Insurance Australia Limited t/as NRMA Insurance v Lobo
[2023] NSWPIC 344
•11 July 2023
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Insurance Australia Limited t/as NRMA Insurance v Lobo [2023] NSWPIC 344 |
| CLAIMANT: | Maria Lobo |
| INSURER: | NRMA |
| MEMBER: | Shana Radnan |
| DATE OF DECISION: | 11 July 2023 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; settlement approval $145,000; 53-year-old female; past and future economic only; loss of promotion; 4% whole person impairment; internal injury to right leg, surgical repair, swelling and immobility right knee and ankle, fracture at right knee and ankle; most injuries healed; section 6.23; Held – proposed settlement is just, fair and reasonable; settlement approved. |
| DETERMINATIONS MADE: | CERTIFICATE Settlement approval 1. The proposed settlement is approved. 2. The proposed settlement is approved under s 6.23(2)(b) of the Motor Accident Injuries Act 2017. 3. The proposed settlement complies with cl 7.392 to cl 7.411 of the Motor Accident Injuries Guidelines. |
STATEMENT OF REASONS
INTRODUCTION
On 29 October 2020 Maria Lobo (the claimant) was a pillion passenger on a ride with her husband John. Travelling at low speed (14kmph) on an unsealed but compact gravel surface know as Yarric Road, the insured skidded lost control and dropped the bike falling to the right side. Both the claimant and her husband fell off. The bike fell onto the claimant’s right leg.
Because of the remoteness of the location, the claimant and insured got back on the bike and travelled back to their campsite. The claimant then attended Forster Medical Centre, was transferred by ambulance to Manning Base Hospital, then airlifted to Nepean Hospital by medivac helicopter. The claimant sustained the following injuries:
(a) internal injuries to her right leg;
(b) swelling and immobility to her right knee and ankle, and
(c) fractures at right knee and right ankle.
The claimant first sought medical assistance from Dr Tamer at Forster Tuncurry Medical Centre (document A10) on 29 October 2020 where she was referred for X-ray imaging of the right knee, lower leg and ankle which recorded fractures of the right tibia and posterior malleolus.
The claimant was then conveyed by Ambulance to Manning Base Hospital (document A11) where she underwent a CT scan of the right lower limb which recorded:
(a) large knee joint hemarthrosis;
(b) heavily comminuted depressed lateral tibial plateau fracture and proximal fibular fracture, and
(c) undisplaced fracture of the distal right tibia.
The claimant was admitted overnight and underwent open reduction and internal fixation to the right tibia and right ankle. On 30 October 2020, the claimant was flown to Nepean Hospital (document A12) from Manning Base for post-surgery care. She was discharged on 6 November 2020. The claimant next attended Smith Street Medical Centre (document A13) on 10 November 2020 where it was recorded that she had attended for ‘contact for right tibia fracture’ nothing further was recorded.
An X-ray of the right knee dated 12 January 2021 indicated:
“Surgical fixation of the lateral tibial plateau noted and the alignment is within
normal limits. The fracture line remains visible. There are a few loose bodies at the
lateral aspect of the knee joint measuring up to 4mm. The knee joint alignment is
normal. There is a small- to moderate-sized suprapatellar joint effusion.
Degenerative changes of the proximal tibiofibular joint also noted.”
An X-ray of the right ankle dated 12 January 2021 recorded:
“Surgical fixation of the distal tibia with two screws noted. There is no hardware
complication. The alignment of the ankle joint is normal. No widening of the distal
tibiofibular overlap. The ankle mortise is congruent. There is no asymmetrical joint
space widening or osteochondral injury identified. No appreciable joint effusion.”
The insured reported the matter to NSW Police on 31 October 2020 at Taree Police Station and event report E147551401 was created.
The claimant has made a claim against NRMA (the insurer) of the at fault vehicle, for lump sum damages. By liability notice dated 3 August 2022, the insurer wholly admitted liability for the common law damages claim.
The insurer has accepted that the claimant had sustained non-minor injuries and pursuant to Division 3.4 of the Motor Accident Injuries Act 2017 (the MAI Act) she is entitled to payment of reasonable treatment and care for the rest of her life for her accident caused injuries.
Dr Keller an occupational physician qualified by the insurer opined on 14 November 2022 the claimant’s whole person impairment is not greater than 10%. This means the claimant is not entitled to recover damages for non-economic loss. I am satisfied that the medical evidence before me indicates that the opinion of Dr Keller is accurate noting the injuries sustained and the recovery as defined in the medical records and from the evidence directly from the claimant. Whole person impairment was assessed at 4%.
