Huang v AAI Limited t/as GIO
[2021] NSWPICMR 49
•5 November 2021
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | Huang v AAI Limited t/as GIO [2021] NSWPICMR 49 |
| CLAIMANT: | Xumin Huang |
| INSURER: | AAI Limited t/as GIO |
| MERIT REVIEWER: | Terence O'Riain |
| DATE OF DECISION: | 5 November 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS- The reviewable decision is about whether for the purposes of section 8.10 of the Motor Accident Injuries Act 2017 (MAI 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 MAI Act; Motor Accident Injuries Act 2017 (MAI Act); Motor Accident Injuries Regulation 2017; Motor Accident Guidelines 2017; costs; reasonable and necessary costs; motor vehicle accident; statutory benefits; treatment dispute; medical assessment; section 3.27 of the MAI Act; unreasonable denial of liability; costs uplift; regulated costs; Personal Injury Commission Regulation 2020; on the papers; merit review; correct and preferable; Held – the reviewable decision is set aside; no award of costs under section 6.21 of the MAI Act; finding of exceptional circumstances in accordance with section 8.10(4)(b) of the MAI Act in respect of this application and awards $471 inclusive of GST to the claimant for this application. |
| DETERMINATIONS MADE: | The reviewable decision is about whether for the purposes of section 8.10 of the Motor Accident Injuries Act 2017 Mr Huang's legal costs and expenses are reasonable and necessary, and is therefore a merit review matter under Schedule 2(1) (aa) of the Motor Accident Injuries Act 2017. 1. The reviewable decision is set aside and in substitute the decision is to pay 2. There is no award of costs under section 6.21 of the Motor Accident Injuries Act2017. 3. The Personal Injury Commission finds exceptional circumstances in accordance with section 8.10(4)(b) of the Motor Accident Injuries Act2017 in respect of this application and awards $471 inclusive of gst to the claimant for this application. |
Background
There is a dispute between Xumin Huang and the insurer about, whether for the purposes of section 8.10 of the Motor Accidents Injuries Act 2017 (the MAI Act) Mr Huang's costs and expenses for three separate treatment disputes are reasonable and necessary.
Mr Huang was injured in a motor vehicle accident on 24 April 2018.
An application for personal injury benefits (claim form) was lodged on 30 April 2018 and the insurer accepted liability under the MAI Act.
Mr Huang received statutory benefits including treatment.
Dr Eric Lim of Workers Doctors and other health care providers from that clinic treated Mr Huang.
There were three separate medical disputes in this claim as follows:
(a) dispute on whether any treatment and care provided to the injured person (Dr Eric Lim’s referral to Drs Brian Martin and Bisham Singh regarding treatment of the right lower limb) is reasonable and necessary in the circumstances or relates to the motor accident related injury for the purposes of section 3.24 (Entitlement to statutory benefits for treatment and care) of the MAI Act[1];
(b) dispute on whether any treatment and care provided to the injured person (further eight physiotherapy sessions requested in AHRR #4) is reasonable and necessary in the circumstances or relates to the motor accident related injury, and
(c) dispute on whether any treatment and care provided to the injured person (request for CT Ceretec perfusion Brain Scan) is reasonable and necessary in the circumstances or relates to the motor accident related injury.
[1] 3.24 Entitlement to statutory benefits for treatment and care
Preceding the resolution of these disputes on 17 April 2019 Mr Huang’s lawyers sent two invoices for $1,826.18 each for the physiotherapy sessions and CT scan disputes.
On 26 November 2019, a tax invoice at $1,826.18 was sent for the right foot treatment dispute.
These were the maximum amounts allowable under schedule 1 of the Motor Accident Injuries Regulation 2017 (the Regulation).
Each dispute was the subject of separate internal reviews, which each confirmed the insurer’s earlier decisions and subsequently were referred to the Dispute Resolution Service (DRS) Medical Assessment Service as follows:
(a) #10088475 regarding Dr Eric Lim’s referral to Drs Brian Martin and Bisham Singh regarding treatment of the right lower limb. This was finalised on 3 October 2019;
(b) #10114917 further eight physiotherapy sessions requested in AHRR #4, which was finalised on 3 February 2020, and
(c) #10114917 Dr Lee’s request for CT Ceretec perfusion Brain Scan, which was finalised on 13 March 2020.
Three separate Medical Assessors examined Mr Huang for each dispute and provided Medical Assessment Certificates (MAC).
None of these resolutions overturned the insurer’s previous decisions.
