Insurance Australia Limited t/as NRMA Insurance v BDO
[2023] NSWPIC 134
•29 March 2023
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | Insurance Australia Limited t/as NRMA Insurance v BDO [2023] NSWPIC 134 |
| Claimant: | BDO |
| insurer: | Insurance Australia Limited t/as NRMA Insurance |
| Member: | Elyse White |
| DATE OF DECISION: | 29 March 2023 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; damages claim; approval of a settlement under section 6.23; claimant self-represented; claimant involved in a multi nose to tail accident; neck and shoulder injuries; frozen shoulder diagnosed and arthroscopic capsular release performed with excellent results; worked for the Electoral Commission; initial total incapacity increasing hours to 50% capacity; gradual return to full time work earning substantially more than pre accident earnings; settlement offer included past loss of earnings of $126,294.62 plus future buffer of $43,333.54 for loss of earnings; Held – settlement approved; parties reminded of claimant's entitlement under sections 3.24 and 3.26; the claimant and the insurer have agreed to settle the claim for damages in the sum of $169,628.16; the proposed settlement is approved in accordance with section 6.23. |
| determinations made: | CERTIFICATE OF DETERMINATION Settlement approved in the sum of $169,628.16. The insurer is to receive a credit for $16,926.16 for paid weekly benefits paid to date. |
STATEMENT OF REASONS
INTRODUCTION
BDO, the claimant, was involved in a motor vehicle accident on 30 January 2018 (“the accident”). At the time, he was travelling in the Sydney Airport Tunnel when his vehicle was rear ended which caused him to collide with the vehicle travelling in front. In total, five vehicles were involved in the chain rear-end accident.
He was wearing a seatbelt, however, the airbags in his vehicle did not deploy. He did not attend a hospital for treatment but did consult his general practitioner a few days after the accident.
The insurer, IAG Limited t/as NRMA Insurance has wholly admitted liability for the accident.
LEGISTATIVE FRAMEWORK/SETTLEMENT APPROVAL
Common law damages are awarded on a once and for all basis. An injured person cannot usually make a claim for further damages once a claim has been settled.
Section 6.23 of the MAI Act says:
“(1) repealed
(2) A claim for damages cannot be settled unless-
(a) the claimant is represented …… by an Australian legal practitioner, or
(b) the proposed settlement is approved by the Commission.
(3) The Commission is not to approve the settlement of a claim unless satisfied that the settlement complies with any applicable requirements of or made under this Act of the Motor Accident Guidelines”.
Section 6.23(2)(b) is an important safety net for persons settling a damages claim without legal advice.
Clause 7.37 of the Motor Accident Guidelines, says that in considering the settlement the Commission must consider whether:
“(a) repealed
(b) 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 (member of the Commission), 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;
(c) the claimant understands that they are entitled to be represented in respect of the claim by an Australian legal practitioner, and
(d) the claimant understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement”.
Claims for damages
The MAI Act limits the types of damages that can be awarded to any injured person and the amounts of those damages. The available heads of damage are set out below.
Damages for non-economic loss
Damages are available for non-economic if the person has a whole person impairment (WPI) of greater than 10%. Whole person impairment is to be assessed in accordance with the Motor Accident Permanent Impairment Guidelines which are largely based on the American Medical Association’s guides to The Evaluation of Permanent Impairment, Fourth Edition (AMA 4 Guides).
10.The insurer obtained a report from a medico-legal expert that the claimant had a WPI of 0% and therefore did not include any award for non-economic loss in its offer.
Damages for Economic losses
11.Section 4.5 of the MAI Act limits the types of damages that can be awarded for economic losses:-
(a) Damages for past or future economic loss of earnings or the deprivation of earning capacity, and
(b) Damages for costs relating to accommodation or travel (not being the cost of treatment and care) of a kind prescribed by the regulations, and
(c) Damages for the cost of the financial management of damages that are awarded, and
(d) Damages by way of reimbursement for income tax paid or payable on statutory benefits arising from the injury that are required to be repaid on an award of damages to which this Part applies.
12.The insurer’s offer did not include the cost of financial management which is usually awarded to persons who have limited capacity and cannot make financial decisions on their own. This is no such case.
13.The insurer has made allowances for past and future loss of earnings including superannuation. There is re-imbursement to the insurer for statutory benefits paid.
14.No allowance has been made for accommodation or travel.
REVIEW OF THE EVIDENCE.
15.BDO is 47 years old. He was born in Ethiopia and completed high school there. He completed a Bachelor of Business and Marketing and a MBA He is currently reading for a PhD.
16.The claimant’s application for personal benefits stated that he was employed as a Senior Project Manager for the New South Wales Electoral Commission at the time of the accident.
17.It appears after the accident BDO was able to drive himself from the scene. He told his general practitioner, Dr Dmitri Tcherkas, he felt pain in his neck and right shoulder immediately after the accident. This pain increased when lifting his right arm. He also noticed pain in his right knee. He was experiencing difficulties sleeping following the accident.
18.An x-ray of BDO’s cervical spine dated 2 February 2018 reporting “straightening of the cervical lordosis. Spondylosis is present at C5/6 and C7/T1 with mild narrowing of the intervertebral discs and endplate osteophytes. The facet joints are normal. The other intervertebral discs are normal. There is mild to moderate right C3/4 neural exit foraminal stenosis due to uncovertebral osteophytes”.
