Insurance Australia Limited t/as NRMA Insurance v Mahoney
[2024] NSWPIC 216
•30 April 2024
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Insurance Australia Limited t/as NRMA Insurance v Mahoney [2024] NSWPIC 216 |
| CLAIMANT: | Reginald Mahoney |
| INSURER: | IAG Limited t/as NRMA Insurance |
| MEMBER: | Elyse White |
| DATE OF DECISION: | 30 April 2024 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; assessment of damages; liability wholly admitted; claimant sustained multiple fractures; claimant a professional truck driver having worked in this field for more than 30 years; attempted to return to work for two months after which he was certified to have no earning capacity; insurer conceded claimant entitled to damages for non-economic loss, past and future economic loss; claimant entitled to reasonable and necessary treatment for accident related injuries; Held – settlement within the range of likely potential damages assessment if claim was to proceed to assessment; settlement just, fair, and reasonable; settlement approved for non-economic loss damages in the sum of $471,062.66 in accordance with section 6.23. |
| DETERMINATIONS MADE: | CERTIFICATE 1. Settlement approved in accordance with s 6.23 of the Motor Accident Injuries Act 2017 in the sum of $336,000. |
STATEMENT OF REASONS
INTRODUCTION
The claimant, Mr Reginald Mahoney was stationary at a stop sign on Townsend Lane and Pacific Highway, Arncliffe, when the insured driver, travelling northbound on the Princes Highway collided with Mr Mahoney’s vehicle. Mr Mahoney sustained injuries to his right arm and shoulder.
Mr Mahoney has made a claim against IAG Limited t/as NRMA Insurance (insurer) the insurer of the at fault vehicle for lump sum damages.
The insurer has wholly accepted liability for the claim for common law damages.
The insurer has accepted that Mr Mahoney is entitled to damages pursuant to the Motor Accident Injuries Act 2017 (the Act) for past and future economic loss and that he is entitled to payment of reasonable treatment and care for the rest of his life for his accident caused injuries.
Mr Mahoney and the insurer have reached agreement as to the settlement of the claim for damages.
Because Mr Mahoney is not represented by a lawyer, his settlement must be approved in accordance with the Act.
The insurer lodged the application for approval of the settlement, and it was referred to me for consideration.
The insurer has not conceded Mr Mahoney has sustained a whole person impairment greater than 10% and accordingly there is no entitlement to recover damages for non-economic loss.
THE RELEVANT LAW
Section 6.23(2) and (3) of the Act requires approval of the settlement and I am not to approve the settlement unless I am satisfied it complies with any requirements of the Act or the Motor Accident Guidelines (Guidelines).
Clause 7.37 of the Guidelines states I must be satisfied the proposed settlement is just, fair and reasonable. The proposed settlement must be within the likely potential damages assessment for the claim were the matter to be assessed by a Member of the Personal Injury Commission (Commission). The matters to be taken into account include the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by
Mr Mahoney. I also must take into account any proposed reductions or deductions in the proposed settlement.
Mr Mahoney also must understand the nature and effect of the proposed settlement and is willing to accept the amount.
DOCUMENTS CONSIDERED
I have considered the documents provided by the insurer including but not limited to submissions, claim form, police report, correspondence between the claimant and insurer, report by Dr Robin Mitchell and letters from Dr Paul Annett, Dr Jai Sungaran, Dr Shirjeel Malik, photographs, physiotherapy reports, imaging, financial records, and particulars.
REVIEW OF THE EVIDENCE
Mr Mahoney is 76 years old. He told me he was a former police officer and had worked in a number of different fields before setting up a consulting business in injury management with a focus on training and safety.
At the time of the accident Mr Mahoney was very fit and healthy. He regularly played golf and enjoyed spending time with his children and grandchildren.
Dr Mitchell was engaged by the insurer to examine Mr Mahoney and provide an opinion on the diagnosis of injuries, disabilities, and an assessment of whole person impairment (WPI).
The doctor accepted Mr Mahoney injured his right shoulder and elbow in the accident and assessed the combined WPI of 2%.
