ACI v AAI Limited t/as GIO
[2021] NSWPICMR 36
•17 August 2021
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | ACI v AAI Limited t/as GIO [2021] NSWPICMR 36 |
| CLAIMANT: | ACI |
| INSURER: | AAI Limited t/as GIO |
| MERIT REVIEWER: | Terence O'Riain |
| DATE OF DECISION: | 17 August 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS- Merit Review; whether for the purposes of section 8.10 of the Motor Accident Injuries Act 2017, claimant’s legal costs and expenses incurred are reasonable and necessary; Medical Assessor assessed claimant; claimant’s lawyers’ tax invoice seeking maximum costs under Motor Accidents Injuries Regulation 2017; insurer claimed costs claimed were excessive; providing claimant’s statement to Medical Assessor not reasonable or necessary; insurer offered part of maximum costs; reduced availability of costs discourages legal participation; costs not contingent on successful outcome; fixed costs; legal costs; lack of exceptional circumstances under section 8.10(4)(a); no costs for merit review; Held- insurer’s decision set aside, costs assessed at maximum for medical assessment. |
| DETERMINATIONS MADE: | The reviewable decision is about whether for the purposes of section 8.10 of the Act costs and expenses incurred by ACI are reasonable and necessary and is therefore a merit review matter under Schedule 2(1) (aa) of the Motor Accident Injuries Act2017 (the MAI Act). 1. The reviewable decision is set aside and in substitute the decision is to pay 2. The amount of the Claimant’s costs assessed in accordance with the Motor Accident Injuries Regulation 2017 is $1,826 inclusive of GST. |
Background
There is a dispute between ACI’s lawyer and the insurer about whether for the purposes of section 8.10 of the MAI Act costs and expenses incurred by ACI are reasonable and necessary.
In accordance with Sch. 2 cl.1(aa) of the MAI Act the costs dispute is a merit review matter.
I am satisfied that sufficient information has been supplied to the Commission in connection with the dispute and that the proceedings can be determined on the papers.
On 1 June 2018 ACI was injured in a motor accident (the accident) as a passenger.
On 21 October 2019 the Claimant’s lawyers lodged a dispute with the DRS to assess whether or not the Claimant had a minor injury to decide if benefits would continue past 26 weeks in accordance with ss 3.11 and 3.28 of the MAI Act.
This was against a background of the Claimant seeking an internal review outcome ACI’s injury status.
ACI, among other injuries, instructed his legal representatives to allege that the accident had caused a right hip fracture and soft tissue injuries.
The fracture if accepted would have led to an assessment that would have satisfied the sections regarding continuing benefits.
The insurer’s decision was delayed due to the pressure of other requests for internal reviews, which lead to ACI’s lawyers proceeding to the DRS, MAS to expedite resolution.
On 22 September 2020, Medical Assessor Home issued his minor injury assessment of the Claimant, determining that accident did not cause the Claimant’s right hip injuries.
The Claimant’s legal representatives issued a tax invoice dated 18 November 2020 to the insurer to pay the maximum regulated costs for the application.
The insurer refused to pay the invoiced amount of $1,660.16 plus GST and offered to pay $800 plus GST.
Section 8.10 of the Act mandates that an internal review is not required in regard to a dispute on costs.
Documents relied on
In making this decision, I have considered the application, reply and supporting documentation as follows:
a. A1 Claimant’s submissions
b. A2 tax invoice
c. A3 Email from QBE negotiating costs
d. A4 Email to QBE re costs
e. A5 Redacted decision re exceptional costs
f. A6 Medical Assessor Home’s MAC
g. R1 Insurer’s submissions
h. R2 Claimant’s minor injury dispute application
i. R3 insurer’s request for additional information
Submissions
Claimant’s submissions
On 2 August 2019, the Claimant’s legal representative requested an internal review of the insurer’s decision to deny liability post 26 weeks.
The insurer’s internal review decision was due on or before 23 August 2019.
By 24 September 2019 the insurer had not provided a decision.
The Claimant’s solicitor followed up the insurer.
On 25 September 2019, the insurer advised that the decision had been delayed.
The insurer’s failure to conduct an internal review within the prescribed time frame, made it necessary for the Claimant’s legal representative to prepare and submit a DRS medical assessment application that was lodged on 21 October 2019.
The insurer’s email dated 19 January 2021 asserts that the Claimant’s DRS application lacked “expert medical evidence” to assist the Assessor to determine whether the Claimant had a nonminor injury.
The Claimant provided documents with the application and additional documents were provided including clinical notes from Charlestown Medical and Dental Centre and John Hunter Hospital.
The Claimant also refers to the insurer’s dismissal of the necessity for a claimant’s statement and asserts that it is useful for medical assessors to have the claimant’s impressions and version of what has occurred.
The Claimant asserts that the Claimant’s entitlements to legal costs under s 8.10 is not contingent on a successful outcome. Further, it is to pay for legal work that is reasonably and necessarily done to prepare and pursue statutory benefits disputes.
The Claimant refers to the DRS Certificate of Assessor Castagnet which notes that an insurer’s breACI of the principles outlined in clause 4.5 and 4.6 of the Motor Accidents Guidelines satisfied the premise that exceptional circumstances exist to justify the payment of the Claimant’s necessary legal costs beyond the regulated fee.
The Claimant submits that the insurer’s failure to act within the required timeframes has required the Claimant’s legal representatives to undertake additional work to bring the matter to DRS to resolve the dispute and incur costs resolving the costs dispute.
Had the insurer acted within their timeframes, it is possible the Claimant would not have been required to prepare submissions and a DRS application would not have had to be lodged.
Accordingly, the Claimant seeks the maximum regulated costs in relation to the medical assessment application that was lodged to DRS in this matter.
