Hector v QBE Insurance (Australia) Ltd
[2021] NSWPIC 99
•8 April 2021
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Hector v QBE Insurance (Australia) Ltd [2021] NSWPIC 99 |
| APPLICANT: | James Hector |
| RESPONDENT: | QBE Insurance (Australia) Ltd |
| MEMBER: | Ms Belinda Cassidy |
| DATE OF DECISION: | 8 April 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS- Claims assessment; settlement approval; riding his bicycle; lump sum damages claim; degree of impairment is 33%; neck injury with radiculopathy and three thoracic compression fractures; IT management; working in his usual capacity now; not returned to soccer; soccer was a big part of his life; currently aged 38; Held- satisfied the proposed settlement figure of $365,000 is an appropriate one. |
| DETERMINATIONS MADE: | The proposed settlement is approved in accordance with section 6.23(2)(b) of the Motor Accident Injuries Act 201. |
STATEMENT OF REASONS
INTRODUCTION
Mr James Hector was riding his bicycle to work on Collins Street Beaconsfield on 12 December 2018. At the intersection with Victoria Street a Hyundai collided with Mr Hector and his bicycle. Mr Hector was thrown from his bike and collided with a Subaru.
Mr Hector has made two claims against QBE, the third-party insurer of the Hyundai after that accident, a claim for statutory (income support and treatment) benefits and a claim for lump sum compensation or damages.
Mr Hector and QBE have agreed on a sum to settle the lump sum damages claim. Because Mr Hector does not have a lawyer representing him, his settlement must be approved in accordance with the relevant provisions of the Motor Accident Injuries Act2017 (the MAI Act).
LEGISLATIVE BACKGROUND
Preliminary matters
QBE referred Mr Hector’s claim to the Dispute Resolution Service (DRS), which was part of the State Insurance Regulatory Authority. The application was allocated to me for consideration and I held a teleconference with Mr Hector and MM of QBE on 7 April 2021.
The Personal Injury Commission (the PIC) was established on 1 March 2021 and the DRS was abolished by cl 3 of Part 2, Division 2, schedule 1 to the Personal Injury Commission Act 2020. I am a Member of the Motor Accidents Division of the PIC and cl 14B(1) of the Personal Injury Commission Regulation 2020 designates QBE’s application ‘pending proceedings’ and cl 14B(3) empowers me to determine those proceedings.
Because of the date of the accident, cl 14B(4)(c) provides that the MAI Act and the Motor Accident Guidelines (the MA Guidelines) continue to apply.
Approval of the settlement
Section 6.23 of the MAI Act provides the following restrictions on settling claims for damages:
(a) Unless a claimant has a whole person impairment of greater than 10%, the claim cannot be settled within two years.
Mr Hector does have a whole person impairment greater than 10% however more than two years has passed since the date of his accident in any event.
(b) The settlement must be approved by DRS and I am not to approve the settlement unless I am satisfied there is compliance with any of the requirements of the MAI Act or the MA Guidelines.
I will cover the issue of compliance with the Act and the Guidelines below.
Clause 7.294 of the Guidelines requires QBE to include in its application details of:
7.294.1 the amount of the proposed settlement and a breakdown of the amount allowed for each head of damage.
The insurer has provided me with a copy of an email sent to the Claimant on 18 February 2021 which provides a breakdown of the offer and an explanation of the various components of the offer which the Claimant has accepted.
7.294.2 the amount of any reductions in the proposed settlement.
QBE has indicated that the sum of $11,562.19 will be deducted (for past statutory benefits paid).
I queried with QBE’s representative whether there was an amount to be deducted for any relevant Medicare payback. MM confirmed that if there was any amount due to be paid to Medicare, it would be paid as part of Mr Hector’s statutory benefits claim and not as part of the damages claim. I have made it clear to the parties that the offer and my approval of the settlement is ‘exclusive’ of any such Medicare payment.
7.294.3 the amount of any advance payments made.
I have been advised none have been made.
7.294.4 the evidence, documents and materials relevant to an assessment of the proposed settlement figure.
I will outline the evidence below.
Clause 7.304 of the MA Guidelines, requires me to consider the following:
7.304.1 timeliness – the proposed settlement satisfies the timing requirements in the Act.
