Hana v AAI Ltd t/as AAMI
[2022] NSWPICMR 15
•28 February 2022
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | Hana v AAI Ltd t/as AAMI [2022] NSWPICMR 15 |
| CLAIMANT: | Jacklin Hana |
| INSURER: | AAI Ltd t/as AAMI |
| MERIT REVIEWER: | Ray Plibersek |
| DATE OF DECISION: | 28 February 2022 |
| CATCHWORDS: | MOTOR ACCIDENTS- Merit review; legal costs for minor injury dispute; physical and psychological injury; claim for maximum regulated legal costs; sections 8.3 and 8.10 Motor Accident Injuries Act 2017 (MAI Act); Held- claimant not awarded maximum regulated legal costs; entitlement to recover legal costs under section 8.10 of the MAI Act not dependent on whether or not the claimant was successful at medical assessment; no exceptional circumstances exist to justify additional legal costs. |
| DETERMINATIONS MADE: | The Insurer is to pay the Claimant’s reasonable and necessary legal costs assessed in accordance with the Motor Accident Injuries Act 2017 (the MAI Act) and the Motor Accident Injuries Regulation 2017 (the Regulations) in the amount of $1,400 plus GST totalling $1,540 in respect of the application for medical assessment (minor injury- physical and psychological injury). |
Issued under section 7.13(4) of the Motor Accident Injuries Act2017
BACKGROUND
There is a dispute between Jacklin Hana (the Claimant) and AAI Ltd t/as AAMI (the Insurer) about the payment of her legal costs for a medical assessment about her treatment and care.
The Claimant was injured in a motor vehicle accident on 19 January 2019. She told Medical Assessor Dr Home (A 5) that she was the driving a car that was stationary in a line of traffic on Kurrajong Rd, Preston. Her vehicle was struck from behind by a car and pushed into the car in front. The airbags of her car did not deploy and she was able to get out of the car without assistance.
After the accident the Claimant was able to get out of her car and collect her daughter from day care and go home, (A 5). She then went to Liverpool Hospital. At the hospital the Claimant reported injuries included: neck, lower back pain and headache. She was discharged the next day after treatment for her pain.
On 29 July 2019 the Insurer advised the Claimant that it considered that her injuries were ‘minor injuries’.
On 29 November 2019 the Insurer advised the Claimant of the outcome of the Insurer’s internal review as follows (A 4):
“Outcome of internal review
1. The decision of the GIO Claims Team has been affirmed.
2. Your injuries fall under the definition of a ‘minor injury’ as per the Motor Accident Injuries Act 2017 (NSW).
3. Your entitlement to weekly benefits and treatment expenses will cease at 26 weeks.
4. You will not be entitled to make a claim for damages.
5. You may be entitled to further treatment under Section 3.28(3) of the Motor Accident Injuries Act (NSW) 2017.”
The Claimant was medically assessed by Assessor Dr Alan Home on 27 March 2021 in regard to her physical injuries, (A 5). Dr Home assessed the Claimant and concluded that her injured cervical spine and lumbar spine were soft tissue injuries caused by the motor accident and were minor injuries as defined under the MAI Act. Dr Home also concluded that her right knee pain was not caused by the motor accident.
The Claimant was assessed by Assessor Dr Enrico Parmegiani on 14 October 2020 in regard to alleged psychological injury, (A 6). Dr Parmegiani diagnosed the Claimant with adjustment disorder with depressed mood which was caused by the motor accident. He concluded that it was a minor injury as defined under the MAI Act.
On 9 July 2020 the Claimant’s solicitors sent an invoice to the Insurer for legal costs for the preparation and subsequent lodgement of the DRS Application, (A 7). The invoice was described as being for the minor injury dispute. The invoice was for the Claimant’s solicitors professional fees of $1,660 plus GST totalling $1,826. It described the work done as follows:
“PROFESSIONAL FEES
TO OUR Professional Costs of representing the Claimant and Application to the Dispute Resolution Service, Motor Accidents Injuries Amendment Regulation 2017 (NSW) as detailed above.”
By email dated 17 November 2020, the Insurer rejected the payment of the invoice and made a counteroffer of $1,200 plus GST, (A 8).
By letter dated 19 November 2020, (A 9), the Claimant’s solicitors rejected the Insurer’s counteroffer and again requested full payment of their Party/Party Tax invoice dated 9 July 2020.
In her merit review application the Claimant maintains her claim for full legal costs for the preparation and conduct of the medical assessment over the minor injury dispute.
