Akkaoui v Allianz Australia Insurance Limited

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER
Citation:	Akkaoui v Allianz Australia Insurance Limited [2023] NSWPICMR 4
ClaimanT:	Mustafa Akkaoui
Insurer:	Allianz Australia Insurance Limited
Merit Reviewer:	Katherine Ruschen
DATE OF DECISION:	19 January 2023
CATCHWORDS:	MOTOR ACCIDENTS- Merit review; Motor Accident Injuries Act 2017; dispute about payment of weekly benefits under Division 3.3; meaning of pre-accident earning capacity; schedule 1, clause 7; meaning of post-accident earning capacity; schedule 1, clause 8; employment reasonably available in view of the claimant’s training, skills and experience; weekly benefits under section 3.8; Held – the reviewable decision is set aside.
Determinations made:	CERTIFICATE OF DETERMINATION Issued under s 7.13(4) of the Motor Accident Injuries Act2017 The reviewable decision is about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the Motor Accident Injuries Act 2017 (the MAI Act), and is therefore a merit review matter under Schedule 2(1)(a) of the MAI Act. 1. The reviewable decision is set aside. 2. The claimant’s pre-accident earning capacity is equal to $1,672 net per week.

STATEMENT OF REASONS

introduction

There is a dispute between Mustafa Akkaoui (the claimant) and the insurer about the amount of weekly statutory benefits payable under Division 3.3 of the MAI Act.
The claimant was involved in a motor accident on 8 May 2021.
The claimant made a claim for statutory benefits under the MAI Act.
On 23 May 2022 the insurer determined the claimant’s pre-accident weekly earnings (PAWE) in the amount of $143.27.
On 6 June 2022 the insurer issued an internal review decision which affirmed PAWE in the amount of $143.27.
On 25 August 2022 the insurer issued an earning capacity decision for the purpose of payment of weekly benefits under s 3.8 of the MAI Act from 6 November 2022. In the earning capacity decision, the insurer determined:
(a)    the claimant’s pre-accident earning capacity was equivalent to his PAWE in the sum of $143.27;
(b)    the claimant has no post-accident earing capacity as a result of the motor accident, and
(c)    the claimant therefore suffered a loss of earnings in the sum of $143.27
On this basis, the insurer determined the claimant is entitled to payment of $57.60 for weekly benefits under s 3.8 from 6 November 2022, after applying the 80% formula in s 3.8 and applying a 50% discount for the claimant’s contributory negligence.
On 8 September 2022 the insurer issued an internal review decision which affirmed the insurer’s decision that $57.60 is payable for weekly benefits under s 3.8.
The claimant challenges the internal review decision of 8 September 2022 on the basis he says his PAWE amount does not represent his pre-injury capacity to earn based on his training, skills and experience.
The claimant has lodged an application for a merit review of the insurer’s internal review decision dated 8 September 2022.

SUBMISSIONS

The clamant submits PAWE does not reflect his pre-accident earning capacity and that his earning capacity ought to be assessed by reference to the work he was carrying out immediately before the day of the motor accident. In this regard, the claimant had been working as a rigger earning approximately $2,000 net per week.
The insurer arranged a formal pre-accident earning capacity assessment of the claimant, which was conducted by Sanchita Bamola, rehabilitation consultant on 2 June 2022. As part of this assessment Ms Bamola canvassed three potential employers regarding positions to work as a rigger. One of these employers advised their existing vacancy required a minimum of five years’ experience working as a rigger. The other two required a current driver’s licence for their existing roles.
The insurer submits the claimant’s experience in rigging is less than five years and that at the time of the accident, the claimant did not hold a driver’s license. On this basis, the insurer submits none of the three rigging roles identified by Ms Bamola would have been reasonably available to the claimant at the time of the accident. The insurer submits in this circumstance, the claimant’s PAWE is the best indication of his pre-accident earning capacity.

