ABH v AAI Ltd t/as GIO
[2021] NSWPICMR 16
•2 June 2021
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | ABH v AAI Ltd t/as GIO [2021] NSWPICMR 16 |
| APPLICANT: | ABH |
| RESPONDENT: | AAI Ltd t/as GIO |
| MERIT REVIEWER: | Brett Williams |
| DATE OF DECISION: | 2 June 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS- whether the costs and expenses incurred by the claimant are reasonable and necessary under section 8.10 of the Motor Accident Injuries Act 2017; minor injury dispute; costs determined by the regulations; medical assessment application did not include detailed, substantive or comprehensive submissions; Held- decision set aside; costs of $500 plus GST; not satisfied of exceptional circumstances. |
| DETERMINATIONS MADE: | 1. The reviewable decision is set aside. 2. The amount of the Claimant’s costs assessed in accordance with the Motor Accident Injuries Act 2017 is $500 plus GST. |
Background
There is a dispute between ABH (the Claimant) and the Insurer about whether for the purposes of section 8.10 of the Act costs and expenses incurred by her are reasonable and necessary.
Legal costs are claimed in connection with a minor injury dispute that was the subject of a medical assessment.
Legal costs are also claimed in relation to this application.
The minor injury dispute was a medical assessment matter (Sch 2. cl. 2(e) of the Act). The dispute was not determined in the Claimant’s favour. On 23 December 2019 Assessor Gibson certified that all the injures found to be related to the accident were minor injuries.
By letter dated 28 February 2020 (A2) the Claimant’s lawyers sought from the Insurer payment of her legal costs in relation to the medical assessment in the sum of $1,660 plus GST. The letter enclosed a tax invoice in that amount. The legal services with respect to which costs were claimed were not itemised.
On 2 March 2020 the Insurer declined to pay the Claimant’s costs on the basis that Assessor Gibson’s Certificate did not include a determination in relation to costs (A3).
Further correspondence passed between the Claimant’s lawyers and the Insurer in relation to her costs (A4 – A9). The costs issue remained unresolved.
The dispute before me is a merit review matter (Sch. 2 cl.1(aa)).
The Claimant has asked for the dispute to be determined on the papers. The Insurer has made no objection to that course. I am satisfied that sufficient information has been supplied in connection with the dispute and that the proceedings can be determined on the papers.
Submissions
The Claimant’s submissions are contained in A1 to the Application. In summary, the Claimant submits that:
(a) the Insurer is obligated to pay the ‘full costs’ associated with this Merit Review;
(b) the Insurer is obliged to pay the legal costs associated with the minor injury dispute;
(c) the Insurer’s obligation to pay the Claimant’s legal costs arises from s 7.28 and s 8.10 of the Act, and
(d) the insurer should be ordered to pay the Claimant’s legal costs at ‘the maximum for both the medical dispute matter and merit review matter’, in the sum of $1,655each, a total of $3,266.
The Insurer’s submissions are contained in R1 to the Reply. In summary, the Insurer submits that:
(a) there is no automatic entitlement to legal costs, particularly the maximum allowable, in medical disputes;
(b) there is limited evidence available to demonstrate that the Claimant’s legal representatives demonstrated genuine legal expertise in relation to the medical dispute;
(c) the Application in the medical dispute did not reflect significant work or effort on the part of the Claimant’s lawyers;
(d) there should be no allowance for legal costs in relation to the medical dispute;
(e) if legal costs are allowed, they should be minimal, and
(f) exceptional circumstances do not exist that would justify the Commission permitting payment of legal costs in accordance with s 8.10(4)(b) of the Act.
Decision
The Claimant is entitled to recover from the Insurer the reasonable and necessary legal costs incurred by her in connection with the claim (s 8.10(1)). The regulations may fix the maximum costs and expenses recoverable (s 8.10(2)).
