Allianz Australia Insurance Limited v Rymer

[2022] NSWPICMRP 6

DETERMINATION OF MERIT REVIEW PANEL

CITATION:

Allianz Australia Insurance Limited v Rymer [2022] NSWPICMRP 6

CLAIMANT:

Christophe Rymer

INSURER:

Allianz Australia Insurance Limited

MERIT REVIEW PANEL MEMBERS:

Merit Reviewer Belinda Cassidy
Merit Reviewer Susan McTegg

Merit Reviewer Katherine Ruschen

DATE OF DECISION:

3 Februrary 2022

CATCHWORDS: 

MOTOR ACCIDENTS - Motor Accident Injuries Act 2017 (MAI Act); interim decision as to jurisdiction; statutory benefits claim; costs of medical disputes (minor injury and treatment) allowed on an exceptional basis under section 8.10(4) of the MAI Act and reasonable and necessary costs assessed; application by insurer for review of decision; preliminary point as to jurisdiction of Merit Review Panel; Held- Merit Review Panel has no power to review decision made in respect of section 8.10(4) of the MAI Act; that decision was a decision made by the Commission as constituted by a member and is not a merit review matter as listed in Schedule 2(1) of the MAI Act; Merit Review Panel’s jurisdiction is limited to an assessment of whether the claimant’s costs as permitted by the Motor Accident Injuries Regulation or by the Commission (constituted by the member) are reasonable and necessary; Rymer v Allianz Insurance [NSWPICMR] 45 and Allianz Insurance v Rymer [2021] NSWPIC 534 referred.

REVIEW PANEL INTERIM DECISION

INTRODUCTION

1. Christophe Rymer was involved in a motor accident on 8 December 2018. He was riding his motorcycle in the second lane of Pittwater Road at Manly and there was a car up ahead in the first lane. Without warning, that car undertook a U-turn manoeuvre and Mr Rymer collided with it sustaining injury.

2. Mr Rymer (the claimant) made an application for personal injury (statutory) benefits on Allianz Australia Insurance Limited, the third-party insurer of the car Mr Rymer says caused his accident (the insurer).

3. A dispute has arisen between the claimant and the insurer about the payment of legal costs in respect of this claim and specifically costs in relation to a number of medical disputes that have arisen in connection with that claim. On 7 October 2021,

   
   

   Mr Plibersek determined that dispute about costs[1].

   [1] Rymer v Allianz Insurance [2021] NSWPICMR 45 (7 October 2021).

4. Allianz lodged an application to review that decision with the Personal Injury Commission (the Commission). The President’s delegate determined that there was reasonable cause to suspect an error in Mr Plibersek’s decision[2] and a Review Panel (the Panel) has been constituted by the President of the Commission to conduct the Review of Mr Plibersek’s decision (the Review).

   [2] Allianz Insurance v Rymer [2021] NSWPIC 534 (14 December 2021).

5. Pursuant to rule 128(1) of the Personal Injury Commission Rules, 2021 (the PIC Rules) the Panel ‘is to conduct and determine the proceedings in accordance with procedures determined by the panel’.

6. The Panel met on 11 January 2021 and discussed the matter.

7. The extensive submissions lodged by the parties in the application that was before

   
   

   Mr Plibersek and in the application for review before the Panel, reveal there is a dispute between Mr Rymer and Allianz about:

   (a) whether the claimant should be permitted to be paid legal costs beyond the sums specified in the Motor Accident Injuries Regulation 2017 (the MAI Regulation) that is costs on the exceptional circumstances basis and, if so

   (b)    the amount that should be allowed as reasonable and necessary for those costs.

8. The Panel identified a preliminary issue as to the scope of the Merit Review Panel’s jurisdiction and whether it had the power to consider both the above matters. After receiving submissions from both parties, the Panel has made a decision which limits the scope of the matters to be determined by it to the second of those matters only for the reasons that follow.

The Legislative Framework

The power to determine whether exceptional costs exist

1. Section 8.10(1) of the Motor Accident Injuries Act 2017 (the MAI Act) says that a claimant can recover from the insurer reasonable and necessary legal costs and other expenses that are incurred in connection with a claim for statutory benefits.

2. Section 8.10(3) provides that these legal costs can only be recovered if payment of them ‘is permitted by the regulation or the Commission[3]’.

   [3] Before 1 March 2021 and the establishment of the Commission the reference here was to the Dispute Resolution Service (DRS).

3. Section 8.10(4) says ‘the Commission can permit payment of legal costs incurred by a claimant but only if satisfied that … (b) exceptional circumstances exist that justify payment of legal costs incurred by the claimant’. Section 24 of the Personal Injury Commission Act 2020 (the PIC Act) says ‘The Commission has the jurisdiction and functions that may be conferred or imposed on it by …’ the MAI Act.

