Insurance Australia Limited t/as NRMA Insurance v Gad
[2025] NSWPIC 144
•10 April 2025
| CERTIFICATE OF DETERMINATION OF MEMBER | |
CITATION: | Insurance Australia Limited t/as NRMA Insurance v Gad [2025] NSWPIC 144 |
CLAIMANT: | Halina Gad |
INSURER: | IAG Limited trading as NRMA Insurance |
MEMBER: | Alexander Bolton |
DATE OF DECISION: | 10 April 2025 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; settlement approval; liability admitted by insurer; claimant suffered multiple injuries including psychiatric disability; 22% whole person impairment; claimant worked part-time at the time of the accident; initial offer of settlement submitted for approval was rejected and subsequent offer made of $315,000; claimant accepted final offer of settlement inclusive of deductions; Held – settlement approved. |
DETERMINATIONS MADE: | CERTIFICATE Settlement Approval Issued under s 6.23 of the Motor Accident Injuries Act 2017 Determination 1. The proposed settlement of $315,000 is approved under sub-s 6.23(2)(b) of the Motor Accident Injuries Act 2017. 2. Pursuant to sub-s 3.40(1)(b) of the Act, the insurer is entitled to deduct the sum of $7,116.08 from the proposed settlement sum by way of recovery for weekly payments of statutory benefits paid to the claimant under Division 3.3. A statement of my reasons for the determination is attached to this certificate. |
STATEMENT OF REASONS
INTRODUCTION
This matter first came before me on 3 March 2025 for approval of the settlement between Mrs Gad (the claimant) and the insurer in the amount of $210,000.
The settlement offer consisted of an allowance of $200,000 for non-economic loss and a further $10,000 for past economic loss. No allowance was made for future economic loss.
The claimant was 67-years-old at the time of the accident and is now 73-years-old.
The accident occurred on 24 November 2019. The claimant was the driver of a car travelling in an eastbound direction on Marion Street, Bankstown. The claimant’s car was stationary at the traffic lights at the intersection of Marion Street and Meredith Street, Bankstown when the insured driver failed to stop and collided into the rear of the claimant’s car. Liability has been admitted by the insurer.
The claimant's work at the time of the accident consisted of being an invigilator at the University of Sydney. I had no information before me about the extent of this work, how often it took place and the rate of payment to the claimant.
When the matter first came before me for approval, I indicated to the parties that I was reluctant to approve the settlement agreed between the parties as I did not have enough information before me and I was concerned that the offer was not reflective of the claimant's injuries.
The insurer has provided a report of Dr Smith, psychiatrist, dated 25 October 2023. The insurer relies on this report.
Dr Smith said that the claimant presented as relatively helpless regarding her future treatment and functional state. He said that the claimant complained of chronic pain in her left shoulder and leg as well as tinnitus in her left ear and visual problems in her left eye. Mrs Gad could not provide further details regarding her physical condition or interventions being planned.
Dr Smith said that the claimant did not have any capacity to work.
The claimant reported to Dr Smith that she suffered from substantial anxiety, hesitation and lack of confidence in her abilities to engage in working tasks. She expressed a significant distress in her functional state.
Dr Smith diagnosed the claimant as having post-traumatic stress disorder and following the accident, a need for antidepressant medication, which she now no longer uses.
Dr Smith assessed the claimant as having 22% whole person impairment.
The claimant had been undergoing, pre-accident, root canal therapy. She was mid treatment when the accident occurred and subsequently, it was noted that she had a crack in her LR7 tooth. Her treating oral surgeon, Dr Rumianek said that this occurred as a direct result of the accident. I have seen a report from this oral surgeon and it is my understanding that the LR7 tooth which was reported as being cracked after the accident was in fact the same tooth undergoing root canal therapy. This is according to Dr Rumianek in his report of 18 November 2020.
The claimant had said that following the accident she was unconscious for a period of time. However, the ambulance report suggests that she only had a loss of consciousness for one minute and had a Glasgow coma score of 14. She vomited twice on the way to hospital.
In its submissions, the insurer relied on Reece v Reece [2011] NSWCA 76. Whilst I acknowledge that the claimant's age is a relevant factor to be taken into account, nevertheless, on the median life tables, she has a life expectancy ahead of her of nearly 17 years. This is still a substantial period to consider and on that basis alone, I did not consider that an initial allowance of $200,000 for non-economic loss was reasonable noting that the maximum that can be awarded for non-economic loss since 1 October 2024 is $654,000.
Subsequently, the insurer made a further offer of $315,000 which includes an allowance for non-economic loss of $300,000 and past economic loss of $15,000.
Legislative Framework
The Personal Injury Commission (Commission) was established on 1 March 2021 and the Dispute Resolution Service was abolished by cl 3 of Part 2, Division 2, Schedule 1 to the Personal Injury Commission Act 2020.