Legislation

Section 3.8 of the MAI Act provides that:
“(1)    A person who is injured as a result of a motor accident and suffers a total or partial loss of earning capacity as a result of the injury is entitled to weekly payments of statutory benefits under this section after the end of the second entitlement period, but only if the person--
(a) is at least 18 years of age (whether or not the person is an earner), or
(b) is under 18 years of age and is an earner.
Note : The person's age after the second entitlement period is relevant to determining entitlement to statutory benefits after the second entitlement period. A person's age at the date of the motor accident is not relevant. Schedule 1 defines when a person is an earner.
(2)     A weekly payment of statutory benefits under this section is to be at the rate of--
(a) in the case of total loss of earning capacity--80%, or
(b) in the case of partial loss of earning capacity--85%,
of the difference between the person's pre-accident earning capacity and the person's post-accident earning capacity (if any) or post-accident earnings, whichever is the greater, after the second entitlement period.
(3)     A weekly payment of statutory benefits to a person under this section is not to exceed the maximum weekly statutory benefits amount less the person's post-accident earning capacity (if any) or post-accident earnings, whichever is the greater, after the second entitlement period.
(4)     A weekly payment of statutory benefits to a person under this section is not to be less than the minimum weekly statutory benefits amount or the person's pre-accident earning capacity, whichever is the lesser.”
(emphasis added)
The meaning of “pre-accident earning capacity” is set out in Schedule 1, cl 7 of the MAI Act, relevantly as follows:
(1) "Pre-accident earning capacity" of an injured person means the weekly amount a person had the capacity to earn before the motor accident concerned in employment reasonably available to the person in view of the person's training, skills and experience.
(2) ..
(emphasis added)
Post-accident earning capacity is relevantly defined in Schedule 1, cl 8 of the MAI Act, as follows:
“(1)    "Post-accident earning capacity" of an injured person means--
(a) …
(b) for any period after the second entitlement period--the weekly amount the person has the capacity to earn in any employment reasonably available to the person, determined on the basis of the person's fitness for work in any such employment.
(2)     ...
(3)     A person's fitness for work after the second entitlement period is to be determined having regard to the following--
(a) the nature of the injury and the likely process of recovery,
(b) treatment provided and rehabilitation undertaken and the potential for further treatment and rehabilitation,
(c) the person's training, skills and experience,
(d) the age of the person,
(e) any medical certificate provided by the injured person as to the person's fitness for work.
(4)     The Motor Accident Guidelines may make provision for the matters to be taken into account for the purposes of determining the employment reasonably available to a person in any period after the second entitlement period.”
(emphasis added)
Pursuant to s 3.16 of the MAI Act an insurer can make a decision about either pre-accident or post-accident earning capacity of an injured person at any time.
The Motor Accident Guidelines (Guidelines) may provide for the procedure to followed in making such decisions.
Clause 4.56 of the Guidelines provides as follows:
“4.56 When determining employment reasonably available to a claimant at any time after the second entitlement period (from week 79 after the motor accident), the matters to be considered include:
(a) the nature and extent of the claimant’s injuries
(b) the claimant’s age, education, skills and work experience
(c) rehabilitation services that are being or have been provided
(d) the nature of the claimant’s pre-injury employment
(e) the claimant’s place of residence at the time of the motor accident
(f) the details given in the claimant’s Certificate of Fitness
(g) the length of time the claimant has been seeking employment
(h) any other relevant circumstances.”
Clause 4.56 of the Guidelines applies to an assessment of post-accident earning capacity. There is no similar list of factors in the Guidelines to be considered specifically when determining pre-accident earning capacity.
There is a distinct change in the legislation after the first and second entitlement periods in respect of weekly benefits under ss 3.6 and 3.7 of the MAI Act. Under ss 3.6 and 3.7 weekly benefits are assessed based on the difference between PAWE and post-accident earning capacity. However, under s 3.8 weekly benefits are assessed based on the difference between pre-accident earning capacity (not actual pre-accident earnings) and post-accident earning capacity.