The claimant and the insurer have agreed to settle the claim for lump sum damages in the sum of $145,000. The initial application referred to a settlement offer made by the insurer on 8 February 2023 in the sum of $84,625.09. The insurer increased its offer to $145,000 after further negotiations between the parties post preliminary conference held on 2 June 2023. The basis of this offer was as follows:
(a) past economic loss (statutory weekly payments to date) $28,436.09;
(b) future economic loss incl superannuation $105,974.91;
(c) past loss of superannuation (11%) $2,205.00, and
(d) tax paid on statutory benefits $8,384.
As the claimant is not represented by a lawyer, the settlement must be approved in accordance with the MAI Act.
JURISDICTION OF THE PERSONAL INJURY COMMISSION
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.
I am a 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 cl 14D empowers me to determine those proceedings.
Because of the date of the accident cl 14D(3)(b) provides that the MAI Act and the Motor Accident Guidelines (the Guidelines) continue to apply.
THE RELEVANT LAW
Sections 6.23(2) and (3) of the MAI Act requires approval of the settlement and I am not to approve the settlement unless I am satisfied it complies with any of the requirements of the MAI Act or the Guidelines.
Clause 7.38 of the Guidelines states I must be satisfied as to the following:
(a) 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, and
(c) the claimant understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement.
Preliminary conference on 17 March 2023
The insurer lodged the application for approval of the settlement, and it was referred to me for consideration. I held a preliminary conference on 17 March 2023. The claimant participated in person with assistance from her husband and the insurer was represented by solicitor Carl Newton.
I discussed the details of the terms of settlement with the parties and it became apparent that the claimant had on her evidence lost the opportunity to undertake a higher graded position. This would include a higher pay scale and a greater loss of future earning capacity than the insurer was aware. The claimant confirmed she could obtain additional evidence to prove her contentions.
The claimant was given time to marshall the additional evidence and for the parties to reconsider their position on the initial settlement offer once the material was on hand.
The claimant was advised if she had any concerns about the ongoing consequences of her injuries she should seek medical advice from her general practitioner or specialist to be fully informed as to any likely deterioration to her condition prior to finalising her settlement.
Preliminary conference on 24 April 2023
The claimant confirmed she had undertaken enquiries with her medical team as to prognosis and was satisfied she knew the ramifications of her injuries into the future.
The claimant produced a statutory declaration of Loreena McMahon dated 12 April 2023 which confirmed the offer of a promotion to principal Service Officer (Grade (7/8)) at NSW Trustee and Guardian due to commence on 1 September 2022. The statement also supported the claimant that she did not take up the offer due to the injuries sustained in the motor accident.
The insurer at this stage increased its offer to $113,358.09 and the claimant sought additional time to negotiate with the insurer as to the impact of her injuries on future earning capacity.
It was noted that to January 2021 the weekly benefits received by the claimant in the sum of $28,436.09 would be deducted from the settlement proceeds the claimant would receive if the settlement proceeded.
The claimant also was given further opportunity to review the medical evidence provided and confirmed what was recorded accurately depicts her injuries and the current status of ongoing disabilities. Should she wish to provide any further updated medical information, she could do so in the interim.
Preliminary conference on 26 May 2023
The insurer increased its offer to $120,000 at this stage and the claimant asked again for additional time to convince the insurer of the reasonableness of an additional sum for future economic loss.
I asked again if the claimant wished to seek legal representation and she confirmed she did not wish to she was aware that the settlement would be the finalisation of her claim for damages and that she could not come back for more at a later stage should her situation change but she wanted to continue negotiations before I determined the matter.
Preliminary conference on 21 June 2023
The parties confirmed that they had just reached a new agreement with settlement in the sum of $145,000. The increase in damages for future economic loss were agreed and the terms of settlement would be reduced to amended terms.
The parties were directed to upload amended terms and any deed no later than
29 June 2023.I asked the claimant if she understood the settlement and its implications and she confirmed to me that she understood the nature of the settlement and was accepting the terms of her own free will.
I asked if she had any question or wished to make any further comments and she said words to the effect “I am satisfied with the outcome”.
The insurer was also asked if any further information or statement was to be made and the representative said “No”.
The preliminary conference concluded with me advising I would make my decision and reduce it to writing. The parties were thanked for their assistance.
DOCUMENTS CONSIDERED
I had regard to the following relevant documents contained in evidence bundle of 565 pages:
· Liability:
Application for Statutory Benefits dated 6 November 2020;
Application for common law damages dated 16 June 2022 ;
liability notice dated 23 August 2023;
report of Barrington Investigations dated 29 January 2021, and
Statutory Benefit letter dated 19 January 2021.