SUBMISSIONS
In its email dated 17 November 2020, the Insurer rejected the payment of the Claimant’s invoice and made a counteroffer of $1,200 plus GST, (A 8). The argument advanced by the Insurer was as follows:
“The reason we have recommended the above amount is because we have considered your time invested in arranging a client consultation, reviewing the internal review outcome, preparing and reviewing relevant medical documents and drafting a DRS application. We also note that you provided submissions articulating why you believed the Claimant’s injuries were non-minor. Further, you enclosed 18 annexures of documents in support of your DRS application.
However, we also note that the DRS application put forth was an unmeritorious application which was not successful at DRS. The Insurer notes that Assessor Alan Home reported the Claimant’s Cervical and Lumbar Spine injuries were minor and Assessor Parmegiani reported the Claimant’s Adjustment Disorder with depressed mood was also a minor injury.”
The Claimant’s solicitors set out the arguments in favour of the awarding of legal costs in their submissions dated 19 April 2021, (A 2). In summary, these arguments are as follows:
(a) the Insurer has misinterpreted section 8.10 of the MAI Act and the delegated legislation when making a determination the Claimant is not entitled to legal costs for an initial DRS Application when there is no DRS Certificate with an order for costs;
(b) under Schedule 1 clause 2 of the Regulations the payment of legal costs in the abovementioned scenario is permitted;
(c) a medical assessment under Division 7.5 of the MAI Act includes an assessment of a medical dispute about whether the accident is a minor injury in accordance with section 2(e) of Schedule 2 of the MAI Act;
(d) under clause 2 of Schedule 1 of the Regulations there is no express provision prohibiting the Claimant from being entitled to legal costs if the DRS Assessor makes a finding that the Claimant has suffered a ‘minor’ injury or makes any other finding adverse to the Claimant;
(e) the Claimant is entitled to the maximum costs for legal services in respect of the DRS application taking into consideration the work undertaken and that the legal cost incurred were reasonable and necessary, and
(f) the Personal Injury Commission (the Commission) must make a finding that the Claimant is entitled to legal costs of 16 monetary units from the Insurer in accordance with Regulation 2(1) of Schedule 1 of the Motor Accident Injuries Regulation 2017 (NSW) and section 8.10 of the MAI Act.
The Insurer submissions concerning legal costs are dated 13 May 2021, (R 1). In summary, the Insurer submissions are that:
(a) the Claimant has made an application pursuant to Schedule 2, clause 1 (aa) of the MAI Act regarding a merit review dispute concerning legal costs;
(b) the Claimant’s solicitors made a four-page submission for the medical dispute three pages of which were devoted to setting out the legislation;
(c) they failed to formulate any submissions with reference to the relevant medical evidence that would have altered the Insurer’s internal review decision;
(d) the Claimant’s solicitors did not provide any further medical evidence that wasn’t already available;
(e) the Insurer highlights that both medical assessment “minor injury” applications were unmeritorious and both assessments were unsuccessful at the Commission;
(f) there is no automatic entitlement to recover legal costs;
(g) consideration ought to be given to the amount of work completed and effort exerted by the Claimant’s solicitor;
(h) the Claimant’s solicitor has not demonstrated any genuine legal expertise beyond that of advising the Commission that the dispute was about a minor injury;
(i) the Insurer alleges that the Claimant’s solicitors strongest medical evidence in support of their application does not exist;
(j) no exceptional circumstances exist in this matter that would justify payment of legal costs incurred by the Claimant; there was no itemised schedule of work performed by the Claimant’s solicitors;
(k) it is inconsistent with the objects of the MAI Act to simply award the maximum amount of costs in the absence of evidence of exceptional circumstances, application or evidence of considerable work undertaken;
(l) in the absence of submissions which refer to medical evidence and lack of overall consideration put into the application, it would not be appropriate to award the maximum costs claimed, and
(m) it would only be appropriate to allow costs for the time it took to complete the Commission Application form and brief submissions the appropriate amount is $1,200 + GST.
RELEVANT STATUTORY PROVISIONS
Both parties in this dispute seem well aware of the statutory provisions relevant to this dispute as they have referred to those provisions in their submissions. Accordingly, I will not set out in detail the text of those provisions but will only refer to them briefly.
The objects of the MAI Act include, at sub-clause 1.3(2)(g), ‘to encourage the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes’. In the interpretation of a provision of the MAI Act or the Regulations, a construction that would promote the objects of the MAI Act or the provision is to be preferred to a construction that would not promote those objects (section 1.3(4)). In the exercise of a discretion conferred by a provision of the MAI Act or the Regulations, the person exercising the discretion must do so in the way that would best promote the objects of the MAI Act or of the provision concerned (section 1.3(5)).
