Abq v Insurance Australia Ltd t/as NRMA
[2021] NSWPICMR 22
•21 June 2021
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | ABQ v Insurance Australia Ltd t/as NRMA [2021] NSWPICMR 22 |
| APPLICANT: | ABQ |
| RESPONDENT: | Insurance Australia Ltd t/as NRMA |
| MERIT REVIEWER: | Brett Williams |
| DATE OF DECISION: | 21 June 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS- Merit review; recovery of costs and expenses under section 8.10 of the Motor Accident Injuries Act 2017; single application; two discrete medical assessment matters; minor injury matter did not proceed to assessment; insurer reversed its position; claimant is entitled to her reasonable and necessary costs in relation to each medical assessment matter; Held- not satisfied exceptional circumstances exist; reviewable decision set aside; claimant’s costs $1,000 plus GST. |
| 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 and Regulations is $1,000 plus GST. |
Background
This is a dispute between the Claimant and the Insurer in relation to the payment of her legal costs in connection with a medical assessment under Division 7.5 of the Motor Accident Injuries Act2017 (the Act). The Claimant lodged a single application in relation to two discrete medical assessment matters; one relating to a work-related activity program (WRAP) and the other to a minor injury dispute. Both matters are declared by the Act to be medical assessment matters.[1]
[1] Schedule 2 cl 2(b) and (e)
The minor injury matter did not proceed to assessment because the Insurer conceded that the Claimant’s injuries resulting from the motor accident were not minor injuries.[2] That left the treatment matter to be assessed by Assessor Wijetunga. The treatment matter was determined in the Claimant’s favour.[3]
[2] R6 letter from NRMA to the Claimant dated 27 February 2020.
[3] See Certificate dated 7 April 2020
The Claimant sought payment from the Insurer of her legal costs in connection with each medical assessment matter. Her costs in relation to the minor injury matter were paid. The Insurer declined to pay the legal costs she sought in connection with the treatment matter. It is payment of those costs that is the subject of this application. The dispute about costs constitutes a merit review matter.[4]
[4] Sch 2 cl 1(aa) MAI Act
The Claimant seeks an uplift on her costs of 25% on the basis that the Insurer’s refusal to pay the costs associated with the treatment dispute constituted an unreasonable denial of liability.[5] She also seeks an exceptional circumstances costs order from the Commission[6].
[5] s 6.21 MAI Act
[6] s 8.10(4)(b)
Having considered both s 52 of the Personal Injury Commission Act 2020 (the PIC Act) and Procedural Direction PIC2 I have determined that the matter can be determined on the papers. I am satisfied that sufficient information is available in connection with proceeding 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 on 19 January 2021, before the PIC was established. In accordance with Sch 1 Part 2 cl 14A and cl 14B of the PIC Act, they constitute pending proceedings and pre-establishment proceedings that I am empowered to determine.
Relevant legislative provisions
The Claimant’s entitlement to recover legal costs is governed by Pt 8 of the Act. That Part 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 the Part otherwise provides[7].
[7] s 8.2
Section 8.3 states:
“8.3 Regulations fixing maximum costs etc recoverable by Australian legal practitioners
(1) The regulations may make provision for or with respect to the following--
(a) fixing maximum costs for legal services provided to a claimant or to an insurer in any motor accidents matter,
(b) fixing maximum costs for matters that are not legal services but are related to proceedings in any motor accidents matter (for example, expenses for investigations, for witnesses or for medical reports),
(c) declaring that no costs are payable for any such legal services or other matters of a kind specified in the regulations.
(2) Without limiting subsection (1), the regulations may fix maximum costs for legal services provided to a claimant by reference to the amount recovered by the claimant.
(3) An Australian legal practitioner is not entitled to be paid or recover for a legal service or other matter an amount that exceeds any maximum costs fixed for the service or matter by the regulations under this section. An Australian legal practitioner is not entitled to be paid or recover any amount for a legal service or other matter of a particular kind if the regulations declare that no costs are payable for a service or other matter of that kind.
(4) An Australian legal practitioner is not entitled to be paid or recover legal costs for any legal services provided to a party to a claim for statutory benefits (whether the claimant or the insurer) in connection with the claim unless payment of those legal costs is permitted by the regulations or the Commission.
