Insurance Australia Limited t/as NRMA Insurance v Young
[2023] NSWPIC 89
•6 March 2023
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | Insurance Australia Limited t/as NRMA Insurance v Young [2023] NSWPIC 89 |
| Claimant: | Elizabeth Young |
| insurer: | Insurance Australia Limited t/as NRMA Insurance |
| Member: | Elizabeth Medland |
| DATE OF DECISION: | 6 March 2023 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; approval of damages settlement under section 6.23; claimant self-represented; no non-economic loss entitlement; claim for past and future economic loss; initial settlement of $75,000 deemed not fair and reasonable based on information received from claimant at initial teleconference; parties given opportunity to negotiate further; Held – proposed settlement of $135,000 approved; claimant earning more post-accident; allowance for future economic loss of $125,000 took into account most likely future circumstances, but for the accident, that claimant would eventually transition to full time work, however, as a result of the accident related injuries, no longer a reasonable possibility. |
| determinations made: | Certificate Issued under section 7.36(1) of the Motor Accident Injuries Act 2017 Assessment of Claim for Damages made in accordance with section 7.36 of the Act 1. The claimant and the insurer have agreed to settle the damages claim in the amount of $135,000. 2. The proposed settlement is approved for the purposes of s 6.23 of the Motor Accident Injuries Act 2017. |
REASONS FOR DECISION
Issued under section 7.36(1) of the Motor Accident Injuries Act2017
BACKGROUND
Ms Elizabeth Young (the claimant) is a 55-year-old female who suffered injuries as a result of a motor vehicle accident which occurred on 18 March 2018.
The accident was reported to the NSW Police on 14 April 2018. The police report establishes that the insured driver, driving a Land Rover Discovery station wagon failed to give way at an intersection and collided with the driver’s side of the claimant’s vehicle. The claimant was the driver of her vehicle.
The claimant subsequently lodged an application for personal injury benefits with the insurer. I understand that liability was admitted and the claimant has been in receipt of statutory benefits. Those statutory benefits continued beyond 26 weeks with the insurer accepting that the claimant’s injuries were “non-minor” and the claimant was not at fault for the accident.
On or about 4 April 2020, the claimant lodged an application for common law damages with the insurer. Liability was subsequently admitted by the insurer, by way of notice dated 30 June 2020.
The claimant is self-represented.
After gathering evidence, including requesting particulars from the claimant, the insurer made an offer of settlement on 7 December 2022 in the amount of $75,000. The breakdown of such offer being:
(a) past economic loss: $10,000, and
(b) future economic loss: $65,000.
It is apparent that the offer was discussed with the claimant over the phone before the emailed offer of settlement was made. The insurer quite appropriately pointed out to the claimant that Centrelink may make a deduction in the event of settlement.
The claimant evidently accepted the offer and a deed of release was signed.
The insurer subsequently lodged an application with the Personal Injury Commission (Commission) seeking approval of the settlement.
I have held three teleconferences with the claimant and the insurer. After the first teleconference and after considering the evidence in detail I decided to call a further teleconference.
At the second teleconference I advised the claimant and the insurer that I was not satisfied that the proposed settlement sum was within the range of likely potential damages assessment for the claim if it were to be assessed by the Commission.
It should be said that at the time I indicated that I made no criticism of the insurer, as my conclusion was largely based on information that the claimant provided during the first teleconference, which is discussed further below. I provided the parties with the opportunity to conduct further settlement negotiations.
At the third teleconference held on 15 February 2023, I was advised that a further proposed settlement had been reached. I am advised that the claimant signed settlement documents on 15 February 2023 accepting an offer of $135,000 all inclusive. The breakdown of such offer is as follows:
(a) past economic loss, buffer: $10,000, and
(b) future economic loss: $125,000.
It is to be noted that the insurer lodged a separate application with the Commission for assessment of a claim for damages. This was done to preserve time and protect the claimant’s rights in the event that the settlement was not approved.
LEGISLATIVE FRAMEWORK
Section 6.23 of the Motor Accident Injuries Act 2017 (MAI Act) provides:
“(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.”
Clause 7.37 of the Motor Accident Guidelines (the Guidelines) provides:
“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 satisfied 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 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.
(d)the claimant understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement.”
DOCUMENTS CONSIDERED
I have considered the documents provided in the application. No reply has been received. The application is comprehensive, being more than 500 pages in length. I have also considered further submissions/material provided by the insurer following the second proposed settlement figure was reached.
