ABJ v AAI Ltd t/as AAMI
[2021] NSWPICMR 17
•10 June 2021
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | ABJ v AAI Ltd t/as AAMI [2021] NSWPICMR 17 |
| APPLICANT: | ABJ |
| RESPONDENT: | AAI Ltd t/as AAMI |
| MERIT REVIEWER: | Brett Williams |
| DATE OF DECISION: | 10 June 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS- Merit review; whether legal costs incurred by the claimant are reasonable and necessary under section 8.10 of the Motor Accident Injuries Act 2017; costs incurred to obtain clinical records; legal costs and disbursements; minor injury dispute; minor injury dispute resolved prior to any assessor intervention; maximum is payable if it reflects the reasonable and necessary legal costs incurred; determined the claimant is entitled to recover the maximum allowed; submissions lodged in the medical matter were comprehensive; Held- reasonable and necessary for the claimant’s lawyers to obtain clinical records; records were relevant to the resolution of the medical matter; costs were reasonable and necessary; not entitled to legal costs in connection with the costs dispute. |
| DETERMINATIONS MADE: | 1. The amount of the Claimant’s costs assessed in accordance with the Motor Accident Injuries Act 2017 (the Act) and Regulation 2017 is $1,660.16 plus GST. 2. The Claimant is entitled to recover from the Insurer the sum of $277.20 inclusive of GST, representing the costs incurred to obtain clinical records from: (a) Dr Ben Wong; (b) Ms Moubarak; (c) Hurstville City Medical Centre; (d) Professor Murrell, and (e) St George Professional Centre. 3. The Claimant is entitled to recover from the Insurer the sum of $1,500 plus GST with respect to Dr Antoun’s report dated 9 September 2020. |
Background
These proceedings involve a dispute between ABJ (the Claimant) and AAMI (the Insurer) in relation to the payment of the Claimant’s legal costs and disbursements. The costs the Claimant seeks to recover relate to a minor injury dispute[1]. That dispute was a medical assessment matter for the purposes of Part 7 of the Act.[2]
[1] DRS Application 10335608.
[2] Sch2 cl 2(e) the Act.
The medical assessment matter was the subject of an application lodged with the Dispute Resolution Service (DRS) on 21 September 2020 (the medical matter). The lodgement of the medical matter followed the Insurer’s determination on 16 July 2020 that the physical and psychological injuries suffered by the Claimant as a result of a motor accident on 20 March 2020 were minor injuries. An internal review was sought in relation to that decision. On 27 August 2020 the internal reviewer affirmed the Insurer’s minor injury decision. As a consequence of the Insurer’s decision in relation to minor injury, the Claimant’s entitlement to payment of statutory benefits would cease at 26 weeks.
On 30 September 2020, after the medical matter was lodged with the DRS, the Insurer changed its decision in relation to minor injury and issued the Claimant with a notice confirming that it accepted liability for his statutory benefits claim after 26 weeks.
On 27 October the DRS finalised the medical matter on the basis that there was no longer a dispute, the Insurer having accepted liability for the claim. The same day, the Claimant’s lawyers sought to recover legal costs and disbursements from the Insurer in relation to the medical matter.[3]
[3] $1,826.17 inclusive of GST plus disbursements totalling $2,147.20.
On 29 October 2020 the Insurer informed the Claimant’s lawyers that it declined to pay his legal costs and disbursements on the basis that the medical matter had not been finalised. This was not correct, as the matter had been finalised on 27 October 2020.
On 2 November 2020 the Insurer disputed the extent of the claimed legal costs. On 17 November 2020 the Insurer again informed the Claimant’s lawyers that it disputed the legal costs claimed. The Claimant’s lawyers were invited by the Insurer to ‘proceed with an appropriate DRS application.’ The invitation was accepted. The dispute in relation to costs now comes before me as a merit review matter.[4]
[4] Sch 2 cl 1(aa) the Act.
Having considered the subject matter of the dispute, the submissions and documents relied on by the parties together with s 52 of the Personal Injury Commission Act and Procedural Direction PIC2 I have determined that the proceedings can be determined on the papers. I am satisfied that sufficient information is available in connection with the proceedings to allow me to determine the dispute without holding any conference or formal hearing.
