Allianz Australia Insurance Limited v Clarke
[2021] NSWPIC 330
•3 September 2021
| CERTIFICATE OF DETERMINATION OF MEMBER | |
CITATION: | Allianz Australia Insurance Limited v Clarke [2021] NSWPIC 330 |
| CLAIMANT: | Mitchell Clarke |
| INSURER: | Allianz Australia Insurance Limited |
| MEMBER: | Belinda Cassidy |
| DATE OF DECISION: | 3 September 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017 (MAI Act); damages claim; approval of settlement under section 6.23 of the MAI Act; claimant self-represented; settlement of $43,500 for past loss of earnings and future loss of earning capacity; injury; right shoulder dislocation; good recovery and return to full duties within 6 months; evidence suggested chance of arthritis and surgery long term; cushion or buffer for future loss of earning capacity; Held - settlement approved; no matters of principle. |
| DETERMINATIONS MADE: | 1. The claimant and the insurer have agreed to settle Mr Clarke’s claim for the sum of $43,500. 2. The proposed settlement is approved in accordance with section 6.23 of the Motor Accident Injuries Act2017. 3. The reasons for the determination are included with this certificate. |
STATEMENT OF REASONS
INTRODUCTION
On 25 June 2019, Mitchell Clarke (the claimant) was driving in the Coffs Harbour area in a line of traffic. The car in front of his stopped suddenly and Mr Clarke stopped behind that vehicle however the vehicle travelling behind Mr Clarke failed to stop in time and a rear end collision occurred[1]. Mr Clarke was injured.
[1] The circumstances of the accident are set out in the police report, identified as document A39 in the Personal Injury Commission’s file. I note also the photographs of the claimant’s car showing damage to both the rear and the front confirming the history in the police report that the force of the rear end impact propelled Mr Clarke’s car forward into the vehicle in front.
Mr Clarke has made two claims against Allianz, the third-party insurer of the vehicle behind him (the insurer), a claim for treatment, care and weekly benefits (the statutory benefits claim) and a claim for lump sum compensation or damages (the damages claim)[2].
[2] The statutory benefits claim form is identified as document A1 and the damages claim form (dated 22 February 2021) is identified as document A2.
Allianz accepted it was the relevant insurer for the purposes of the statutory benefits claim and has paid Mr Clarke those benefits. Allianz has also accepted liability for the damages claim in a letter dated 12 April 2021[3].
[3] The insurer’s decisions to accept liability for the statutory benefits claim are identified as documents A3 and A4 and the insurer’s decision to admit liability for the damages claim is identified as document A5.
Mr Clarke and Allianz have agreed on a sum to settle the lump sum damages claim. Because Mr Clarke does not have a lawyer representing him, the settlement must be approved in accordance with the relevant provisions of the Motor Accident Injuries Act2017 (the MAI Act).[4]
[4] In an email to Allianz dated 2 June 2021 (document A10) in which he accepts the insurer’s first offer, Mr Clarke says he has received assistance from his father who works in insurance.
On 21 June 2021, Allianz referred the settlement to the Personal Injury Commission (the Commission) and the matter was referred to me. I held two teleconferences with Mr Clarke and Ms Jackson from Allianz on 28 July and 26 August 2021 to discuss the claim and the settlement.
I have decided to approve the settlement.
LEGISLATIVE FRAMEWORK
Section 6.23 of the MAI Act says:
(1) A claim for damages by an injured person cannot be settled within 2 years after the motor accident unless the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident is greater than 10%.
(2) A claim for damages cannot be settled unless—
(a) the claimant is represented in respect of the claim by an Australian legal practitioner, or
(b) the proposed settlement is approved by the Commission.
(3) The Commission is not to approve the settlement of a claim unless satisfied that the settlement complies with any applicable requirements of or made under this Act or the Motor Accident Guidelines.
Clause 7.38 of the Motor Accident Guidelines (the Guidelines) says that in considering the settlement I must consider whether:
(a) the proposed settlement satisfies the timing requirements in section 6.23(1) of the MAI Act;
(b) the proposed settlement is just, fair and reasonable and within the range of likely potential damages assessments for the claim were the matter to be assessed by a (member of the Commission), taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the claimant, and taking into account any proposed reductions or deductions in the proposed settlement, and
(c) the claimant understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement.
Clause 11 of the Commission’s Procedural Direction MA3 provides that the application must include:
(a) the amount of the proposed settlement and a breakdown of the amount allowed for each head of damage;
(b) the amount of any reductions in the proposed settlement;
(c) the amount of any advance payments made, and
(d) the evidence, documents and materials relevant to an assessment of the proposed settlement figure.
The insurer has lodged a copy of an email sent to the claimant on 30 August 2021 which provides a breakdown of the offer and an explanation of the components of the offer which the claimant has accepted and details the deductions to be made. The insurer’s application to the Commission complies with the Procedural Direction and includes 41 documents relevant to both the statutory benefits claim and the assessment of Mr Clarke’s damages claim.
