Chowdhury v AAI Limited t/as GIO
[2025] NSWPIC 135
•3 April 2025
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Chowdhury v AAI Limited t/as GIO [2025] NSWPIC 135 |
| CLAIMANT: | Md Alamgir Chowdhury |
| INSURER: | AAI Limited t/as GIO |
| MEMBER: | Maurice Castagnet |
| DATE OF DECISION: | 3 April 2025 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; miscellaneous claims assessment; whether motor accident caused mostly or wholly by the fault of the claimant; sections 3.11 and 3.28; collision occurred when claimant attempted to change lanes; whether insured driver was travelling at a speed that was unsafe in the circumstances; whether the claimant indicated its intention to change lanes without giving insured driver sufficient time to react; claimant’s costs beyond the regulated amount permitted under section 8.10(4); payment of insurer’s solicitor and client costs permitted beyond the regulated amount under section 8.3(4); Held – motor accident was not caused wholly or mostly by the fault of the claimant. |
| DETERMINATIONS MADE: | CERTIFICATE Issued under s 7.36(4) of the Motor Accident Injuries Act2017 Determination 1. For the purposes of s 3.11 the motor accident was not caused wholly or mostly by the fault of the claimant. 2. For the purposes of s 3.28 the motor accident was not caused wholly or mostly by the fault of the claimant. 3. Pursuant to s 8.10(4)(b) the Commission permits payment of the claimant’s reasonable and necessary legal costs incurred in relation to the claim, the amount of such costs to be agreed with the insurer. Should the parties fail to reach agreement as to the amount of the costs, the claimant is at liberty to apply for an assessment of costs by the Commission by filing an application for assessment under Schedule 2, cl (1) (aa). 4. Pursuant to s 8.3(4) the Commission permits the insurer to pay its solicitor and client legal costs reasonably incurred in relation to the claim, noting that the insurer’s solicitors are not entitled to recover costs for a legal service or matter that a court or costs assessor determines were unreasonably incurred. A brief statement of my reasons for this determination is attached to this certificate. |
STATEMENT OF REASONS
INTRODUCTION
These proceedings concern a Miscellaneous Claim assessment under Schedule 2, cls (3)(d) and (e) of the Motor Accident Injuries Act 2017 (the MAI Act).
The claimant, MD Alamgir Chowdhury, seeks a review of the insurer’s decision made under ss 3.11 and 3.28 of the MAI Act to the effect that the claimant was wholly or mostly at fault for the motor accident.
BACKGROUND
Just before 4.00pm on Saturday 12 November 2022, the claimant was driving his Toyota Landcruiser in the centre lane (of two lanes) on West Botany Street, Banksia in a northerly direction. At about the same time, a 2021 Ford Ranger (insured by GIO) was travelling in the same direction in the kerb lane. A collision occurred between the two vehicles in circumstances where there was an attempt by the claimant to change lanes from the centre lane to the kerb lane.
The claimant claimed that he sustained injuries in the motor accident. On 16 December 2022, he made an application to the insurer for payment of statutory benefits.
The insurer accepted liability for the claim and made payment of those benefits for the first 26 weeks.
On 19 April 2023, the insurer notified the claimant that it declined liability for any further payment on the basis that the claimant was wholly at fault in the accident. Following an internal review on 4 May 2023, the insurer maintained its original position.
To resolve the dispute, on 5 May 2023, the claimant made an application to the Personal Injury Commission (Commission). The matter was referred to me for determination.
PROCEDURAL BACKGROUND
I conducted several teleconferences with the parties to explore the extent of, and the filing of evidence and to establish the number of potential witnesses that may be available to give evidence.
The matter was then listed for an assessment conference on 2 May 2024.
In her statement to the insurer’s investigator, Constable Clare Matheson of the NSW Police Force stated that she had interviewed both the claimant and the insured driver by body worn video (BWV) at the scene of the accident. At the commencement of the conference I indicated to the parties that it is apparent that the BWV interviews were not produced by the NSW Police Force under the Direction for Production issued by the Commission. The parties agreed that I should adjourn the assessment conference to allow the NSW Police Force more time to comply with the direction for production.