Transitional matters
The Personal Injury Commission (the PIC) was established on 1 March 2021. These proceedings were commenced before the PIC was established. They constitute both pending proceedings and pre-establishment proceedings[5] that I am empowered to determine.[6]
[5] Sch 1 Pt 2 cl 14A PIC Act.
[6] Sch 1 Pt 2 cl 14B PIC Act.
Relevant statutory provisions
The minor injury dispute was a medical assessment matter.[7] The Regulations allow legal costs in connection with a medical assessment under Division 7.5 up to a maximum of 16 monetary units.[8] A medical assessment means an assessment of a medical assessment matter under Division 7.5.[9]
[7] See definition in s 7.1 and Sch 2 cl 2(e)
[8] Sch 1 Pt 1 cl 2(1)
[9] See definition of ‘medical assessment’ in s 7.17
The Claimant’s entitlement to recover legal costs is governed by Part 8 of the Act.
The Claimant’s lawyers are not entitled to be paid or recover legal costs for any legal services provided to him in connection with his claim for statutory benefits unless payment of those costs is permitted by the regulations or the Commission.[10]
[10] s 8.3(4)
Section 8.10 states:
“8.10 Recovery of costs and expenses in relation to claims for statutory benefits
(1) A claimant for statutory benefits is (subject to this section) entitled to recover from the insurer against whom the claim is made the reasonable and necessary legal costs, and other costs and expenses, incurred by the claimant in connection with the claim. Other costs and expenses include the cost of medical and other tests and reports.
(2) The regulations may make provision for or with respect to fixing the maximum costs and expenses recoverable by a claimant under this section (including any matters for which no costs and expenses are recoverable from the insurer).
(3) A claimant for statutory benefits is only entitled to recover from the insurer against whom the claim is made reasonable and necessary legal costs incurred by the claimant if payment of those costs is permitted by the regulations or the Commission.
(4) The Commission can permit payment of legal costs incurred by a claimant but only if satisfied that—
(a) the claimant is under a legal disability, or
(b) exceptional circumstances exist that justify payment of legal costs incurred by the claimant.
(5) …”
Submissions
In summary, the Claimant submits that:
(a) The Insurer’s refusal to consider payment of his legal costs on the grounds that the DRS application was withdrawn is unfounded and has resulted in further disputation. This is contrary to the objects of the Act, particularly s 1.3(2)(g): “to encourage the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes”.
(b) Pursuant to Schedule 1, Part 1(2)(1) of the 2017 Regulations, the Insurer is liable to pay the Claimant’s reasonable and necessary legal costs.
(c) The maximum costs for legal services provided to a claimant in connection with a medical assessment under Division 7.5 of the Act are 16 monetary units (to a maximum of 60 monetary units per claim).
(d) The costs and disbursements claimed in relation to the medical assessment matter are reasonable and necessary.
In summary, the Insurer submits that:
(a) Whilst the Claimant has a right to have medical disputes determined by a medical assessor, there is no automatic entitlement to recover legal costs in matters such as this.
(b) Maximum costs should be awarded in circumstances where the legal representative has put significant and justified time and effort into the application.
(c) Consideration ought to be given to the amount of work completed and effort exerted by the Claimant’s solicitor, as well as the merits of the application and the outcome of assessment.
(d) The Claimant’s lawyers submitted an application to DRS pertaining to the minor injury dispute that was subsequently overturned by the Insurer prior to the dispute being allocated for medical assessment.
(e) The Insurer declined to pay the Claimant’s legal costs in connection with the medical assessment matter on the basis that the minor injury decision had been overturned and resolved prior to any assessor intervention.
(f) The disbursements weren’t reasonable or necessary.
(g) The submissions lodged in support of the medical matter by the Claimant’s lawyers were ‘…vastly unmeritorious with the exception of the part addressing the Psychological Injury.’
