Allianz Insurance v Rymer
[2021] NSWPIC 534
•14 December 2021
| DECISION OF PRESIDENT’S DELEGATE | |
CITATION: | Allianz Insurance v Rymer [2021] NSWPIC 534 |
| CLAIMANT: | Christophe Rymer |
| INSURER: | Allianz Insurance |
| MERIT REVIEW CONDUCTED BY: | Ray Plibersek |
| DATE OF ORIGINAL CERTIFICATE: | 7 October 2021 |
| PRESIDENT’S DELEGATE: | Jeremy Lum |
| DATE OF DECISION: | 14 December 2021 |
| CATCHWORDS: | WORKERS COMPENSATION- Delegate of President accepting application for review of merit review decision of Merit Reviewer; assessment of reasonable and necessary legal costs; exceptional circumstances that justify payment of legal costs; adequacy of reasons; Held – Delegate of the President satisfied that there is reasonable cause to suspect that the merit review was incorrect in a material respect; the review application is accepted and will be referred to a Merit Review Panel. |
DETERMINATIONS MADE: | I am satisfied that there is reasonable cause to suspect that the merit review was incorrect in a material respect. Accordingly, the review application is accepted and will be referred to a Merit Review Panel. |
Determination of an Application for Review of a Merit Review
Statement of Reasons for Decision
Issued under section 7.15 of the Motor Accident Injuries Act 2017
Under the Delegation of the President: Item 19, Table of delegations “A” – Personal Injury Commission Act 2020, PIC Regulation and Scheme regulations
BACKGROUND
Christophe Rymer (the claimant), was injured in a motor accident on 8 December 2018.
There was a medical dispute with respect to treatment and whether or not the claimant’s injuries were minor injuries.
The medical dispute was assessed by Assessor Bodel which then became the subject of an application for medical review and was allowed by the President’s Delegate to proceed to a Review Panel.
Following the Review Panel’s determination, the claimant lodged a merit review application for a determination of the costs payable to his solicitors for the preparation of the Review Panel proceedings.
It is noted that an internal review is not required as the recovery of costs for a claim for statutory benefits under section 8.10 of the Act is not a merit review matter of a kind prescribed by the Regulations (see clause 10(d) of the Regulations).
On 7 October 2021, Merit Reviewer Plibersek issued a Certificate under section 7.13(4) of the Act and determined the amount of the claimant’s reasonable and necessary legal costs to be $30,400 (inc GST) for the solicitors professional legal costs and $4,455 (inc GST) for barristers fees.
Allianz Insurance (the applicant) seeks to have the assessment of the Merit Reviewer reviewed on the basis that it was incorrect in a material respect. They rely on the particulars set out in the application and supporting documentation.
Christophe Rymer (the respondent) does not agree that a review is warranted and addresses the issues raised by the applicant.
Section 7.15 of the Act provides that if the Delegate of the President is satisfied that there is reasonable cause to suspect that the decision determining the review was incorrect in a material respect, the review application will be referred to a Merit Review Panel.
SUBMISSIONS
The applicant insurer has provided several grounds with detailed submissions alleging that the decision is incorrect in a material respect.
These grounds are:
· Misconstruction of sub-sections 8.10(3) and 8.10(4) of the Act
· Misconstruction of the objects of the Act
· Failure to adequately consider the relevant material
· Failure to provide sufficient reasons
· Legal unreasonableness
I will focus on the submission regarding the misconstruction of sub-sections 8.10(3) and 8.10(4) of the Act because any reasonable cause to suspect an error with the application of the relevant provisions of the Act will be material to the outcome of the assessment upon which the other grounds for review are based.
As reproduced by the applicant, sub-section 8.10(3) and 8.10(4) of the Act provide respectively as follows:
(3)A claimant for statutory benefits is only entitled to recover from the insurer against whom the claim is made reasonable and necessary legal costs incurred by the claimant if payment of those costs is permitted by the regulations or the Commission.