The matter was relisted for an assessment conference on 2 July 2024.
On this occasion, it was again established that the BWVs were not produced by the NSW Police Force in time for the assessment conference despite several requests by the Commission to the NSW Police Force to comply with the direction for production.
Given that witnesses were in attendance, the parties agreed that the assessment conference should proceed. It was also agreed that when the BWV interviews were eventually produced and viewed by the parties, they could either make written submissions on the new evidence or request that the assessment conference to be resumed if either party form the view that witnesses need to be recalled for questioning.
On 20 August 2024, the NSW Police Force produced a BWV interview with the insured driver and a rear dashcam footage of the accident obtained from a witness who was driving behind the insured driver. (The front dashcam footage of the accident obtained from that witness was already in evidence). No BWV interview with the claimant was produced.
On 11 September 2024, the insurer made written submissions on the new evidence. The claimant did not make any submissions.
On 13 December 2024, I conducted a further teleconference with the parties to discuss the non-production of the BWV interview with the claimant. On this occasion Mr Livers submitted that his instructions were that the claimant does no recall being informed by the NSW Police Force that his interview was being recorded via a BWV. Both parties confirmed that I could proceed to determine the matter on the available evidence.
DOCUMENTS CONSIDERED
The material filed by the parties included statements from the claimant, statements from the insured driver, a statement from a witness who was travelling in the claimant’s vehicle as a passenger, a statement from a witness who was travelling in the insured driver’s vehicle as a passenger and video footages and police notebooks produced by the NSW Police Force.
I considered all the material filed by the parties and all the material produced by the NSW Police Force.
EVIDENCE
The claimant’s evidence
The claimant was interviewed by Constable Emma Whawell at the scene of the accident. According to her police notebook, the claimant stated:
“I came out of Tabott [sic] Street turning left onto West Botany [sic]. I was in the right lane. I put my indicator to change lanes into the left lane. I came into the left lane and I believed I had enough time and space. After I changed lanes he hit me in the back.”
According to the police notebook, the claimant stated that he was travelling about “45 or 50kmph” at the time of the collision and that he was completely in the left lane when the insured vehicle hit him.
In his application for personal injury benefits dated 15 December 2022 (claim form), the claimant described the circumstances of the accident as follows:
“I turned left from Tabrett street into West Botany St and merged into the right lane as the left lane was a parking lane. Using my left indicator, I slowed down to change into the left lane to park and after checking the car on the left lane was a safe distance away I began to merge. I heard a very loud honk behind me and my car got hit from behind and jolted forward from the impact, going over the curb [sic]…”
On 2 May 2024, the claimant made a signed statement for the purpose of these proceedings. The evidence in that statement may be relevantly summarised as follows:
(a) he turned left from Tabrett Street onto West Botany Street and merged into the right lane of the two lanes as the left lane was a parking lane;
(b) he was driving at around 40 to 50kmph within the speed limit of 60kmph;
(c) at a point on West Botany Street (between Tabrett Street and Lynwen Crescent), he turned on his left indicator, slowed down, checked the rear left lane through the “left-view” mirror and over his shoulder. He saw a car behind him that was a safe distance away. He began to merge into the left lane because he wanted to park;
(d) as he began to merge into the lane, the car behind him “honk very loud.” When he looked into the mirror again, the car “had accelerated” and was extremely close to his vehicle. He was then hit from behind, and
(e) after the accident, he saw that his vehicle was smashed in the back left side.
The claimant’s oral evidence given at the assessment conference may relevantly be summarised as follows:
(a) he had been travelling for about five to seven minutes from his home when the accident occurred. He was on his way to Arncliffe;
(b) when he was driving on West Botany Street, he wanted to stop and park his car because he was expecting a call from his wife. His phone was not ringing at the time that he decided to stop;
(c) his wife works at the airport and was due to finish work at 3.30pm. He was expecting a call from her so that they can go shopping. He was expecting her call around 4.00pm;
(d) on Mondays to Fridays, the left lane along West Botany Street is a “clearway”. On Saturdays, it is a parking lane;
(e) the speed limit on West Botany Street (at the time of the accident) was 60kmph. When he slowed down to change lanes to park, he slowed down to about 40-45kmph;
(f) before he started to go in the left lane, he looked in his mirrors on both sides. He saw the car behind him travelling in the left lane. It was a “clear distance and enough distance to park and slow down my car”;
(g) he believes that his car was about 40-50m away from the car behind. He does not understand “how he came close to me”. When the car was close to his, he heard a sound like a horn, and
(h) it was put to the claimant by the insurer’s counsel that when he decided to put his indicator on, he did it within a second of moving into the left lane. The claimant said that it was not within a second. He checked all cars “in front of me and behind me” and there was enough space for him to move into the left lane.
