Duong v AAI Limited t/as GIO
[2022] NSWPICMR 46
•12 August 2022
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | Duong v AAI Limited t/as GIO [2022] NSWPICMR 46 |
| CLAIMANT: | Thi Hau Duong |
| INSURER: | AAI Limited t/as GIO |
| MERIT REVIEWER: | Terence O'Riain |
| DATE OF DECISION: | 12 August 2022 |
| CATCHWORDS: | MOTOR ACCIDENTS - The reviewable decision is about whether for the purposes of section 8.10 of the Motor Accident Injuries Act 2017 (2017 Act) the claimant’s legal costs and expenses are reasonable and necessary and is therefore a merit review matter under Schedule 2(1) (aa) of the 2017 Act; Motor Accident Injuries Regulation 2017 and Personal Injury Commission Regulation 2020 considered; Held — the reviewable decision is set aside. |
| DETERMINATIONS MADE: | Issued under section 7.13(4) of the Motor Accident Injuries Act2017 The reviewable decision is about whether for the purposes of s 8.10 of the Motor Accident Injuries Act 2017 Ms Duong’s claim for legal costs and expenses is reasonable and necessary and is therefore a merit review matter under Schedule 2(1)(aa) of the Motor Accident Injuries Act 2017. The reviewable decision is set aside, and the insurer is to pay the claimant $1,660.16 + GST assessed in accordance with the Motor Accident Injuries Regulation 2017. |
BACKGROUND
There is a dispute between Ms Duong’s lawyer and the insurer about whether for the purposes of s 8.10[1] of the Motor Accident Injuries Act 2017 (the MAI Act) the claimant's costs and expenses are reasonable and necessary.
[1] 8.10 Recovery of costs and expenses in relation to claims for statutory benefitsThi Hau Duong was involved in a motor vehicle accident. As a result of the motor vehicle accident she has had chronic neck pain and back pain that has required treatment in the form of physiotherapy, Lyrica, Panadeine Forte and Voltaren. She has seen Dr McKechnie, a neurosurgeon who has recommended exercise physiology and hydrotherapy. She has also seen her general practitioner (GP), Dr Liang who has recommended further psychological sessions, in addition to 10 previous sessions.
The claimant made a claim for treatment and the insurer declined the claim. The insurer confirmed that decision in an internal review decision.
This is a dispute over a claim for professional costs for referring the insurer’s medical services decision to the Dispute Resolution Service (DRS), which preceded the Personal Injury Commission (the Commission).
I am satisfied sufficient information has been supplied to the Commission in connection with the dispute and the proceedings can be determined on the papers.
The claimant has made an application pursuant to Schedule 2, cl 1 (aa) of the MAI Act regarding a merit review dispute concerning legal costs.
Section 8.10 (3) of the MAI Act, entitles the claimant’s solicitors to recover legal costs in relation to a claim for statutory benefits if the Regulation or the Commission permits such costs. The Regulation exempts disputes under s 8.10 of the MAI Act from internal review.[2]
[2] Clause 10 of the Regulation
The claimant’s solicitor claims professional fees of $1,660.16 + GST (16 monetary units) in relation to the previous treatment and care dispute.
In addition the claimant seeks costs for the retainer and preparation for serving the claim notice. I note that the fees sought relate to part 2 of Schedule 1 of the regulation. That aspect of MAI Act costs relates to damages. Hence, that is not relevant to the medical assessment. Those costs will not be considered as part of this dispute.
The insurer offered professional costs of $207.52 + GST (2 monetary units) for the treatment and care application.
SUBMISSIONS
Claimant’s submissions
The minor injury and treatment disputes outcomes are contained in Dr Jonathan Herald's Medical Assessment – Minor Injury (Physical) & Treatment certificate dated
25 January 2021. It includes the minor injury status for six separate injuries and treatment and care for two treatment modalities.There were claimant's submissions, which gave a brief treatment history and expressed why the claimant would benefit from the treatment sought.
There was considerable documentation including clinical notes and medical certificates provided, which were listed over two pages. The tax invoice dated 11 May 2021 is attached to this application.[3]
[3] A1
The claimant submits the costs sought in that invoice were reasonable and necessary as well as the costs and disbursements previously agreed to.
Insurer’s submissions
The insurer insists the amount the insurer offered previously represents the claimant’s solicitors time and effort put into the application.
Upon consideration of the original Commission Application, dated 20 November 2019, the insurer notes the claimant’s solicitor relied upon information previously provided in their ‘Application for Internal Review’ dated 3 October 2019.
The insurer notes the submissions merely indicated the application was in relation to the ‘treatment and care’ dispute, listed subjective symptoms and stated “the cortisone injection” will be invaluable for her recovery.