The Claimant is only entitled to recover legal costs from the Insurer if the costs are permitted by the regulations or the Commission (s 8.10(3)). There is no reference in the Claimant’s submissions to a claim for an ‘exceptional circumstances’ costs order pursuant to s 8.10(4)(b) in relation to the medical assessment. Thus, costs in relation to that assessment are to be determined under the regulations.
The regulations allow the payment of legal costs in connection with a medical assessment up to a maximum of 16 monetary units (Sch. 1 Pt. 1 cl. 2(1)). Accordingly, the maximum legal costs allowable by the regulations in relation to the medical assessment are $1,660.
The Claimant argues that s 7.28 obliges the Insurer to pay her legal costs in relation to the medical assessment. I do not agree. That section relates to non-legal costs of the medical assessment, including the remuneration of the Medical Assessor and costs incurred by an injured person attending the assessment. The section does not create an entitlement to the payment of legal costs.
The Claimant’s entitlement to recover legal costs in relation to the medical assessment is governed by Part 8 of the Act. Part 8 applies to and in respect of legal costs payable on a party and party basis, on a solicitor and client basis or on any other basis, unless otherwise provided for by that Part (s 8.2).
Success is not a pre-requisite to the Claimant accruing an entitlement to the payment of her legal costs in connection with the medical assessment. In AAI Ltd v Moon [2020] NSWSC (Moon) Wright J observed:
“82 As to the general nature of the entitlement conferred by s 8.10, it can be noted that it is not similar to the awarding of costs in court proceedings. There is nothing in s 8.10 or any other provisions of the MAI Act that suggests that a claimant’s entitlement to recover legal costs under s 8.10 depends on whether or not the claimant was successful before the DRS…”
The Claimant seeks the maximum costs allowable under the regulations in relation to the medical assessment. I have to determine the Claimant’s reasonable and necessary legal costs in connection with that assessment. Whether legal costs are ‘reasonable and necessary’ is determined on a case by case basis (Moon at [105]). As the Claimant has not provided an itemised schedule of costs, I am left to make a decision on the material contained in the Application and Reply lodged in this matter.
The material available to me includes the Application lodged on the Claimant’s behalf in the medical assessment matter (R2). The medical assessment Application did not include detailed, substantive, or comprehensive submissions from the Claimant’s solicitors that addressed the minor injury dispute. Eight documents were attached to the Application - the claim form, two radiological reports, the Insurer’s liability notice, communications between the Claimant’s solicitors and the Insurer, and a copy of the Insurer’s file.
I am satisfied that legal services were provided to the Claimant in relation to the medical assessment and that those services involved the exercise of professional legal judgement. I am not satisfied that the Claimant’s legal costs in connection with the medical assessment should be awarded at the maximum. I have determined that the maximum allowable costs do not reflect the reasonable and necessary legal costs in connection with the dispute. I have concluded that the reasonable and necessary legal costs associated with the medical assessment are $500 plus GST.
The Claimant also seeks legal costs in connection with the costs dispute. As noted in paragraph 8, the costs dispute is a merit review matter. The regulations do not permit payment of costs in relation to a costs dispute. In these circumstances, the only basis upon which she may recover legal costs from the Insurer is if payment is permitted by the Commission in accordance with s 8.10(3). The Commission can only permit payment of legal costs if satisfied that the Claimant is under a legal disability or exceptional circumstances exist that justify the payment of her costs (s 8.10(4)). The Claimant is not under a legal disability. In the circumstances she must satisfy me that exceptional circumstances exist.
I am not satisfied that this costs dispute involved an unusual degree of factual or legal complexity (see Moon at [99]). I am not satisfied that exceptional circumstances exist that would justify an order for the payment of the Claimant’s costs under s 8.10(4)(b).
As general observation, it would assist the Commission if the lawyers seeking a costs determination in statutory benefits matters provided an itemised schedule of costs showing the work undertaken and the time spent undertaking that work.
Brett Williams
Member - Motor Accident Division | Merit Reviewer
Personal Injury Commission
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