ACC v AAI Limited t/as AAMI
[2021] NSWPICMR 29
•8 July 2021
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | ACC v AAI Limited t/as AAMI [2021] NSWPICMR 29 |
| APPLICANT: | ACC |
| RESPONDENT: | AAI Limited t/as AAMI |
| MERIT REVIEWER: | Brett Williams |
| DATE OF DECISION: | 8 July 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS- Merit Review; Claimant sought to recover from the Insurer legal costs in connection with five applications for medical assessment lodged on her behalf; each application was about a medical assessment matter for the purposes of Part 7 of the Motor Accident Injuries Act 2017; claimant submitted she was entitled to maximum allowed by the regulations per claim; insurer submitted that exceptional circumstances did not exist and each of the applications relied on the same documents; taken into account that legal services provided to the claimant had to be translated; Held- not satisfied that exceptional circumstances exist; the Claimant’s reasonable and necessary costs in connection with each of the five medical assessments is $400 plus GST. |
| DETERMINATIONS MADE: | 1. The amount of the Claimant’s reasonable and necessary costs in connection with each of the five medical assessments, assessed in accordance with the Motor Accident Injuries Act and Regulation 2017, is $400 plus GST, a total of $2,000 plus GST. |
Background
ACC (the Claimant) seeks to recover from the Insurer her legal costs in connection with five applications for medical assessment lodged on her behalf. The applications related to disputes about the following:
(a) Bone scan of her lumbar spine.
(b) Consultation with Dr Herald, orthopaedic surgeon.
(c) Perineural L5 Injection.
(d) Physiotherapy treatment.
(e) X-ray of the lumbar spine.
Each application was about a medical assessment matter for the purposes of Part 7 of the Motor Accident Injuries Act 2017 (MAI Act)[1].
[1] Schedule2 cl. 2(b) MAI Act.
The application relating to the perineural L5 Injection was lodged on 20 May 2019. The other four disputes were the subject of applications lodged on 21 May 2019. This approach should not be encouraged. All five matters could have been the subject of a single application. A single application would have avoided significant duplication of work and resources. Submitting individual applications for each of the five medical disputes did not, in my view, facilitate the quick, cost effective and just resolution of the disputes.[2]
[2] See objects of the MAI Act s 1.3(2)(g).
All the medical disputes were the subject of a medical assessment undertaken by Assessor Home, who issued a certificate addressing all five matters on 18 July 2019.[3]
[3] Assessor Home found that the consultation with Dr Herald, the x-ray of the lumbar spine and bone scan of the lumbar spine were reasonable and necessary. The L5 injection and the physiotherapy were found not to be reasonable and necessary.
Following receipt of Assessor Home’s certificate, the Claimant’s lawyers submitted five tax invoices to the Insurer seeking costs of $1633plus GST in each matter[4]. The sum claimed in each matter represented the maximum regulated costs that may be recovered in connection with a medical assessment. As the total costs claimed for all five matters exceed the regulated per claim maximum of 60 monetary units[5] the Claimant sought to recover costs on the basis of the per claim maximum.
[4] The value of a monetary unit at the time of the medical assessment was $102.06.
[5] Schedule 1 cl.2(1) Motor Accident Injuries Regulation 2017.
The Insurer offered to pay the Claimant’s costs in relation to the medical assessments in the total sum of $2,801.52, representing 27 monetary units.[6]
[6] Letter from AAMI to Stephen Young Layers dated 14 January 2021. The Insurer appears to have based its offer on the current value of a monetary unit, $103.76.
Further correspondence passed between the parties in relation to costs. The parties were unable to reach agreement. An application to resolve the costs dispute was lodged by the Claimant at the Dispute Resolution Service on 4 February 2021. The dispute constitutes a merit review matter.[7]
[7] Schedule. 2 cl.1(aa) MAI Act.
In addition to the costs initially claimed, the Claimant now asks the Commission to impose both a costs penalty of 25% on the Insurer[8] and make an exceptional costs order.[9]
[8] Section 6.21 MAI Act.
[9] Section 8.10(4)(b) MAI Act.
Having conducted a teleconference with the parties and 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 a formal hearing.
Transitional matters
The Personal Injury Commission (the PIC) was established on 1 March 2021. These proceedings were commenced on 4 February 2021, before the PIC was established. In accordance with Sch 1 Pt 2 cl 14A and cl 14B of the PIC Act, they constitute pending proceedings and pre-establishment proceedings that I am empowered to determine.
