Hafeez v AAI Ltd t/as AAMI
[2021] NSWPICMR 25
•28 June 2021
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | Hafeez v AAI Ltd t/as AAMI [2021] NSWPICMR 25 |
| APPLICANT: | Azeem Hafeez |
| RESPONDENT: | AAI Limited t/as AAMI |
| MERIT REVIEWER: | Terence O’Riain |
| DATE OF DECISION: | 28 June 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS- Merit review; whether the claimant’s costs and expenses are reasonable and necessary in accordance with section 8.10 of the Motor Accident Injuries Act 2017; cost of a medical report; minor injury dispute; at the Dispute Resolution Service; report addressed the disputed issue; radiculopathy; Held- report was a reasonable and necessary expense; reviewable decision set aside. |
| DETERMINATIONS MADE: | 1. The reviewable decision is set aside. 2. The amount of the Claimant’s costs assessed in accordance with the Act and Regulation is $1,245.12 plus GST in addition to the agreed costs and disbursements. |
BACKGROUND
There is a dispute between Mr Hafeez’s (the Claimant) lawyer and the Insurer about whether for the purposes of s 8.10[1] of the Act expenses incurred by the Claimant are reasonable and necessary.
[1] 8.10 Recovery of costs and expenses in relation to claims for statutory benefits
(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.
In accordance with Sch 2 cl1(aa) of the Act the costs dispute is a merit review matter.
The Regulation exempts disputes under s 8.10 of the Act from internal review.[2]
[2] Clause 10 of the Regulation.
I am satisfied that sufficient information has been supplied to the Commission in connection with the dispute and that the proceedings can be determined on the papers.
The Claimant seeks to recover the cost of a report in connection with a Minor Injury dispute that was the subject of a Medical Assessment concerning minor injury on 6 November 2020.
Medical Assessor Home issued a Medical Certificate resolving the dispute regarding the physical injuries.
The Insurer has agreed that legal costs as claimed with some disbursements are payable and declines to pay for Dr Eugene Gehr’s medico-legal report obtained after the Insurer’s internal review affirmed a minor injury decision in accordance with s 3.11 of the Act.
Dr Gehr’s fee is $1,245.12 plus GST.
The report was lodged with the Claimant’s application to the Personal Injury Commission (PIC).
SUBMISSIONS
Claimant’s submissions
The minor injury disputes outcomes are contained in Certificates of Assessor Alan Home dated 6 November 2020 [A10] and Assessor Doron Samuels dated 28 October 2020.
Both Assessors determined that the Claimant’s injuries fell within the definition of minor injury as defined in the Act and the Motor Accident Guidelines.
The Claimant seeks payment of an invoice in the sum of $3,933.73 including the cost of the disputed Dr Gehr report dated 7 February 2020.
The tax invoice dated 12 November 2020 is attached to this application.
On 11 March 2021, LB of Suncorp emailed the Claimant's solicitors agreeing with the professional costs incurred and the disbursements for Dr Singh’s report and clinical records of Workers Doctors.
The insurer disputed the disbursement for Independent Medico-legal Expert (IME) Dr Gehr’s report, which was annexed to the original application.
The insurer submits that this report is not payable as an IME was not required and the Claimant did not rely on it prior to the Insurer’s decision.
On 20 April 2020, the insurer emailed the Claimant advising that Dr Gehr’s report was "absolutely not reasonable and necessary, given that the matter was progressing to the Personal Injury Commission at that point".
The Claimant submits the disbursement was incurred on a reasonable and necessary basis.
Dr Gehr was asked to comment specifically on whether the Claimant had sustained any injuries that were not minor injuries, as provided by the Act[3] and Guidelines.
[3] Section 1.6 of the Act.
The Claimant submits it was reasonable and necessary to seek medical evidence addressing the specific matter in dispute to determine whether the injuries sustained by the Claimant fell within the definition of a non-minor injury.
Dr Gehr’s report addressed the disputed issue.
There was no other clinical evidence that addressed the specific definition of a minor injury in the Act.
The Claimant submits that obtaining Dr Gehr’s report was reasonable and necessary to achieve a fast and just resolution that considered all necessary medical evidence.
The Claimant submits that if the cost of such a report were not recoverable, it would discourage claimant's and/or their solicitors from properly investigating a claim and obtaining appropriate medical evidence to minimise disputes or support claims with evidence in the Dispute Resolution Service (as it then was).
The decision of whether an injury is minor is significant.
The insurer supplied no opinion from treating doctors or otherwise as to whether the Claimant's injuries fell within the minor injury definition.
The Insurer submitted in the reply to the minor injury application that the Claimant's GP, Dr Calvache-Rubio had diagnosed radiculopathy but not provided evidence of verifiable radiculopathy signs.
Dr Gehr’s report addressed that aspect, although it was not present when Dr Home assessed the Claimant.
The DRS application in respect of the minor injury dispute was lodged on 28 February 2020 and the DRS determined the dispute by 6 November 2020 which is more than eight months.
The Claimant submits that Dr Gehr’s report, could have resolved the dispute earlier if the insurer decided to accept Dr Gehr's evidence.
Dr Gehr’s report assisted the parties and the Assessor.
Assessor Home considered the report of Dr Gehr in detail and noted that although Dr Gehr’s findings of radiculopathy were not present on the day of the DRS assessment the report assisted the Medical Assessor.
The DRS assessment took place after the examination by Dr Gehr and it should not be assumed that the Claimant did not in fact have those features of radiculopathy earlier.
For the above reasons, the Claimant submits the disbursement related to the report of Dr Gehr was reasonable and necessary as well as the costs and disbursements previously agreed to.
