Chih v AAI Limited t/as AAMI
[2025] NSWPICMR 9
•17 March 2025
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
CITATION: | Chih v AAI Limited t/as AAMI [2025] NSWPICMR 9 |
CLAIMANT: | Cheng-Hsueh Chih |
INSURER: | AAI Limited t/as AAMI |
MERIT REVIEWER: | Elizabeth Medland |
DATE OF DECISION: | 17 March 2025 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; application to set aside insurer’s decision regarding payment of legal costs in respect of a medical assessment; claimant submitted that the insurer had no statutory right to assert that payment of costs should be anything less than the maximum regulated fee of 16 monetary units; Held – the “maximum” regulated legal costs for a medical dispute does not represent the mandatory amount recoverable for legal costs; section 8.10 specifies an entitlement to “reasonable and necessary” legal costs; determined on the evidence that reasonable and necessary legal costs total $600 plus GST. |
DETERMINATIONS MADE: | CERTIFICATE 1. The reviewable decision is set aside. 2. The amount of the claimant’s costs assessed in accordance with the Motor Accident Injuries Act 2017 is $600 plus GST. |
STATEMENT OF REASONS
INTRODUCTION
The subject dispute relates to a claim for legal costs arising from an application lodged with the Personal Injury Commission (Commission) for assessment of a dispute as to whether the injuries caused by the motor accident are threshold injury for the purposes of the Motor Accident Injuries Act2017 (MAI Act).
That dispute proceeded to assessment as a medical assessment matter. Following the determination, the claimant’s legal representatives forwarded a tax invoice dated
19 September 2024 to AAI Limited t/as AAMI (the insurer) for 16 monetary units ($2,111.30 inclusive of GST) and disbursements.
The legal representatives of the insurer forwarded a letter dated 14 November 2024 rejected payment of the legal fees and instead applied their own assessment of legal costs, being a proposal of 8 monetary units, in the sum of $956.68.
I held a teleconference with the parties on 11 February 2025 wherein both parties confirmed that no further information/documentation is to be relied upon and it was appropriate that I determine the matter on the papers.
LEGISLATIVE FRAMEWORK
The dispute that gives rise to the claim for legal costs is a medical assessment matter under Schedule 2(2)(e) of the MAI Act.
The dispute is deemed a merit review matter under Schedule 2(1)(aa) of the MAI Act which specifies the dispute to encompass “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.”
Section 8.10 of the MAI Act provides relevantly as follows:
“(1) A claimant for statutory benefits is (subject to this section) entitled to recover from the insurer against whom the claim is made the reasonable and necessary legal costs, and other costs and expenses, incurred by the claimant in connection with the claim. Other costs and expenses include the cost of medical and other tests and reports.
(2) The regulations may make provision for or with respect to fixing the maximum costs and expenses recoverable by a claimant under this section (including any matters for which no costs and expenses are recoverable from the insurer).
(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”
Schedule 1 cl 2(1) of the Motor Accident Injuries Regulation 2017 (Regulation) provides that:
“the maximum costs for legal services provided to a claimant or an insurer in connection with a medical assessment under Division 7.5 of the Act are 16 monetary units (to a maximum of 60 monetary units per claim).”
At all material times the value of a monetary unit was $119.96 pursuant to schedule 3 cl 2 of the Regulation.
DOCUMENTATION
I have considered the documentation provided by the parties in the application and the reply.
The documentation submitted by the parties is limited to submissions from both parties in addition to a copy of the invoice of the claimant’s legal representatives dated
19 September 2024 and the correspondence from the insurer’s legal representatives dated 9 November 2024.
I have also reviewed additional documentation for the purposes of arriving at this determination. In this regard, I have been provided with a copy of the subject application for determination of a medical dispute dated 31 January 2024 and the insurer’s reply date 19 June 2024. I have also considered the medical assessment of Medical Assessor Sidorov dated 14 October 2024 and the medical assessment of Medical Assessor Assem dated 23 August 2024.
In the letter rejecting the invoice, the lawyers stated, inter alia:
“With respect, the costs claimed by your office in relation to this dispute seem to be excessive in the context of this claim. In this regard, we note the following.
