BCS v AAI Limited t/as GIO
[2022] NSWPIC 674
•12 December 2022
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | BCS v AAI Limited t/as GIO [2022] NSWPIC 674 |
| Claimant: | BCS |
| insurer: | AAI Limited t/as GIO |
| Member: | Brett Williams |
| DATE OF DECISION: | 12 December 2022 |
CATCHWORDS: | MOTOR ACCIDENTS - Approval of proposed settlement of damages claim under section 6.23(2)(b) of the Motor Accident Injuries Act 2017 in the amount of $1,837,292.30; claimant suffered significant physical injuries, together with scarring and psychological injury as a result of accident; liability admitted; Held – proposed settlement approved; when considered by reference to the allowance for each head of damages, and as a whole, the proposed settlement is just, fair and reasonable and within the range of likely potential damages assessments for the claim; the matter to be assessed by the Personal Injury Commission, taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the claimant. |
| determinations made: | CERTIFICATE OF DETERMINATION 1. The proposed settlement in the sum of $1,837,292.30 is approved under section 6.23(2)(b) of the Motor Accident Injuries Act 2017. |
STATEMENT OF REASONS
BACKGROUND
BCS was injured in a motor accident on 20 October 2020 (the accident). On 1 June 2022 he made a claim for damages on AAI Limited t/as GIO (GIO) under the Motor Accident Injuries Act 2017 (MAI Act). The insurer initially denied liability for the claim pending investigations being finalised. BCS referred his damages claim to the Commission for assessment.
I conducted a preliminary conference in relation to the assessment proceedings on 15 September 2022. The report of the same date records what transpired at that time.
A further preliminary conference was conducted on 14 November 2022. On that occasion the parties confirmed that, subject to approval by the Commission in accordance with s 6.23 of the MAI Act, BCS’ claim for damages had settled for the sum of $1,837,292.30, inclusive of weekly payments of statutory benefits paid to him by GIO under the MAI Act (the proposed settlement). The parties agreed that, in accordance with rule 95 of the Commission Rules (the Rules), the insurer would lodge an application for approval of the proposed settlement, and that I should determine the approval.
On 17 November 2022 the insurer lodged with the Commission an application for approval of the proposed settlement (the approval). The approval was listed for a preliminary conference on 2 December 2022.
APPLICABLE STATUTORY PROVISIONS
Restrictions on the settlement of a claim for damages are found in s 6.23 of the MAI Act, which is in the following terms:
“6.23 Restrictions on settlement of claim for damages
(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 7.37 of the Motor Accident Guidelines state as follows:
“7.37 Under section 6.23(3) of the Act, before the Personal Injury Commission may approve the settlement of a claim for damages, it must be satisfied that:
(a) the proposed settlement satisfies the timing requirements in section 6.23(1) of the 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 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
(c) the claimant understands that they are entitled to be represented in respect of the claim by an Australian legal practitioner
(d) the claimant understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement.”
Procedural Direction MA3 concerns the requirement for the Commission to approve the settlement of a claim for damages in circumstances where the claimant is not represented by an Australian legal practitioner, and the process for obtaining the Commission’s approval of the settlement of the claim.
PRELIMINARY CONFERENCE ON 2 DECEMBER 2022
BCS attended the preliminary conference, as did Ms Allen. I confirmed with them that the proposed settlement was in the sum of $1,837,292.30 inclusive of weekly payments of statutory benefits under the MAI Act, plus costs and disbursements as regulated by the Motor Accident Injuries Regulation 2017.
I confirmed with BCS and Ms Allen the documents they wanted me to consider for the purposes of the approval.1 We also stepped through the allowances made in the proposed settlement for non-economic loss, past economic loss and future economic loss.