Insurer’s submissions
The original minor injury DRS Application was lodged on 28 February 2020.
That dispute resolved with Medical Assessment Certificates from Assessors Alan Home and Doron Samuel, dated 6 November 2020 and 28 October 2020 respectively.
The Insurer agreed to make payment for the professional fees associated with the minor injury application – that is, $1,826 incl GST and the report of Dr Singh and clinical records of Workers Doctors (all together $671) as this evidence was served and relied on by the parties, assisting with the dispute.
Liability for IME Dr Eugene Gehr’s report at $1,245.12 is disputed.
Medical Assessor Alan Home certificate dated 6 November 2020 assessed the soft tissue injuries to the right knee, cervical spine, and lumbar spine as minor injuries. This was commensurate with the Insurer’s internal review outcome.
The Claimant did not advise the Insurer that Dr Gehr was going to provide a report prior to filing the DRS application.
No requests for a joint medico-legal examination were made, which the Insurer may have agreed to.
Dr Gehr’s report was unnecessary.
The Insurer states that the Claimant, following the internal review, only submitted Dr Gehr’s report to the Insurer prior to proceeding to the DRS to resolve the medical dispute.
The Claimant served the report with the DRS Application.
The DRS minor injury medical assessment made Dr Gehr’s report unnecessary.
Assessor Home, when noting Dr Gehr’s report, reported that Dr Gehr’s findings of radiculopathy that were not present.
The Insurer submits that Dr Gehr’s examination was incorrect and replete with errors.
The objects of the Act do not support obtaining unnecessary, expensive reports and incurring unnecessary costs, without first seeking the Insurer’s approval.
The Insurer submits it is unfair to impose unreasonable and unnecessary costs on the Insurer without affording the Insurer an opportunity to rely on the evidence obtained.
For the reasons set out above, the Insurer submits that the request for payment of the Independent Medico-legal Report of Dr Eugene Gehr in the amount of $1,245.12 is not reasonable and necessary in the circumstances, against the objects of the Act and should remain denied.
Reasons
In determining a merit review, according to s 7.13(1) of the 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).
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 I ought to set aside the reviewable decision and substitute my decision for the following reasons.
It is apparent that Dr Gehr’s report was reasonable and necessary because it was part of advising the Claimant on his chances of overturning the minor injury findings, essential to continuing access to statutory benefits and future damages as well supporting the case in the DRS, as it then was.
Dr Gehr’s report was obtained after the insurer's internal review affirmed the minor injury.
The Insurer does not refer to where the Act, Regulation or Guidelines oblige the Claimant to notify an Insurer if he or she is contemplating obtaining medicolegal evidence to support an application to the DRS or the PIC.
Notwithstanding that it could be good practice, the parties are not obliged to jointly instruct IMEs to facilitate further internal review, nor does the Regulation encourage a collaborative approach to dispute resolution prior to lodging a dispute application.
As the Regulation prohibits payment for legal services for internal review[4], unless an insurer offers to pay the whole report fee when jointly instructing an expert it is practical for claimants and their legal representatives to mitigate costs and disbursements during the internal review process.
[4] RegulationIt would be unfair on Claimants and their legal representatives to require them to incur legal expenses when regulations expressly forbid recovery of such.
The Insurer does not point to the legislation that states the requirement for the Insurer’s approval prior to incurring expenses.
Dr Gehr's findings on radiculopathy were not supported in the Medical Assessor’s certificate but an award of costs and disbursements in statutory claims disputes is not dependent on a successful outcome.[5]
[5] AAI Limited t/as GIO v Moon [2020] NSWSC (Moon) Wright J
[82] As to the general nature of the entitlement conferred by s 8.10, it can be noted that 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 that suggests that a claimant’s entitlement to recover legal costs under s 8.10 depends on whether or not the claimant was successful before the DRS.
Further, Dr Gehr assessed whole person impairment at 25%.
It was reasonable and necessary to have the report in that context because if the minor injury finding was overturned it was significant to the question of damages.[6]
[6] Section 4.4 of the Act.
The Insurer’s submission that Dr Gehr’s report was full of errors is not helpful to me because it is a subjective assessment, and not relevant to the question of whether the expense was reasonable and necessary.
“Whether legal costs are ‘reasonable and necessary’ is a matter that depends on the particular circumstances of each case…”[7]
[7] Moon at [105].
In this case the Claimant’s legal representatives incurred the cost of an IME when the internal review process had gone against the Claimant.
I find that Dr Gehr’s report was a reasonable and necessary expense because of:
(a) the Insurer’s position on minor injury;
(b) the need to advise the Claimant as to whether he could obtain a different outcome in the DRS;
(c) the need to advise whether it was worthwhile to proceed with a medical dispute on minor injury, and
(d) to support the case for minor injury in the DRS.
Conclusion
The reviewable decision is set aside.
The amount of the Claimant’s disbursements assessed in accordance with the Act and Motor Accident Injuries Regulation 2017 is $1,245.12 plus GST in addition to the agreed costs and disbursements to a total of $3,933.73 including GST.
Legislation and Guidelines
In making this decision, I have considered the following:
· The Application, Reply and supporting documentation;
· The Motor Accident Injuries Act 2017;
· Motor Accident Guidelines, and
· Motor Accident Injuries Regulation 2017.
Terence O'Riain
Merit Reviewer
Personal Injury Commission
23 Costs not payable for internal review (section 8.3 (1) (c))
It is declared that no costs are payable for legal services provided to a claimant or to an insurer in
connection with an application for internal review by the insurer under Part 7 of the Act.
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