On 5 March 2020 the insurer declined to pay the legal fees sought in each invoice.
Jurisdiction
I am required to decide what the correct and preferable decision is in respect to this merit review and I am not bound by the rules of evidence and may inquire into any matter relevant to the issues in dispute in such manner as I see fit.
I am satisfied that sufficient information has been supplied to the Personal Injury Commission (the Commission) in connection with the proceedings, so that I may determine this matter without a formal hearing pursuant to section 52(3) of the Personal Injury Commission Act 2020 (the PIC Act) and the Procedural Direction PIC2.
The Commission was established on 1 March 2021 and the DRS was abolished by clause 3 of Part 2, Division 2, Schedule 1 to the PIC Act.
I am a merit reviewer and Member of the Motor Accidents Division of the Commission. Clause 14A (1) of the Personal Injury Commission Regulation 2020 designates the application “pre-establishment proceedings” and clause 14D empowers me to determine those proceedings.
Because of the date of the accident, clause 14D(3)(b) provides that the Act and the Motor Accident Guidelines 2017 (the Guidelines) continue to apply.
Submissions
Claimant’s submissions
The Regulation does not prohibit a legal practitioner issuing separate invoices for different “reasonable and necessary” medical treatment disputes application.
Mr Huang’s representatives refer for comity’s sake to Merit Reviewer Tajan Baba’s (as she then was) decision in AFK v Allianz Australia Insurance Limited [2019] NSWDRS MR 137.
In that decision the claimant issued two invoices for medical disputes arising on the minor injury status of the claimant’s psychological and physical conditions based on one application with one set of submissions.
Ms Baba noted that at Division 7.5 of the MAI Act that section 7.20 provides for referral of a “medical dispute” for medical assessment, which is defined at section 7.17 to mean a medical assessment matter under this Division (7.5).
Ms Baba wrote that maximum costs provided at clause 2(1), Schedule 1 of the Motor Accident Injuries Regulation 2017 (the Regulation) are related to costs connected with a “medical assessment”
Assessor Baba decided that,
“The maximum of 16 monetary units therefore does not relate to injuries or types of injuries or the number of applications made to the DRS, but rather the ‘medical dispute’ that has been referred to the DRS for a ‘medical assessment’. In this case, the medical dispute is regarding ‘minor injury’.”
25.In this case there are three medical disputes.
Mr Huang’s lawyers’ submit that each of the disputes is a single dispute item so three separate invoices should be paid.
Mr Huang seeks a direction that I apply the powers of section 7.42 and section 8.10(4)(b) to permit payment of legal costs in an amount in excess of the Regulation as exceptional circumstances exist that justify payment of Mr Huang’s legal costs, because the insurer has acted unreasonably in denying the costs sought and there was additional work done.
Mr Huang refers to at least 10 hours of legal work obtaining instructions, reviewing decisions, conducting investigations, researching and preparing for complex issues.
The claimant also refers to Assessor McTegg’s (as she then was) decision in AFH v AAI Limited trading as GIO [2019] NSW DRS CA 134 (AFH).
The assessor approved costs above the regulated maximum amount under Schedule 1, Part 1, schedule 3(1) of the Regulation.
I am also asked to consider a section 6.21 costs penalty for an increase of 25% costs to be awarded for being imposed for the unreasonable denial of liability.
In pursuant to clause 7.276 of the Guidelines and clause 1.3 of the MAI Act,
Mr Huang’s lawyers contend that an officer of DRS shall exercise a discretion that would best promote the objects of the Act and submit that these subclauses of clause 1.3 of the Act may be applicable:(a) to encourage early and appropriate treatment and care to achieve optimum recovery of persons from injuries sustained in motor accidents and to maximise their return to work or other activities, and
(b) to provide early and ongoing financial support for persons injured in motor accidents.
Insurer’s submissions
The insurer’s submissions rely generally on the proposition that the disputes referred to the DRS were unsuccessful due to lacking merit and lack of preparation.
In respect of the right foot dispute the insurer submits that no more than half the maximum costs ought to be awarded because:
(a) liability for the right foot injury had competing causative factors;
(b) the application lacked merit;
(c) the application did not succeed;
(d) there was difficulty obtaining relevant medical notes and scans from
China and they ought to have been provided with the original application;(e) the application was rudimentary and reflects the effort exerted;
(f) there was no attempt in the internal review request to argue against the insurer’s original decision;
(g) there is a medical panel review currently on foot for this dispute, which is being held up due to material still not being produced from China;
(h) I ought to approach the question of assessing costs in statutory benefits claims disputes as per the decision in Hodgson v Crane (2002) 55 NSWLR 199 (Hodgson), and
(i) I should decline to make any award for costs uplift.