The insured driver’s evidence
The insured driver, Charlie Dib, was interviewed by Constable Clare Matheson at the scene of the accident. Mr Dib’s statement was recorded her police notebook and her BWV.
According to the police notebook, Mr Dib stated:
“I was driving north along West Botany Street in the left lane, when a Toyota in (sic) Grey colour driving alongside me driving in the same direction in the right lane, the driver tried to change lanes into mine and hit the right side of my car, pushing me further into the left lane. I had to nowhere to go and drove into a power pole.”
According to the police notebook, Mr Dib stated that he was travelling at 50kmph at the time of the collision.
According to the BWV recording, Mr Dib stated that:
(a) the claimant was alongside him in the right lane;
(b) the claimant just changed lanes in one second;
(c) the claimant tried to change into the left lane and hit the right side of his car and pushed his car into the power pole;
(d) at the time of the accident, he was doing “normal speed limit, 50”, and
(e) if it was not for the (power) pole “it would not have happened.”
On or about 13 March 2023, Mr Dib provided an unsigned statement to the insurer’s investigators. That evidence may be summarised as follows:
(a) he was driving a grey 2021 Ford Ranger utility in a northerly direction along West Botany, Banksia at about 3.50pm when the collision occurred;
(b) his partner, Nicole Assaad, was travelling as a front seat passenger. Their two children were travelling in the rear seats;
(c) the roadway had two lanes in either direction and the line markings were broken. At the time of the collision, he was travelling at about 55kmph, and
(d) in paragraph 23 of the statement, he stated:
“As I drove along the roadway I was looking directly ahead. I saw a vehicle travelling in the number two lane alongside my vehicle and it was grey Toyota four-wheel drive. That vehicle drove past my vehicle and then changed lanes into my lane. I do not know why that vehicle changed lanes. That vehicle cut me off. The Toyota then braked harshly and again I do not know why it braked. I then harshly braked I steered to the left to avoid a collision with the Toyota. The front offside corner of my vehicle then collided with the rear nearside of the Toyota. My vehicle has then left the roadway and then the front of my vehicle has then collided with a power pole on the footpath and then rolled. We were all trapped in the vehicle. I am not aware of the names of any witnesses to the accident.”
Mr Dib made a signed statement on 2 February 2024. In this document, Mr Dib said that he recalls that he gave a statement to the insurer’s investigator on 13 March 2023, but he was never asked to sign the statement.
Mr Dib said that he has since had the opportunity to review the statement and says that paragraph 23 contained an error because the investigator misunderstood what he said. The claimant’s vehicle did not drive past him before changing lanes and cutting him off. The claimant’s vehicle did not overtake his vehicle when it suddenly braked and merged into his lane. Mr Dib said that he does “not recall seeing an indicator”.
Mr Dib gave oral evidence at the assessment conference. That evidence may relevantly be summarised as follows:
(a) he was travelling in lane 1 which was the left lane. He was “driving normal, within the speed limit, 60 for this area”;
(b) when asked by the claimant’s solicitor whether he was speeding, Mr Dib repeated that he “was not speeding, just driving normal.” When asked to estimate his speed, Mr Dib said “up to 60km, 50-60km, can’t remember exactly, 100% within the limit”, and
(c) he did not see the claimant’s vehicle put on the indicator.
Other witnesses
The claimant’s daughter, Mahjabin Chowdhury, was travelling as a front seat passenger at the time of the accident. She made a signed statement on 2 May 2024 for the purpose of these proceedings. It seems that she recalled the circumstances of the accident in exactly the same terms as the claimant did in his statement of 2 May 2024.