I explained to BCS, as I did on 14 November 2022, that as he is not legally
1 AD11, AD12, AD13, AD14 and AD15 in the portal.
represented, the proposed settlement must be approved by the Commission. I explained that the proposed settlement had to comply with the following requirements:
(a)timeliness – that the proposed settlement satisfies the timing requirements in s 6.23(1) of the MAI Act;
(b)appropriateness – that 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, taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by him, and taking into account any proposed reductions or deductions in the proposed settlement, and
(c)understanding – that he understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement.
BCS confirmed that he understood that he is entitled to be represented in respect of the claim by a lawyer and that he does not want to be legally represented.
BCS told me about the impact the injuries and disabilities he sustained in the accident have had on him.
At this and previous preliminary conferences, BCS presented as an intelligent and articulate individual. He understood the basis of his entitlements and how they were calculated. He referred to actuarial tables, superannuation rates, and understood the application of multipliers and vicissitudes.
BCS agreed that the amount of $1,254 net a week was a fair reflection of his pre-accident earnings.
Ms Allen confirmed that GIO had paid weekly payments of statutory benefits under the MAI Act, and that the weekly payments would be deducted from the proposed settlement. BCS confirmed that he understood that this deduction would be made. The amount to be deducted from the settlement on this account is $133,016.03.
Ms Allen confirmed that, other than the sum reflecting the weekly payments of statutory benefits paid to the claimant and any amount repayable to Centrelink, no other sum would be deducted from the proposed settlement. BCS told me that he had received Centrelink payments for up to six months.
I explained to BCS that the agreement he had reached with GIO to settle his damages claim would bring to an end his rights against GIO and the at fault driver for damages in relation to the accident. He confirmed that he understood this. He also understood that the settlement of his damages claim is to be paid as a lump sum on a once
and for all basis.
BCS confirmed that he understood the way in which the proposed settlement had been formulated and calculated. He agreed that, while there was an argument that future superannuation may be calculated at 14.49%, he would accept a sum calculated at 13%.
While the sums that comprise the total amount allowed for past economic loss add up to
$171,463, the insurer has calculated the allowance for past economic loss by rounding up the individual sums to $177,000.
EVIDENCE
On 13 September 2022, BCS provided particulars to the insurer’s solicitor.2 The particulars include a comprehensive list of the injuries he suffered as a result of the accident. The particulars also include details of the employment in which he had engaged prior to the accident, and his earnings in that employment. I do not propose to record in these reasons full details in this regard, but observe that, at the time of the accident, BCS was working as a skilled labourer. His work history includes employment as a delivery driver/warehouse hand. He had, for a period in 2016-2017, also worked as an apprentice air conditioner. The particulars record that BCS left school in year 9, and undertook, but did not complete, an air conditioning apprenticeship with TAFE NSW.
BCS has provided a detailed, unsigned statement. At the preliminary conference today he confirmed that the contents of the draft statement were true and correct. The statement records details of his schooling and education, his pre-accident work history, including his work duties, the accident, his injuries and disabilities arising from the accident, the impact the injuries and disabilities have had on his life and his treatment. I note in particular, the injuries and disabilities referred to at [21]-[24] of the statement, and the impact the injuries have had on his life, as recorded at [25]-[42] of the statement. I further note the impact that the injuries have had on BCS’ relationship with his daughter and his partner.
The statement also records that he has not been able to return to work. He states that he enjoyed his pre-accident work, and intended to remain with his pre-accident employer for the foreseeable future. It saddens him that he has lost the opportunity to earn a wage or progress his career.
There is a body of medical evidence that has been provided by the parties with the approval
2 In response to a request for particulars made under cover of correspondence from the insurer’s solicitor dated 31 August 2022.
application. I do not propose to provide a comprehensive summary of the medical evidence. I will, however, address aspects of the evidence to provide context for my determination.
Dr Hyde-Page, orthopaedic surgeon, reported on 28 July 2022. The report records that BCS was taken by ambulance from the scene of the accident to St Vincent’s
Hospital, where he was admitted for over two weeks. He underwent surgery to his right knee and leg. He had an intercostal tube inserted for a number of weeks as he had suffered a lung puncture. He left hospital in a wheelchair. He was re-admitted in March 2021 and underwent a right ACL ligament repair at the hands of Dr Small. He underwent a third operation in February 2022 when the hardware and reconstruction material was removed. He has received physiotherapy, osteopathic and podiatry treatment.