I asked Mr Mahoney if he understood that this assessment did not entitle him damages for non-economic loss. He confirmed he understood the limitations of damages and expressed his positive relationship with the insurer’s agents who had explained the entitlement to damages and that they had encouraged him to undergo treatment for his accident-related injuries.
Mr Mahoney’s general practitioner Dr Melik diagnosed a right forearm brachioradialis muscle tear. He provided the claimant with a capacity certificate certifying fit to work 40 hours a week with limitations and restrictions on a number of activities.
An MRI of Mr Mahoney’s right forearm revealed a mild brachioradialis strain at the musculotendinous junction. There was mild tendinopathy detected at the flexor origin with mild bursitis.
The physiotherapists reported with treatment, an improvement in symptoms but noted
Mr Mohoney reported chronic fatigue which had prohibited him from returning to work.
I asked him about comments made by treatment providers that he had reported symptoms of anxiety and an adjustment disorder. He told me he was frustrated rather than anxious and that he was annoyed the police had not attended the scene of the accident and charged the insured driver because he was reaching for his phone which had caused the collision.
Mr Mahoney told me his income allowed he and his wife to travel extensively and to visit his family. He told me he was very happy with the process and with the proposed offer.
THE PROPOSED SETTLEMENT
Dr Mitchell’s assessment of WPI appears to be a reasonable conclusion having reviewed his treating medical professional’s opinions and their reports of improvements and recovery.
As the assessment does not give an entitlement to damages for non-economic loss,
Mr Mahoney’s damages assessment is limited to past and future economic loss.
At the time of the accident, Mr Mahoney was earning an average of $73,790 per year for the preceding three financial years which has been extracted from his profit and loss statements.
Having regard to the past earnings, the insurer has nominated an amount for past economic loss in the sum of $79,000. The insurer has not paid any past weekly benefits. There are no deductions.
For the future, Mr Mahoney confirmed during the telephone conference that he intended to retire at age 80 years. Although this is four years in the future, the insurer has calculated a loss for two years. They have proposed $159,166.81 per year divided by 52 weeks. The weekly amount proposed for Mr Mohoney’s future wage loss is $3,060.90 per week with a reduction of 15% for vicissitudes.
Based on this calculation, the buffer that has been proposed for future economic loss is $257,000.
I do not understand this submission.
In submissions, the insurer has provided a table of Mr Mohoney’s profit and loss from 2018, when I assume he commenced his consultancy business, to year ending 2024. From this table I have averaged his earnings for the three years pre-accident and arrive at $73,790.
Taking this average yearly earning for fours year into the future, and applying the discount for vicissitudes, the figure is the same as the insurer’s proposed future buffer.
SHOULD I APPROVE THE SETTLEMENT
I am satisfied Mr Mahoney is aware of his rights to have his reasonable treatment expenses paid for the remainder of his life. Whilst the insurer is only liable to pay treatment expenses for five years, thereafter the claim is transferred to Lifetime Care and Support who will be liable for ongoing reasonable treatment expenses and care.
The insurer will not deduct and pay monies to Medicare under the Health and Other Services (Compensation) Act, 1995 (Cwlth) from the settlement sum. In the event a Notice of Charge is raised by Medicare for reasonable and necessary treatment expenses the insurer will pay the charge in addition to the settlement sum.
I am satisfied the proposed settlement is just, fair, and reasonable and within the range of likely potential damages assessments if the claim was to proceed to assessment taking into account the nature and extent of the claim, the injuries, disabilities, impairments, and losses sustained by Mr Mahoney.
I am satisfied, even though I did not follow the insurer’s submissions in the calculation of future economic loss, that the proposed amount of $257,000 is a fair and reasonable amount.
I am satisfied Mr Mahoney is aware he can seek legal advice but does not wish to do so.
I am satisfied Mr Mahoney understands the binding nature of the settlement and that he will be precluded from making a further claim for damages arising out of the accident. I am satisfied Mr Mahoney is willing to accept the proposed settlement.
Accordingly, pursuant to s 6.23(2)(b) of the Act I approve the settlement of Mr Mahoney’s claim for damages in the sum of $336,000.
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