The issue

There is no dispute that the claimant currently has no post-accident earning capacity as a result of the motor accident. The issue to be determined is:
(a) whether the claimant’s pre-accident earning capacity is equivalent to his PAWE, and
(b) if not, what is the claimant’s pre-accident earing capacity?

Consideration

The insurer takes the view that because (in the insurer’s view) the three specific rigging roles identified in the pre-accident earning capacity assessment require a minimum of five years’ experience in rigging and/or a driver’s licence that these roles would not have been reasonably available to the claimant in view of his training skills and experience. The insurer concludes on this basis that the claimant’s PAWE is the best indication of his pre-accident earning capacity.
The approach taken by the insurer is somewhat extraordinary. It misrepresents parts of the pre-accident earning capacity assessment report, ignores substantial parts of that report and pays little attention to the definition of pre-accident earning capacity (as distinct from PAWE) in the MAI Act. The insurer has taken an extremely narrow approach to the issue of pre-accident earning capacity and in doing so, has failed to consider matters relevant to an assessment of pre-accident earning capacity.
There does not seem to be any dispute that at the time of the accident the claimant:
(a) was employed as a rigger earning an average of $2,000 net per week (his PAWE does not reflect this due to what appears to be a combination of a lack of evidence of earnings in the 12-month pre-accident period and/or gaps in employment in that period, noting that PAWE is averaged over 12 months), and
(b) held several qualifications in the construction industry, including a White Card, Dogman Licence, Riggers Licence, Boom Lift Ticket, Scissor Lift Ticket and Crane Ticket.

The claimant’s experience (in years) as a rigger at the time of the accident

There is a question as to whether the claimant had five years’ experience as a rigger or only two years and four months’ experience as at the date of the motor accident. The insurer relies on the claimant’s high risk work licence, which authorises the claimant to undertake dogging, basic rigging and crane work from 4 January 2019 in support of their contention that the claimant only had two years and four months experience.
The claimant is legally represented. The insurer’s view that work reasonably available to the claimant as a rigger is limited by reason that he had less than five years experience as a rigger at the time of the accident is made clear in the internal review decision. The claimant has not provided any further evidence to establish he had more than two years and four months’ experience as a rigger.
In addition, a person must be over the age of 18 to carry out high risk work such as rigging. The claimant did not turn 18 until 8 September 2017 which is only three years and eight months before the accident. Accordingly, the claimant did not have the opportunity to accrue as much as five years pre-accident experience as a rigger given his age. He was also unemployed for two to three years after leaving school at the end of year 10 (which presumably was in 2015 based on the claimant’s date of birth) and took time off from rigging in 2019 and/or 2020 to work in his uncle’s restaurant for several months. Having regard to this and the evidence that the claimant’s rigging license did not commence until 4 January 2019 I am satisfied on balance that the claimant had less than five years experience as a rigger as at the date of the motor accident.

Driver’s licence

The insurer submits employment as a rigger was also not reasonably available to the claimant because he did not hold a drivers licence at the time of the accident.
However, there is no evidence of this, and the insurer misstates the content of Ms Bamola’s report. The insurer states in submissions that the claimant did “not hold a driver’s licence for two years prior to the accident” (emphasis added). However, this is not what Ms Bamola says in her report. Rather, Ms Bamola states the claimant “did not have a driver’s licence for two years and required an OT assessment before his license was reinstated”. The two year period in which the claimant did not hold a licence is not clarified, but it can be inferred from the following that the claimant’s licence was reinstated some time before the date of the accident:
(a)    the reference to the license being reinstated appears to be a reference to reinstatement before the accident;
(b)    Ms Bamola was engaged as an expert specifically to assess the claimant’s pre-accident earning capacity, and
(c)    Ms Bamola opined that the claimant had the pre-accident earing capacity and held qualifications at the time of the accident to fulfil the three rigging roles identified in her report, including two which required a driver’s licence. Presumably, Ms Bamola would have ruled those two roles out, if it were determined in her assessment that the claimant did not hold a driver’s licence as at the date of the accident.
In addition to the above, the claimant completed his application for personal injury benefits on 19 May 2021, 11 days after the motor accident. In the application he records his (presumably valid) drivers’ licence number. Given the serious injuries suffered by the claimant it would not have been possible for him to obtain his licence in this brief, 11 day post-accident period. Accordingly, the number given is presumably the claimant’s license held as at the date of the motor accident.
On balance, the evidence establishes the claimant had his driver’s license at the time of the motor accident.