(5) This section does not entitle an Australian legal practitioner to recover costs for a legal service or matter that a court or costs assessor determines were unreasonably incurred.
(6) This section and any regulations under this section prevail to the extent of any inconsistency with the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014). An assessment under that legislation of any costs in respect of which provision is made by a regulation under this section is to be made so as to give effect to that regulation.
(7) ….”
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)…”
Schedule 1 Pt 1 cl 2(1) of the regulations state relevantly:
“2 Medical disputes
(1)The maximum costs for legal services provided to a claimant or an insurer 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).
…”
Section 7.1(1) defines ‘medical assessment matter’ to mean a matter declared by Schedule 2 to be a medical assessment matter for the purposes of this Part.
Section 7.17 states:
“7.17 Definitions
In this Part—
medical assessment means an assessment of a medical assessment matter under this Division.
medical dispute means—(a) a dispute between a claimant and an insurer about a medical assessment matter, or
(b) an issue arising about a medical assessment matter in proceedings before a court for damages or in connection with the assessment of a claim by the Commission.”
Schedule 2 cl 2 states:
“2 Medical assessment matters
The following matters are declared to be medical assessment matters for the purposes of Part 7—
(a) the degree of permanent impairment of the injured person that has resulted from the injury caused by the motor accident (including whether the degree of permanent impairment is greater than a particular percentage),
(b) whether any treatment and care provided to the injured person is reasonable and necessary in the circumstances or relates to the injury caused by the motor accident for the purposes of section 3.24 (Entitlement to statutory benefits for treatment and care),
(c) whether for the purposes of section 3.28 (Cessation of statutory benefits after 26 weeks to injured adult persons most at fault or to injured persons with minor injuries) treatment or care provided to an injured person will improve the recovery of the injured person,
(d) the degree of impairment of the earning capacity of the injured person that has resulted from the injury caused by the motor accident,
(e) whether the injury caused by the motor accident is a minor injury for the purposes of the Act.”
Submissions
The Claimant relies on two sets of submissions[8]. In summary, she submits that:
(a) She is entitled to recover from the Insurer legal costs in relation to each medical assessment matter.
(b) The Commission should allow her costs on the basis that exceptional circumstances exist such that she is not limited to the regulated maximum.
(c) The legal work performed occupied ‘…no less than 10 hours’ and included ‘obtaining instructions, reviewing decisions, conducting investigations, researching and preparing for complex issues’.
(d) A s 6.21 costs penalty of 25% should be “…imposed for the unreasonable denial of liability.”
[8] A3 & A4 to the application
In summary, the Insurer submits that:
(a) It is not liable to pay the claimant’s solicitors’ tax invoice for legal costs incurred in lodging DRS application 10148214 (regarding the Insurer’s denial of a WRAP).
(b) It has paid the Claimant’s regulated legal costs associated with the minor injury dispute, which was sought to be determined in the same application as the WRAP.
(c) There was only one DRS application made. Only a single medical assessment resulted.
(d) There is no scope for awarding a costs penalty in this case under s 6.21.
(e) There is nothing in the previous DRS application, nor the Claimant’s submissions in relation to this dispute, that establishes exceptional circumstances for the purposes of awarding costs in excess of the regulations under section 8.10(4).
(f) In the event it is found to be liable for the legal costs in dispute, an allowance ought to be made at less than the maximum amount allowable in the Regulations.
Determination
The regulations provide for the payment of legal costs in connection with a ‘medical assessment’ under Div 7.5 of the Act. ‘Medical assessment’ means an assessment of a ‘medical assessment matter’[9]. ‘Medical assessment matter’ means a matter declared by Schedule 2 to be a medical assessment matter for the purposes of Part 7[10]. Sch 2 cl. 2 declares both the treatment dispute and the minor injury dispute to be medical assessment matters. These provisions have the effect of allowing payment of the Claimant’s reasonable and necessary legal costs in connection with each medical assessment matter.