The claimant’s solicitor failed to formulate any relevant submissions with reference to the medical evidence which could have altered the insurer’s denial letter.
Further, the insurer notes the claimant’s solicitor did not provide any further medical evidence, which wasn’t already available in support of the application.
Medical Assessor Jonathan Herald issued his Medical Assessment Certificate on
25 January 2021.Medical Assessor Herald determined the requested Ultrasound guided cortisone injection C4 treatment was not reasonable and necessary in the circumstances and will not improve the recovery of the injured person.
The insurer submits this outcome and reasons were near identical to the reasons for the denial provided within the insurer’s denial letter dated 27 September 2019, therefore application lacked merit and was unsuccessful.
The insurer submits whilst injured persons have a right to have a Medical Assessor determine a dispute, there is no automatic entitlement to recover legal costs, particularly the maximum amount (16 monetary units) of legal costs.
The insurer submits consideration ought to be given to the amount of work the claimant’s solicitor supplied.
The insurer submits there is little evidence to demonstrate the claimant’s solicitor has demonstrated any legal expertise beyond advising the Commission that the dispute was in relation to ‘treatment and care’.
The insurer notes the claimant’s solicitor did not sufficiently demonstrate any reasoning as to why the available evidence would alter the dispute outcome.
Notwithstanding the above, the insurer submits the claimant’s solicitor did not provide a schedule itemising the tasks for which the costs were incurred with respect to the application for medical assessment.
Further, the insurer notes the claimant’s solicitor did not make submissions regarding the tasks undertaken for the costs claimed in the invoice.
The insurer submits it is not in line with the objects of the MAI Act to award the maximum amount of costs in a medical dispute, or at all, in the absence of evidence of exceptional circumstances, application of legal expertise, or considerable work undertaken.
The insurer submits maximum costs may be awarded in circumstances where the legal representative has put significant and justified time and effort into the application. In this instance, there has been no identifiable effort exerted with respect to providing medical evidence and/or formulating arguments in support of their position.
Therefore, the insurer submits the claimant’s Application for Legal Costs ought to be assessed at $207.52 + GST (2 monetary units).
Reasons
Objects of the relevant Acts
Ms Duong’s claim is made under the provisions of the MAI Act; accordingly I will make the merit review decision in accordance with the Personal Injury Commission Act 2020 (the 2020 Act), the Commission's rules and any relevant provisions of the MAI Act.
The MAI Act objects are found at s 1.3(2), which addresses among other things "the early resolution of motor accident claims and the quick, cost-effective and just resolution of disputes” and “to provide early and ongoing financial support for persons injured in motor accidents".
Section 1.3(4) provides that when interpreting the provisions of the MAI Act, a construction that would promote the objects of the Act is to be preferred over one that would not.
Section 1.3(5) provides that when exercising an MAI Act conferred discretion, that discretion must be exercised in a way that would also promote the objects of the MAI Act.
The objects of the 2020 Act are set out in s 3 and include ensuring that the Commission’s decisions are timely, fair, consistent and of a high quality and that the Commission is enabled to decide matters justly, quickly, cost effectively and with as little formality as possible.
Section 4 of the 2020 Act echoes ss 1.3(4) and (5) of the MAI Act and requires interpretations of provisions that promote the objects of the 2020 Act and the exercise of legislatively conferred discretions in a way which promotes the objects of the 2020 Act.
Section 42(1) of the 2020 Act and the Commission rules contain the Commission’s ‘guiding principle’ which is that the Commission must facilitate “the just, quick and cost-effective resolution of the real issues in the proceedings”.
Section 42(2) requires me, as a Member of the Commission, as well as a Merit Reviewer, to give effect to the guiding principle when exercising any power given to me under the 2020 Act or the rules of when interpreting any provision of the 2020 Act or the rules.
The merit review on earning capacity is a fresh decision, and the decision to be made is on injury causation. I have noted the outcomes of the earlier conclusions regarding causation, and they provide guidance as to what must be considered.
Amount of weekly payments
In determining a merit review, according to s 7.13(1) of the MAI Act, I must decide what the "correct and preferable decision" should be, according to the material before me.
I am required to step into the shoes of the insurer and make my own decision on the merits of the dispute – s 7.13(2), based on the information provided rather than on identifying errors in the previous decisions.
Pursuant to s 7.13(3), as Merit Reviewer I may decide to:
· affirm the reviewable decision, or
· vary the reviewable decision, or
· set aside the reviewable decision and make a decision in substitution for the reviewable decision, or
· set aside the reviewable decision and remit the matter for reconsideration by the insurer in accordance with any direction made by the merit reviewer.