What is the claimant’s pre-accident earning capacity?

Whether the claimant had a driver’s licence and the years of experience he had in a particular occupation are only two of a number of factors to consider when determining the claimant’s pre-accident earning capacity.
The insurer has ignored all other factors and misrepresented the report of Ms Bamola in concluding, solely based on less than five years’ experience as a rigger and their view the claimant did not have a drivers licence, that the claimant’s pre-accident earning capacity is equivalent to PAWE in the sum of $143.27.
In relation to one potential employer’s requirement for a minimum of five years experience as a rigger Ms Bamola’s report must be put in context. The relevant context is that Ms Bamola understood at the time of her assessment that the claimant had at least five years experience as a rigger. It is clear from a proper reading of her report that this was one of the reasons why Ms Bamola identified this role as a role available to the claimant in view of his pre-accident training, skills and experience. Presumably, if Ms Bamola had the correct work history, she would have taken steps to identify a different role as being reasonably available to the claimant being one that required less experience.
There is no evidence to suggest alternative roles requiring less than two years and four months experience (the claimant’s experience) would not have been reasonably available to a person such as the claimant.
There is also no evidence to suggest alternative roles as a rigger not requiring a driver’s licence (although I have concluded the claimant likely had a drivers licence at the time of the accident) would not have been reasonably available to the claimant.
At least one of the roles identified by Ms Bamola did not require a drivers licence. Another only required some experience as a rigger. The three positions available identified by Ms Bamola are presumably just three of many rigger roles available in NSW and throughout Australia with varying pre-requisites. The fact the claimant was gainfully employed as a rigger immediately before the accident is in itself, evidence that employment was reasonably available to the claimant as a rigger based on his training, skills and experience, even if my conclusion that the claimant had a driver’s license is wrong.
The insurer’s narrow approach also fails to consider whether employment was reasonably available to the claimant in view of his training, skills and experience in any occupation other than as a rigger. The insurer’s position incorrectly assumes the only occupation relevant to pre-accident earning capacity is the occupation engaged in by the claimant immediately before the accident. However, nothing in the definition of pre-accident earning capacity limits an assessment of pre-accident earning capacity in this way. If the intention of the MAI Act was for the claimant’s pre-accident earning capacity to be assessed only by reference to the specific occupation engaged in at the time of the accident, presumably the legislation would say so. However, the definition of pre-accident earning capacity is broader, requiring an assessment of the type or types of employment reasonably available to a person in view of their training, skills and experience. In many cases, a person’s training, skills and experience may mean that a range of employment, in different occupations and different industries, is reasonably available to them because they either have a range of skills and experience or a range of transferable skills.
The claimant held several other construction industry qualifications at the time of the accident. At the very least it seems there would have been no impediment to employment as a labourer in the construction industry pre-accident, given the claimant held a White Card and had experience in the construction industry.
The insurer failed to consider whether work in the construction industry, other than as a rigger, would have been reasonably available to the claimant in view of all of the claimant’s training, skills and experience in construction and not just his training, skills and experience as a rigger.
The claimant also had restaurant experience and Ms Bamola identified several hospitality roles in respect of which she opined the claimant had the pre-accident earning capacity to fulfil. The insurer has ignored this part of Ms Bamola’s report by failing to consider these alternative roles identified by Ms Bamola.
As noted above, the definition of pre-accident earning capacity in Schedule 1 of the MAI Act is limited to “the weekly amount a person had the capacity to earn before the motor accident concerned in employment reasonably available to the person in view of the person's training, skills and experience”. In other words, it is all of the person’s “training, skills and experience” that is relevant to determining the employment reasonably available to them and not just their experience in their specific pre-accident occupation. What is required is a theoretical assessment of what the claimant would have been able to earn if he realised his full earning potential based on his training, skills and experience.