REVIEW OF THE EVIDENCE
Documentary evidence
I have reviewed the statutory benefits claim form which indicates that the Claimant sustained a right dislocation of his shoulder in the accident.
The first certificate of capacity dated 3 July 2019 and was completed by Dr Pawar[5]. He noted:
(a) the Claimant sustained a right anterior shoulder dislocation;
(b) the Claimant is right hand dominant;
(c) he requires rest, sling and physio, an MRI of the right shoulder to evaluate the axillary nerve and an x-ray of his right wrist to evaluate wrist tenderness;
(d) he should avoid the use of his right shoulder, and
(e) he has no capacity for work until 18 July and could return to work within 3 – 6 weeks.
[5] Identified as document A12.
A further certificate of capacity issued by Dr Pawar on 6 September 2019[6] notes ‘prior left shoulder reconstruction’. He also noted the claimant had been referred to
Professor Murrell in Sydney for orthopaedic review and right shoulder stabilisation.
Mr Clarke was again advised not to carry, lift, push or pull with his right arm. He was certified unfit for work until 27 September noting he was ‘still needing rehabilitation for right shoulder stabilisation’.
[6] Identified as document A14.
A similar certificate was issued by Dr Pawar on 24 September 2019 by which stage the claimant had been operated on and was having physiotherapy. The claimant was again certified unfit for work until 1 October 2019.[7] Dr Pawar’s certificate dated 1 October 2019[8] gave the claimant clearance to lift up to 1kg in a bicep curl and carry 1 kg but pushing and pulling was to be done with the left hand only. The certificate completed by Dr Pawar on 19 November 2019 certified the claimant as fit for work from 19 November 2019 with lifting, carrying, pushing and pulling restricted to ‘as tolerated’[9]. The claimant was advised to continue with physiotherapy and rehabilitation to strengthen his right arm.
[7] Identified as document A15.
[8] Identified as document A16.
[9] Identified as document AD3 and A21.
There are several reports from the claimant’s physiotherapist Hoys Allied Health and Wellness[10] as follows:
(a) 10 October 2019 - plan to commence physiotherapy twice a week;
(b)
25 October 2019 – email from physio to Allianz and response regarding
Mr Clarke’s duties to comply and participate in workplace review;
(c) 18 November 2019 – exercise program upgraded and to progress to exercise physiology to commence 20 December 2019. Physiotherapy recommended for periodic review only, and
(d) 29 November 2019 – closure report noted claimant fit for his pre-injury duties and that Mr Clarke had returned to work on 1 October 2019 working 8 hours a day, 5 days a week and that no further workplace rehabilitation was required. Continuation of exercise physiology was recommended to continue.
[10] Identified as documents A17, A19, A20 and A23.
Exercise physiology by Hoys Allied Health and Wellness was approved by Allianz on 9 December 2019 and a report of the treatment provided in a report from Michallie Pearce dated 6 March 2020[11]. In that report it was noted that:
(a) the aim of the treatment was to improve shoulder stability and strength;
(b) Mr Clarke participated and greatly improved his physical abilities and functional abilities;
(c) the claimant completed exercises at home;
(d) Mr Clarke has had significant improvement in his overall strength and range of motion and was participating in activities of daily living;
(e) The claimant reported no pain in his shoulder but some stiffness;
(f) Mr Clarke had no issues with work and was fulfilling his ‘travelling aspirations’, and
(g) he had been provided with exercise bands and a range of exercises to help him avoid aggravations or re-injury.
[11] Identified as documents A22 (the referral) and A25 (the discharge report).
The claimant’s treating orthopaedic surgeon Professor Murrell has provided his notes[12] and a letter to Dr Pawar dated 17 February 2021. These documents report:
(a) Professor Murrell treated the claimant for left shoulder instability following a fall in 2009 and a motor vehicle accident in Vietnam in 2014. There were instances of instability and further dislocations in between;
(b) Professor Murrell first saw the claimant after the subject motor vehicle accident on 29 July 2019 and recommended surgery which was performed on 16 August 2019, and
(c) the letter dated 17 February 2020 notes it is six months since the claimant’s arthroscopic surgery to stabilise his right shoulder. Professor Murrell records the claimant is back to full activities with no further instability episodes. On examination the shoulder had a good range of motion, was strong in strength testing and table. Professor Murrell says, ‘We may contact him in several years to see how he is going, but otherwise I do not need to see him again’.
[12] Documents identified as A24 (report) and A27 (notes).
Because of the last comment, at the first preliminary conference I requested the insurer obtain a report or comment from Professor Murrell as to the long-term prognosis for the Claimant’s injury. In a letter to Allianz dated 6 August 2021 Professor Murrell says:
Mr Clarke can return to full activities with no restrictions.
There is a 20% chance of arthritis which may require a shoulder replacement in 40 years’ time.