Teleconference
With a view to facilitating the just, quick and cost effective resolution of the real issues in dispute I held a teleconference with the parties on 28 June 2021.
The parties agreed that the monetary unit that applied to each matter was $102.06, not $103.76. It was agreed that the legal services with respect to which costs are claimed were provided prior to 1 October 2019.
Mr Cheng, for the Claimant, confirmed that the documents relied on by the Claimant in each of the five applications were predominantly the same. He also agreed that the submissions in each matter were identical other than with respect to the reference in each set of submissions to the specific treatment that was in dispute.
I informed the parties of my preliminary views about the costs dispute as follows:
(a) There was significant cross over and duplication of legal work performed in the five matters.
(b) The submissions in each matter were very limited and were not materially different.
(c) Each treatment dispute constituted a separate medical assessment matter in accordance with Sch 1 cl.2(b) of the MAI Act that was the subject of a medical assessment[10] by Assessor Home. That Assessor Home issued a single certificate addressing all five matters did not alter this position.
[10] See definition of ‘medical assessment’ in s 7.17 MAI Act.
(d) The Claimant was entitled to recover her reasonable and necessary legal costs in connection with each of the five medical assessments.
(e) The regulated maximum costs per assessment was not mandatory. The issue to be determined is the sum that represents the Claimant’s reasonable and necessary legal costs in connection with each of the medical assessments.
(f) Having reviewed the material and heard from the parties, I did not consider the Claimant’s reasonable and necessary costs in connection with any of the medical assessments amounted to the maximum costs allowed for a medical assessment (16 monetary units). Likewise, I did not consider that the regulated maximum per claim (60 monetary units) would be allowed.
(g) There was a risk to the Claimant that I would find her reasonable and necessary costs in connection with each medical assessment, and in the aggregate, were less than had been offered by the Insurer.
I gave the parties further time to explore whether the costs dispute could be resolved. I have subsequently been informed that the parties are unable to reach agreement and that I should proceed to determine the dispute.
Claimant’s submissions
The Claimant submits that she is entitled to recover costs representing the maximum allowed by the regulations per claim. This is on the basis that there were five separate and distinct medical assessment matters and each medical assessment matter should attract the maximum per matter allowance, capped by the maximum per claim allowance.
The maximum per claim amount referred to in the Claimant’s submissions dated 8 June 2021 is $6,848.16. This amount is based on the incorrect monetary unit, as was conceded at the telephone conference. The applicable monetary unit is $102.06. Accordingly, the per claim maximum for the purposes of this costs dispute is $6,736.[11]
[11] $102.06 x 60 = $6,123.60 plus GST ($612.36) = $6,736 (rounded).
The Claimant submits that no less than 10 hours of professional legal services were provided in connection with the five disputes. The legal work is said to have involved lodging and managing her personal injury claims, internal review applications and the medical assessment applications, acquiring clinical notes and reports, and the time spent reading and compiling the documents associated with the applications.
It is submitted that due to the large volume of medical documents the Insurer provided after the applications were lodged additional legal work was undertaken verifying and reading those documents.
It is also submitted that the legal work performed included obtaining instructions, reviewing decisions, conducting investigations, researching and “preparing for complex issues”.
Further, as she does not speak English, the legal services provided to the Claimant had to be interpreted or translated into Mandarin.
The Claimant argues that her costs should be increased by 25% representing a penalty imposed on the insurer in accordance with s 6.21 of the MAI Act.
The Claimant also seeks a costs order in accordance with s 8.10(4)(b) on the basis that exceptional circumstances exist so as to empower the Commission to make an order for costs.
Insurer’s Submissions
The Insurer argues that the Claimant’s reasonable and necessary costs in each matter should not be assessed at the maximum. Likewise, it is submitted that an allowance based on the regulated per claim maximum would not reflect her reasonable and necessary costs of all five matters in the aggregate.
The Insurer argues that each of the applications predominantly relied on the same documents and that the submissions in each matter were brief, did not address the substance of the matters in dispute, and were in all material respects the same. The Insurer says that these are matters that should be taken into consideration when determining the Claimant’s reasonable and necessary costs.
