Insurance Australia Limited t/as NRMA Insurance v Burgoyne
[2022] NSWPIC 593
•26 October 2022
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | Insurance Australia Limited t/as NRMA Insurance v Burgoyne [2022] NSWPIC 593 |
| Claimant: | Sophie Burgoyne |
| insurer: | Insurance Australia Limited t/as NRMA |
| Member: | Terence Stern |
| DATE OF DECISION: | 26 October 2022 |
| CATCHWORDS: | MOTOR ACCIDENTS - Damages claim; approval of settlement under section 6.23 of the Motor Accident Injuries Act 2017; claimant self-represented; claimant born in July 2003; passenger in motor vehicle which struck two trees; left sided hearing loss; cochlear implant; compression fracture of T11; psychiatric injury; major depression; able to work 4 days per week; offer of $890,000; Held – settlement approved as just, fair and reasonable, and within the range of likely outcomes. |
| determinations made: | The proposed settlement is approved under s 6.23 (2)(b) of the Motor Accident Injuries Act 2017. |
STATEMENT OF REASONS
BACKGROUND
Sophie Burgoyne (the Claimant) was born in July 2003 and injured in a motor vehicle accident on 5 March 2020.
The Insurer has wholly admitted liability.
On 5 September 2022 the Insurer made an offer of settlement of $890,000.00.
On 5 September 2022 the Claimant accepted the offer.
The Claimant is unrepresented.
The Insurer seeks approval of the settlement.
The Claimant supports the application for approval.
Nature of the accident and its impact
The Claimant was a passenger in a vehicle driven by her boyfriend when it slid off the road and crashed into two trees. She was taken by ambulance to Dubbo Base Hospital where she was an inpatient for 4 days.
Physical injuries
During the accident the Claimant hit the left side of her head including her left ear on the pillar of the left-hand side of the vehicle. The Claimant became aware of the sudden loss of hearing in her left ear associated with very loud ringing.
10. The Claimant sustained a compression fracture of T11, bruising of the left ulnar and tenderness of the cervical spine and sternum.
11. The Claimant sustained a brain injury without skull fracture or intracranial haemorrhage.
12. On 13 October 2021, the Claimant noted a change in her voice and was subsequently diagnosed as having muscle tension dysphonia.
13. The Claimant was subsequently diagnosed as having total deafness in her left ear.
14. On 30 July 2020, the Claimant had a left cochlear implant.
15. The Claimant has a disturbance of balance.
16. Since the accident, the Claimant has headache symptoms without a firm diagnosis.
17. The Claimant has ongoing back pain, cervical region pain and a whiplash injury.
Psychiatric injury
18. Dr Inglis (Howe) Synnott in an assessment for Insurer of 24 May 2022, was of the opinion that the Claimant described experiencing sufficient psychiatric symptoms to meet the diagnostic criteria of a Major Depressive Disorder with prominent anxiety. He was not persuaded that a diagnosis of Post-Traumatic Stress Disorder was the correct characterisation of the condition. He considered that treatment was unlikely to bring a significant change in her psychiatric symptoms whether the treatment was therapy or medication.
19. He noted that there had been little change in her symptoms over the last two years.
20. His opinion was that there was some psychiatric limit in the Claimant’s capacity to participate in employment. In his opinion, she was psychiatrically capable of working 4 days per week (assuming she did not have a study load). Given her constructive attitude one could reasonably anticipate that she would eventually reach a point of being psychiatrically capable of working 5 days per week. However, when or if that occurs he was unable to estimate.
21. Dr Bezad Eftekhar a neurosurgeon in a report arising from an examination of 9 July 2020 was of the opinion that there was no significant brain or spinal abnormality demonstrated by an MRI of the brain and spine.
22. As noted above on 5 September 2022, NRMA made an offer of settlement of $890,000.00 being $400,000.00 for non-economic loss, $30,000.00 for past economic loss and $460,000.00 for future economic loss.
LEGISLATION AND LEGAL PRINCIPLES
23. In making my decision I have considered the following legislation and Guidelines:
(a) the Personal Injury Commission Act 2020;
(b) the Personal Injury Commission Regulation 2020;
(c) the MAI Act, and
(d) the Guidelines.
24. Section 6.23 of the MAI Act provides:
“6.23 Restrictions on settlement of claim for damages
(1) A claim for damages by an injured person cannot be settled within 2 years after the motor accident unless the degree of permanent impairment of the injured person as a result of the injury caused by the motor vehicle is greater than 10%.
(2) A claim for damages cannot be settled unless –
a. the claimant is represented in respect of the claim 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 or the Motor Accident guidelines.”
25. Clause 7.37 of the Guidelines states: “Under section 6.23(3) of the Act, before the Personal Injury Commission may approve the settlement of a claim for damages, it must be satisfied that:
(a) the proposed settlement satisfies the timing requirements in section 6.23(1) of the Act;
(b) the proposed settlement is just, fair and reasonable and within the range of likely potential damages assessments if the claim were the matter to be assessed by the Commission, and 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.”
26. I am satisfied that all these requirements have been met.
Should the settlement be approved
Legislation
27. Non-economic loss is defined in the Act by s 1.4 of the Act to mean:
(a) pain and suffering, and
(b) loss of amenities of life; and
(c) loss of expectation of life;
The maximum that may be awarded under this head of damages has since the 1st October 2022 been $605,000.00.
