negligent driving causing grievous bodily harm was prepared.

8. Whilst I am of the view the evidence is equivocal as to whether it is appropriate to make a reduction for contributory negligence, I also note Mrs Phillips is prepared to accept the reduction and would like the settlement approved.  In those circumstances
   I propose to approve the reduction of 10% for contributory negligence. 

Treatment and post-accident sequalae

1. Mrs Phillips was admitted to Liverpool Hospital where she came under the care of
   Dr Owen Ou Yang, hand and plastic surgeon. She underwent surgery namely extensive debridement, index finger distal phalanx fixation, middle finger terminalisation at the PIP joint, fixation of the comminuted fracture of the proximal phalanx ring finger and metacarpal base fracture and fixation of the little finger proximal phalanx as well as comminuted metacarpal fracture. She also had an adipofascial flap and skin graft to reconstruct the dorsal skin defect.

2. Following her discharge on 7 September 2020 Mrs Phillips attended the Fairfield Hospital Hand Clinic twice a week for review with the hand surgeon and hand therapy team and for redressing, splint development and advice as to movement and function.

3. On 7 October 2020 Mrs Phillips underwent removal of the wires to the right 4^th and 5^th metacarpal fractures and to the index finger distal phalanx fracture.

4. Following an ADL assessment on 6 November 2020 the insurer approved domestic assistance and the provision of equipment to facilitate
   Mrs Phillips return home.

Dr Yang

1. Mrs Phillips was reviewed by Dr Yang on 3 December 2020. He reported a significant improvement in the pain in her hand although Mrs Phillips still had mild tenderness to the fifth metacarpal.  He reported she had a stiff hand, and her little and ring finger range was approximately 20 – 30 degrees at the MCP joints only. Dr Yang reported the main symptoms appear to be related to the ulnar side of the wrist. He noted a recent MRI confirmed Mrs Phillips had sustained a Triangular fibrocartilage complex (TFCC) injury. Dr Yang recommended an ultrasound guided corticosteroid injection to the ulnocarpal joint.

2. On 11 January 2021 Dr Yang reported the ulnar sided wrist pain subsided after the corticosteroid injection and the overall discomfort in the right hand had improved. However, he observed overall skin changes for the right hand which presented as erythematous with some trophic changes, with shiny, swollen skin over the dorsum of the right hand as well as the right palm. He reported Mrs Phillips finds her right hand “ugly”, and she prefers to wear gloves to cover it up. Dr Yang concluded there was a neuropathic component to the symptoms and recommended she obtain an opinion from a pain specialist. He also reported she had been quite depressed and recommended a referral to a psychologist or psychiatrist.

Dr Danesh

1. Mrs Phillips was reviewed by Dr Mazyar Danesh, pain medicine physician on 9 February 2021. He diagnosed the development of complex regional pain syndrome (CRPS) in the right hand subsequent to the successful reconstructive surgery. He recommended the use of antineuropathic compound creams which apparently were successful in relieving the pain.

2. Dr Danesh reviewed Mrs Phillips on 11 March 2021 and reported the skin shininess and redness had settled as had the pain on the back of the hand.  He reported
   Mrs Phillips had had a fall at home several weeks earlier when she suffered a fifth right metacarpal fracture. She was fitted with an ulnar gutter forearm-based splint. 

3. On 29 March 2021 Dr Yang reported persistent pain in the 5^th metacarpal region following a period of immobilisation.  To manage the re-fracture in the setting of CRPS he arranged for Mrs Phillips to undergo low intensity pulse ultrasound therapy with Exogen. By 31 May 2021 Dr Yang reported good union of the fifth metacarpal fracture. 

Psychological treatment

1. Mrs Phillips commenced treatment with a psychologist from Lighthouse Psychology. On 1 April 2021 Alanna Mao of the Lighthouse Psychology Practice submitted an Allied health recovery request seeking approval for eight weekly psychology sessions aimed at helping Mrs Phillips remember and process the traumatic accident, at encouraging suitable self-care, domestic and leisure duties through arousal reduction strategies, pacing and behavioural activation.

2. Under the heading clinical assessment Ms Mao recorded:

   “Ms Phillips reported that she was involved in a car accident last year, and that her surgeon believed she was blocking out memories of the accident where were preventing her hand from completely healing. Ms Phillips also reported experiencing frustration at losing her independence and not being able to complete activities as she did prior to her accident.”

3. During the teleconference on 30 May 2022 Mrs Phillips informed me she developed psychological symptoms after her attendance at court because before that date she had no recollection of the accident. As a result, she is now undergoing psychological counselling. She has attended three or four sessions recently.

4. On 17 June 2021 Dr Danesh reported Mrs Phillips had increased the range of movement in her index, fifth and ring fingers, and he noted the allodynia to light touch along the stump of the middle finger and also on the fifth finger resolved with the application of the neuropathic compound cream.

5. Because Mrs Phillips found herself frequently knocking the stump of the middle finger, she underwent surgery to shorten the stump on 14 October 2021.