· Treating medical records:
clinical records of Forster Tuncurry Medical Centre (document A10);
clinical records of Manning Base hospital (document A11);
clinical records of Nepean Hospital (document A12);
clinical records of Dr Khatib (document A14) ;
clinical records of Mr Jurkovic (document A15);
certificate of capacity (document A16);
clinical records Ms Kinney (document A22);
records of Medicare (document A23), and
records of Prescribed Benefits Scheme.
· Medico-legal reports
Dr Keller qualified by the insurer, dated 24 October 2022, and
Dr Keller supplementary report dated 14 November 2022 (the doctor opined whole person impairment of 4% : 2% for right tibial plateau fracture and 2% for right thigh and calf wasting. The doctor noted muscle wasting in the right lower limb and mild restriction of motion in the right knee. He deemed the claimant fit for pre-injury role to normal retirement age without restriction).
· Settlement documents
settlement agreement dated 23 June 2023 and executed on 26 June 2023.
REVIEW OF THE EVIDENCE
Statement of the claimant
The claimant confirmed that she sustained injury and in her oral responses during the preliminary conferences confirmed that she occasionally took over the counter pain relief medication.
Treatment had concluded. There were no ongoing treatment needs except when an occasional flare up required over the counter pain relief. She was managing her work and home tasks independently.
The ongoing disabilities and restrictions related to the right knee and ankle and right lower limb, which impacted on her ability to take public transport and stand for long periods.
She had reported significant recovery in rehabilitation notes that she was able to run shorter distances and had returned to some of her pre-injury hobbies.
Pre-existing injuries and unrelated conditions
There were no conditions impacting on the claimant at the time of the motor vehicle accident relating to areas of her body that were injured.
INJURIES
Following the accident, the claimant attended upon doctor and orthopaedic specialist.
As a result of the accident the claimant claimed she sustained the following injuries:
(a) right tibial plateau fracture;
(b) undisplaced fracture of distal right tibia, and
(c) comminuted fracture of right lateral malleolus.
The claimant required surgery and was non weight bearing for eight weeks.
She required rehabilitation and physiotherapy for a period of time.
Having reviewed the medical evidence I am satisfied that the claimant’s injuries would not exceed the statutory threshold and that non-economic loss would not have been available to the claimant.
I accept that the claimant is still symptomatic from time to time as it relates to her right knee and ankle. Other than the muscle wasting in the right leg, and some restriction in knee movement her injuries have healed well.
The injuries sustained to her right leg have resulted in a claim for economic losses on the basis that the injuries have resulted in losses to her past and future earning capacity.
ECONOMIC LOSS
Past economic loss
In her Application for Personal Injury Benefits, the claimant indicated that the impact of using her right knee and ankle impacts on her earning capacity as it related to standing for long periods, talking public transport and time she was unable to work due to being non weight bearing.
The claimant was employed pre-accident as a Client Services Officer at the Department of the NSW Trustee and Guardian earning $2,315.44 net per fortnight.
The claimant was assessed as having no capacity to work as a result of accident-related injuries from 29 October 2020 to 24 February 2021. By email dated 26 February 2021, the claimant advised the insurer that she had achieved a full upgrade to return to work from
1 March 2021 but was working full time from home.As at 28 July 2022 the claimant reported that she was flexibly working three days in the office and two days at home. The claimant reported to the insurer that ‘they were very busy at work due to vacancies, and she struggled to keep up’. The claimant further reported the drive the to the office was a ‘bad drive’ due to so much traffic and after driving she tries to stand up as long as possible due to being stiff from the drive.
The parties have agreed to past economic loss of $28,436.09, being the amount of statutory weekly benefits paid to date. Loss of tax on the sum paid amounted to $8,384 and loss of superannuation on this sum paid amounted to $2,205.
Past losses in total were agreed in the sum of $39,025.09.
Future economic loss
The claimant confirmed she had been offered a promotion to a Grade 7/8 and this equated to an ongoing loss for the remained of her working life to age 67 years.
The claimant’s answers to particulars dated 7 September 2022 (document A28) indicated as follows:
“Had the accident not occurred, I would have likely been promoted into a Grade 7-8
position with an annual pay scale of $99,431. With a recent organisations restructure, I was given the opportunity to move into this 7-8 position but management wanted me to assume another 7-8 role based in the city office prior to a 7-8 role being available at my current location. I was forced to decline the offer owing to the additional travel and stress this would place on me both physically and psychologically owing to my leg injury.”
Further, the claimant indicated:
“I have already missed out on career progression opportunities as these
required working out of office locations that did not have parking facilities, catching
public transport, sitting for longer on trains and buses, longer wait times standing at
railway stations and walking longer distances as part of my daily routine.”