The Claimant’s evidence
The claimant is 23 years of age.
He is working on a casual basis as a service officer with the Commonwealth Department of Human Services. He is currently working in an area dealing with the impact of COVID-19. He is working very long hours.
He says he is back to work with no restrictions and outside of work he is participating in his pre-accident recreational and daily activities.
In terms of the future, Mr Clarke says he likes the work he is doing but does not imagine he will be a service officer for the rest of his life.
SHOULD I APPROVE THE SETTLEMENT?
When considering the provisions of s 6.23 of the MAI Act and clause 7.38 of the Guidelines along with the rules and practice directions of the Commission, what I need to do in deciding whether to approve or not approve Mr Clarke’s settlement is to consider:
(a) timing – whether the date of the settlement is more than two years after the accident;
(b) appropriateness – whether the amount of the settlement is just, fair and reasonable, and
(c) understanding – whether Mr Clarke understands the settlement and its terms and the effect of the settlement in ending his claim for damages.
Timing
I am satisfied that the timing requirements of the MAI Act have been met. It is more than two years since Mr Clarke’s motor vehicle accident.
Appropriateness
The amount of the settlement that I am asked to approve comprises the following:
Past economic loss $26,000
Future economic loss $17,500
Deductions are $19,034.87 being weekly payments made to date.
Past loss is calculated on the basis that:
(a) the claimant had 20 weeks where he did not work at all or did not work full duties and his net weekly wage for that period would have been, had he not been injured, $19,640;
(b) the claimant would have accrued superannuation at the rate of 15.4%[13] on the sum above being the sum of $3,024.56 which must be added to (a) giving an amount of $22,664.56;
(c) the claimant actually earned $2,589.34 during that period which must then be deducted from the figure in (b) to give the sum of $20,075.22, and
(d) the insurer has paid the claimant his benefits at 95% of his net earnings and has deducted tax from that – the amount of tax paid is $5,720 which needs to be recredited giving a total sum of $25,795.22
[13] I have been provided with documentation that demonstrates as a commonwealth public servant, Mr Clarke’s superannuation accrued at 15.4% of his earnings.
The claimant is satisfied with the mathematics of this and accepts this is a fair reflection of what he has lost in the past. I note the insurer has:
(a) accepted a higher net weekly pre accident earnings rate than disclosed in the claimant’s taxation returns, and
(b) has rounded up the total past loss of earnings to $26,000.
Future loss of earning capacity is conceded by the insurer. In the first offer I considered, the insurer allowed the value of six days lost earnings each year for the next two years ($2,500). On the one hand there was no medical evidence to support any loss of earning capacity into the future, on the other hand there was no medical evidence to say there is no loss of earning capacity in the future. There was simply no medical evidence at all as to how Mr Clarke’s injury was likely to progress in the short, medium or long term.
At my request, the insurer obtained the report from Professor Murrell referred to in paragraph 18 above. This suggests the claimant has a 20% chance of developing arthritis and requiring surgery within 40 years. I note that the cost of any treatment including surgery and rehabilitation would, if related to the accident, be covered by the claimant’s statutory benefits claim. In the light of Professor Murrell’s report, it is possible that the claimant’s condition may deteriorate and he may require time off work before any surgery and after any surgery. He may have to stop work and find it difficult to then return to work. I agree that a buffer or cushion approach to the assessment of the claimant’s likely future losses is appropriate and that the amount proposed by the insurer ($17,500) is appropriate bearing in mind the length of time before any loss is likely to be incurred and the chance the loss may never be incurred.
I am satisfied that the total amount of damages comprising the settlement is appropriate and within the range of damages I would assess.
Understanding
Having spoken with the claimant on two occasions, I am satisfied that Mr Clarke:
(a) accepts the insurer’s offer and wishes to finalise his claim now;
(b) is aware he can seek legal advice but does not wish to do so, and
(c) understands the binding nature of the settlement and this approval and that he may not be able to make a further claim for damages related to his injuries in the future.
I am satisfied that Mr Clarke is aware that his statutory benefits claim continues for life and that the insurer is required to pay for any reasonable and necessary, accident-related treatment including:
(a) medical (GP and specialist) follow up consultations and surgery;
(b) Allied health (including physio) treatment;
(c) medication (over the counter or prescription), and
(d) domestic assistance, care and rehabilitation.
CONCLUSION
I am therefore satisfied that the proposed settlement figure of $43,500 is an appropriate one and that it complies with the requirements of cl 7.38 of the Guidelines, in that it is:
… just, fair and reasonable and within the range of likely potential damages assessment for the claim were the matter to be assessed by a [member], taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the claimant, and taking into account any proposed reductions or deductions in the proposed settlement.
Accordingly, pursuant to s 6.23 of the MAI Actthe proposed settlement of Mr Mitchell Clarke’s claim for damages is approved.
Belinda Cassidy
Member (Motor Accidents Division)
Personal Injury Commission
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