29. The amount of non-economic loss damages to be awarded should be proportionate to the claimant’s injuries and disabilities:
“It is a relationship of the award to the injury and its consequences which is to be proportionate. It is not a matter to be resolved by reference to some norm or standard supposedly to be derived from a consideration of amounts award in a number of other specific cases. The principle to be followed. It is that the amount of damages must be fair and reasonable compensation for the injuries received and disabilities caused. It is to be proportionate to the situation of the claimant and not to the situation of other parties in other actions, even if some similarity between their situations may be supposed to be seen. The judgment of a Court awarding damages is not to be overborne by what other minds have judged right and proper for other situations. It may be granted that a judge who is making such an assessment will be aware of and give weight to current general ideas of fairness and moderation. But this general awareness is quite a different thing The awareness must be a product of general experience and not formed ad hoc a process of considering particular cases and endeavouring to allow for differences between the circumstances of other cases and the circumstances of the case in hand.” [Planet Fisheries Pty Ltd v La Rosa (1968) 119CLR 118 per Barwick CJ, Kitto and Menzies JJ] [at para 11]”
30. A key principle is that the amount assessed for non-economic loss should be comparable to awards of non-economic by other Assessors and Courts [James Hardie & Co v Newton(1977) 42 NSWLR 729 as per Handley JA at 732].
31. The amount award is not assessed on the basis of a percentage of the maximum but on the basis of what the appropriate dollar amount is. The non-economic loss figure awarded is not required to be proportionate to the maximum. This was rejected in Hodgson v Crane [2002] NSW CA 276.
32. The Claimant’s young age is significant. She will have to deal with the consequences of her deafness and the insertion of a cochlear implant for decades to come. She is only very young. Hence, the Claimant’s age at the time of assessment of damages is a relevant factor but one of only a number of matters which the court should take into account [Reece v Reece [1994] NSWCA 259 and as discussed in Varga v Galea [2011] NSWCA 76 where McColl JA said at para. 72:
“Reece v Reece states the uncontroversial proposition that the plaintiff’s age at the time of the assessment of damages is a factor relevant to the assessment of non-economic loss, a proposition Handley JA made abundantly clear when considering Reece v Reece in Marshall v Clarke; see also Christalli v Kassar [1994] NSWCA 48.”
33. The degree of Whole Person Impairment is not a reliable indicator of the severity or otherwise of the claimant’s injuries. Whole Person Impairment is a statutory method of assessing entitlement. It does not directly measure incapacity, pain and suffering.
34. Case law for awards of non-economic loss. These discretionary decisions are not binding or even persuasive. They may from time to time however be helpful. In Scarlett Anne Robinson bhnf Anthony James Robinson v Riverina Equestrian Association Inc [2022] NSWSC 953, the Plaintiff sustained traumatic left sided deafness and brought proceedings for negligence. The Plaintiff a young person, lost hearing in her left ear and came to a cochlear implant. The loss of hearing in the left ear had been severe.
35. The court proceeded to on the Submission of Kelvin W Andrews Counsel for the Plaintiff in the context of the likely damages. The Defendant submitted that the medico-legal evidence did not support an overall assessment of damages above $500,000.
36. The presiding judge was of the view that there was a risk that the damages might exceed the jurisdictional limit of the District Court if the Plaintiff succeeded in her claim.
37. Mr Andrews submitted that the damages for non-economic loss assessed pursuant to section 16 of the Civil Liability Act 2002 (NSW) (‘CLA’) required taking into account that there was a total loss of hearing in the left ear which would require a cochlear implant and may result in some degree of embarrassment or concern as the Plaintiff entered her teenage years.
38. Mr Andrews submitted that non-economic loss, depending upon eventual findings in relation to brain damage, might amount to between 38% and 50% of a most extreme case, being between $263,500 and $347,000 (though under the CLA the cap is different, the percentage range is of some interest).
Buffer for economic loss
39. The offer provides for a buffer of $460,000 for future economic loss and $30,000 for past economic loss.
40. The Plaintiff told me at the Assessment Conference (her mother was also present) that she is back at work and anticipates being able to work in the long term 4 days per week and I clarified that the buffer was in fact based on a loss of capacity for employment of 1 day per week.
41. Of course, there is a great deal of uncertainty as to what the Claimant will earn in the future, whether or not she will have children, times she will take off for having children if applicable and the necessary uncertainties of calculation of future loss over such a long period of time.
42. If one took for example a period of 60 years at a 5% discount factor, the multiplier is 1,120.2. On that basis a loss hypothetically of $200 per week over 60 years would convert to a present lump sum equivalent of $202,440.00.
43. With respect to economic loss, I take into account that the Claimant has made a good and solid effort to exercise her economic potential, is likely to be able to continue to work in her current or similar capacity about 4 days per week.
DETERMINATION
44. I am satisfied that the Claimant understands the binding nature and effect of the proposed settlement and that she will be precluded from making a further claim for damages arising out of the motor accident but is entitled to ongoing treatment and care needs. I am satisfied she knew she was entitled to legal representation.
45. The proposed settlement is appropriate and complies with clause 7.04.2 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 of the PIC, taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the claimant.”
46. I am satisfied that the Claimant understands the binding nature and effect of the proposed settlement and that she will be precluded from making a further claim for damages arising out of the motor accident but is entitled to ongoing treatment and care needs.
47. Accordingly, I approve the proposed settlement of $890,000.00.
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