In her answer to the question at 1.6 of the insurer’s request for further and better particulars regarding alteration in her duties post-accident, the claimant indicated:
“Over the past few months I have taken up secondment roles in grade 7-8 as well
as grade 5-6 within the organisation on a temporary basis to backfill vacant
positions within the same office. These have been transitionary in nature while a
restructure of the organisation is completed. I am due to return to my substantive
role in a GR 3-4 level at the end of October 2022.”
Accepting the claimant’s evidence that there was a loss of promotion, the insurer also argued that the claimant has been able to participate in short term positions at grade 7/8 and the claimant may well take on such a temporary role in future.
The parties came to a resolution of the future economic loss by way of a buffer of $92,635.41 and loss of future superannuation of $13,339.50 (14.57%).
Future economic loss was agreed in total sum of $105,974.91.
SHOULD I APPROVE THE SETTLEMENT
I am satisfied that the amounts allocated in the settlement for past and future economic losses accord with the evidence provided by the claimant in this matter and are within the range of likely potential damages assessment 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.
The claimant was working as a Client Service Officer at the Department of NSW Trustee and Guardian at the time of the accident earning $2,315.44 fortnightly. She had no capacity to work from 29 October 2020 to 24 February 2021. She returned to work, working full-time from home on 1 March 2021. Then by 28 July 2022 her routine was three days in the office and two days at home. She has continued in full-time work thereafter.
The past losses as indicated by the payment of statutory benefits in the sum of $28,436.09 and past superannuation loss of $2,205 accord with losses during the period she was unable to work. Losses relating to tax in the sum of $8,384 are established by the financial records produced.
In assessing future economic loss, I must have regard to the provisions of s 4.7 of the MAI Act which states no allowance may be made for future loss of earning capacity unless the claimant establishes that the accident has caused a change in her most likely future circumstances.
In cases such as Medlin v State Government Insurance Commission (1995) 185 CLR and Husher v Husher (1999) 197 CLR 138, the High Court confirmed that the fundamental questions to be determined in a case such as this, are whether the claimant has sustained a loss or diminution in her earning capacity and, if so, whether that loss or diminution will result in economic loss. The circumstances in this matter accord with the most likely circumstances but for the accident.
Further, it is appropriate to award a buffer when the impact of an injury upon the economic benefit from exercising earning capacity after injury is difficult to determine, as per Penrith City Council v Parks [2004] NSWCA 201. I agree that this is an appropriate matter for the award of a buffer as the claimant has a variable diminution to her earning capacity.
I consider the agreed buffer in the sum of $92,635.41 plus loss of future superannuation in the sum of $13,339.50 is within the range of likely damages had the matter been assessed by a Member of the Commission.
I am satisfied that the claimant is aware of her right to have her reasonable treatment.
Mr Newton confirmed there was likely no Centrelink deductions and that the insurer would not deduct and pay monies to Medicare under the Health and Other Services (Compensation) Act, 1995 (Cwlth) from the settlement sum. If any charge is raised the insurer will pay the charge as a treatment expense in addition to the settlement sum. The only deduction would be the statutory weekly payments already made to date in the sum of $28,436.09.I advised the claimant if a charge is raised by Medicare in respect of treatment expenses paid by Medicare relating to the injury, she should refer the matter to the insurer to pay that charge as part of their obligation to pay reasonable treatment costs.
CONCLUSION
I am satisfied the proposed settlement of $145,000 is just, fair and reasonable and within the range of likely potential damages assessments if the claim was to proceed to assessment by a Member of the Commission taking into account the nature and extent of the claim, the injuries, disabilities, impairments and losses sustained by the claimant.
I am satisfied the claimant was aware she could seek legal advice but chose not to avail herself of legal representation.
I am satisfied the claimant understands the binding nature of the settlement and that she will be precluded from making a further claim for damages arising out of the accident.
I am satisfied the claimant was willing to accept the proposed settlement and her decision to accept it was of her own volition.
I am satisfied the claimant is aware that from the proceeds a sum of $28,436.09 will be deducted as prepaid statutory benefits.
Accordingly, pursuant to s 6.23(2(b) of the MAI Act I approve the settlement of the claimant’s claim for damages.
Legislation
In making my decision I have considered the following legislation and guidelines:
· MAI Act;
· Motor Accident Injuries Regulation 2017, Personal Injury Commission Regulation 2020, Motor Accidents and Workers Compensation Legislation Amendment Regulation 2020, and
· Motor Accident Guidelines 2017/Personal Injury Commission Rules 2021.
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