4. The Commission clearly has the jurisdiction and function of determining whether exceptional circumstances exist, and that the claimant’s reasonable and necessary costs are to be paid by the insurer under s 8.10(4) on the basis that the MAI Regulation and the sums allowed in it do not apply.

5. Section 31 of the PIC Act provides that ‘The Commission is to be constituted by one or more Division members … to which the function of dealing with the proceedings is allocated’. Division members are listed in section 8 of the PIC Act and include principal, senior and general members. Importantly for the matters before the Panel, merit reviewers are not members of the Commission.

6. Merit reviewers, along with medical assessors are ‘decision makers’ under s 7.1(1) of the MAI Act and s 32 of the PIC Act. Section 34 of the PIC Act says a decision-maker (such as a merit reviewer) has the functions that are conferred on the decision-maker by or under the PIC Act and the MAI Act.

7. The Panel is not aware of any functions relevant to the dispute before it conferred on merit reviewers by or under the PIC Act. Neither party has drawn the Panel’s attention to any provision of the PIC Act conferring any function relevant to this costs dispute on merit reviewers.

8. The function conferred on merit reviewers by or under the MAI Act is the determination of matters defined in s 7.1 as those matters declared by Schedule 2 of the MAI Act to be merit review matters.

9. Schedule 2(1)(aa) declares the following to be a merit review matter:

   “Whether for the purposes of section 8.10 (Recovery of costs and expenses in relation to claims for statutory benefits) the costs and expenses incurred by the claimant are reasonable and necessary.”

The bifurcation of disputes about costs

1. Disputes about costs are often split between decision makers. In matters that come before the courts, the judicial officer will make the order in relation to costs (the entitlement to costs, whether indemnity costs should be awarded and issues surrounding offers of compromise and so on) but the quantification of costs, if disputed, is determined by a separate process[4].

   [4] In New South Wales overseen by the Supreme Court’s costs assessment jurisdiction.

2. In a common law claim, the member undertaking the assessment of it has the jurisdiction and function of assessing both the entitlement to costs and the quantum of those costs (see s 7.37 of the MAI Act). These costs include any medical disputes (and medical reviews) that arise in connection with that common law claim.

3. A miscellaneous claims assessment matter may arise in either a common law claim or a statutory benefits claim[5]. In the course of the determination of a miscellaneous claims assessment matter, a member of the Commission has the power to also determine both the entitlement to costs and the amount of those costs (see ss 7.37 and 7.42(2) and the decision of Justice Wright in AAI Limited t/as GIO v Moon[6]).

   [5] See the list in Schedule 2(2) of the MAI Act.

   [6] [2020] NSWSC 714 at [61].

4. But what of a dispute about costs in a statutory benefits claim, or costs in a dispute that arises in a statutory benefits claim that is not a miscellaneous claims assessment matter such as a medical assessment matter? Who has had conferred upon them the function of determining the entitlement to costs and who has had conferred upon them the function of assessing or quantifying those costs?

5. Wright J in the Moon case emphasised the clear distinction between the two functions or powers in respect of costs. For example, at [101] he said that ‘Section 8.10(3) should be construed as conferring on the DRS [now the Commission] a discretion to permit the recovery and payment of legal costs in excess of the maximum costs fixed by the regulations, where the requirements of s 8.10(4) are met’. He also held at [102] that a claimant can recover legal costs ‘which exceed the maximum costs fixed by the regulations where the payment of those costs is permitted by the DRS [now the Commission] in the circumstances referred to in s 8.10(4). He then observed as follows:

   “[105] Whether legal costs are “reasonable and necessary” is a matter that depends on the particular circumstances of each case. No issue arose in the present matter concerning the construction or application of the words “reasonable and necessary”. As a result, it is not appropriate to consider that aspect of s 8.10(1) in these reasons. It can be noted that, if there is a dispute concerning whether the legal costs sought to be recovered by a claimant for statutory benefits are “reasonable and necessary”, this is declared by Sch 2 cl 1(aa) of the MAI Act to be a “merits review matter” for the purposes of Pt 7 of the Act and can be determined in accordance with Div 7.4 of Pt 7.”

6. It is the Panel’s view that in a statutory benefits claim, there is a bifurcation of the determination of costs disputes between the parties. The power to permit costs outside the MAI Regulation (under s 8.10(4)) lies with a member of the Commission who, absent agreement between the parties, must give that permission before a merit reviewer can then assess those costs and determine what costs are reasonable and necessary and payable by the insurer.

7. If there is no claim for costs on the exceptional basis under s 8.10(4) then there is no bifurcation because the MAI Regulation permits certain costs and any dispute about the quantification of those (regulated) costs would appear to be dealt with by a merit reviewer under Schedule 2 clause 1(aa).