The distinction between pre-accident and post-accident earning capacity effectively means there is to be a theoretical assessment of pre-accident earning capacity (that is, what the claimant could have earned if he had realised the full earning potential arising from his training, skills and experience) and a practical assessment of post-accident earning capacity (that is, a practical assessment of the extent to which the claimant is able to realise that theoretical earning capacity, post-accident).
Whilst identification of roles presently available to the claimant based on his pre-accident earning capacity is useful, a theoretical assessment of pre-accident earning capacity is not limited to only this exercise, as suggested by the insurer’s submissions. Rather, the broader definition of pre-accident earning capacity in the MAI Act requires a holistic approach to assessing what the claimant likely could have earned had he realised his full pre-accident earning potential in view of his training, skills and experience.
The claimant’s PAWE in this case obviously recognises that the claimant did not realise the full potential of his earning capacity pre-accident. There are many reasons why a person may not realise the full potential of their earning capacity pre-accident, which are not relevant to the theoretical assessment required by the definition of pre-accident earning capacity. A person may not have realised their full pre-accident earning capacity due to family matters, study or overseas travel for example, or because they simply chose not to work full-time hours. An assessment of PAWE must follow a specific formula under the MAI Act which in most cases, will reflect such gaps in employment in the 12 month pre-accident period. However, PAWE and pre-accident earning capacity are different concepts. PAWE is the weekly average of actual earnings received pre-accident. Pre-accident earning capacity is the theoretical assessment of what the claimant could have earned pre-accident, if they had realised their full earning potential in view of their training, skills and experience.
The insurer’s suggestion the claimant’s pre-accident earning capacity was no better than his PAWE because he did not meet the minimum criteria for the three specific rigging roles identified by Ms Bamola is the equivalent to suggesting a person who is newly admitted to practice as a lawyer does not have capacity to work as a lawyer based on identifying only those roles requiring at least 12 months experience. This would similarly ignore the likelihood that employment as a graduate lawyer is likely to be reasonably available to such a person.
For the insurer’s argument to hold weight there would need to be evidence that at all material times rigging work for a person with less than five years experience or with no driver’s licence was not on offer by any employer, anywhere in Australia. This proposition is readily rebutted by the evidence that the claimant was offered, and did engage in, rigging work prior to the accident despite having less than 5 years’ experience and on the insurer’s view, no driver’s licence.
For the reasons set out above, including that the claimant was able to obtain employment as a rigger pre-accident, I am comfortably satisfied that the claimant’s training, skills and experience (as at the date of the accident) where such that the following employment would have been reasonably available to him (with or without a driver’s licence):
(a)    work as a rigger (it can be reasonably inferred work is available to a person with less than five years experience from the fact the claimant was able to find such work pre-accident and such roles must be available. Otherwise, a person could not accrue five years experience and no candidates would be available to any employer requiring at least five years experience);
(b)    work as a crane operator (up to 60 tonnes);
(c)    work as a construction labourer, and
(d)    work as a general hand or kitchen hand in a restaurant or fast food outlet.
As I am satisfied that, among other occupations, the claimant had the pre-accident earning capacity to work as a rigger I consider it appropriate to assess the value of the claimant’s pre-accident earning capacity (that is, in terms of the income it would likely have generated) based on employment as a rigger. In this regard:
(a)    the evidence establishes that in a two week pre-accident period the claimant earned a weekly average of approximately $2,000 net working as a rigger for Civil & Telco Solutions Pty Limited;