In this case, a Medical Assessor has determined that Mr Hector has a whole person impairment of greater than 10% (the degree of impairment is 33%), however the second anniversary of Mr Hector’s accident had passed when the settlement was referred for approval.
7.304.2 appropriateness – the proposed settlement is just, fair and reasonable and within the range of likely potential damages assessments for the claim were the matter to be assessed by a claims assessor, taking into account the nature and extent of the claim and the injuries, disabilities impairments and losses sustained by the claimant, and taking into account any proposed reductions or deductions in the proposed settlement.
This will be dealt with in my reasons below.
7.304.3 understanding – the claimant understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement.
I will also deal with this in my reasons below.
THE SETTLEMENT
QBE accepted liability for Mr Hector’s claim for statutory benefits and has paid treatment and care benefits to, or on behalf of Mr Hector although the quantum of those payments has not been provided to me.
QBE has accepted that Mr Hector had non-minor injuries and so he is entitled to treatment and care relating to his accident caused injuries for the rest of his life pursuant to Division 3.4 of the MAI Act. ‘Treatment’ is widely defined and includes medical treatment (including reviews by the Claimant’s GP and specialist and any surgery that may occur in the future), allied health treatment (including physiotherapy), medication (over the counter as well as prescribed) and domestic assistance or care that may be required if his condition should deteriorate.
Mr Hector made a claim for lump sum compensation or damages and QBE accepted liability for that claim and has made one offer which Mr Hector has accepted in the sum of $365,000.
REVIEW OF THE EVIDENCE
Treating medical evidence
The Claimant was taken to St Vincent’s Hospital by ambulance on 12 December 2018 and was discharged on 15 December 2018. Hospital notes reveal:
(a) Mr Hector was not knocked unconscious but was somewhat amnesic of the events.
(b) CT scans and MRI scans were conducted showing no damage to the spinal cord, fractures at C5, C6 and compression fractures from C7 – T4, and some anterolisthesis at C5/6.
(c) Mr Hector had normal sensation and power in his upper limbs and was treated conservatively.
(d) He was discharged home in a collar for follow up by a neurosurgeon.
The Insurer has not provided me with any further reports from anyone who has treated the Claimant and MM said she has not requested clinical records from the Claimant’s treating doctors.
Insurer’s medico-legal evidence
Dr Frank Machart, orthopaedic surgeon provided a report to the Insurer on 22 December 2020. He had been provided with a report from the Claimant’s treating neurosurgeon dated 14 January 2019, as well as the hospital’s discharge summary, a certificate of capacity, referral for physiotherapy and the MRI and CT scans.
The Claimant told Dr Machart he was hospitalised for five days, wore a collar for seven weeks, was followed up by Dr Fairhall and had physiotherapy.
Doctor Machart has a history of the Claimant working before the accident in a ‘desk job’ in IT management and that he was off work until February 2019. Dr Machart also took a history of Mr Hector’s difficulty doing housework for the first six months but that he is back to his pre-injury levels. The Claimant reported to Dr Machart that he has returned to pushbike riding, one of his pre-accident hobbies, but not soccer.
The Claimant reported current symptoms of stiffness and discomfort in the cervicothoracic region radiating into the left trapezius and top of the shoulder. Mr Hector told Dr Machart he was having physiotherapy every three weeks.
On examination Dr Machart observed neck movements restricted by about a quarter with neurological abnormality in the upper limb. There were no apparent abnormalities on examination of the thoracic spine. The Claimant was said to have a ‘small scar’ on the right ankle area. I have not been provided with a photograph of the scar but noting it is small and does not trouble the Claimant too much I do not believe I would be assisted by having a photograph.
Dr Machart diagnoses the neck injury with radiculopathy and the three thoracic compression fractures. He noted the Claimant had made a good recovery with minimal impact on his activities of daily living. He did say (at question 3) that ‘nerve injuries can be unpredictable in the healing’.
Dr Machart thought that the Claimant’s conservative treatment to date has been reasonable and that his physiotherapy can be tapered off over the next six months replaced by self-directed exercises. He thought no further interventional treatment was necessary.
Dr Machart records that Mr Hector was working at a his ‘usual capacity now’, was fit for his pre-injury duties, had returned to housework and was fit for those duties but noted the Claimant had not returned to soccer because of ‘heading a ball’.