As a member of the Motor Accidents Division of the Commission, cl 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, cl 14D(3)(b) of the Personal Injury Commission Regulation 2020 provides that the Motor Accident Injuries Act 2017 (the MAI Act) and the Motor Accident Guidelines (the Guidelines) continue to apply.
In making my decision I have considered the following legislation and guidelines:
(a) the Personal Injury Commission Act 2020;
(b) the Personal Injury Commission Rules 2021;
(c) the Personal Injury Commission Regulation 2020;
(d) the MAI Act, and
(e)the Guidelines.
Section 6.23 of the MAI Act states:
“6.23 Restrictions on settlement of claim for damages
· (1) (Repealed).
· (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.”
Regulation 95 of the Personal Injury Commission Rules (the Rules) states:
“95 Application for approval of Damages settlement
· (1) If a claimant, who is not represented by an Australian legal practitioner, and an insurer have agreed to a proposed damages settlement, the insurer must lodge an application for approval of a damages settlement under section 6.23 of the MAI Act, on behalf of both the claimant and the insurer, within 7 days of reaching the agreement.
· (2) (Repealed).”
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 [since 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 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.”
Clause 10 of the Commission’s Procedural Direction MA3 provides that the Application must include:
(a) a deed of release;
(b) the amount of the proposed damages settlement, including a breakdown of the amount allowed for each head of damage and how each amount allowed has been calculated;
(c) the amount of any reductions in the proposed damages settlement including for contributory negligence or any other reduction, including brief reasons for that reduction and how any reductions have been calculated;
(d) the amount of any advance payments that the insurer has made in advance of the settlement and the dates of those advance payments, including brief reasons explaining why those advanced payments were made, and
(e) the evidence, documents and materials relevant to an assessment of the damages settlement including liability notices.
I am satisfied that the Application complied with clause 10 of the Commission’s Procedural Direction MA3.
Clause 7.294 of the Guidelines requires the insurer, NRMA, to include in its Application details of:
(a) the amount of the proposed settlement and a breakdown of the amount allowed for each head of damage;
(b) the insurer has provided me with a copy of an email sent to the claimant on 24 January 2025 which provides a breakdown of the offer and confirmation the offer represents an amount for non-economic loss of $200,000 and $10,000 for past economic loss including superannuation, and
(c) the insurer has since made a further offer to the claimant of $315,000 less deductions which includes an allowance for non-economic loss of $300,000 and past economic loss of $15,000.
Clause 7.294.2 of the Guidelines requires the amount of any deductions in the proposed settlement:
(a) NRMA has confirmed that $7,116.08 will be deducted from the offer made. This represents a refund to the insurer of past statutory benefits paid;
(b) there is no money repayable to Centrelink, and
(c) as far as the parties are aware, there is no payback to Medicare.
The balance payable to the claimant will be $307,883.92.
Should I approve the settlement?
When considering the provisions of s 6.23 of the MAI Act and cl 7.38 of the Guidelines along with the rules and practice directions of the Commission, in deciding whether or not to approve or not approve Mrs Gad’s settlement, I need to consider:
(a) appropriateness – whether the amount of the settlement is just, fair and reasonable, and
(b) understanding – whether Mrs Gad understands the settlement and its terms and the effect of the settlement in ending his claim for damages.
Appropriateness
The amount of the settlement I am asked to now approve comprises the following:
non-economic loss $300,000, and
past economic loss $15,000.
There are no other heads of damage to which Mrs Gad is entitled. She is currently 73 years of age.
I am satisfied that the offer of settlement is fair and reasonable, taking into account the injuries suffered by Mrs Gad and her age.
Noting the injuries suffered by Mrs Gad, I am satisfied that the amount of $300,000 for non-economic loss is appropriate.
Regarding the allowance for past economic loss of $15,000, I accept that based on the nature of the claimant’s part-time work and her age, that this is a reasonable allowance
There are no deductions to be taken into account other than past statutory benefits of $7,116.08.
Understanding
Having spoken to Mrs Gad, I am satisfied that she:
(a) accepts the insurer’s offer and wishes to finalise her claim now;
(b) is aware that she can seek legal advice but does not wish to do so, and
(c) understands the binding nature of the settlement and this approval and that she may not be able to make a further claim for damages in the future.
Legislation
In making my decision I have considered the following legislation and guidelines:
· the MAI Act;
· Motor Accident Injuries Regulation 2017, and
· the Motor Accident Guidelines.
Conclusion
I am satisfied that the proposed settlement figure of $315,000 is appropriate and that it complies with the requirements of clause 7.38 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.”
Pursuant to s 6.23 of the MAI Act, I approve the settlement of the Mrs Gad’s claim for damages for 315,000.
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