The Claimant also seeks exceptional costs due to the insurer’s failure to deal with the claim in a manner that is consistent with the objectives of the Act.
Insurer’s submissions
The insurer submits that the Claimant’s solicitor provided nine supporting documents with the minor injury application, of which only one of those documents, being the Certificate of Capacity, represented medical evidence.
The insurer contacted the Claimant to highlight that no evidence supported a right hip/leg fracture or any torn ligaments and tendons and request more information.
The Claimant’s solicitor, on the request of the insurer provided clinical notes from Charlestown Medical and Dental Centre, as well as correspondence from the John Hunter Hospital for an outpatient appointment, relating to a fracture sustained a substantial time after the subject accident.
The insurer submits that the Claimant’s statement was unnecessary because the Assessor could obtain a history from the Claimant during any medical examination.
The Claimant’s solicitor’s submissions with respect to the minor injury application focused on procedural issues relating to the insurer’s delay in processing the internal review process.
Medical Assessor Alan Home’s Medical Assessment certificate dated 22 September 2020 determined that the accident did not cause the referred injuries.
The insurer submits that the Claimant’s Application for assessment of injuries lacked merit and that whilst injured persons have a right to have Medical Assessors determine medical disputes, there is no automatic entitlement to recover legal costs, if the case lacks merit.
The insurer seeks consideration of the amount of work completed and effort exerted by the Claimant’s solicitor and that there is little evidence that the Claimant’s solicitor has demonstrated any genuine legal expertise.
The Claimant’s solicitor is seeking exceptional costs and provides a redacted decision of Merit Reviewer Castagnet in support.
The Insurer disputes the relevance of that case to this dispute.
Section 8.10(4)(b) of the MAI Act provides that DRS can permit legal costs if there are exceptional circumstances to justify payment of legal costs.
The Claimant was not under a legal disability and no exceptional circumstances exist in this matter.
The insurer says that additional costs sought pursuant to s 6.21 of the Act is inappropriate.
This section was enacted to failing to address determinations reasonably on liability not legal costs disputes.
The Claimant’s solicitor did not provide a schedule itemising the tasks carried out to prepare the medical assessment application:
“The Insurer submits it is not in line with the objects of the Act to simply award the maximum amount of costs in a medical dispute, or (any costs) at all, in the absence of evidence of exceptional circumstances, application of legal expertise, or considerable work undertaken.” (added by decision maker) Maximum costs may be awarded in circumstances where the legal representative has put justified time and effort into the application.”
The insurer opines there was minimal effort made to prepare this application.
The insurer seeks that this Merit Review dismisses ACI’s costs application or in the alternative allow no more than eight units of costs, as currently offered.
Reasons
In determining a merit review, according to s 7.13(1) of the MAI 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 – s 7.13(2).
Pursuant to s 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.
I am satisfied that I ought to set aside the reviewable decision and substitute my decision for the following reasons.
An award of costs in statutory claims disputes is not dependent on a successful outcome.[1]
[1] AAI Limited t/as GIO v Moon [2020] NSWSC (Moon) Wright JI am satisfied that the Claimant's lawyers had done the work that was reasonable and necessary to prepare the minor injury dispute application.
“Whether legal costs are ‘reasonable and necessary’ is a matter that depends on the particular circumstances of eACI case…”[2]
[2] Moon at [105]
The steps taken to prepare the matter are listed in the Claimant’s submissions.
Preparing the Claimant’s statement to assist the Medical Assessor is commendable, because in the pressure of attending a brief medical examination, a statement prepared without haste prior to the examination will assist an unsophisticated claimant and ensure that the examiner has a full history.
The fees available apply whether the dispute involves complex questions for resolution or not.
As this Act establishes a no-fault statutory scheme with fixed legal costs available, it is important that parties consider demands to reduce or withhold legal costs carefully, lest it discourage lawyers’ participation and make it harder for claimants to obtain legal assistance.
Dealing with self-represented claimants can slow down the claims resolution process, wastes resources and can lead to poor outcomes for both parties.
The availability of costs for legal representation reduces the chance of proceedings being prolonged and confused with irrelevant material, which can cause a perception of a lack of due process to the self-represented litigant.[3]
[3] Gamester Pty Limited and Barbara Ann Cameron v. The Honourable Mr Justice Lockhart (1993) 112 ALR 623
Further, ACI’s lawyers seek costs for lodging this merit review on costs.
There is no allowance made for the payment of such costs in the Motor Accident Injuries Regulation 2017.
Further, I am not satisfied that there are exceptional circumstances to justify the Commission permitting payment for the costs of this application under s 8.10(4)(b) of the Act.[4]
[4] 8.10 Recovery of costs and expenses in relation to claims for statutory benefits…Notwithstanding the outcome of this merit review, the insurer made an offer, which was an attempt to resolve the costs dispute.
That does not constitute unreasonable conduct, so s 6.21 of the Act would not apply if it were applicable for costs dispute under Schedule 2, clause 1(aa) of the Act.
Costs cannot be permitted unless there are exceptional circumstances, or the claimant is under a legal disability (not applicable in this case).
I am not satisfied that there are exceptional circumstances to justify the Commission permitting payment for the costs of this application under s 8.10(4)(b).
Conclusion
The reviewable decision is set aside and in substitute the decision is to assess
ACI costs at the maximum regulated amount.The amount of the Claimant’s costs assessed in accordance with the Motor Accident Injuries Regulation 2017 is $1,826 inclusive of GST.
In making this decision, I have considered the following:
· The application, reply and supporting documentation
· the MAI Act
· Motor Accident Injuries Regulation 2017
· Motor Accident Guidelines, 6th version.
Terence O'Riain
Merit Reviewer
Personal Injury Commission
[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
(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.
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