The insurer does not refer me to the relevant part of Hodgson as it applies to costs.
In respect of the dispute regarding physiotherapy the insurer submits that the above considerations apply and that the costs of the treatment in dispute probably would be less than the maximum amount of costs.
The insurer submits that the appropriate amount of costs in such a case ought to be no more than 20% of the maximum statutory amount.
In respect of the CT scan dispute, the insurer refers to a lack of findings to support
Mr Huang’s allegations that he injured his brain in the accident and a lack of submissions with the request for internal review and the DRS application.The insurer submits in this case that the insurer had to provide additional information such as clinical notes to assist the DRS Approved Medical Specialist to produce the MAC.
The insurer submits that section 6.21 of the MAI Act is applicable to questions of negligence not statutory benefits.
Teleconference
On 10 September 2021 Mr Cheng and Mr Gillis attended for Mr Huang and the insurer respectively.
They reiterated their earlier submissions, with Mr Cheng raising the proposition that all of the disputes had to be referred to DRS as Mr Huang’s lawyers are not medically qualified and relied on the DRS approved doctors to resolve each dispute.
Mr Gillis raised the proposition that the integrity of the scheme requires a strict stance on avoiding awarding unnecessary costs.
Reasons
In determining a merit review, according to section 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 – section 7.13(2).
Pursuant to section 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 to the insurer for reconsideration in accordance with the merit reviewer’s direction.
Mr Huang’s lawyers claim that the insurer is liable to pay each invoice for legal services pursuant to clause 2(3) of Schedule 1 of the Regulations because there were three types of medical services disputed under Schedule 2, clause 2(b) of the Act, which declares a dispute about whether any treatment and care provided to the injured person is reasonable and necessary in the circumstances or relates to the motor accident related injury, for the purposes of section 3.24 is a “medical assessment matter”.
The insurer submits that due to the amount of work involved, merits of the application and the outcomes, that ultimately total costs ought to be limited to 90% of the maximum statutory costs for one medical assessment.
Clause 2(1), Schedule 1 of the Regulation provides:
“2 Medical disputes
(1) The maximum costs for legal services provided to a claimant or an insurer in connection with a medical assessment under Division 7.5 of the Act, as allowed by the claims assessor or court, are 16 monetary units (to a maximum of 60 monetary units per claim).”
Schedule 2, clause 2(b) of the MAI Act provides that a dispute about whether treatment or care to an injured person is reasonable and necessary is a “medical assessment matter”.
The maximum of 16 monetary units therefore does not relate to injuries or types of injuries or the number of applications made to the DRS, but rather the “medical dispute” that has been referred to the DRS for a “medical assessment”.
“Whether legal costs are ‘reasonable and necessary’ is a matter that depends on the particular circumstances of each case…”[2]
[2] AAI Limited t/as GIO v Moon [2020] NSWSC (Moon) Wright J at [105]
Based on my own legal experience and knowledge as a principal private legal practitioner in personal injury claims I am satisfied that Mr Huang’s lawyers would have been required to do significant distinct work to prepare three separate disputes.
What was reasonable and necessary to prepare each application would have included obtaining instructions, advising, obtaining and perusing the GP requests and insurer’s responses, completing the application forms and drafting submissions in support of the requests for the right foot treatment, CT scans and physiotherapy.
The bundle of documents that Mr Huang’s lawyers lodged after the teleconference marked AD2-AD1-Bundled Application included almost 1900 pages of material relevant to the three medical disputes. I scanned this material, and it was substantial and complex.
Mr Huang’s lawyers submitted that they are not qualified to give medical advice and it was apparent from that material that each dispute required specialised knowledge to resolve.
It was appropriate that the disputes were referred to DRS.
The insurer makes the point that because the outcomes were successful for the insurer that the disputes lacked merit, so the outcome ought to be a relevant consideration in respect of whether costs at the maximum regulated amounts are approved.
The issue of whether the outcome is successful is not a relevant factor for the purpose of section 8.10 of the MAI Act.[3]
[3] Moon at 82
Further the insurer is critical of the lack of material that Mr Huang’s lawyers were able to provide for the resolution of the internal reviews and DRS.
The insurer was in a position to provide material that the medical assessors were able to refer to including copies of clinical notes and scans.