Dr Hyde-Page recorded ongoing symptoms in BCS’ neck and shoulders, lumbar spine, right leg and foot. He cannot use his arms above waist level, but has regained reasonably good function in his elbows, wrists and hands. He experiences instability, pain and stiffness in his right knee. He uses a walking stick. While there is a partial right foot drop he can now at least lift the foot off the ground when he's walking. There is some pain around the right ankle. Other than some chest tightness, the chest injury had settled well. He continues to have regular treatment from his physiotherapist, osteopath, and podiatrist. He is concentrating on doing a lot of exercises, and has a home gym. He continues to take strong pain medication in the form of Targin, Palexia and Lyrica which is prescribed by his GP. He takes anti-inflammatories. He uses a walking stick in his left hand constantly.
The doctor diagnosed the following injuries as a result of the accident:
(a)fractured ribs and collapsed left lung treated with intercostal tube for two weeks with a good recovery;
(b)multiple ligamentous injuries and fractured tibial plateau of the right knee needing initial surgical stabilisation, subsequent ACL ligament repair, and eventual removal of metalware;
(c)right peroneal nerve palsy with footdrop with partial recovery;
(d)fractured right ankle treated conservatively with good recovery;
(e)soft tissue injuries to the left ankle;
(f)soft tissue injury of the left knee and left hip;
(g)undisplaced left acetabular fracture;
(h)cervical spine injury with ongoing dysmetria, significant stiffness, but no
radiculopathy;
(i)lumbar spine injury with muscle guarding and stiffness but no radicular symptoms or radiculopathy, and
(j)persistent pain and stiffness of the shoulders.
Dr Hyde-Page recorded that before the accident, BCS was a very fit healthy man with no significant complaints. He had a fractured left forearm, from which he had made a full recovery, and a right hernia repair in the past. Otherwise, there was no history of any significant injury. There had been a limited recovery from the injuries suffered in the accident, and the prognosis for further recovery was “not good at all”. Due to the severity of his injuries and the multiple musculoskeletal problems that he presented with, the doctor thought that BCS remained completely unfit to return to the workforce in any capacity. With his multiple musculoskeletal complaints, it was unlikely that he will return to labouring work in the foreseeable future. His ability to do any other type of work is very limited in view of his poor reading and writing skills. He would need to go through an extensive retraining programme. The doctor assessed a 37% permanent impairment as a consequence of the physical injuries sustained in the accident. The doctor observed that BCS was straightforward in his answers and that, in both the history taken and physical examination, there was no suggestion of any embellishment or exaggeration.
Dr Baron Levi conducted a psychological assessment of BCS and reported on 5 October 2022. The report records that BCS satisfied the DSM5 criteria for a diagnosis of an adjustment disorder as a direct result of the accident. In his view, while there was evidence of post-traumatic stress disorder symptoms, these were now in remission. Dr Baron Levi stated that, in his opinion, BCS was genuine in his reporting of the difficulties he was experiencing, both in terms of his physical limitations and the psychological impact of those impairments. There was evidence that he was determined to be as independent as he could.
In terms of employment, BCS was limited in work options given that he had poor literacy skills and had always engaged in physical work, which in all likelihood was no longer an option for him. There would, however, be positions where BCS could work from home, although he would need to be computer literate.
Dr Baron Levi suggested that a formal vocational assessment would need to be administered in order to explore possible pathways to employment. He was not prepared to “go as far as to say that [BCS] was completely unemployable”. The doctor observed that, in his capacity as a director of a Disability Employment Service for 17 years, he had placed
some jobseekers who were severely physically disabled into open employment. There would need to be a formal vocational assessment before the decision was made that BCS was unemployable. A 13% permanent impairment was assessed in relation to the psychological injury.