What decisions did Mr Plibersek make?

1. Document AD12 in the portal is a sealed copy of the decision of Mr Plibersek. The document contains a first page headed ‘Merit Review’ where Mr Plibersek is identified, in the formal parts of the document as a ‘Merit Reviewer’. Beneath the formal parts is the word ‘Certificate’ which was said to be issued under section 7.13(4) of the MAI Act.

2. Paragraphs 1 and 2 of the Certificate are found under a heading ‘determination’. Over the next eight pages are other headings including: background, submissions, relevant statutory provisions and conclusion.

3. On page 6 of the document are two sub-subheadings as follows:

   (a)    Reasonable and necessary costs

   (b)    Do exceptional circumstances exist?

4. The ‘conclusion’ part of the document contains the following two paragraphs:

   “[69] Under sub-section 8.10(4) I am satisfied that that exceptional circumstances exist that justify payment of legal costs incurred by the Claimant.

   [70] The amount of the Claimant’s reasonable and necessary legal costs assessed in accordance with the MAI Act and the Regulations is $30,800, inclusive of GST for the solicitor’s professional legal costs and $4,455 inclusive of GST for barrister’s fees.”

5. The document finishes with a sign off section as follows:

   “Ray Plibersek

   General Member and Merit Reviewer

   Personal Injury Commission”

6. The Panel is aware that Mr Plibersek is both a member of the Commission and a Merit Reviewer.

7. The front page of the decision in question refers only to the matter being a merit review matter and identifies the certificate as having been issued under s 7.13(4), a section of the Act relevant only to merit review matters. However, the Merit Review Certificate document includes within it (in particular the conclusions at paragraphs 59 and 60) two decisions – a decision to permit the payment of costs on an exceptional basis under s 8.10(4)(b) and a decision quantifying those costs by deciding what costs are reasonable and necessary which he has assessed at over $35,000. The document is ‘signed off’ with Mr Plibersek’s name and notes his two appointments (General Member and Merit Reviewer).

8. It is the Panel’s view that this document should be considered as containing:

   (a) the decision of the Commission as constituted by Member Plibersek to whom has been allocated the function of permitting (or not) the claimant to recover legal costs in accordance with s 8.10 of the MAI Act, and

   (b) the determination of a Schedule 2(1)(aa) merit review matter by Merit Reviewer Plibersek in accordance with section 7.13 of the MAI Act.

What decisions can the Panel review?

1. Section 7.15 of the MAI Act:

   (a)    permits a party to apply to the President to refer a merit review decision to a review panel of merit reviewers for review,

   (b)    limits the grounds for a review to where ‘the decision was incorrect in a material respect’ which must first proceed through a gatekeeper test of ‘reasonable cause to suspect’ the decision was incorrect in a material respect, and

   (c)    provides that the Panel may confirm the decision in question or set aside the decision or substitute its own decision.

2. The Panel communicated to the parties, its preliminary view that it only has power to review a decision made by a merit reviewer in relation to a merit review matter. The Panel sought submissions and both the claimant[7] and the insurer[8] agree that the Panel only has power to review Merit Reviewer Plibersek’s decision under Schedule 2(1)(aa) as to whether the costs and expenses incurred by Mr Rymer are reasonable and necessary.

   [7] The claimant’s submissions are identified as document AD16 in the portal and were received on 2 February 2022.

   [8] The insurer’s submissions are identified as document AD15 in the portal and were received on 25 January 2022.

3. The Panel has therefore determined that it will only consider the decision made by Merit Reviewer Plibersek as to the assessment of the reasonable and necessary costs and expenses incurred by the claimant. That matter is a merit review matter and the Panel only has power to review merit review matters.

4. In terms of Member Plibersek’s decision to permit the payment of legal costs incurred by the claimant in accordance with s 8.10(4)(b), the insurer’s submissions raise, in paragraph two a question as to the validity of that decision. The insurer asks whether Member Plibersek has ‘acted outside the scope of the dispute referred to him, which is noted to have been a merit review’. The insurer also ‘queries what jurisdiction the Member held to make that determination in circumstances where the dispute referred for determination was limited to a merit review of legal costs’.

5. With respect to the insurer’s legal representatives, whether Mr Plibersek’s decision under s 8.10(4)(b) is within the scope of what was referred to him and whether that decision is valid or invalid is not a matter which the Panel can determine. As the parties agree, and the Panel has decided, the Panel can only review a merit review matter.

6. The Panel will convene a teleconference with the parties to discuss the assessment of the claimant’s costs. The parties will be advised of the arrangements for the teleconference in due course.

   Merit Reviewers Belinda Cassidy, Susan McTegg and Katherine Ruschen