The Claimant’s entitlement to recover legal costs is governed by Part 8 of the MAI Act. That Part applies to and in respect of legal costs payable on a party and party basis, on a solicitor and client basis or on any other basis, unless the Part otherwise provides, see section 8.2.
Section 8.3 of the MAI Act provides that Regulations may make provision for the fixing of maximum costs recoverable by Australian legal practitioners. Sub-section 8.3 (4) provides the recovery of legal costs is not allowed unless payment is permitted by the Regulations or the Commission.
Sub-section 8.10 (1) provides that a claimant for statutory benefits is (subject to the section) entitled to recover from the insurer ‘reasonable and necessary’ costs incurred by the claimant in connection with the claim. This is qualified by sub-section 8.10 (3) which provides that the recovery of costs is allowed if payment is permitted by the Regulations or the Commission. Then sub-section 8.10 (4) provides that the Commission can permit payment of legal costs incurred by the claimant if satisfied that the claimant is under a legal disability or exceptional circumstances exist.
Clause 22 of the of the Regulation provides that the costs set out in Schedule 1 are the maximum costs for legal services provided by an Australian legal practitioner to a claimant.
Clause 23 of the Regulation declares 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. (See also sub-section 8.3 (1) (c).)
Schedule 1 Part 1 sub-clause 2 (1) of the Regulation provides that the maximum claim for legal services in connection with a medical assessment under Division 7.5 are 16 monetary units up to a maximum of 60 monetary units per claim.
“Medical assessment matter” and “medical disputes” are defined in section 7.17 of the MAI Act as follows:
“7.17 Definitions
In this Part—
medical assessment means an assessment of a medical assessment matter under this Division.
medical dispute means—
(a) a dispute between a claimant and an insurer about a medical assessment matter, or
(b) an issue arising about a medical assessment matter in proceedings before a court for damages or in connection with the assessment of a claim by the Commission.”
“Medical assessment matter” is defined in sub-section 7.1(1) of the MAI Act to mean a matter declared by Schedule 2 to be a medical assessment matter for the purposes of Part 7.
In Schedule 2 the definition of “medical assessment matter” includes a dispute about whether the injury caused by the motor accident is a minor injury for the purposes of the MAI Act, Schedule 2, sub-clause 2(e) of the MAI Act.
In this case the dispute satisfies the definition of “medical assessment matter” because it is about whether or not the Claimant had sustained either a physical or a psychological injury which meets the definition of “minor injury”.
DETERMINATION
In this matter the Claimant seeks the payment of legal costs of $1,660 plus GST totalling $1,826. The area of dispute is that the Claimant submits that the medical assessment for the minor injury disputes about the physical and psychological injuries justified payment of the maximum amount of legal costs. The Insurer disagrees and submits that a lesser amount of $1,200 + GST should be awarded.
The application filed in relation to the medical matter was in connection with a dispute about a minor injury. A “minor injury” is declared by Schedule 2 sub-clause 2 (e) of the MAI Act to be a medical assessment matter.
The Claimant’s lawyers can only recover legal costs for legal services provided in relation to the medical assessment matters if payment of those costs is permitted by the Regulations or the Commission, sub-section 8.3(4).
The Claimant is not entitled to recover legal costs for legal services provided to a Claimant in connection with an application for internal review by the Insurer, clause 23 of the Regulation.
Success in the outcome of a dispute is not a pre-requisite to the Claimant accruing an entitlement to the payment of her legal costs in connection with the medical matters. In AAI Ltd v Moon [2020] NSWSC 714 (Moon) Wright J stated:
“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…”.
Payment of the Claimant’s legal costs in relation to the medical matters is permitted by Schedule 1 Part 1 sub-clause 2 (1) of the Regulations. The maximum costs for legal services provided to a claimant 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). ‘Medical assessment’ means an assessment of a ‘medical assessment matter’ (section 7.17). ‘Medical assessment matter’ means a matter declared by Schedule 2 to be a medical assessment matter for the purposes of Part 7 (sub-section 7.1 (1)). Schedule 2 sub-clause 2(e) declares the minor injury dispute to be medical assessment matter. Together these provisions have the effect of allowing payment of the Claimant’s reasonable and necessary legal costs with respect to each medical assessment matter.
Based on the application of the relevant legislation above, the Claimant has an entitlement to the payment of her legal costs for the two minor injury disputes which are both a medical assessment matter.