I am satisfied that sufficient information has been supplied to the Commission in connection with these proceedings, so I may determine this merit review without holding a conference or formal hearing (see s 52(3) of the 2020 Act) and can proceed on the papers in accordance with Procedural Direction PIC2.
In accordance with s 43 of the 2020 Act the rules of evidence do not bind my decision making, but I may inform myself on any matter in the manner I think appropriate and as the proper consideration of this matter permits.
I am satisfied I ought to set aside the reviewable decision and substitute a decision to allow 16 monetary units for legal services pursuant to Schedule 1, Part 1(1)(2) of the Motor Accident Injuries Regulation 2017 for the following reasons.
An award of costs in statutory claims disputes is not dependent on a successful outcome.[4] The application’s merit is normally not relevant.
[4] AAI Limited t/as GIO v Moon [2020] NSWSC (Moon) Wright JThe insurer insists the amount the insurer offered previously represents the claimant’s solicitors time and effort put into the application.
Despite the claimant’s solicitor not providing an itemised bill or a timesheet which recorded each attendance I may rely on my own experience as a legal service provider to accept as common knowledge that a claimant’s engagement with legal representation requires at least the following actions:
(a) an initial discussion between client and lawyer to confirm if there is merit in the claim;
(b) provide documentation, which allows the lawyer to form a view of the scope of work;
(c) identify anticipated disbursements and the engagement’s objectives so they are clearly defined before the claimant confirms instructions;
(d) correspond with the insurer;
(e) collate medical evidence, and
(f) the firm is required to explain its basis for charging, obtain instructions and make claims, which has occurred in this case, to the insurer.
The claimant, via the lawyer will prepare documents and submit them initially to the insurer, peruse the insurer’s denial, advise the claimant, obtain instructions then draft an application to the tribunal for resolution. This is all properly within the scope of legal services provided in a statutory claims dispute.
I am satisfied the claimant's lawyers had done the work based on the material contained in the application. This was reasonable and necessary to prepare the minor injury and treatment disputes applications. The regulation does not exclude work done before lodging an application as the insurer asserts.
The regulation does not provide for professional costs for work done prior to submitting a request for internal review, but if it becomes necessary to proceed to an assessment or medical dispute then the cost of work done initially is of utility in the dispute before the Commission.
The insurer submits it is not in line with the objects of the MAI Act to award the maximum amount of costs in a medical dispute, or at all, in the absence of evidence of exceptional circumstances, application of legal expertise, or considerable work undertaken.
The insurer’s submission that maximum costs may only be awarded in circumstances where the legal representative has put “significant and justified time and effort” into the application does not apply to the process required for injured persons engaging legal representation in statutory claims.
Before there is any identifiable effort exerted with respect to providing medical evidence and/or formulating arguments in support of a position, legal representatives perform considerable work to engage the claimant, advise, peruse documents, make claims and obtain instructions.
I note there are two pages listing clinical notes and certificates, which would have been perused and advised on before obtaining instructions to dispute the insurer’s decisions in the tribunal.
The regulation does not refer to folios or pages of submissions as the basis for awarding costs or to hours spent on work. It is event based costing.
The insurer’s submissions seeks that I read a requirement into the regulation that effectively allows that the costs payable may be taxed and reduced in accordance with what the decision maker discerns reflects a fair outcome.
It would discourage lawyers from providing legal services to claimants, if any work done prior to the commencement in the Commission could not be recovered or reduced based on arbitrary opinions of the work put into each matter.
This could have the effect of increasing disputation because the quality of the initial internal review application could be substandard if left solely to the claimant and therefore be less likely to resolve or create unjust outcomes.
In making this decision I am seeking to exercise my discretion to promote the objects of the MAI Act. The relevant object that I am seeking to promote is s 1.3 (2) (g)[5].
Costs
[5] …(g) to encourage the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes
There is no dispute between Thi Hau Duong and the insurer in respect to recovery legal costs under s 8.10 of the MAI Act in respect of this merit review and I am not satisfied Thi Hau Duong is entitled to the payment of legal costs.
Conclusion
The reviewable decision is set aside, and the insurer is to pay the claimant $1,660.16 + GST assessed in accordance with the Motor Accident Injuries Regulation 2017.
Legislation and Guidelines
In making this decision, I have considered the following:
· The application, reply and supporting documentation;
· the MAI Act, and
· Personal Injury Commission Rules 2021
· Motor Accident Injuries Regulation 2017
· 2020 Act
(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.
[82] As to the general nature of the entitlement conferred by s 8.10, it can be noted it is not similar to the awarding of costs in court proceedings. There is nothing in s 8.10 or any other provisions of the MAI Act suggests a claimant’s entitlement to recover legal costs under s 8.10 depends on whether or not the claimant was successful before the DRS (or the Commission)
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