ACB v IAG Ltd t/as NRMA Insurance
[2021] NSWPICMR 28
•8 July 2021
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | ACB v IAG Ltd t/as NRMA Insurance [2021] NSWPICMR 28 |
| APPLICANT: | ACB |
| RESPONDENT: | IAG Ltd t/as NRMA Insurance |
| MERIT REVIEWER: | Terence O’Riain |
| DATE OF DECISION: | 8 July 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS- Merit Review; whether for the purposes of section 8.10 of the Motor Accident Injuries Act 2017, costs and expenses incurred by the claimant are reasonable and necessary; Medical Assessor assessed claimant for two treatments; Claimant’s lawyers issued two tax invoices in relation to the two types of treatment disputed; Insurer submitted that as there was only one medical dispute in relation to both treatments, the insurer need only pay one tax invoice; Held- satisfied that claimant’s lawyers would not have been required to do significant separate work to prepare the application regarding the two treatments; reviewable decision affirmed. |
| DETERMINATIONS MADE: | 1. The reviewable decision is affirmed. 2. The total amount of the Claimant’s costs assessed and already paid in accordance with the Motor Accident Injuries Regulation 2017, is $1,826.18 inclusive of GST. |
Background
The reviewable decision is about whether for the purposes of section 8.10 of the Motor Accident Injuries Act 2017 (2017 Act), costs and expenses incurred by ACB (the claimant) are reasonable and necessary, therefore it is a merit review matter under Schedule 2(1)(aa) of the 2017 Act.
ACB was in a motor vehicle accident on 12 July 2018.
ACB completed and lodged an Application for Personal Injury Benefits on 31 July 2018.
On 4 September 2018 the insurer issued a Liability Notice accepting liability for statutory benefits for a period of 26 weeks.
On 2 November 2018 the insurer issued a Liability Notice – Benefits After 26 Weeks advising ACB that he had been assessed as having a minor injury.
The insurer conducted an internal review and affirmed the minor injury findings in an internal Review Certificate issued on 29 November 2018 and the disputes proceeded to the Dispute Resolution Service (DRS).
DRS affirmed the minor injury decisions for the psychological and physical conditions.
ACB then requested ongoing treatment post 26 weeks. The insurer denied this.
The treatment requested included the following:
(a) psychological treatment
(b) physiotherapy treatment, and
(c) MRI scan of cervical and lumbar spine.
The Internal Review Certificate for the physiotherapy treatment and MRI scans was issued on 30 July 2019.
ACB’s legal representative lodged an Application with the DRS in relation to the following disputed treatments:
(a) MRI scan of the cervical and lumbar spine, and
(b) Physiotherapy treatment.
On 25 February 202 Medical Assessor Alan Home assessed ACB for both treatments.
Assessor Home issued a Medical Assessment Certificate dated 02 March 2020.
Assessor Home assessed the treatments sought as not reasonable and necessary in the circumstances.
On 3 March 2020, ACB’s lawyers issued two tax invoices referenced SYO1435DRS5WUH and SYO1435DRS6WUH for $1,826.18 incl GST each to the insurer seeking payment under Schedule 1, Part 1, clause 2(1) of the Motor Accident Injuries Regulation 2017 (the Regulation) in relation to two types of treatment disputed: further physiotherapy and MRI scan.
This reflects 16 monetary units at $103.76 per unit for each invoice, which was the maximum costs allowable under Schedule 1, Part 1, clause 2 the Regulation for a medical dispute at the adjustment year of 2019-2020.
The insurer has agreed to pay for one tax invoice as it asserts there was only one medical dispute, and subsequent assessment in relation to both treatment requests.
ACB’s lawyers seek payment for the additional tax invoice.
Submissions
Claimant’s submissions
On 17 March 2020, the insurer declined to pay for both invoices dated for 3 March 2020 and conceded payment for one of the invoices.
The Regulation does not prohibit a legal practitioner issuing separate invoices for two different “reasonable and necessary” medical dispute applications, which states that:-
(a) 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, as allowed by the claims assessor or court are 16 monetary units (to a maximum of 60 monetary units per claim).
The claimant submits in lodging the two application forms and assisting with the claimant in preparation and undergoing two medical examinations in the course of over 19 months, the maximum costs have been rendered.
As decided in AFK v Allianz Australia Insurance Limited [2019] NSWDRS MR 137,
“20. In this matter, it appears that AFK’s legal representatives have issued the two invoices referred to above relating to the dispute about minor injury, on the basis that AFK has both physical and psychological injuries. I note that AFK’s legal representatives only lodged one application for medical assessment however, listing a number of different physical injuries and a psychological injury, and attaching one set of very brief submissions.
21. Nevertheless, regardless of whether two separate applications are lodged or not, I note that section 7.20 of the Act provides that a “medical dispute” can be referred to the DRS for a “medical assessment”. A definition for “medical assessment” is provided at section 7.17 as follows:
medical assessment means an assessment of a medical assessment matter under this Division
22. Schedule 2, clause 2(e) of the Act declares a dispute about whether an injury is a ‘minor injury’ as a “medical assessment matter”.