Dr Machart assessed the Claimant’s cervical spine injury as DRE III (15%), his thoracic spine injury at DRE IV (20%) and that the scar attracted a 1% impairment rating making a combined total in accordance with the Guidelines of 33%.
Under the heading prognosis Dr Machart said this:
There is unlikely to be much change in is condition in the foreseeable future. In the long term there is likely to be spondylosis at the C5/6 level. This may or may not be significant in the future. It is unlikely that he will require additional treatment or surgical intervention. There is [an] outside possibility that he may require fusion at the C5/6 level. Reason is that there is spondylolisthesis. This may be cause for late degenerative changes, perhaps 15 or 20 years down the track.
Claimant’s evidence
The Claimant is currently aged 38, married with a nine-year-old child.
The Claimant gave evidence in a very straightforward manner. He articulated clearly the history of his accident and treatment, the impact of the accident and his concerns for the future.
The Claimant told me that after he was discharged from hospital that he had a follow up with Dr Fairhall in January 2019 and then March or April 2019. He has not seen him since. Mr Hector has a local GP, Dr Wong who has provided relevant certificates of capacity and who has referred him for physiotherapy. Mr Hector said he is still having physiotherapy, although the frequency has decreased and he has one or two more sessions left as part of currently approved program. He understands the plan is to give him exercises he can do at home.
I asked Mr Hector to confirm the areas of his body injured and he agreed that the main problem was his neck injury, that he had a thoracic spine injury and that he has a small scar over his right ankle. I asked him how the injuries affect him now and Mr Hector said he is nearing his pre-injury levels of mobility and feeling. He says he has some small pain and stiffness that he has not felt previously but that he has ways of dealing with it.
The Claimant said he has been in the same job as a manager in an IT company for over 16 years. He said his job involves mainly desk work and he is at his computer a lot. He said shortly after the accident he was not able to sit down but that as his treatment progressed and he continued to recover he was able to return to work and increase his hours. He said the Insurer funded a new chair as part of his rehabilitation program and while he has a sit/stand desk in his office he does not have one in his home where he has been required to work as a result of COVID. Mr Hector agreed that he was fairly flexible in being able to sit down and stand up and move around during the course of the day.
Mr Hector said that the company he works for is doing well albeit in a slightly more tenuous state and his position may therefore change. He receives a salary of $165,000 including superannuation and has had a small increase since the accident.
I asked Mr Hector whether the accident was affecting his work and he said at times it does but only to a mild degree in terms of some stiffness and pain that he did not have previously.
Mr Hector confirmed that apart from the time immediately after the accident he has had no time off work as a result of his accident related injuries.
He confirmed he has returned to all his pre-accident domestic and child-care duties.
Mr Hector said he had returned to bike riding which was one of the ways he kept fit. He rides once per week whereas before the accident he road to and from work more often.
Mr Hector said he had not gone back to soccer. Dr Fairhall said it was an unnecessary risk. While he would have no difficulty with most of the game it would be unwise to perform any ‘header’ type movements and for this reason Mr Hector has given up this sport. The Claimant explained in detail that this is a major disappointment to him. That he loved soccer and had been playing it since he was a child. He had been managing a senior side for 15 years. He played throughout the winter and in a five-a-side competition as well. He said soccer was a big part of his life.
Mr Hector said that the scar on his ankle does not bother him very much but it is visible.
I asked the Claimant whether he was satisfied that the Insurer’s offer of $15,000 for his past loss of earnings adequately reflected 100% of his net earnings since the date of the accident and he agreed it was. In terms of the future while he said Dr Fairhall had said it was likely he would experience early onset arthritis he was confident that he will remain able to work in the role he has, in the company he is currently working for or in a similar role.
Mr Hector advised that the Insurer’s offer that he was accepting was the first and only offer made by the Insurer. He said he had not wanted to obtain a lawyer because of bad experiences his wife and his father-in-law had in claims they had made.
SHOULD I APPROVE THE SETTLEMENT?
I am satisfied that Mr Hector is aware that his statutory benefits claim continues for life and that the Insurer is required to pay for any reasonable and necessary accident related:
(a) Medical (GP and specialist) follow up consultations and future surgery, if his injuries come to that.