(b)    there appears to be no reason the claimant could not have continued in his role as a rigger with Civil & Telco Solutions Pty Limited, but for the motor accident;
(c)    the claimant worked 40 to 60 hours per week (9 to 10 hour shifts) with Civil & Telco Solutions Pty Limited. Potential employers canvassed by Ms Bamola reported that 10 hour shifts/50 hours per week is usual in rigging work. Ms Bamola also reported that research shows full time riggers work an average of 52 hours per week;
(d)    the minimum hourly rate under the relevant award is $31.36, and
(e)    the advertised hourly rate for intermediate to advanced riggers across the advertisements/employers canvassed by Ms Bamola ranges from $30 to $50 per hour, depending on experience, with penalty rates for overtime and weekend work, as recorded in Ms Bamola’s report.
Although less than five years, the claimant had some experience as a rigger at the time of the accident. On this basis, I consider the mid-point of the hourly wage range of $30 to $50 per hour, being $40 per hour to be the most likely hourly rate applicable to the claimant’s training, skills and experience. I also consider it appropriate to include allowance for overtime based on the evidence that on average, full time riggers work 50 hours per week with penalty rates for overtime.
Under the applicable award, ordinary working hours are eight hours per day. Accordingly, the average fulltime worker is paid the ordinary hourly rate for 40 hours per week (five days x eight hours per day) with the remaining 10 hours of the average 50 hour week paid as time and a half. Accordingly, I consider the claimant’s pre-accident earning capacity equates to the following:
(a)    40 hours per week at $40/hour equals $1,600;
(b)    plus 10 hours per week overtime at $60/per hour (time and a half penalty rate) equals $600, and
(c)    total gross weekly earnings equal $2,200 ($1,600 plus $600).
This equates to a pre-accident earning capacity to generate net weekly earnings in the sum of $1,672.
Whilst there is a variation between my conclusion the claimant’s pre-accident earning capacity equates to $1,672 net per week and the payslips from Civil & Telco Solutions Pty Limited indicating the claimant earned approximately $2,000 net per week during this short period of employment, the evidence suggests the claimant was employed on a casual basis. This means he would not have been paid for annual leave, sick leave or public holidays. A standard four weeks of annual leave, 13 public holidays per year and a usual allowance of eight sick days per year in fulltime employment equates to seven weeks. Accordingly, the average casual worker is expected to work 45 weeks in a year (52 weeks less seven weeks of unpaid leave/public holidays). On this basis, earnings from Civil & Telco equate to a fulltime equivalent of $1,730 net per week, as follows:
(a) $2,000 net per week x 45 weeks equals $90,000, and
(b) $90,000 divided by 52 weeks equals a weekly average of $1,730 net.
I have calculated the claimant’s pre-accident earning capacity based on fulltime, rather than casual, employment. The variation is only slight ($58) suggesting my calculation is reasonably accurate based on the claimant’s training, skills and experience. The variation takes into account other fluctuations expected in casual employment such as standdown days, which often occur in construction due to inclement weather, Worksafe shutdowns or other reasons as a result of which a casual worker will not be paid and periods of unemployment in between casual positions, which provide no guarantee of ongoing work.
I see no reason the claimant would not have been able to work on a fulltime basis rather than casual before the accident, based on his training, skills and experience. For this reason, I consider the assessment on the basis of fulltime employment, which does not suffer the same fluctuation in earnings that typically occurs with casual work, to be appropriate.

CONCLUSION

For the reasons set out above I conclude the claimant:
(a) had a pre accident earning capacity to work as a fulltime (plus the average 10 hours overtime in the industry) rigger, among other occupations reasonably available to him, and
(b) this pre-accident earning capacity would likely generate $1,672 net per week.
Accordingly:
(a) the reviewable decision is set aside, and
(b) the claimant’s pre-accident earning capacity equates to $1,672 net per week.

LEGISLATION AND GUIDELINES

In making this decision, I have considered the following:
· the application, reply and supporting documentation;
· the MAI Act;

· Motor Accident Guidelines, and
· Motor Accident Injuries Regulation 2017.

[2023] NSWPICMR 4

19 January 2023