23. It is important to note that the maximum costs provided at clause 2(1), Schedule 1 of the Regulations relates to costs in connection with a “medical assessment”, which is defined above to be an assessment of a “medical assessment matter”. The maximum of 16 monetary units therefore does not relate to injuries or types of injuries or the number of applications made to the DRS, but rather the “medical dispute” that has been referred to the DRS for a “medical assessment”. In this case, the medical dispute is regarding ‘minor injury’.”
Assessor Baba affirmed that,
“The maximum of 16 monetary units therefore does not relate to injuries or types of injuries or the number of applications made to the DRS, but rather the “medical dispute” that has been referred to the DRS for a “medical assessment”. In this case, the medical dispute is regarding ‘minor injury’.”
Accordingly, the claimant lodged two medical disputes and submits that the dispute on physiotherapy is a single dispute while the dispute on MRI on Cervical Spine and Lumbar Spine is another dispute, therefore two separate invoices should be released and paid.
The Claim also seek that the DRS Assessor consider a section 6.21 costs penalty for an increase of 25% costs to be awarded for being imposed for the unreasonable denial of liability.
Referring to clause 7.276 of the Motor Accident Guidelines and clause 1.3 of the 2017 Act the claimant asks the Commission to exercise a discretion to promote the objects of the 2017 Act and submit that the subclauses below of clause 1.3 of the 2017 Act may be applicable:
i.to encourage early and appropriate treatment and care to achieve optimum recovery of persons from injuries sustained in motor accidents and to maximise their return to work or other activities,
ii.to provide early and ongoing financial support for persons injured in motor accidents,
The claimant’s submission is that the insurer declining to pay both sets of cost fails to promote the aims of the legislation.
The claimant states in the submissions supplied with this application that it had not been paid any costs at that point.
Insurer’s submissions
In accordance with section 8.10(3) of the 2017 Act, a claimant for statutory benefits is “only entitled to recover reasonable and necessary legal costs if payment of those costs is permitted by the regulations or the Dispute Resolution Service” (as it then was) My italics.
The insurer submits that schedule 1 of the Regulation sets out the maximum costs for legal services. The maximum costs for legal services provided in connection with a medical assessment matter under Division 7.5 of the 2017 Act are 16 monetary units. In accordance with section 7.17 of the 2017 Act medical assessment means “an assessment of a medical assessment matter under this Division”, medical dispute means “a dispute between a claimant and an insurer about a medical assessment matter”. Schedule 2 clause 2(b) of the 2017 Act declares that a dispute about whether a requested treatment is reasonable and necessary is a medical assessment matter.
The insurer submits that as per the Regulation ACB’s legal representatives are permitted to recover reasonable and necessary legal costs for the services provided in connection with the medical dispute that has been referred to the DRS for a medical assessment rather than in connection with the types of treatment in dispute.
ACB’s legal representatives lodged one DRS Application (Application no: 10118852) and provided one set of submissions in relation to both MRI scan and further physiotherapy treatment. ACB underwent one medical assessment conducted by assessor Home, who provided the Medical Assessment Certificate confirming that the requested MRI scan and further physiotherapy treatment were not reasonable and necessary.
In AFJ v AAI Limited trading as GIO [2019] NSWDRS Mr 136 it was noted that “AFJ’s legal representatives, Stephen Young Lawyers subsequently issued two invoices to the Insurer claiming recovery of legal costs in the amount of $1,796.26 for ‘DRS Application – Medical Dispute (Physical)’ and $1,796.26 for ‘DRS Application – Medical Dispute (Psychological)’.”
Assessor Baba determined the following:
“35. However, I do not consider I am able to allow the total cost of the two invoices, in the sum of $3,592.52, as it exceeds the maximum costs of 16 monetary units ($1,633.00) provided in the Regulations.”
“39. It is important to note that the maximum costs provided at Schedule 1, Part 1, clause 2 of the Regulations relates to costs in connection with a “medical assessment”, which is defined to be an assessment of a “medical assessment matter”. The maximum of 16 monetary units therefore does not relate to injuries or types of injuries, which appears to be the basis of the two separate invoices issued in this matter, but rather the “medical dispute” regarding ‘minor injury’ which has been referred to the DRS for a “medical assessment”.
40. In this matter, given that there was one medical dispute about minor injury, that was referred to the DRS, I consider the maximum of 16 monetary units applies in respect to AFJ’s application for medical assessment dated 18 January 2019.”
In AGD v AAI Limited trading as AAMI [2019] NSWDRS Mr 160 AGD’s legal representatives lodged two applications with the DRS: in relation to the MRI of the right hip and physiotherapy treatment dated 06 March 2019 and in relation to the MRI of the cervical spine dated 08 May 2019. DRS referred both applications to Assessor Woo who issued a Medical Assessment Certificate on 21 July 2019. Assessor Baba considered “it appropriate to allow the maximum 16 monetary units” in respect to the applications for medical assessment dated 06 March 2019 and 08 May 2019.