In oral evidence, Ms Chowdhury said that they were on their way to pick up their mother or get something for her from the shops, but she was not entirely sure. She said that her father’s phone might have rung while they were travelling but his father did not pick up any call while driving.
Nicole Assaad made an unsigned statement to the insurer’s investigator on 13 March 2023. On 25 June 2024, Ms Assaad made a signed statement confirming that the contents of her statement made on 13 March 2023, was accurate.
In her statement of 13 March 2023, Ms Assaad stated that she was travelling as a front seat passenger in the insured vehicle. She was looking directly ahead when all of a sudden “there was a big bang” and her next recollection was waking up in St George Hospital.
Ms Assaad stated that she was not interviewed by the NSW Police Force.
Dashcam footage
I have reviewed two sets of dashcam footage produced by the NSW Police Force. The footage was recorded by a vehicle that was travelling in the same direction as the subject vehicles at the time of the accident. The footage captured images of the movement of the subject vehicles prior to the collision and images of the collision itself.
SUBMISSIONS
The insurer made written submissions to the Commission prior to and after the assessment conference. Neither party made oral submissions at the assessment conference.
The insurer says that based on the whole of the evidence, the insurer maintains its position that the claimant failed to keep a proper lookout and to accurately assess the traffic conditions prior to merging into the insured driver’s lane.
The insurer submits that there is no evidence to suggest negligence on the part of the insured driver, who by virtue of the lack of care exercised by the claimant in checking for vehicles prior to conducting a merge manoeuvre, was unable to take evasive action to avoid the collision.
The insurer reiterates that all drivers have a duty to other road users to take reasonable care. In the circumstances of this accident, it is the claimant who has failed to take reasonable care for the safety of the other driver on the road and through a lack of care and attention, is negligent in failing to take account of what is happening in the vicinity of his vehicle. The insurer relies on Manley v Alexander [2005] HCA 79 at page 12.
The insurer submits that the conclusion in this matter should be that the motor accident was caused mostly by the fault of the claimant.
The claimant did not make any submissions.
CONSIDERATION
The relevant legislation and legal principles
Part 3 of the MAI Act is concerned with the entitlement to statutory benefits and the circumstances in which they are payable in respect of death or injury resulting from a motor accident.
Section 3.1 of the MAI Act provides that the claimant as an injured person is entitled to payment of statutory benefits regardless of whether he was at fault in the motor accident.
On that basis, the claimant received payment of statutory benefits payments for treatment expenses from the insurer for a period of 26 weeks.
At the end of that period, in reliance on ss 3.11 and 3.28 of the MAI Act, the insurer ceased paying those benefits.
Sections 3.11(1)(a) and 3.28 (1)(a) of the MAI Act provide an injured person is not entitled to statutory benefits after 26 weeks if the accident was caused wholly or mostly by the fault of the injured person.[1]
[1] For motor accidents occurring on or after 1 April 2023, the period of 26 weeks has been amended to 52 weeks by the Motor Accident Injuries Amendment Act 2022.
Sections 3.11(2) and 3.28 (2) provide that a motor accident was caused mostly by the fault of a person if the contributory negligence of the person in relation to the motor accident was greater than 61%.
In this case, the insurer’s decision in dispute was that the claimant was wholly at fault in the motor accident although I note that the insurer’s submissions in reply to the claimant’s application in the proceedings is that the claimant was mostly at fault in the accident.
Section 1.4(1) of the MAI Act defines fault as negligence or any other tort.
In s 5 of the Civil Liability Act 2002 (Civil Liability Act), negligence is defined as meaning failure to exercise reasonable care and skill.
Pursuant to s 3B(2)(a) of the Civil Liability Act, Divisions 1-4 and 8 of Part 1A (Negligence) apply to motor accidents.
For the purpose of assessing breach of duty of care, s 5B(1) of the Civil Liability Act provides that a person is not negligent in failing to take precautions against a risk of harm unless: (a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), (b) the risk was not insignificant, and (c) in the circumstances, a reasonable person in the person's position would have taken those precautions.