MEDICAL EVIDENCE
An ambulance did not attend the scene of the accident and the claimant did not attend the hospital.
The claimant attended upon her general practitioner (GP), Dr Burn, of the Old Linton Medical Practice, the day following the accident. She complained of pains in her neck and torso with tenderness. Her sleep was disturbed. She also had pains in her ankles and knees, and her left side was more painful. Dr Burn noted a history of many falls from horse show jumping.
The claimant was referred for a CT and ultrasound of the left ankle and knee and prescribed Endone. There is no mention of left shoulder symptoms, however, the claimant also attended upon her physiotherapist who noted that following the accident the claimant’s left shoulder was “achy”.
When attending upon her GP on 9 April 2018, the claimant reported that her left shoulder had become painful with limitation of movement following the accident.
An MRI was eventually performed on 12 April 2018, which confirmed prominent supraspinatus tendinopathy with a partial thickness tear and advanced subdeltoid bursitis. No full thickness tear was evident.
Dr Burn, on 15 April 2018, certified the claimant as having a limited sitting and driving tolerance due to pain and was only able to lift/carry with one shoulder. She was certified for pre-injury work.
The claimant came under the care of orthopaedic surgeon, Dr Damiani. The doctor noted the neck pain had settled since the accident, but the shoulder was still symptomatic. Dr Damiani believed the MRI revealed pre-existing shoulder impingement problems with associated bursal state changes to the supraspinatus. Based on the findings, he recommended a cortisone injection, which was administered in mid 2018 and significantly improved the bursitis.
The shoulder became irritable by 5 March 2019 and an MRI arthrogram and CT arthrogram took place on 9 May 2019. The investigation revealed a heterogeneous synovial thickening within the rotator interval suggestive of glenhumeral joint synovitis.
The claimant was referred to Dr Igor Policinski. She ultimately underwent a left rotator cuff repair, biceps tenodesis and subacromial decompression on 16 December 2020. The surgery was funded by the insurer.
On 23 March 2021, Dr Polincinski provided a three month post-surgery report which noted the claimant was pain free and had been rehabilitating well with her physiotherapist.
Dr Powell, orthopaedic surgeon, provided an initial medico-legal report to the insurer dated 26 November 2020. A further report was provided dated 12 January 2021.
Dr Powell accepted the surgery was reasonable and necessary and related to the motor accident. He diagnosed a musculoligamentous injury to the cervical spine aggravating underlying spondylitic changes. In respect of the left shoulder he accepted an injury with aggravation of some underlying degenerative pathology involving the rotator cuff and bicipital mechanism. He assessed a 1% whole person impairment (WPI) due to a slight restriction of movement in the left shoulder.
Dr Powell provided his opinion that the claimant was fit to return to her pre-injury duties alternating her tasks and with regular rest breaks. He recommended that she avoid repetitive use of her left arm above shoulder height and away from her body.
An internal review conducted by the insurer affirmed an original decision that the claimant’s injuries did not exceed the 10% WPI threshold for the entitlement to non-economic loss damages.
Due to the claimant being unrepresented, and the claimant apparently having misgivings as to the opinion of Dr Powell, the insurer referred the matter to the Commission for assessment of WPI.
Medical Assessor Mohammed Assem examined the claimant on 22 October 2022 with respect to the WPI dispute. Medical Assessor Assem accepted the accident resulted in injuries to the cervical spine and left shoulder. He found a combined WPI of 4% (cervical spine – 0%; left shoulder – 4%).
DAMAGES
Non-economic loss
Based upon the certificate of Medical Assesor Assem, the claimant is not entitled to damages for non-economic loss.
Past economic loss
At the time of the accident the claimant was employed as a part-time show jumping teacher (equestrian coach) and part-time teacher’s aide working in two different schools.
The claimant returned to her roles as an equestrian coach and part-time teacher’s aide.
The claimant, in correspondence to the insurer dated 5 December 2022, stated that the claim for economic loss is limited to six weeks following her surgery and time off to attend treatment and medical examinations. The claimant is not making any claim for any loss as an equestrian coach.
The taxation material is before me and demonstrates the claimant’s earnings increasing since the accident. For instance, combining all income sources, the claimant’s net average weekly earnings were $362.96 per week for the 2019 financial year and were $802.56 per week for the 2022 financial year. These increases appear to be derived from upward earnings from the Department of Education.