(4) The Commission can permit payment of legal costs incurred by a claimant but only if satisfied that –
(a) the claimant is a person under legal incapacity, or
(b) exceptional circumstances exist that justify payment of legal costs incurred by the claimant.
The applicant refers to page 8 of the Certificate where the Merit Reviewer stated …”some of the work done by the Claimant’s solicitors for the Review Panel was unnecessary [at paragraph 62].”
The applicant submits that in awarding the claimant’s solicitors costs and expenses beyond the regulated maximum amount of $1,600.00 plus GST, the Merit Reviewer must “engage in an assessment of whether the costs awarded are reasonable and necessary”.
It is further submitted that the Merit Reviewer’s comment is imprecise and does not specify what proportion of the total claimed costs ($69,482.60) are “in connection with the medical assessment” (using the words of schedule 1, part 1, sub-clause 2(1) of the Regulation), in which the present case is the Review Panel assessment, to the work performed before the insurer’s lodgement of the application for review.
REASONS FOR DECISION
I have read the Certificate and in particular, paragraphs 60-67 which purportedly contain the Merit Reviewer’s reasons for determining the amount of reasonable and necessary legal costs.
Paragraphs 60-62 largely summarise the position of both parties. There is a short sentence in paragraph 62 where the Merit Reviewer states that some of the extra medical material was not requested by the Review Panel and found by the Merit Reviewer to be work that was unnecessary.
Paragraph 63 is a discussion about hourly rates with respect to legal services provided for a claim for damages and the amount for per unit fees charged by the claimant’s solicitors.
Paragraph 64 concerns the Merit Reviewer’s acknowledgement of the absence of any scale of legal costs or schedule of fees for the payment of legal costs incurred by the claimant once the Commission is satisfied exceptional circumstances exist. As such, the Merit Reviewer states that the discretion to award legal costs in exceptional circumstances must be used consistently with the objects of the MAI Act, which include the quick, cost effective and just resolution of disputes.
Paragraph 65 contains the Merit Reviewer’s view that it is not appropriate to deal with the assessment of the claimant’s legal costs on an item-by-item basis. Rather, the Merit Reviewer states that the discretion requires him to assess those “reasonable and necessary costs for the disposition of the Review Panel dispute having regard to the objects and framework of the legislation”.
At paragraph 66, the Merit Reviewer states:
“Taking into consideration the above submissions from the parties, the comment from the Review Panel and the objects of the MAI Act, I find that not all of the legal work claimed by the Claimant’s solicitors for the Review Panel dispute was reasonable and necessary. I award the amounts of: $30,800 including GST for the solicitors professional legal costs and $4,455 including GST for barristers fees.”
I acknowledge the Merit Reviewer’s reasons that the assessment was based on an exercise of discretion with the objects of the Act in mind and without the assistance of a scale of legal costs or a schedule of fees.
I note however that the claimant’s memorandum of costs is a lengthy and detailed account and for a period of just over a year (1/07/2019 – 8/10/2020) contained more than 400 entry dates, many of which have multiple units claimed.
While I am aware of the Merit Reviewer’s reasons that an item-by-item account of reasonable and necessary costs was not considered appropriate, I agree with the applicant that there needs to be some engagement by the Merit Reviewer as to what costs were and were not reasonable and necessary. It follows that the “award” of $30,800 (incl GST), without some analysis of the claimant solicitor’s detailed memorandum of costs is reasonable cause to suspect that the determination is incorrect in a material respect.
The review application is therefore accepted and will be referred to a Merit Review Panel.
As mentioned above, there are other grounds for review including detailed submissions on whether the preliminary finding of the presence of “exceptional circumstances” is correct. It is not necessary for me to address these other grounds as they will be before the Merit Review Panel.
In making this decision, I have considered the following:
The application, reply and supporting documentation
The certificate including the reasons issued by Merit Reviewer Plibersek, the application for assessment, the response and all the documents provided prior to the determination.
Motor Accident Injuries Act 2017 (the Act)
Motor Accident Injuries Regulation 2017 (the Regulation)
Jeremy Lum
Delegate of the President
Personal Injury Commission
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