Section 5B(2) provides that in determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things): (a) the probability that the harm would occur if care were not taken, (b) the likely seriousness of the harm, (c) the burden of taking precautions to avoid the risk of harm, and (d) the social utility of the activity that creates the risk of harm.
Legal principles – driver’s duty of care
The principles concerning the duty of care a driver owes to other road users, and relevant to breach of duty by reference to s 5B of the Civil Liability Act, were summarised by Meagher JA (Macfarlan and Emmett JJA agreeing) in Marien v Gardiner [2013] NSWCA 396 as follows (omitting citations):
"[33] The duty of the driver of a motor vehicle to users of the roadway, including pedestrians, is to take reasonable care for their safety having regard to all the circumstances of the case: per McHugh J in Vairy at [26]. Under the common law and the Civil Liability Act, the standard by which reasonable care is measured is an objective and impersonal one….
[34] The question whether there has been a breach of that duty is to be addressed prospectively and by reference to what a reasonable driver in the appellant's circumstances would have done, if anything, by way of response to any foreseeable risks of injury or sources of danger to other road users…. A person is not negligent in failing to take precautions against a risk of harm unless the risk was foreseeable, not insignificant and a reasonable person would have taken those precautions in those circumstances: s 5B(1).
[35] Whether reasonable care has been exercised is not determined by asking if different conduct could have produced a different outcome and avoided a collision or accident… The exercise of reasonable care requires, as the majority observed in Manley v Alexander at [11], 'reasonable attention to all that is happening on and near the roadway that may present a source of danger'. That in turn requires 'simultaneous attention to, and consideration of, a number of different features of what is already or may later come to be, ahead of the vehicle's path'.
[36] The driver is not required, however, to know or predict every event which happens in the vicinity of the vehicle so as to be able to take reasonable steps to react to such events. As Hodgson JA (Ipp JA and Gyles AJA agreeing) said in Hawthorne v Hillcoat [2008] NSWCA 340 at [47], the driver is only required to take reasonable steps to be in a position to know what is happening or might happen in the vicinity of the vehicle.
[37] Nor is the driver required to be in a position where he or she can react to everything which may happen in the vicinity of the vehicle. The driver is not required to travel at a speed which is within the 'limits of visibility and control' so as to be able to react to whatever ventures into the vehicle's path… Derrick v Cheung was such a case. An unattended infant child emerged from between two parked cars and darted into the path of the vehicle. The driver was not negligent despite the fact that he was travelling at a speed which did not enable him, upon seeing the child, to avoid the collision."
(Emphasis added)
Discussion
In his interview with the NSW Police Force at the scene of the accident, in his claim form, in his statement filed in these proceedings and in oral evidence, the claimant was consistent in his evidence as to the following matters:
(a) the accident occurred at about 4.00pm on West Botany Street Banksia shortly after he turned left in a northerly direction onto West Botany Street;
(b) after he made his left-hand turn, he proceeded to drive in the middle lane;
(c) the left lane becomes a parking lane outside peak hour on weekends;
(d) he had slowed down and was driving at between 40 to 50kmph at the time the accident occurred;
(e) he had slowed down as he intended to stop and park in the left lane;
(f) he had seen the insured driver’s vehicle travelling behind him in the left lane prior to the collision through his left rear-view mirror;
(g) he activated his left indicator to change lanes and began to merge into the left lane;
(h) prior to the collision, he heard the sound of a horn, and
(i) the impact of the collision was to the left rear corner of his vehicle.
I accept the claimant’s evidence in regard to the above matters.
According to the evidence recorded by Constable Emma Whawell, the claimant stated that his vehicle was completely in the left lane when the collision occurred. Having viewed the dashcam footage of the vehicle that was travelling behind the claimant and the insured driver at the time of the collision, I do not accept the claimant’s evidence in that regard. I find that at the time of the collision, the claimant’s vehicle was about halfway in the left lane.
I accept the insured driver’s evidence that prior to the collision, he was travelling in the left lane behind the claimant’s vehicle which was in the centre lane. I accept his evidence that the impact of the collision was to the front left corner of his vehicle.