The material lodged with the approval includes radiological reports; I have read and considered those reports.
Dr Symes, orthopaedic surgeon, has been treating BCS’ bilateral foot and ankle injuries. In a report dated 20 June 2022, he recorded that there were no surgical options that would improve BCS’ foot and ankle symptoms. He required ongoing physiotherapy and would benefit from a chronic pain team review. The doctor recorded that BCS remained very motivated.
In a report dated 24 October 2022, BCS’ GP, Dr Kuzmanovski, confirmed the medication that he has been prescribed. The report records that, taking into consideration the medication alone, he is not fit for any job, nor is he fit to undertake any courses or training. In the doctor’s opinion, BCS was totally and permanently disabled for any job, and that “[e]verything else is wishful thinking and not reasonable”.
I have considered the report from Mr Kmetoni, BCS’ physiotherapist. He expressed the opinion that BCS was completely unfit to return to the workforce in any capacity.
A report from Dr Ghazi, podiatrist, dated 29 August 2022, records that BCS’ lower limb injuries will continue to cause him limitations in his capacity to walk, run, and work, and will severely impact his quality of life and his ability to work.
Material from BCS’ pre-accident employer records that his employment was terminated two months after the accident. At the time of the accident he was working in a highly physical environment. The employer stated that:
“BCSwas an outstanding member of the team and we had every intention of keeping him and promoting him into a role with more responsibility over the years to come. He was punctual, hard working, and was always willing to push himself to meet designated deadlines.”
GIO’S SUBMISSIONS IN SUPPORT OF THE APPROVAL
GIO has provided submissions in support of the approval dated 15 November 2022. The submissions record that GIO issued a liability notice dated 25 October 2022 admitting liability for the claim. On 4 August 2022 GIO conceded that BCS’ injuries as a result of
the accident exceed 10%.
The submissions record that:
(a)Past economic loss has been agreed in the sum of $177,000. This sum is comprised as follows:
1. $1,254 x 110 weeks = $137,940;
2. Fox v Wood (s 4.5(d) MAI Act) = $20,418, and
3. Past loss of superannuation @9.5% = $13,1053.
(b)Future economic loss has been agreed in the amount of $1,160,292.30, comprised as follows:
1. $1,254 a week for 35.5 years (multiplier 880.3) less 15% = $938,311.77;
2. Superannuation at 13% = $121,980.53, and
3. Buffer for loss of opportunity and promotions = $100,000.
(c)GIO seeks credit for weekly payments of compensation made to
BCS, and that this sum will be deducted from the proposed settlement.
DETERMINATION
The nature and extent of the injuries suffered by BCS have been addressed earlier in these reasons. It is clear that he suffered significant physical injuries in the accident. He has scarring and has developed a psychological condition. He has undergone surgery on three occasions.
BCS is entitled to damages for non-economic loss, past economic loss (including superannuation and tax paid on weekly statutory benefits) and future economic loss (including loss of superannuation).
BCS will shortly turn 32 years of age and has a life expectancy of 51.36 years. The current maximum amount of damages that can be awarded for non-economic loss under the MAI Act is $605,000.4 The proposed settlement includes an allowance of $500,000 for non-economic loss. I am satisfied that this allowance is just, fair and reasonable and within the range of likely potential awards for this head.
I am likewise satisfied that the allowances made for past and future economic loss are just,
3 As recorded earlier, these sums add up to $171,463 but have been rounded up to $177,000.
4 Section 4.13 MAI Act as adjusted.
fair and reasonable and within the range of likely potential awards for these heads of damages.
When considered by reference to the allowance for each head of damages, and as a whole, I am satisfied that 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 the Commission, taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by BCS.
I note the deductions that are to be made to the proposed settlement, as discussed earlier in these reasons.
I am satisfied that BCS understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement.
Having considered the material provided with the application, and what BCS told me at the preliminary conference on 2 December 2022, the proposed settlement is approved.
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