AAJ v AAI Limited t/as AAMI - [2021] NSWPIC 68

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	AAJ v AAI Limited t/as AAMI [2021] NSWPIC 68
APPLICANT:	AAJ
RESPONDENT:	AAI Limited trading as AAMI
MEMBER:	Ms Belinda Cassidy
DATE OF DECISION:	7 April 2021
CATCHWORDS:	MOTOR ACCIDENTS- Claims assessment as to a proposed settlement approval under section 6.23(2)(b) of the Motor Accident Injuries Act 2017; liability accepted; non-minor injuries; entitled to treatment and care; claim for lump sum compensation; non-economic loss; whole person impairment of 5%; some limitation of movement; returned to full time work; future loss of earning capacity; ongoing gym-based exercises; top up of his statutory benefits; buffer; Held- proposed settlement approved.
DETERMINATIONS MADE:	The proposed settlement is approved in accordance with section 6.23(2)(b) of the Motor Accident Injuries Act 2017

INTRODUCTION

AAJ was crossing Beecroft Road at a light controlled on 5 June 2018 when he was knocked down by AAMI’s insured vehicle? which had travelled through a red light.
AAJ has made two claims against AAMI following that accident as follows:
(a) a claim for statutory (income support and treatment) benefits, and
(b) a claim for lump sum compensation or damages.
AAJ and AAMI have agreed on a sum to settle the lump sum damages claim. Because AAJ does not have a lawyer representing him, his settlement must be approved in accordance with the relevant provisions of the Motor Accident Injuries Act2017 (the MAI Act).

LEGISLATIVE BACKGROUND

Preliminary matters

AAMI referred AAJ’s claim to the Dispute Resolution Service (DRS), which was part of the State Insurance Regulatory Authority. The application was allocated to me for consideration and I have held four teleconferences in the matter as follows:
(a)    17 July 2020 at 12.00 pm with AAJ and Ms G;
(b)    19 October 2020 at 2.00 pm with AAJ and Ms G;
(c)    27 January 2021 at 10.00 am with AAJ and Ms G, and
(d)    6 April 2021 at 2.00 pm with AAJ and Mr H.
The Personal Injury Commission (the PIC) was established on 1 March 2021 and the DRS was abolished by cl 3 of Part 2, Division 2, schedule 1 to the Personal Injury Commission Act 2020. I am a Member of the Motor Accidents Division of the PIC and cl 14B(1) of the Personal Injury Commission Regulation 2020 designates AAMI’s application ‘pending proceedings’ and cl 14B(3) empowers me to determine those proceedings.
Because of the date of the accident, cl 14B(4)(c) provides that the MAI Act and the Motor Accident Guidelines (the MA Guidelines) continue to apply.

Approval of the settlement

Section 6.23 of the MAI Act provides the following restrictions on settling claims for damages:
(a) Unless a claimant has a whole person impairment of greater than 10%, the claim cannot be settled within two years.
AAJ does not have a whole person impairment greater than 10% however more than two years has passed since the date of his accident.
(b) The settlement must be approved by DRS and I am not to approve the settlement unless I am…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NSWPIC 68
Decision Date: 7 April 2021

CaseChat Overview and Summary

The case of AAJ v AAI Limited t/as AAMI involved a dispute regarding the assessment of a settlement claim under section 6.23(2)(b) of the Motor Accident Injuries Act 2017. AAJ, the claimant, sought compensation for a motor accident that resulted in non-minor injuries, entitling him to treatment and care, and a lump sum for non-economic loss. The settlement included compensation for whole person impairment, some limitation of movement, and future loss of earning capacity. The key issue was whether the proposed settlement, which the claimant had accepted, was fair and appropriate.

The court had to determine whether the settlement amount was reasonable, particularly in relation to the past loss of earnings and the future loss of earning capacity. The court considered the claimant's evidence that he had additional days off work due to surgeries and a colonoscopy, which the insurer had agreed to consider. The claimant had returned to full-time work but experienced some difficulty. The court found that the claimant's future earnings capacity was likely to be less than his current earnings due to the accident, and thus, the settlement included a 'buffer' to account for potential future losses. The court referenced previous cases where a 'buffer' was deemed appropriate to cover intermittent losses and treatment periods. The court also noted that the claimant understood the terms of the settlement and the implications of accepting it.

The court concluded that the proposed settlement was appropriate and approved it. The court's approval was based on the claimant's acceptance of the settlement, his understanding of its terms, and the consideration of a 'buffer' for future potential losses. The final orders confirmed the approval of the settlement as presented.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

Following AAJ’s evidence at the fourth teleconference I am satisfied that the Claimant had a week off work after this second surgery, in July 2019 and he had a further three days off work at the time of his colonoscopy. Bearing in mind Assessor Cameron’s finding in relation to his IBS aggravation, and the clear relationship between the second surgery and the accident, I am satisfied that the Claimant’s claim for past loss of earnings should include an additional 10 days, subject to the provision of proof such as medical certificates and/or pay slips. I note the Insurer has, in principle, agreed to consider this. I accept that the most likely future circumstances for AAJ, but for this accident and its injuries is that he would continue to work in the IT industry in a role similar to that which he is currently engaged in and that he would have continued to progress and work to the usual retirement age of 70. I note the Insurer originally informed me that the allowance for future loss of earning capacity damages was based on $100 a week for seven years. There is no evidence that the Claimant is currently losing $100 per week or is likely to be losing that amount for seven years. He is working a full-time job at a greater salary than before the accident. The Claimant confirmed that other than the additional 10 days (for surgery and a colonoscopy) he has not had any other accident related absences from work. I accept AAJ’s evidence that he is working with modifications and with some difficulty. I have therefore assumed that the current sum of $58,500 for future loss of earning capacity in the settlement offer which the Claimant has accepted is what is usually termed a ‘buffer’ or ‘cushion’ for the possibility that the Claimant will suffer occasional losses as a result of his injuries such as days off work that he would otherwise not have had, additional time off work between jobs should he be required to look for work and possible lack of promotional opportunities or even early retirement. In Dunbar v Brown [2004] NSWCA 103 the Court of Appeal found that a buffer could be allowed to account for absences from work from time to time and in particular to allow for periods of respite or treatment. This principle has been applied and followed in a number of subsequent judgments of the Court including Allianz Australia Insurance Ltd v Kerr (2012) 83 NSWLR 302 where Justice McColl said at [30]:There is a point … beyond which the selection of a figure for economic loss is so fraught with uncertainty that the preferred course is to award a lump sum as a “buffer”, without engaging in an artificial exercise of commencing with a precise figure, and reducing it by a precise percentage. Bearing in mind the age of the Claimant (29) and the length of his working life (which could be 38 more years) I think a buffer of the size offered by the Insurer and agreed by the Claimant is acceptable and within the range likely to be awarded. Having spoken with the Claimant I am satisfied that the Claimant:(a) Has exhausted settlement negotiations with the Insurer.(b) Is aware he can seek legal advice but that he does not wish to do so.(c) Understands the binding nature of the settlement and this approval and that he may not be able to make a further claim for damages in the future.(d) Understands what the Insurer will be deducting from the settlement.(e) Accepts the amount for past loss of earnings is a ‘top up’ to 100% of his lost income during the period he was being paid weekly statutory benefits.(f) Accepts that the amount for future loss of earning capacity reflects an amount which covers the loss arising from the difference between his current state and the most likely future circumstances but for the accident and his injuries. In particular this amount accounts for any possible early retirement, periods of time off work between now and then and any difficulty he may have obtaining employment in the future due to his accident related injuries.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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