Having viewed the dashcam footage of the vehicle that was travelling behind the claimant and the insured driver at the time of the collision, I do not accept the insured driver’s evidence that prior to the collision, he was travelling at either 50, 55 or the speed limit of 60kmph. He appears to increase his speed to overtake the vehicle in front of him. As he does so, the claimant’s vehicle’s left indicator begins to operate and that vehicle’s brake lights come on. Although the insured driver’s brake lights can be seen, the vehicle does not appear to slow significantly before the collision. Whether or not the insured driver was driving over the speed limit, he was travelling at a speed that was unsafe in the circumstances.
In Manley v Alexander [2005] HCA 79 at [11]‑[12], the plurality Gummow, Kirby and Hayne JJ stated the duty of riders and drivers on public roads as follows:
“…driving requires reasonable attention to all that is happening on and near the roadway that may present a source of danger. And much more often than not, that will require simultaneous attention to, and consideration of, a number of different features of what is already, or may later come to be, ahead of the vehicle’s path…the reasonable care that a driver must exercise when driving a vehicle on the road requires that the driver control the speed and direction of the vehicle in such a way that the driver may know what is happening in the vicinity of the vehicle in time to take reasonable steps to react to those events.”
I find that both drivers were at fault. The insured driver was at fault by travelling too fast while attempting to overtake a vehicle on its right. The claimant was at fault in slowing down and not indicating its intention to move to its left in sufficient time for vehicles travelling behind it to react. I consider that the respective drivers share roughly equal responsibility for the accident. I do not need to determine the precise contribution that each driver made other than to find that the claimant’s responsibility for the accident was not greater than 61%.
It follows that for the purposes of ss 3.11 and 3.28 of the MAI Act, I find that the claimant was not wholly or mostly at fault for the motor accident.
COSTS
Both parties make an application for the recovery of their legal costs beyond the maximum amount allowed by the Motor Accident Injuries Regulation 2017 (the Regulations).
In this case, where there have been two miscellaneous claims assessment matters in dispute, the maximum regulated costs for legal services provided to the claimant and the insurer in connection with those matters are $3,984 plus GST[2] (the regulated amount).
[2] Schedule 1, Part 1 Regulation 3 and Schedule 3 of the Regulations.
Part 8 of the MAI Act governs the award of legal costs in motor accident matters and applies to legal costs payable on a party and party basis, on a solicitor and client basis or on any other basis.[3] The expression, ‘legal costs’, includes amounts payable to a law practice as well as other items that may be charged (such as disbursements) but does not include interest.[4]
Claimant’s application
[3] Sections 8.2 of the MAI Act.
[4] Sections 8.1 of the MAI Act.
Although he was invited to do so, the claimant did not make any submissions in support of his application.
Nevertheless, it is apparent that the determination of the claimant’s application is governed by the provisions of s 8.10 of the MAI Act, which deals specifically with the recovery of costs incurred by a claimant in a claim for statutory benefits.
The relevant provisions of s 8.10 are:
“(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) ...
(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.
(5) …”
To be “exceptional circumstances”, the circumstances must be unusual or out of the ordinary whether as a result of qualitative or quantitative factors. The case need not be one that is unique, unprecedented, or very rare. The question is determined on the basis of the facts of the individual case: San v Rumble (No 2) [2007] NSWCA 259 at [67]. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional: Ho v Professional Services Review Committee No 295 [2007] FCA 388 at [26].
Considering in this case, the following matters:
(a) the nature of the factual circumstances in dispute;
(b) the requirement to issue a direction for production to the NSW Police Force for further material and to deal with such material;
(c) the late consideration of BWV and dashcam footages;
(d) the requirement for the claimant, insured driver and other lay witnesses to attend the assessment conference for questioning;
(e) the need to conduct the hearing of the matter in two assessment conferences, and
(f) it was a matter in which it was reasonable for either party to brief junior counsel,
I consider that exceptional circumstances exist for the Commission to permit payment the claimant’s reasonable and necessary legal costs beyond the regulated amount.
Pursuant to s 8.10(4)(b) of the MAI Act, I permit the payment of the claimant's reasonable and necessary legal costs incurred by the claimant in connection with the claim.