19.An ultrasound of his right shoulder also taken on 2 February 2018 reported subacromial subdeltoid bursitis with impingement.
20.On 28 February 2018, Dr Tcherkas referred the claimant to shoulder surgeon, Dr George Murrell. Dr Murrell diagnosed a frozen right shoulder and recommended an arthroscopic capsular release which was performed March 2018. BDO reported to his physiotherapist, Mr Phillip Liao on 7 May 2018 he was happy with the outcome of the surgery and although he still experienced pain at end ranges, he was making steady progress.
21.After reporting to Dr Tcherkas he was experiencing headaches since the accident, he was referred to Dr Ashish Diwan in August 2018. A MRI scan and x-rays showed minor mid cervical kyphosis with very small herniations at C3-4 and C4-5. His lumber spine was normal. Dr Diwan explained to BDO that patients involved in accidents can get exacerbation of different type of symptoms and pain associated elsewhere that is likely to become worse. He was reassured that surgery was not required. Dr Diwan reported only a small number of patients develop chronic neck issues but he felt BDO could manage his symptoms non-operatively.
22.The insurer arranged for BDO to be examined for the purposes of a medical-legal assessment with Consultant Orthopaedic Surgeon Dr Charles Allen on 21 June 2021. After taking a comprehensive history from BDO, Dr Allen diagnosed an exacerbation of pre-existing cervical spondylosis in the accident. He also accepted BDO sprained his right shoulder, hip and knee in the accident. He opined there were no ongoing injury related disabilities.
23.The insurer asked the doctor to assess whole person impairment. The assessment reads “Using the SIRA Guidelines which are underpinned by the American Medical Association Guides to the Evaluation of Permanent Impairment (4th Edition) BDO’s whole person impairment relating to his injuries. Dr Allen found no permanent impairment and concluded impairment equals 0%.
CONSIDERATION OF THE SETTLEMENT
The offer of settlement
24.The insurer’s offer of settlement is $169,628.16 made up of:
a) Past economic loss - $126,294.62
b) Future economic loss - $43,333.54
25.The insurer indicated it would deduct $16,926.16 in wage payments.
26.The past loss of earnings is calculated based on an initial 13 weeks at $1,960 net per week for total incapacity, 36 weeks at 50% incapacity, 15 weeks 50% incapacity, 14 weeks 50% incapacity plus 11% superannuation. During in these periods, he left his job at the Electoral Commission before travelling overseas. On his return, he was employed at the University of New South Wales which resulted in an unfair dismissal claim. Subsequently, he has worked as a consultant for LifeFit for up to 40 hours a week. It is on this basis the insurer and the claimant have agreed to the past economic loss figure which includes superannuation.
27.BDO is currently working in a contracting capacity for Quay Consulting as a program delivery consultant. He is able to perform up to 40 hours a week and earns between $3000-$5000 per week depending on the number of hours worked. His earnings far exceed his pre-accident earnings.
28.BDO’s past work history reveals periods of unemployment. Further, he has an underlying Crohn’s disease which in the past, has caused him gastrointestinal problems which has impacted on his work capacity. He also suffers with osteoarthritis and has described to doctors, family related stress which has resulted in time off work which is unrelated to the accident. Dr Allen found no impact to BDO’s earning capacity arising from the accident.
29.The insurer allowed $43,333.54 as a buffer amount for the claim for future economic loss which includes superannuation.
The requirements of the legislation
30.When considering the provisions of s 6.23 of the MAI Act and cl 7.37 of the Guidelines along with the rules and practice directions of the Commission in determining whether to approve BDO’s settlement, I must consider:
a) Appropriateness – whether the amount of the settlement is just, fair and reasonable, and
b) Understanding- whether BDO understands the settlement and its terms and the effect of the settlement in ending his claim for damages.
31.I am satisfied that BDO understands that he is entitled to reasonable and necessary, accident-related treatment and care for the remainder of his life. The settlement of this damages claim does not affect that claim and BDO can continue to ask and receive assistance and treatment from the insurer.
32.BDO accepts that the settlement of his damages claim is binding upon him and that he cannot make a further claim for damages in the future. He understands while he will receive treatment and care if he asks for it, the settlement of this claim will end and the insurer’s liability to pay him weekly benefits for any loss of earnings.
33.BDO confirmed he did not wish to engage legal representation and in fact, within the material I have available to me, BDO has been negotiating settlement figures with insurer which resulted in an increase in the original offer.
34.I am satisfied that the allowance for past and future economic loss is appropriate. Both have been assessed in a sensible and fair manner. BDO has returned to full time work and his duties at work are not impacted by any incapacity.
35.I am therefore satisfied that the total amount for damages offered to BDO by the insurer is appropriate and within the range I would assess.
CONCLUSION
36.I am therefore satisfied that the proposed settlement figure of $169,628.16 is an appropriate one and that it complies with the requirements of cl 7.37 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 the Commission, taking into account the nature and extent of the claim and injuries, disabilities, impairments and losses sustained, and taking into account any propose reductions or deductions in the proposed settlement”.
37.Accordingly, pursuant to s 6.23 of the MAI Act the proposed settlement of BDO’s claim for damages is approved.
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