The information from the claimant reveals that prior to the accident she worked in more active classroom roles. Whilst she continued to engage in classroom type work assisting students until December 2019, she also gradually commenced administrative type work and has now moved into that type of work.
After consideration of the evidence before me, I am satisfied that the allowance of $10,000 for past economic loss is appropriate. The claimant has provided particulars that she suffered six weeks of wage loss following the shoulder surgery. It is also to be noted that the claimant’s earnings have increased since the accident.
Future economic loss
At a current age of 55, the claimant has approximately 12 years of working life until retirement age.
Whilst Dr Powell provided an opinion that the claimant was fit to return to her pre-injury hours of work, he was not asked and did not provide an opinion as to whether the claimant was fit for an increase in hours of work.
In the insurer’s initial submissions, prior to the first teleconference, it was submitted that as the claimant was working as a school administration officer, it was expected that the majority of her tasks would be office based without the need to use her left arm above shoulder height.
However, at the first teleconference I asked the claimant to describe the ongoing issues she has with her left shoulder, especially in relation to work. She explained that she now works six to seven days per fortnight, but that was the limit of her abilities given the shoulder symptoms she experiences. The claimant indicated that it had been the plan, prior to the accident, that she would commence full-time hours with the Department of Education once her youngest child completed their schooling. It was confirmed that this would occur in three years’ time. Therefore, but for the accident, the claimant would have commenced full-time hours from 2026.
The insurer had initially allowed a buffer for future economic loss of $65,000. However, I noted in the second teleconference that I considered the claimant to be truthful and sincere regarding her plans but for the accident.
The insurer subsequently allowed an amount of $125,000 for future economic loss. The insurer provided me with further brief submissions on how this figure was arrived at. I am informed of an allowance of a diminution in earning capacity of $300 per week (approximately $105,000) plus an additional “buffer” of $20,000 to account for a possible deterioration in the claimant’s condition.
The $105,000 figure is arrived at as follows:
· Income from work at Department of Education in the 2022 financial year equates to approximately $697.33 net per week.
· If an income of $697.33 net per week represents a seven day fortnight, and if she were to return to work full time, her income would be approximately $996.19 net per week.
· That equates to a difference of approximately $296.86 net per week.
· Utilising the 5% tables for 12 years and with a 15% deduction for vicissitudes, deferred for three years, totals $104,431.68.
I agree with the insurer’s approach to the assessment of future economic loss. The proposed allowance of $125,000 is fair and reasonable and within the range of likely potential assessment if the matter were assessed by the Commission. The claimant’s neck symptoms have resolved. The ongoing shoulder symptoms are managed with appropriate restrictions and breaks. However, I accept that the claimant’s most likely future circumstances, but for the accident, would have involved her working in a full time capacity with the Department of Education once her youngest child finished their schooling. The allowance for future economic loss appropriately reflects the fact that the claimant is unlikely to work full time in the future, noting that her current working arrangement represents her maximum capacity.
OTHER CONSIDERATIONS
At the teleconferences, I raised with the claimant that she was not represented by a legal practitioner. I made it clear to the claimant that she was entitled to engage a suitably qualified legal practitioner to represent her in her claim. The claimant indicated that she had seen a local lawyer in Yass initially, however, was advised that it would not be cost effective to the claimant to engage a lawyer. I formed the impression that the claimant was cognisant of the issues in her case.
I am satisfied that the claimant understood her entitlement to legal representation and after considering such option, did not wish to take up such entitlement.
I have been provided with a copy of the Settlement agreement in respect of the proposed settlement. I find it appropriately protects the rights of the claimant. It is to be noted that I expressed some concern with the content of the settlement agreement in respect of the initial proposed settlement. The insurer took those concerns on board and made appropriate amendments when drafting the agreement for the revised settlement agreement.
REASONS
I find the settlement amount to be fair and reasonable and within the range of likely potential damages assessments for the claim were the matter to be assessed by the Commission.
On the basis of the above, I approve the proposed settlement in the amount of $135,000 pursuant to s 6.23(3) of the MAI Act.
LEGISLATION
In making my decision I have considered the following legislation and guidelines:
· the MAI Act;
· Motor Accident Injuries Regulation 2017, and
· Motor Accident Guidelines.
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