I note that the amount of the legal costs to be paid to the claimant is determined by agreement with the insurer, failing such agreement, the amount recoverable by the claimant is determined by an assessment by the Commission. This may be done by the claimant by filing an application for assessment under Schedule 2, cl (1) (aa) of the MAI Act.
The insurer’s application
The insurer submits that its application for legal costs beyond the regulated amount is founded upon the provisions of s 8.3(4) of the MAI Act.
The insurer submits that the s 8.3(4) bestows upon the Commission the power to enable a legal practitioner to be paid for legal services in excess of the regulated amount.
Section 8.3(4) provides that an Australian legal practitioner is not entitled to be paid or recover legal costs for any legal services provided to a party to a claim for statutory benefits (whether the claimant or the insurer) in connection with the claim unless payment of those legal costs is permitted by the regulations or the Commission.
When considering the issue of the Commission permitting payment of legal costs beyond the regulated amount in AAI Ltd trading as GIO v Moon [2020] NSWSC 714, (Moon) Wright J made the following observations in regard to s 8.3(4):
“127 … There is no limitation in s 8.3(4) on the ability of the DRS [5] to permit payment, whether by reference to the maximum costs fixed by the regulations or otherwise. The only effective limit on the amount of costs that might be recovered where the payment is permitted by the DRS under s 8.3(4) is found in s 8.3(5) which provides:
“This section does not entitle an Australian legal practitioner to recover costs for a legal service or matter that a court or costs assessor determines were unreasonably incurred.”
128 As a result of the unconfined terms in which the DRS’s ability to permit payment under s 8.3(4) is stated and the fact that payment of those legal costs, to the extent that they do not exceed the maximum costs fixed by the regulations under s 8.3(1), is “permitted by the regulations”, it appears to me that the DRS has a discretion to permit payment of those legal costs where they exceed the maximum costs fixed by the regulations. Were it otherwise, the words “unless payment of those legal costs is permitted by … the Dispute Resolution Service” would be otiose and superfluous.”
[5] The Commission’s predecessor.
Considering the helpful observations of Wright J together with the provisions of s 8.3(4) of the MAI Act, I accept that the Commission is conferred with a general discretion to permit payment of legal costs beyond the regulated amount in a statutory benefits claim. It follows that if I exercise such discretion, the insurer is entitled to pay its own lawyers, its solicitor and client costs reasonably incurred in connection with the claim. That is because the payment or recovery of such costs is not constrained by the provisions of s 8.10 of the MAI Act which only applies to the payment or recovery of the claimant’s reasonable and necessary costs on a party and party basis from the insurer.
Section 8.4(5) also makes it clear that in case of a dispute between the insurer and its solicitors about the amount of the insurer’s solicitor and client costs to be recovered is not determined by the Commission, but by a court or costs assessor.
It also appears that the exercise of my discretion under s 8.3 (4) to permit payment of insurer’s solicitor and client costs beyond the regulated amount is not subject to a finding that I am satisfied that exceptional circumstances exist that justify the payment of the legal costs on that basis.
In Moon, Wright J considered that the discretion should be exercised in “appropriate cases”.[6] Given that I have found that exceptional circumstances exist that justify the payment of the legal costs incurred by the claimant in connection with the claim, I consider that this is an appropriate case to exercise my discretion to permit payment of the insurer’s solicitor and client costs beyond the regulated amount under s 8.3(4).
CONCLUSION
[6] At [140-141].
For the purposes of s 3.11 the motor accident was not caused wholly or mostly by the fault of the claimant.
For the purposes of s 3.28 the motor accident was not caused wholly or mostly by the fault of the claimant.
Pursuant to s 8.10(4)(b) the Commission permits payment of the claimant’s reasonable and necessary legal costs incurred in relation to the claim, the amount of such costs to be agreed with the insurer. Should the parties fail to reach agreement as to the amount of the costs, the claimant is at liberty to apply for an assessment of the costs by the Commission by filing an application for assessment under Schedule 2, cl (1) (aa).
Pursuant to s 8.3(4) the Commission permits the payment of the insurer’s solicitor and client legal costs reasonably incurred in relation to the claim, noting that the insurer’s solicitors are not entitled to recover costs for a legal service or matter that a court or costs assessor determines were unreasonably incurred.
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