The sealed PIC application served by your office was only 63 pages long, including brief submissions of just 1.5 pages.
By way of analogy, as you are aware, the PIC has recently introduced a 500 page limit for application. This was because a lot of the applications being submitted contained material well in excess of this amount including the provision of lengthy submissions (given the complexity of the issues involved in those disputes).
With respect, it does not seem reasonable to assert that a solicitor can charge the maximum fee allowable (16 monetary units) for a 63-page application when the same would be payable for a far more complex and onerous application.
Furthermore, this dispute did not involve any expert evidence (or submissions requiring analysis their reports) and from the claimant’s own comments to the PIC Assessor Sidorov, his symptoms had resolved within 6 months of the subject accident.
…”
SUBMISSIONS
Claimant
In written submissions dated 9 January 2025, it is asserted that the insurer has no power under the MAI Act to propose what the legal costs should be in respect of a Commission application.
It is submitted that the maximum costs should be awarded and that the MAI Act and Regulation do no specify “…that there is any other amount to be awarded for legal costs, other than 16 monetary units.”
It is submitted the MAI Act and Regulation do not set out a power for the insurer to reject the claim for legal costs and/or reject any claim.
The submissions then refer to Workers Compensation Regulation 2016 that sets out maximum costs in compensation matters in schedule 6, Part 1. Reference is also made to the Independent Legal Assistance and Review Service (ILARS) funding guidelines in respect of professional fees in workers compensation matters.
Insurer
The insurer’s submissions refer to the decision of Merit Reviewer Ruschen in the matter of Taouk v AAI Limited t/as GIO [2022] NSWPICMR 60. Member Ruschen found that the maximum does not operate as a fixed sum payment and that only the reasonable and necessary costs are payable. To obtain the maximum it must be established that the reasonable costs reach or exceed the maximum under the Regulation.
The insurer also refers to the case of ABH v AAI Ltd t/as GIO [2021] NSWPICMR 16, where it was found that as to whether a party can recover the maximum recoverable amount is one of reasonableness.
It is submitted that regard ought to be given to the fact that the subject medical assessment dispute was only 63 pages long, which included brief submissions, and did not include any expert medical evidence.
The insurer asserts that it is not reasonable for a solicitor to charge the maximum allowable costs for an application such as that described.
It is also noted that the letter from the insurer’s representatives attached to the claimant’s application for costs was headed “without prejudice save as to costs” and represented a genuine attempt to resolve the dispute and should not be seen as an admission that such amount offered should be awarded.
FINDINGS
Simply put, I reject the claimant’s legal representative’s suggestion that the “maximum costs” somehow represent the mandatory amount that is recoverable in respect of a dispute.
Plainly, if it were the case that a set figure was to apply to all disputes the word “maximum” would not be required.
Furthermore, the claimant’s representatives have failed to grapple with the wording in
s 8.10 of the MAI Act, that specifies an entitlement to legal costs that are “reasonable and necessary”.
I agree with the insurer’s submissions that the medical dispute application that was lodged on behalf of the claimant was relatively basic. Whilst there are submissions included they are essentially a summary of the background and the injuries alleged. There is no analysis of medical evidence, and indeed no expert medical evidence is included.
Whether costs are “reasonable and necessary” is determined on a case by case basis (see: AAI Ltd v Moon [2020] NSWSC).
The claimant’s representatives have not provided an itemised schedule of costs. Thus, I am to make a decision on the material contained within the application and reply in this matter and the related medical dispute matter. It is noted that when seeking an award of costs, legal practitioners should provide an itemised schedule of costs claimed that sets out the tasks performed and the time spent on each.
I am satisfied that the claimant is entitled to recover legal costs in respect of the medical assessment matter, which involved some legal expertise. I am not satisfied that the claimant is entitled to recover the maximum regulated costs in circumstances where the application was relatively basic in its form, the submissions were brief and did not contain an analysis of medical evidence.
Having considered the relevant material, I determine that the claimant’s reasonable and necessary legal costs associated with the medical dispute is $600 plus GST.
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