The insurer submits that while there were two types of treatment in dispute, ACB’s legal representatives referred one medical dispute for a medical assessment. In this case the medical dispute was whether treatment was “reasonable and necessary”.
The insurer submits that as there was one dispute, the insurer was required to pay “the maximum 16 monetary units” in relation to one dispute, being whether MRI scan and further physiotherapy treatment is reasonable and necessary treatment in the circumstances.
It is submitted that the insurer received two tax invoices in relation to two types of treatment: further physiotherapy and MRI scan. As there was only one medical dispute in relation to both treatment requests, the insurer paid only one tax invoice.
The insurer confirms that the payment was sent to Stephen Young Lawyers Account as specified in the tax invoice dated 03 March 2020, reference SYO1435DRS5WUH. The insurer confirms that the payment was paid vie EFT (Deposit reference 02209654700520) on 06 April 2020. The insurer confirms that the payment was cleared as received by Stephen Young Lawyers.
Reasons
In determining a merit review, according to section 7.13(1) of the 2017 Act, I must decide what the "correct and preferable decision" should be, according to the material before me.
I am required to step into the shoes of the insurer and make my own decision on the merits of the dispute – section 7.13(2).
Pursuant to section 7.13(3), as Merit Reviewer I may decide to:
· affirm the reviewable decision, or
· vary the reviewable decision, or
· set aside the reviewable decision and make a decision in substitution for the reviewable decision, or
· set aside the reviewable decision and remit the matter for reconsideration by the insurer in accordance with any direction made by the merit reviewer.
ACB’s lawyers claim that the insurer is liable to pay both sets of legal service pursuant to clause 2(3) of Schedule 1 of the Regulations because there were two types of medical services disputed.
In an email dated 17 March 2021 the insurer declined to pay the additional invoice because both disputes were dealt with by the same Medical Assessor and resolved in one Medical Assessment Certificate.
$1,826.18 has already been paid to ACB’s lawyers.
The insurer declines to pay invoice
SYO1435DRS6WUH dated 3 March 2020.
The insurer submits that costs are limited to the one medical assessment.
I agree with the insurer’s submissions for the following reasons.
Clause 2(1), Schedule 1 of the Regulations provides:
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, as allowed by the claims assessor or court, are 16 monetary units (to a maximum of 60 monetary units per claim).
ACB’s lawyers issued two invoices referred to above for payment disputes about an MRI and additional physiotherapy on the basis that there are two separate treatments sought, which arose from the same GP generating the original requests on the same day.
Section 7.20 of the 2017 Act provides that a “medical dispute” can be referred to the DRS for a “medical assessment”.
Section 7.17 contains the definition for “medical assessment”:
medical assessment means an assessment of a medical assessment matter under this Division
Schedule 2, clause 2(b) of the 2017 Act provides that a dispute about whether treatment or care to an injured person is reasonable and necessary is a “medical assessment matter”.
The maximum costs provided at clause 2(1), Schedule 1 of the Regulation relates to costs in connection with a “medical assessment”, which is defined above to be an assessment of a “medical assessment matter”.
The maximum of 16 monetary units therefore does not relate to injuries or types of injuries or the number of applications made to the DRS, but rather the “medical dispute” that has been referred to the DRS for a “medical assessment”.
These disputes were dealt with in the one Medical Assessor attendance and report.
“Whether legal costs are “reasonable and necessary” is a matter that depends on the particular circumstances of each case…”[1]
[1] AAI Limited t/as GIO v Moon [2020] NSWSC (Moon) Wright J at [105]
Based on my own legal experience and knowledge as a principal private legal practitioner in personal injury claims I am satisfied that ACB’s lawyers would not have been required to do significant separate work to prepare the application regarding both the disputed MRI and disputed physiotherapy.
What was reasonable and necessary to prepare the application would have included obtaining instructions, advising, obtaining and perusing the GP requests and insurer’s responses, completing the application form and drafting submissions in support of the requests for MRI and physiotherapy.
I am not able to permit any further costs as ACB has recovered the maximum costs for the medical assessment at 16 monetary units because the dispute about the separate treatment modes were dealt with in one assessment.
Finally, ACB’s lawyers seek an uplift on costs for lodging this merit review citing section 6.21 of the 2017 Act, asserting that the insurer’s denial was unreasonable.
The insurer’s decision to not pay the additional invoice was reasonable, as set out in its submissions and which I have adopted.
I decline to award any uplift.
Conclusion
The reviewable decision is affirmed
The total amount of the claimant’s costs assessed and already paid in accordance with the Motor Accident Injuries Regulation 2017, is $1,826.18 inclusive of GST.
Legislation and Guidelines
In making this decision, I have considered the following:
· The Application, Reply and supporting documentation;
· 2017 Act;
· Personal Injury Commission Rules 2021, and
· The Regulation.
Terence O'Riain
Merit Reviewer
Personal Injury Commission
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