The Insurer submits that exceptional circumstances do not exist that would permit an exceptional costs order to be made by the Commission in relation to the medical assessment matters or the costs dispute. The Insurer argues that a costs penalty under s 6.21 should not be applied.
Determination
I agree with the Claimant’s submission that each of the five treatment disputes constituted a separate and distinct medical assessment matter[12] that was the subject of a medical assessment.[13]
[12] Schedule. 2 cl. 2(b) MAI Act.
[13] Section 7.17 MAI Act.
The Claimant’s right to recover costs is governed by Pt 8 of the MAI Act. She was successful in three of the five medical disputes. However, success is not a pre-requisite to the Claimant recovering her reasonable and necessary costs from the Insurer in connection with a medical assessment.[14]
[14] See AAI Limited v Moon [2020] NSWSC at [82] where Wright J observed:
“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 is entitled to recover from the Insurer her reasonable and necessary costs incurred in connection with the claim[15] subject to the costs being permitted by the regulations or the Commission.[16] Legal costs in connection with a medical assessment are allowed under the regulations, subject to the caps that apply on a per assessment and per claim basis.
[15] Section 8.10(1) MAI Act.
[16] Section 8.10(3) MAI Act.
In all but one of the five applications, the Claimant relied on 11 documents, nine of which were to be provided by the Insurer. In the application relating to physiotherapy 13 documents were relied on, nine of which were to be provided by the Insurer. By and large, the documents relied on in each application were records from treating doctors, including clinical notes, reports and certificates.
The submissions in each application were very brief and did not address the substance of the medical disputes. The only material difference in the submissions was that the description of the treatment in dispute was changed.
At the telephone conference held on 28 June 2021 the Claimant’s representative confirmed that the documents relied on by the Claimant in each of the five applications were predominantly the same. He also agreed that the submissions were identical other than with respect to the reference in each set of submissions to the specific treatment that was in dispute.
I have concluded that there was a substantial duplication of work across the five applications. I do not consider that the Claimant’s reasonable and necessary legal costs in connection with any of the medical assessments amount to the maximum per assessment allowance. Nor do I consider that the per claim maximum represents the Claimant’s reasonable and necessary costs in the aggregate.
The regulations allow for the payment of costs in connection with a medical assessment. The regulations declare that no costs are payable for legal services provided to a claimant or to an insurer in connection with an application for internal review by the insurer under Part 7 of the Act.[17] I have only taken into consideration legal services provided to the Claimant in connection with the medical assessments in arriving at my determination in relation to the reasonable and necessary costs that the Claimant is entitled to recover from the Insurer.
[17] Regulation 23 Motor Accident Injuries Regulation 2017.
I have taken into account that the legal services provided to the Claimant had to be translated into Mandarin. In this regard, I note that a Mandarin interpreter was required when the Claimant was examined by Assessor Home on 8 July 2019.
In addition to the matters referred to above, in determining the Claimant’s reasonable and necessary costs in connection with the medical assessments I have also taken into consideration:
(a) Instructions would have been taken from the Claimant in relation to the applications.
(b) The contents of each application, including the submissions and documents relied upon, together with the legal work associated with the preparation of each application.
(c) My impression of the forensic judgement exercised by the Claimant’s lawyers in the preparation of submissions and the selection of documents to be provided in each application. In this regard, the submissions in each matter were brief, did not address the substance of the medical disputes and were in all material respects identical in each matter. Further, the documents relied on by the Claimant in each of the five matters were predominantly the same.
(d) Review of the Insurer’s reply would been undertaken.
(e) Review of Assessor Home’s certificate and reasons would have been undertaken and the outcome communicated to the Claimant.
I find that the Claimant’s reasonable and necessary costs in connection with each of the five medical assessments is $400 plus GST, a total of $2,000 plus GST.
I am not satisfied that exceptional circumstances exist in connection with any of the medical assessments or the costs dispute. I decline to make an exceptional costs order in accordance with s 8.10(4)(b).
In my view s 6.21 does not apply to the Insurer’s decisions about treatment. I decline to impose a costs penalty.
To the extent that the Claimant seeks to recover expenses in connection with the medical assessments, any such expenses have not been quantified or particularised in a way that would allow me to determine whether those expenses were reasonable and necessary. As a consequence, I make no allowance for expenses in connection with the medical assessments.
Brett Williams
Member - Motor Accidents Division | Merit Reviewer
Personal Injury Commission
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