6. A further ADL assessment was undertaken by Rehab Management on 11 November 2021 when it was noted that Mrs Phillips has limited use of the right hand due to reduced range of movement, stability and strength in all fingers.  However, she was able to prepare meals independently with the aid of equipment and received meals from her children as required. She was independent in dusting, vacuuming, sweeping, kitchen cleaning and making the bed. She described difficulty cleaning the bathroom due to physical limitations with the right upper limb. She required assistance with laundry.

Cameron Small, Hand Injury Trauma Service

1. Mrs Phillips has continued to see Cameron Small of the Hand Injury Trauma Service since her discharge from hospital. On 2 February 2022 he reported ongoing issues with pain daily, including phantom pain, and noticeable changes to swelling in the ring and little fingers in addition to redness. Mr Small referred Mrs Phillips to Second Skin for the construction of a custom-made garment for compression to help with pain and swelling.

Report of Associate Professor Peter Haertsch

1. Associate Professor Haertsch assessed Mrs Phillips at the request of the insurer on 2 December 2021.  He reported current symptoms as follows:

   “Currently she complains she has great difficulty using her right hand. Whilst she has key pinch and pulp pinch using her thumb and index fingers, she has no use in the ring and little fingers which are basically without tendons and feel numb.

   There is an adherent skin graft over the dorsum of the ulnar aspect of her right hand in the region of the 4th and 5th metacarpals. She has a stiff wrist as a result of scarring and an adherent graft. There is a lot of redness, sweating and pain associated with the palm of her right hand and particularly the right ring and little finger.”

2. Associate Professor Haertsch concluded the orthopaedic and soft tissue injuries sustained by Mrs Phillips had stabilised and he found she has sustained a WPI of 32% including an assessment of 1% for scaring of the hand. 

3. Associate Professor Haertsch stated he could not assess WPI in respect of the condition of reflex sympathetic dystrophy otherwise known as CRPS where it had not been fully investigated, established and treated.  He stated:

   “Whilst acknowledging that the four cardinal signs of reflex sympathetic dystrophy exist, they being pain, swelling, stiffness and discolouration, the diagnosis of that has not been, to my knowledge, firmly established by way of three phase nuclear tied flow studies, cold stress testing or stellate ganglion block.”

Current functioning

1. During the teleconference on 30 May 2022 Mrs Phillips stated she is limited in doing many things. Her ring finger was amputated and only two fingers on her right hand are really functional.  She can dress and shower herself.  She has been provided with a number of aids but does not cook very often because she has so little mobility in her right hand and has difficulty using a knife. Mrs Phillips informed me she generally buys frozen or pre-cooked meals.

2. Mrs Phillips informed me she is still living independently.  She has learnt to adjust and compensates with her left hand.  She already had a stick vacuum cleaner and is able to use disinfectant wipes.  She said she had cleaning services provided until COVID when she dispensed with the service.  She said whilst not easy she manages reasonably well. 

Should I approve the settlement

1. Section 1.4 of the MAI Act defines non-economic loss as,

   (a)     pain and suffering;

   (b)     loss of amenities of life;

   (c)     loss of expectation of life, and

   (d)     disfigurement.

1. The current maximum payable for non-economic loss is $595,000.

2. The medical evidence suggests there is only likely to be an inexorable increase in
   Mrs Phillips’s pain and disability. I think the assessment of $220,000 for non-economic loss is appropriate, although I note the amount payable to Mrs Phillips will be reduced by 10% for contributory negligence to $200,000.

3. I am satisfied that Mrs Phillips is aware of her right to have her reasonable treatment expenses and any need for care paid for the remainder of her life. Whilst the insurer is only liable to pay statutory benefits including treatment expenses for five years, thereafter the claim may be transferred to Lifetime Care and Support who will be liable for ongoing reasonable treatment expenses.

4. I am satisfied Mrs Phillips understood that the settlement was only in respect of her entitlement to damages for non-economic loss.

5. I am satisfied Mrs Phillips understood there will be no repayment to Centrelink or any impact on her ongoing entitlements.

6. Ms Papaspiros advised the insurer would not deduct and pay monies to Medicare under the Health and Other Services (Compensation) Act, 1995 (Cwlth) from the settlement sum. She advised in the event a Notice of Charge is raised by Medicare for reasonable and necessary treatment expenses the insurer will pay the charge in addition to the settlement amount.

7. I advised Mrs Phillips if a charge is raised by Medicare in respect of treatment expenses paid by Medicare relating to the injury, she should ask the insurer to pay that charge as part of their obligation to pay reasonable treatment costs.

8. Taking into account Mrs Phillips’ pre-existing disability, her age and the impact on her ability to live independently in the latter stage of her life I am of the view that the sum of $200,000 is an appropriate award of damages for the injuries sustained by
   Mrs Phillips in the accident.

Conclusion

1. I find the timing requirements of section 6.23(1) of the MAI Act satisfied where it is agreed Mrs Phillips has sustained a permanent impairment greater than 10%.

2. 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 Mrs Phillips.

3. I am satisfied Mrs Phillips is aware she can seek legal advice but does not wish to do so. I am satisfied Mrs Phillips understands the binding nature of the settlement and that she will be precluded from making a further claim for damages arising out of the accident. I am satisfied Mrs Phillips is willing to accept the proposed settlement.

4. Accordingly, pursuant to section 6.23(2(b) of the MAI Act I approve the settlement of Mrs Phillips’ claim for damages.