(h) Whilst the effort exerted by the Claimant’s lawyers in the minor injury dispute was evident by reference to the pure length of the Application and annexures, the submissions and reasoning provided by the Claimant’s solicitors regarding the physical injuries showed ‘little evidence to demonstrate the Claimant’s Solicitor has specifically applied legal expertise in addressing the minor injury criteria’.
(i) Documents were submitted in the medial matter that were irrelevant to the dispute. This represented ‘additional unjustified work completed for that dispute’.
(j) It is not in line with the objects of the Act to award the maximum amount of costs for a medical matter in the absence of evidence of exceptional circumstances and/or application of legal expertise, or considerable, justified, meritorious work undertaken.
(k) Given the merits of the medical matter with respect to the Claimant’s psychological injury alone, some costs should be allowed, up to a maximum of 10 monetary units.[11]
[11] 10 x $103.76 = $1,037.60.
(l) The Claimant’s entitlement to legal costs in connection with the minor injury dispute ought to reflect the quality and extent of the submissions lodged together with the overall merits of the application. Accordingly, while it would not be appropriate to award the maximum regulated costs, some costs should be allowed up to a maximum of 10 monetary units.
(m) With respect to the claimed disbursements, no allowance should be made because the clinical records did not add to what was already contained on the Insurer’s file.
(n) As the report of Dr Antoun related to the assessment of physical injuries only, it played no part in the Insurer’s minor injury determination and has not been used in any way in the decision making by the Insurer with respect to the Claimant’s treatment or care. Further, as there was enough information on the Insurer’s file to provide evidence and clarity in relation to the Claimant’s injuries the costs associated with the report are not reasonable or necessary and should not be allowed.
(o) As the regulations don’t allow for payment of legal costs in relation to the costs dispute and exceptional circumstances don’t exist, the Claimant is not entitled to recover legal costs in connection with the costs dispute.
Determination
The Insurer does not dispute that the Claimant is entitled to recover legal costs in relation to the medical matter, having conceded that some legal costs should be allowed.[12] The dispute in relation to legal costs now boils down to the appropriate allowance for those costs.
[12] See Insurer’s submissions (R1) at paragraph 9.
There is a dispute in relation to the claimed disbursements and the Claimant’s entitlement to recover legal costs from the Insurer in relation to this costs dispute.
Had the Insurer not conceded the Claimant’s entitlement to recover legal costs in connection with the medical matter, I would have found that the Claimant was entitled to the payment of his reasonable and necessary costs in connection with that matter. He was put in a position of having to lodge an application in relation to the medical matter as a consequence of the Insurer’s determination, affirmed by the internal reviewer, that the only injuries he suffered as a result of the accident were minor injuries. The Insurer changed its’ position in relation to this issue only after the DRS application had been lodged and legal work had been undertaken by the Claimant’s lawyers in connection with the application.
The Claimant can recover from the Insurer his reasonable and necessary legal costs up to the maximum amount prescribed by the regulations, $1,660.16.[13]
[13] 16 monetary units @ $103.76 a unit.
The Insurer argues that an allowance for costs based on 10 monetary units[14] would appropriately reflect the Claimant’s reasonable and necessary legal costs, with particular reference to the costs associated with the Claimant’s psychological injury.
[14] $1,037.60.
In my view, when determining the Claimant’s entitlement to recover reasonable and necessary costs in connection with the medical matter, it is appropriate to take into account the legal work performed, and costs incurred, in connection with both the physical and psychological injures.
In AAI Ltd trading as GIO v Moon [2020] NSWSC 714 (Moon) Wright J held that:
‘90 …”[F]ixing maximum costs” involves setting an upper limit to the costs that are recoverable and payable in respect of the legal services in question. When such an upper limit is fixed, there is in effect a prohibition on the recovery or payment of costs above that limit but, otherwise, what is not prohibited is permitted. In other words, where the maximum recoverable costs are fixed by the regulations, this necessarily implies that recovery and payment of legal costs not exceeding the applicable maximum costs are permitted, assuming that those legal costs are otherwise recoverable and payable in the circumstances.’
Whether legal costs are “reasonable and necessary” is a matter that depends on the particular circumstances of each case.[15]
[15] Moon at 105.