(b) Medication (over the counter or prescription).
(c) Domestic assistance, care and rehabilitation which may be needed.
The amount of the settlement that I am asked to approve comprises the following:
(a) Non-economic loss $250,000
(b) Past loss of earnings $15,000
(c) Future loss of earning capacity $100,000
(d) Total $365,000
Non-economic loss
The Claimant is entitled to non-economic loss which is defined in the Act to mean pain and suffering, loss of amenities of life, loss of expectation of life and disfigurement.
There is no suggestion in the medical evidence that the Claimant’s life expectancy has been reduced because of his injuries. At the age of 38, the medium life expectancy tables based on data from the Australian Bureau of Statistics suggests the Claimant has a further 45 years to live with the impacts of the accident. While the effects of the accident are not significant at this stage, the length of time the Claimant is likely to experience them and the prospect of deterioration foreshadowed by Dr Machart is significant.
The Claimant has had to give up his favourite sport and a sport that he has been involved in for over 30 years. He says this is a great disappointment to him.
The Claimant has a small scar which he says bothers him.
I note the significant level of impairment (33%), the nature of the accident, the period in hospital and Mr Hector’s time in a collar.
I am satisfied that the sum of $250,000 is within the range of damages likely to be awarded if this matter had progressed to hearing.
Past loss of earnings
I am satisfied that the sum of $15,000 reflects the net earnings lost by the Claimant for five – six weeks he was off work after the accident and is within the range of damages likely to be awarded.
Future loss of earning capacity
I accept that the most likely future circumstances for Mr Hector, but for this accident and its injuries is that he will continue to work in the IT industry in a management or other role similar to that which he is currently engaged until the usual retirement age of 70.
I accept Mr Hector’s evidence that he is working with limited modifications and with little difficulty and that he has had two years without any time off. I note the opinion of Dr Machart suggests there is some chance of a deterioration of the injury over the next 15-20 years.
The sum proposed ($100,000) for future loss of earning capacity is what is usually termed a ‘buffer’ or ‘cushion’ for the possibility that the Claimant will suffer occasional losses as a result of his injuries such as days off work that he would otherwise not have had, additional time off work between jobs should he be required to look for work and possible early retirement should his injuries deteriorate over the next 15-20 years and should he be required to have surgery.
In Allianz Australia Insurance Ltd v Kerr (2012) 83 NSWLR 302 Justice McColl said at [30]:
There is a point … beyond which the selection of a figure for economic loss is so fraught with uncertainty that the preferred course is to award a lump sum as a “buffer”, without engaging in an artificial exercise of commencing with a precise figure, and reducing it by a precise percentage.
It is certainly clear to me that the Claimant has had no recent loss of earnings and that a buffer approach to the assessment of future loss of earnings is appropriate. Bearing in mind the age of the Claimant (38) and the length of his working life (which could be 32 more years) I think a buffer of the size offered by the Insurer and agreed by the Claimant is acceptable and within the range likely to be awarded.
CONCLUSION
Having spoken with the Claimant I am satisfied that the Claimant:
(a) Accepts he could negotiate with the Insurer but has chosen to settle the matter on the basis of the only offer made by the Insurer.
(b) Is aware he can seek legal advice but that he does not wish to do so.
(c) Understands the binding nature of the settlement and this approval and that he may not be able to make a further claim for damages in the future.
(d) Understands what the Insurer will be deducting from the settlement.
(e) Accepts that the amount for future loss of earning capacity reflects an amount which covers the possible loss of earnings in the future should his injuries deteriorate and cause him to take time off work, seek alternative employment or retire early.
The Insurer has confirmed that the Claimant will not be out of pocket for any amount that has to be repaid to Medicare.
I am therefore satisfied that the proposed settlement figure of $350,000 is an appropriate one and that it complies with the requirements of clause 7.304.2 of the Guidelines, in that it is
… just, fair and reasonable and within the range of likely potential damages assessment for the claim were the matter to be assessed by a [member], taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the claimant, and taking into account any proposed reductions or deductions in the proposed settlement.
Accordingly, pursuant to section 6.23(2)(b) of the MAI Actthe proposed settlement of the Claimant’s claim for damages is approved.
Belinda Cassidy
Member (Motor Accidents Division)
Personal Injury Commission
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