[9] s 7.17
[10] s 7.1(1)
The Claimant was in the position of having to lodge an application that included both a medical assessment matter about treatment and minor injury because of the Insurer’s decision to put minor injury in dispute. The Insurer’s subsequent concession in relation to minor injury does not alter the fact that when the application was filed two distinct medical assessment matters were in dispute. Each matter was to be the subject of a medical assessment.
In its’ submissions the Insurer concedes that there were two separate medical assessment matters within the one application. However, the Insurer argues that in circumstances where only one dispute was ultimately referred to a single medical assessment arising out of a single application, an allowance should only be made for the costs associated with one of the disputes. I do not agree. The submission does not find support in the applicable legislative provisions.
The Claimant is entitled to costs “…in connection with a medical assessment”. There is nothing in the relevant provisions that requires a medical assessment to be undertaken by an assessor before an entitlement to recover costs arises. In my view, such a requirement would act as a disincentive to a Claimant reaching agreement with an Insurer in relation to a medical assessment matter after an application had been lodged. This would not align with the objects of the MAI Act to encourage the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes.[11]
[11] See s 1.3(2)(g)
The Claimant should not be prevented from recovering her reasonable and necessary legal costs because the Insurer reversed its’ position in relation to minor injury. The Claimant is entitled to her reasonable and necessary costs in relation to each medical assessment matter. Her costs in relation to the minor injury matter have been paid. She is entitled to recover from the Insurer her reasonable and necessary legal costs in connection with the treatment matter.
I must determine the Claimant’s reasonable and necessary costs in connection with the treatment matter. Particulars in relation to the work said to have been undertaken by the Claimant’s lawyers are contained in the submissions provided in AD 3, and include the following:
“15. It is submitted that no less than 10 hours of legal work has been performed in obtaining instructions, reviewing decisions, conducting investigations, researching, and preparing for complex issues. We request consideration as to the decision and rates as outlined in AFH v AAI Limited trading as GIO [2019] NSW DRS CA 134.”
In reaching a decision about the Claimant’s reasonable and necessary legal costs in connection with the treatment matter, I have taken into account the following:
(a) The contents of the application and reply lodged in relation to this dispute.
(b) The contents of the application lodged in relation to the treatment dispute. Sixteen documents are referred to in the index to the application, including submissions, treatment reports and correspondence.
(c) The preparation of the application would have involved the exercise of forensic judgement.
(d) The Claimant’s lawyers would have been required to take instructions in relation to the application.
(e) The Claimant’s lawyers would have reviewed the reply, submissions, and documents relied on by the Insurer.
(f) A review of the Assessor’s certificate and reasons in the treatment matter would have been required, and the outcome communicated to the Claimant.
(g) There would have been some cross-over with respect to legal work performed in relation to both medical matters, particularly in relation to the preparation of the application lodged.
23. I am not satisfied that the treatment matter involved an unusual degree of factual or legal complexity. I am not satisfied that exceptional circumstances exist that would empower the Commission to permit payment of the Claimant’s costs in that matter.
24. In the alternative, the Claimant seeks payment of her costs in relation to the treatment matter at the maximum allowed by the regulations. While the regulations allow payment of costs up to the maximum, they do not mandate an entitlement to the maximum in every case. I have determined that the Claimant’s reasonable and necessary legal costs in relation to the treatment matter are $1,000 plus GST. She is entitled to recover this sum from the Insurer.
25. The Claimant also seeks payment by the Insurer of her legal costs in connection with the costs dispute. The regulations do not permit payment of legal costs in a costs dispute. In the circumstances, the Claimant invites the Commission to find that exceptional circumstances exist, thereby permitting the Commission to order payment of those costs.
26. I am not satisfied that exceptional circumstances exist in relation to the legal costs dispute. I am not satisfied that the matter involved an unusual degree of factual or legal complexity or that there is some other reason that would support a finding that exceptional circumstances exist.
27. To the extent that the Claimant seeks a costs penalty against the Insurer in accordance with s 6.21, I am not prepared to impose such a penalty. In my view, s 6.21 does not apply to decisions made by an Insurer in relation to treatment and care or legal costs.
Brett Williams
Member – Motor Accidents Division | Merit Reviewer
Personal Injury Commission
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