I reject the Insurer’s submission that the regulated maximum should only payable if exceptional circumstances exist. The maximum is payable if it reflects the reasonable and necessary legal costs incurred by the Claimant in connection with the medical matter.
A determination about whether exceptional circumstances exist is only required if a Claimant seeks an order from the Commission permitting recovery of legal costs that either exceed the maximum allowed by the regulations or are not provided for by the regulations.[16]
[16] See s 8.10(3) & (4)(b).
I have determined that the Claimant is entitled to recover the maximum allowed by the regulations in relation to the medical matter, $1,660.16 plus GST. In my view, that amount reflects his reasonable and necessary costs in relation to the matter, particularly in light of the following:
(a) The submissions lodged in the medical matter were comprehensive. They addressed the substantive issues that arose in relation to whether the Claimant’s physical and psychological injuries resulting from the accident were minor injuries.
(b) The content of the application lodged in the medical matter, including the evidence relied on in support.
(c) My impression of the time it would reasonably have taken the Claimant’s lawyers to obtain instructions from him and prepare the application, together with the professional skill involved in that work.
(d) Two statements from the Claimant, addressing matters relevant to the medical matter, were prepared by his lawyers and lodged in support of the application.
(e) The forensic judgment I consider was exercised by the Claimant’s lawyers when determining what material ought to be included in the application.
I consider that, in connection with the medical matter, it was reasonable and necessary for the Claimant’s lawyers to obtain clinical records from:
(a) Dr Ben Wong;
(b) Ms Moubarak;
(c) Hurstville City Medical Centre;
(d) Professor Murrell, and
(e) St George Professional Centre (Dr Ho).
The records were relevant to the resolution of the medical matter. In particular, the records from Ms Moubarak supported a finding that the Claimant suffered from Post Traumatic Stress Disorder as a consequence of the accident. This diagnosis supported the Claimant’s contention that he suffered a non-minor injury as a result of the accident.
The evidence discloses that the Claimant incurred costs associated with the provision of the clinical records. I do not understand the Insurer to argue that the sums paid for the provision of these records were unreasonable; rather the Insurer argues that the Claimant did not need to obtain them.
I am satisfied that the Claimant is entitled to recover the costs incurred obtaining the clinical records. Those costs were both reasonable and necessary.
That leaves the costs incurred by the Claimant in relation to the report of Dr Antoun dated 9 September 2020 in the amount of $1,870. Dr Antoun’s report addresses the minor injury issue in the context of the physical injuries sustained by the Claimant in the accident.
The Insurer says that the report played no part in its’ decision in relation to minor injury and had not been used in any way in the Insurer’s decision making with respect to the Claimant’s treatment and care. While that may be the case, the Claimant’s entitlement to recover costs in relation to the report is not dependant upon what use the Insurer did or did not make of it. The Claimant is entitled to recover costs if they were reasonable and necessary.
Had the medical matter proceeded to medical assessment, the assessor would have taken Dr Antoun’s report into account when determining the minor injury issue in the context of the physical injuries suffered by the Claimant in the accident. The report addressed matters that were relevant to a determination about that issue.
In the circumstances, I am satisfied that it was reasonable and necessary for the Claimant to incur costs associated with Dr Antoun’s report. I have determined that the sum of $1,500 plus GST represents the reasonable and necessary costs associated with the report.
The regulations make no provision for recovery by the Claimant of his legal costs in relation to the costs dispute.
Accordingly, the only basis upon which the Claimant can recover costs from the Insurer in connection with the costs dispute is if the Commission concludes that exceptional circumstances exist that justify the payment of those costs.[17]
[17] s 8.10(4)(b).
I am not persuaded that the costs dispute involved an unusual degree of factual or legal complexity[18]. Nor am I satisfied that there are other reasons that would justify a finding that exceptional circumstances exist. Accordingly, I find that the Clamant is not entitled to legal costs in connection with the costs dispute.
[18] See Moon at 99.
Brett Williams
Member – Motor Accidents Division | Merit Reviewer
Personal Injury Commission
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