Having found that there is an entitlement to legal costs in this case, the next question that arises is the amount of costs that should be awarded. Sub-section 8.10 (1) provides that a claimant for statutory benefits is entitled to recover from the insurer ‘reasonable and necessary’ costs incurred by the claimant in connection with the claim. In this case the Claimant’s solicitor claims professional fees of $1,660 (plus GST). The Claimant’s solicitors have not itemised the legal services provided or the time taken to perform those services. The only detail provided by in the Claimant’s solicitor’s is a tax invoice (A 7) which refers to professional services being for the minor injury dispute.
Apart from the invoice description above, there is little other detail about what material was prepared for the medical assessment application.
For the above reasons, I am of the view that the Claimant’s solicitors are entitled to legal costs in relation to the minor injuries dispute. I consider some legal costs should be allowed for the preparation and lodgement of the application for medical assessment (minor injuries dispute). It is open to me to permit any amount of costs up to the maximum amount.
The Claimant’s solicitors have provided a tax invoice dated 9 July 2020 regarding the costs claimed in respect of the application for medical assessment (minor injuries dispute). I note they have not provided an itemised schedule or made submissions stipulating how the costs claimed have been incurred.
When considering whether the costs claimed by the Claimant’s solicitors are reasonable and necessary in this matter, I consider that some costs are appropriate based on the level of work which appears to have been made for the medical assessment application. While it is not apparent what time and consideration was put into the application, I consider that an amount of legal costs should be allowed for the time that would have been expended on consulting with the Claimant, review of the documents, as well as consideration and preparation of the medical assessment application and submissions. I note that although there was one set of submissions prepared by the Claimant’s solicitors it resulted in two medical assessments. One medical assessment by Assessor Dr Alan Home dealt with the physical injuries of the cervical and lumbar spine and also the right knee. The other medical assessment by Assessor Dr Enrico Parmegiani concerned the psychological injury of an adjustment disorder with depressed mood. I have reviewed the Claimant’s solicitors submissions dated 20 December 2019. These submissions were brief but made numerous arguments relevant to a review of the medical evidence as it applied in the Claimant’s case. I also note these submissions addressed two sets of minor injury disputes being the physical and psychological injuries.
I note the Insurer’s submissions that the Claimant’s solicitors submissions were very brief and did not refer to any relevant medical evidence that would have altered the Insurer’s internal review decision. I also note, as submitted by the Insurer, that no additional medical evidence was submitted by the Claimant at the medical assessments. In its submissions the Insurer argued that legal costs should be reduced because both medical assessment “minor injury” applications were “unmeritorious” and both were unsuccessful.
Applying my discretion and experience, in this case I consider it appropriate to allow legal costs of $1,400 (plus GST) giving a total of $1,540.
I do not consider that the Claimant should be allowed the maximum legal costs claimed of $1,660 (plus GST). As noted above, the Claimant’s solicitors submissions were succinct but sufficient to put their client’s arguments to the medical assessors. The solicitors made one set of submissions but these submissions responded to two medical assessments about both physical and psychological minor injury disputes. It is for these reasons that I do not agree with the Insurer’s submissions and conclusion that the appropriate amount for legal costs in this case is $1,200 + GST. I also do not agree with the Insurer’s argument that an unsuccessful medical assessment application is a reason to reduce any award of legal costs. As stated by Wright J in Moons case, an entitlement to recover legal costs under section 8.10 of the MAI Act is not dependent on whether or not the claimant was successful at medical assessment, [at 82].
Accordingly, I allow costs in the amount of $1,400 (plus GST) in respect of the application for medical assessment regarding the minor injuries dispute.
Finally, sub-section 8.10(4)(b) of the MAI Act provides that the Commission can permit payment of legal costs if there are “exceptional circumstances” to justify payment of legal costs. The Claimant’s legal representatives have not applied for “exceptional circumstances” costs under this sub-section. In their written submissions the Insurer’s solicitors submitted that no exceptional circumstances exist to justify the payment of additional legal costs.
There were no submissions or material before me that supports a finding of exceptional circumstances to justify payment of legal costs in this application. I am not satisfied that the information submitted supports a finding of exceptional circumstances. Therefore, I find that legal costs are not recoverable for “exceptional circumstances”.
CONCLUSION
The Insurer is to pay the Claimant’s reasonable and necessary legal costs assessed in accordance with the MAI Act and the Regulations in the amount of $1,400 plus GST totalling $1,540 in respect of the application for medical assessment (minor injury).
Ray Plibersek
General Member and Merit Reviewer
Personal Injury Commission
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