That is appropriate and expected given the insurer’s resources and being authorised through the claim form to have access to treating doctors’ correspondence and notes.
The MAI Act contemplates that legal costs are to be provided as part of the scheme of the Act to ensure that parties are represented, and that resolution of disputes is facilitated.
I find that due to the necessity to refer these medical disputes to DRS, the complexity and amount of the material for each matter provided, that the maximum rate of regulated legal costs are justified in each matter. Note that these amounts are to be rounded down in accordance with the formula of Schedule 3 of the Regulation.
I do not find exceptional circumstances in the amount of work done so the costs cannot exceed the regulated amounts.
Finally, Mr Huang’s lawyers seek uplifts on costs for each medical dispute citing section 6.21 of the MAI Act, asserting that the insurer’s denials for each were unreasonable.
The insurer’s decisions that lead to these disputes were reasonable and arguable, as the DRS decision makers ultimately preferred the insurer’s decision in each case.
Further the provision is meant to deal with unreasonable denials of liability for negligence not statutory benefits.
I decline to award any uplift.
Costs for this application
70. There is a dispute between Xumin Huang and the insurer in respect of legal costs for this dispute under section 8.10(4)(b) of the MAI Act.
71. Costs for costs disputes under Schedule 2(1) (aa) of the MAI Act are not listed as permitted under the Regulation.
72. I decline to make a direction that I apply the powers of section 7.42 as that applies to miscellaneous assessments, not merit reviews.
73. I approve payment under section 8.10(4)(b) of legal costs as there were exceptional circumstances to justify payment of legal costs because the insurer's denial of three invoices for costs required made it necessary to do additional work to prepare this application.
74. In San v Rumble (No. 2) [2007] NSWCA 259 the Court of Appeal considered the term "exceptional case".
75. Campbell JA stated at [67]: in deciding whether it is an "exceptional case" within the meaning of section 153 (1), the court needs to find that the circumstances of the instant case are unusual or out of the ordinary, whether that unusualness or being out of the ordinary arises from qualitative or quantitative factors.
76. In this case it was exceptional due to quantity and circumstances as Mr Huang's lawyers had to produce the entire bundle of documents regarding the three medical disputes to support their cases in each dispute.
77. I decline however, to accept Mr Huang's lawyer's submission that I make an award of costs in this case in line with the decision and rates outlined in AFH.
78. AFH was a complex factual dispute that required multiple teleconferences, a contested hearing and the instruction of senior counsel and experts.
79. However, Mr Huang's application is a complex costs matter, as there was considerable work performed in submitting additional material including nearly 1,900 pages regarding each medical dispute, which exceptional for costs disputes for statutory benefits.
80. I award 4 units of the current monetary unit amount at $106.89 calculated as per schedule 3 of the Regulation being $471 including GST.
Conclusion
The reviewable decision is set aside and in substitute the decision is to pay
Mr Huang’s costs set out in each invoice to the maximum regulated amount in accordance with the Regulation at $1,826 including GST.There is no award of costs under section 6.21 of the MAI Act.
The Commission finds exceptional circumstances in accordance with section 8.10(4)(b) of the MAI Act in respect of this application and awards $471 inclusive of gst to the claimant for this application.
Legislation and Guidelines
In making this decision, I have considered the following:
· The application, reply and supporting documentation;
· MAI Act sections 7.13(4), 7.17, 7.20, 8.10, Schedule 2 clauses 1(aa) & 2(b);
· Personal Injury Commission Rules 2021;
· the Regulation Schedule 1 clause 2(1), and
· the Guidelines.
Terence O'Riain
Merit Reviewer
Personal Injury Commission
(1) An injured person is entitled to statutory benefits for the following expenses (treatment and care
expenses) incurred in connection with providing treatment and care for the injured person—
(a) the reasonable cost of treatment and care,
(b) reasonable and necessary travel and accommodation expenses incurred by the injured
person in order to obtain treatment and care for which statutory benefits are payable,
(c) if the injured person is under the age of 18 years or otherwise requires assistance to travel
for treatment and care, reasonable and necessary travel and accommodation expenses
incurred by a parent or other carer of the injured person in order to accompany the injured
person while treatment and care for which statutory benefits are payable is being provided.
(2) No statutory benefits are payable for the cost of treatment and care to the extent that the
treatment and care concerned was not reasonable and necessary in the circumstances or did not
relate to the injury resulting from the motor accident concerned.
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